Participating U.S. listed REITs outperformed their global peers overall in environmental, social and governance (ESG) performance in 2017, according to the latest edition of the Global Real Estate Sustainability Benchmark (GRESB) Real Estate Assessment.
The GRESB Real Estate Assessment provides an investor-centric ESG benchmark and reporting framework for listed real estate companies, property funds, real estate developers and private real estate investors. Participating U.S. listed REITs earned an average score of 67, putting them ahead of the global GRESB average of 63.
Listed REITs accounted for 42 of the 204 North American companies and funds reporting on their ESG performance in 2017, according to GRESB. The average GRESB score for the North American region as a whole stood at 64.
Dan Winters, head of the Americas for GRESB, said the U.S. REIT industry made “tremendous strides” in 2017. He noted that U.S. REITs recorded their fifth straight year of improved GRESB scores. Winters also pointed out that the five-year carbon dioxide reductions of participating REITs exceeded sustainable development goals set forward by the United Nations.
“This year’s GRESB results offer credible evidence [participating REITs] will continue to set the tone for the industry,” Winters said.
NAREIT Vice President for ESG Issues Fulya Kocak highlighted the growing number of U.S. REITs participating in the GRESB survey, as well as their recognition for strong performance. “At NAREIT, we believe that benchmarking ESG performance results helps to identify opportunities for environmental, social and financial gains,” she said.
GRESB noted that the 2017 results showcase a drive by North American participants with more than five years of benchmarking experience to increase the availability of ESG data, with 90 percent or more of companies having data management systems in place to monitor energy and water consumption. Winters pointed out that in 2012, less than 25 percent of U.S. REITs were comprehensively tracking consumption data.
Globally, a record 850 property companies and real estate funds completed the 2017 GRESB assessment. In total, they represent 77,000 assets with a value exceeding $3.7 trillion combined.
“We hope that the commitment and meaningful actions taken by the 850 GRESB participants serve as an example to others and help to drive improved sustainability performance more broadly across the market,” said Sander Paul van Tongeren, co-founder and managing director at GRESB.
NAREIT’s Leader in the Light Awards, which are announced in November, use GRESB data as part of the selection process.