In real estate, we have seen the global GRESB fund-benchmarking reach over €1 trillion in European AUM. But, at the same time the emergence of a large number of building-specific certifications globally has also created confusion among both investors and occupiers as each of these mostly national certifications are not based on consistent methodologies. The real estate investment management industry will therefore have to embrace more detailed and consistent reporting and further innovation to meet investors’ increasingly pro-active ESG requirements.
GRESB Benchmark challenged by more precise Green REIT Index
GRESB has become mainstream as an ESG real estate fund benchmark, with the number of funds covered increasing from 198 in 2010 to 903 in 2018. Europe is the most represented region in GRESB with 446 real estate funds, totaling USD $979 billion of GAV. However, the recently launched FTSE EPRA Nareit Developed Green Index enables investors to integrate climate risk and shows that investors do not need to sacrifice returns to invest in green certified and energy efficient buildings. By using building-level data it can also avoid potential bias in a self-reporting survey like GRESB.
Share of Certified Green Office Buildings
Sources: CBRE, University of Maastricht, MSCI, AEW