INREV GRESB Sustainability Report 2012 1

7/30/2019 INREV GRESB Sustainability Report 2012 1

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SUSTAINABILITY REPORT 2012

INREV RESEARCH & MARKET INFORMATION

NOVEMBER 2012


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INREV

STRAWINSKYLAAN 6311077 XX AMSTERDAM

THE NETHERLANDS

T +31 (0)20 799 39 60

[email protected]

WWW.INREV.ORG

INREV is the European Association for Investors in Non-Listed Real Estate Vehicles. Our aim is to

improve the accessibility of non-listed real estate funds for institutional investors by promotinggreater transparency, accessibility, professionalism and standards of best practice.

As a pan European body, INREV represents an excellent platform for the sharing and dissemination

of knowledge on the non-listed real estate funds market.

Vereniging INREV

This document, including but not limited to text, content, graphics and photographs, are protected

by copyrights. You agree to abide by all applicable copyright and other laws as well as any

additional copyright notices or restrictions contained in this document and to notify INREV in

writing promptly upon becoming aware of any unauthorised access or use of this document by any

individual or entity or of any claim that this document infringes upon any copyright, trademark or

other contractual, statutory or common law rights and you agree to cooperate to remedy any

infringement upon any copyright, trademark or other contractual, statutory or common law rights.


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SUSTAINABIL ITY REPORT 2012

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CONTENTS

EXECUTIVE SUMMARY

1 INTRODUCTION

2 METHODOLOGY AND SAMPLE

METHODOLOGY

SAMPLE

3 INDUSTRY PERFORMANCE

FOUR-QUADRANTMODEL

4 STRENGTHS AND WEAKNESSES

5 SUSTAINABILITY ASPECTS

MANAGEMENT

POLICYANDDISCLOSURE

RISKANDOPPORTUNITIES

ENVIRONMENTALMANAGEMENTSYSTEMS

PERFORMANCEINDICATORS

BUILDINGCERTIFICATION

SOCIALFACTORS

6 NEW DEVELOPMENTS


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PAGE 02

EXECUTIVESUMMARY

TheresultsoftheGRESBSurveyshowthattheEuropeannon-listedpropertyfundsindustry

isstillfocusedonpolicyratherthanactionwhenitcomestosustainability.

ThesampleofINREVmemberfundsscoredonaverage37%inthesurvey,whichmeasured

fundsprogressacrossanumberofkeysustainabilityaspects.Thisresultwasinlinewiththe

globalnon-listedandtheoverallGRESBsamplesat39%and38%respectively.

Whenthisscoreisbrokendownintothetwofurtherdimensions,whichreectsanemphasis

onpolicyorimplementation,theINREVsamplescored55%and33%respectively,

demonstratingthattheindustrycontinuestobeinalearningandpreparationphasewhen

itcomestosustainability.

However,26fundsor12%oftheINREVsampleachievedaGreenStarrating,which

demonstratesbestpracticeinbothpolicyandimplementation.Thiscompareswith16%of

theglobalnon-listedsamplewhichwasawardedthesameratingand19%oftheoverall

sample,whichalsoincludeslistedpropertycompanies.

OneofthestrongestareasforINREVmembersisitscommitmentofseniormanagement

time.JustoverthreequartersoftheINREVsamplehasseniorrepresentationfor

sustainabilityonitshighestmanagementbody,outperformingtheaveragesforboththe

globalnon-listedandGRESBsamples.

Theindustrysstrongreportingethicalsocomesthroughinthesurveyresults.Around39%

oftheINREVsamplereportstotheirhighestmanagementbodyonsustainabilityon

aquarterlybasis,whichisinlinewiththeGRESBsample.However,afurther18.4%exceeded

thisbyreportingonamonthlybasis.For6.9%oftheINREVsample,thereiscurrentlynoregularreportingtothehighestboardonsustainability,whichismuchlowerthanthe

GRESBsampleof17%.

Afurtherexampleoftheindustrysgroundworktoimproveitssustainabilitypracticesisthe

highpercentageoffundswhichhavepoliciesinplacetomonitorandguideonenvironmental

issues.EnergyconsumptionandmanagementisthemainfocusfortheINREVsamplewith

81.6%havingapolicyonthisissue.Waterandwastemanagementarenextinlinewith

policiesinplacefor65.9%and65.4%respectively.Onthesetwoissues,theINREVsample

trailsslightlybehindglobalnon-listedandtheGRESBsamplelevels,whichare69.6%and

69.2%forwatermanagementrespectivelyand68.5%and69.2%forwastemanagement.

However,theINREVsamplecouldmakeimprovementswhenitcomestounderstandingthepossibleimpactofsustainabilitymeasures.TheINREVsampletrailedwhenitcameto

performingsustainabilityriskassessments.Forexample,thetopicofclimatechangerisksis

addressedbyonly30%oftheINREVsample.Themajorityofrespondentsfocusonood

risk,althoughsomearerethinkingacquisitionsanddisposalsbasedonthepotentialimpact

ofclimatechange.

Themostlikelyriskmonitoringisforregulatorychangesat58%.Thisisalsoahighpriority

fortheglobalnon-listedsampleat62%andtheGRESBsampleat64%.Thisisnotsurprising

asregulationhasdrivenmanyrecentsustainabilityinitiativesandfundsareobligedtocomply

sowillensuretheyareinformedofchanges.


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Regulationisalsolikelytohavebeenamaindriverwhenitcomestoachievingrecognised

buildingcerticatesthatprovidetenantsandinvestorswithtransparencyaboutapropertys

energyefciencyorsustainability.Around45%oftheINREVsamplesportfoliohadenergy

certicates,wellabovetheratesforglobalnon-listedat36%andtheGRESBsample

at34%.Thiscanbepartlyexplainedbythefactthatenergyperformancecerticatesare

obligatoryinmanyEuropeanjurisdictions.

ForcerticatesawardedbyorganisationssuchasLEEDandBREEAM,theresultsofthe

surveyshowthatjust10%oftheINREVsamplesportfolioshaveachievedcertication.

Thisisbelowtheglobalnon-listedandGRESBsamplesachievementsat14%.

TheINREVsampleforthissurveycomprised217fundswithagrossassetvalueof$257billion

(H201billion).Thetotalsamplesizeforthe2012GRESBsurveyis455respondentsglobally

representing$1,336billion(H1,046billion)inassetsundermanagement.Thisincludes359

non-listedpropertyfundsglobally,representing$651billion(H510billion).

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1

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INTRODUCTION

Aspartofitscommitmenttosupportingitsmemberstoimprovetheirsustainabilityefforts,

INREVisapartnerintheGlobalRealEstateSustainabilityBenchmark(GRESB),aglobal

consortiumofinstitutionalinvestorsandrealestateindustryassociationscommittedtoassessingthesustainabilityperformanceofrealestateportfolios.

OneofGRESBsmaininitiativesisitsannualsurvey,whichprovidesfocusanddirectionfor

therealestatesectorbybenchmarkingsustainabilityperformance.Theresultsprovidean

overviewofsustainabilityactivitiesandtrendsinglobalrealestateforboththepublicand

privatesector.

Thebenchmarkisnowusedbymorethan35institutionalinvestorstobetterunderstand

thesustainabilityoftheirinvestments.Thedataprovidesabaseforinvestorstohave

informeddiscussionswiththeirfundmanagersforexistinginvestmentsaswellassetting

parametersfornewinvestments.

In2012,455respondentscompletedthesurveywithatotalcoverageof$1,336billion

(H1,046billion)ofassetsundermanagement(AUM).Thisincluded359non-listedproperty

fundsglobally,ofwhich217werefromEurope.

INREVsupportedthissurveyandencourageditsmemberstoparticipatebycontributing

theirdata.Aspartofitspartnershipwiththeconsortium,GRESBsuppliedINREVwith

moredetailedinformationonthesampleofnon-listedpropertyfundsinthesurvey.This

reporttakesthatdataandanalysesthesustainabilityperformanceofthesefunds,with

aparticularfocusonEuropeannon-listedpropertyfunds,toprovidemoretailoredinfor-

mationandguidancetoourmembersonthistopic.

AcopyofthefullGRESBReportisavailableonINREVswebsiteatwww.inrev.org

INREVisalsoundertakingitsownsustainabilityinitiativeswithworkinthisareaguidedby

itsSustainabilityWorkingGroup.InJanuary2012,INREVreleaseditssustainabilityreporting

recommendationstohelpfundmanagersdeterminethedatatheyshouldbereportingto

investors.Theserecommendationsareinlinewiththeexistingmandatoryreportingrequire-

mentsandvoluntaryinitiatives,inparticulartheGlobalReportingInitiativesConstruction

andRealEstateSectorSupplement(GRICRESS).

In2013,INREVwillconsiderincorporatingtheserecommendationsintoitssetofindustry

standardsasitundertakesareviewoftheINREVGuidelines.


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METHODOLOGYANDSAMPLE

Methodology

ThequestionnairefortheGRESBsurveycapturesalmost50datapointsmeasuringsustain-ability,includingenvironmentalandsocialfactors.Thisincludesenvironmentalperformance

indicatorssuchasenergyconsumption,greenhousegasemissions,waterconsumptionand

wasteaswellassustainabilityprocessesandpracticessuchaspolicies,riskassessmentsand

socialindicators.

Theanswerstothesequestions,whicharecollectedviaasecureonlineplatform,aredivided

intosevensub-aspects.Thereisanadditionalcategoryaddedforpropertycompaniesand

fundswithdevelopmentactivities,whichisnotincludedinthetotalGRESBscore.Thescores

fortheindividualquestionsarebasedontheirrelevancetoinvestorsandthenaddedupto

generateatotalGRESBscorefortherespondent,whichisexpressedasapercentageofthe

maximumscore.

ThetotalGRESBscoreisfurtherdividedintotwodimensions:ManagementandPolicy

(MP),whichhasaweightofaboutone-third,andImplementationandMeasurement(IM),

whichisabouttwothirdsofthetotalscore.Thesetwodimensionsaimtocaptureboth

respondentsintentionsandactionswithintheaspects.Eachindividualquestionisallocated

tooneofthedimensions,andthescoresonMPandIMarereectedasapercentageof

thetotalscore.

Thebenchmarkssetthroughthesurveyquestionsaredesignedtohighlightreducedopera-

tionalexpendituresandlowerconsumptionlevelsthataredrivenbyimprovedsustainability

practices.Thesurveyillustratesnotonlythemitigationofclimatechangeorotherenviron-

mentalthreats,butalsotheaccompanyingreducedriskandimprovednancialperformanceofrealestateinvestments.

Sample

Thetotalsamplesizeforthe2012GRESBsurveyis455respondentsgloballyrepresenting

anAUMof$1,336billion(H1,046billion).Thisincluded359non-listedpropertyfunds

globally,ofwhich217werefromEurope.Thenon-listedpropertyfundssampleglobally

represents$651billion(H510billion),ofwhich$257billion(H201billion)isinEurope

(Table01,page06).Thelargestproportionofnon-listedpropertyfundsfromoutsideEurope

comefromtheUSwithgoodrepresentationsfromAsiaandOceania.Theguresused

inthisreportareslightlydifferenttothoseinthereportpublishedbyGRESBinSeptember.Thisisbecauseitcontinuedtoacceptdataandaddedanother12fundstothesample,

includingsixfurtherEuropeannon-listedpropertyfunds.

Forthereport,theEuropeannon-listedpropertyfundssampleof217fundswillbereferred

toastheINREVsample,asallbuttwofundsaremanagedbyINREVmembers.Theoverall

non-listedpropertyfundssamplewillbereferredtoastheglobalnon-listedsamplewhile

theGRESBsamplereferstothetotalsurveyrespondents.

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PAGE 06


By sector, the largest proportion o the INREV sample by number is diversifed unds at

29%, which is reective o the large number o multi-sector unds in the market (Figure 01).

This is ollowed by ofce and retail, the two most traditional sectors, at 22% and 20%

respectively.

Figure 02 shows the gross asset value (GAV) o the 217 unds in the INREV sample broken

down by the sector in which they are invested. This shows that ofces and retail represent

around one third each at 33.4% and 34% respectively. The fgure shows a urther break

down in the types of retail with shopping centres being the largest proportion at 17.8%.

Investment in residential is also signifcant at 13.3%.

FIGURE 02 / SECTOR BREAKDOWN FOR THE INREV SAMPLE, BY GAV

23.4

45.9

18.4

86.1

16.4

8. 4

34.2

4. 7

3.1 16.9

RETAIL HIGH STREET

RETAIL SHOPPING CENTRES

RETAIL WAREHOUSING

OFFICE

DISTRIBUTION WAREHOUSES

OTHER INDUSTRIAL

RESIDENTIAL

HOTELS

HEALTHCARE

OTHER

SOURCE: GRESB

TOTAL: $257 BILLION

FIGURE 01 / SECTOR BREAKDOWN FOR THE INREV SAMPLE, BY NUMBER

# FUNDS

44

47

20

25

4

11

64

2

RETAIL

OFFICE

INDUSTRIAL

RESIDENTIAL

HEALTHCARE

OTHER

DIVERSIFIED

NEW DEVELOPMENTS

SOURCE: GRESB

TOTAL GAV($ BILLION)

NUMBER OFRESPONDENTS

1,336

65 0

25 7

TOTAL GAV(L BILLION)

1,046

51 0

20 1

45 5

35 9

21 7

TABLE 01 / SAMPLE SIZE

GRESB SAMPLE

GLOBAL NON-LISTED SAMPLE

INREV SAMPLE

SOURCE: GRESB


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Inmanycases,theINREVsamplesperformancewillbecomparedwiththatoftheglobal

non-listedsampleaswellastheGRESBsample.Thisglobalnon-listedsamplecomprises61%

Europeanfundsand39%non-EuropeanwhiletheGRESBsamplecomprises79%non-listed

propertyfundsand21%listedpropertycompanies.


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3 INDUSTRYPERFORMANCE

Theresultsofthesurveyallocatedanoverallaveragescoreforeachparticipant,whichis

expressedasapercentageofthemaximumscore.Inaddition,thistotalscoreisdividedinto

twodimensionsManagementandPolicy(MP)andImplementationandMeasurement(IM)whichwereawardedaratingofaroundonethirdandtwothirdsrespectively.

TheresultsfortheINREVsampleshowthatthebalanceofactivitieswithinsustainability

isstillweightedtowardsMPratherthanIP.Overall,theINREVsamplescoredonaverage

37%,whichwasinlinewiththeglobalnon-listedandGRESBsamplesat39%and38%

respectively(Figure03).

However,withthebreakdownintothetwofurtherdimensions,theINREVsamplescored

55%onaverageforMPand33%forIM.Whilethisshowsanemphasisonpolicyrather

thanaction,itisnotdissimilartothetwoothersamples,bothofwhichscored55%forMP

withglobalnon-listedscoring32%forIMwhiletheGRESBsamplescored33%.

ThisfocusonpolicyisalsohighlightedinFigure04(page09)whichshowsthatformanage-

mentofenergy,greenhousegasandwater,morefundshavepoliciesinplacecompared

withmeasuringperformance.Thelargestgapisforenergymanagementwith82%having

apolicyinplacecomparedwith59%measuringperformance.

FIGURE 03 / OVERALL SCORES AND FOCUS ON POLICY AND IMPL EMENTATION

0% 10% 20% 40%30% 50% 60%

MANAGEMENTAND POLICY

IMPLEMENTATION

AND MEASUREMENT

OVERALL SCORE

SOURCE: GRESB

GLOBAL

NON-LISTED

SAMPLE

INREV SAMPLE

GRESB SAMPLE


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However,theindustryismakingprogressas26%showedimprovementsthroughreduced

consumptionforenergymanagementcomparedwiththe2010-2011resultswithanother

26%havingtargetsinplace.Forgreenhousegasandwatermanagement,theprogressis

slowerbutstillrespectablewith18%and15%showingimprovementsrespectivelywith

similarproportionsputtinginplacetargets.

Figure05showsthesameresultsfortheGRESBsample.Theseshowfewdifferencescom-

paredwiththeINREVsampleotherthanaslightlystrongerfocusonwatermanagement.

FIGURE 05 / OVERVIEW OF GRESB SAMPLE FOR ENVIRONMENTAL MANAGEMENT

ENERGY

MANAGEMENT

GREENHOUSE GAS

MANAGEMENT

WATER MANAGEMENT

0% 20% 60%40% 80% 100%

POLICY IN PLACE

PERFORMANCE

MEASURED

SHOWN

IMPROVEMENT

(2010 2011)

TARGET SET

SOURCE: GRESB

FIGURE 04 / OVERVIEW OF INREV SAMPLE FOR ENVIRONMENTAL MANAGEMENT

0% 20% 60%40% 80% 100%

POLICY IN PLACE

PERFORMANCE

MEASURED

SHOWN

IMPROVEMENT

(2010 2011)

TARGET SET

SOURCE: GRESB

ENERGY

MANAGEMENT

GREENHOUSE GAS

MANAGEMENT

WATER MANAGEMENT


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Four-quadrantmodel

Toshowthedistributionoftheoverallscoresforthesample,theGRESBsurveyalsoincludes

afour-quadrantmodelofsustainabilityperformance,whichratesafundorpropertycompany

onitsprogressintwodimensions.Thiscomprisestheprogressafundorcompanyshows

fromGreenStartertoGreenStarsaswellaswhetheritsactivitiesdisplayactionratherthandiscussion,makingthemGreenTalkorGreenWalk.Thefourendsofthespectrumare

denedas:

GREENSTARTERS:Havestartedtodevelopsomesustainabilitypolicies,butshowlimited

organisationalfocus.Environmentalinitiativesarenotyetfullyimplementedandmeasured

acrosstheentireportfolio.Nocomprehensivemeasurementofenvironmentalkeyperfor-

manceindicators.

GREENTALK:Dedicatedresourcesforsustainabilitymanagement,comprehensiveexternal

reporting,sustainabilityimplementationplanshavebeendeveloped.Moreattentionshould

begiventowardstheimplementationandmeasurementoftheseactionplans.

GR EE N WA LK :Integrationofsustainabilitypoliciesandmeasurementofenvironmental

keyperformanceindicators,butlimitedreporting,andalackofformalpoliciesandproce-

dures.Externalstakeholdersexpectastrongerfocusontransparency.

GREENSTARS:Integratedorganisationalapproachtowardsmeasurementandmanage-

mentofenvironmentalkeyperformanceindicators.Focusonreductionofresourcecon-

sumption,andinnovationinmeasuresbeyondenergyefciency,(eg,productivity,tenant

behaviour).

ThedistributionoftheINREVsampleinFigure06showsthatrespondentsarestillmore

talkthantheyarewalkwhenitcomestosustainability.Thismeansthatmanyhave

policiesandmeasurementinitiativesinplacebutcouldworkhardertoformalisetheseand

provideinvestorswithmoretransparency.Thisinlinewithglobalnon-listedandthe

performancetheGRESBsample,demonstratingthatthewholeindustryisstillinalearning

phasewhenitcomestosustainability.

10 0

80

60

40

20

0

FIGURE 06 / FOUR-QUADRANT MODEL

0 20 6040 80 100

INREV SAMPLE AVERAGE

INREV SAMPLE

GRESB SAMPLE AVERAGE

MANAGEMENT & POLICY

IMPLEM

ENTATION&

MEASUREMENT

GREEN WALK GREEN STARS

GREEN STARTERS GREEN TALK

SOURCE: GRESB


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However,thisratingapproachalsosaw12%,or26funds,intheINREVsampleachieve

GreenStarstatus.Thiscompareswith16%oftheglobalnon-listedsampleawardedthe

sameratingand19%oftheGRESBsampleincludinglistedpropertycompanies.This

showsthatINREVperformsinlinewiththeglobalsampleandslightlybelowthesample

whichincludeslistedpropertycompanies.


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4 STRENGTHSANDWEAKNESSES

TheGRESBreportbreaksdownsustainabilityintosevenmainaspectsaswellasnew

development,whichisincludedwhereappropriateforthefundorpropertycompany.

Figure07showstheINREVandGRESBsamplesoverallperformanceintheseareasonawebgraph.Thefactthattheshapesforthetwosamplescloselymirroreachotherdemon-

stratesthattheINREVsampleisinlinewiththeoverallsurveyresults.Themainareasof

differenceareinnewdevelopmentandperformanceindicators,wheretheGRESBsample

scoresslightlyhigher.

FIGURE 07 / SUSTAINABILITY STRENGTHS AND WEAKNESSES

%

GRESB INREV

MANAGEMENT

POLICY & DISCLOSURE

ENVIRONMENTAL MANAGEMENT

RISK & OPPORTUNITIES

PERFORMANCE INDICATORS

BUILDING CERTIFICATIONS

SOCIAL FACTORS

NEW DEVELOPMENTS

SOURCE: GRESB

FIGURE 08 / SUSTAINABILITY STRENGTHS AND WEAKNESSES, BY SECTOR

%

RETAIL OFFICE INDUSTRIAL RESIDENTIAL DIVERSIFIED

MANAGEMENT

POLICY & DISCLOSURE

ENVIRONMENTAL MANAGEMENT

RISK & OPPORTUNITIES

PERFORMANCE INDICATORS

BUILDING CERTIFICATIONS

SOCIAL FACTORS

NEW DEVELOPMENTS

SOURCE: GRESB


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PAGE 13


WhenlookingattheresultsfortheINREVsampleonasectorbasis,thereareclearer

differences(Figure08).Theofcessectorscoreshigherforenvironmentalmanagement

systems,riskmanagement(RisksandOpportunities)andmanagement.Retailisalsoscores

highlyinmanagementbutoutperformsofcesforitsperformanceindicatorsandsocial

factors.


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PAGE 14


5 SUSTAINABILITYASPECTS

Management

Forsustainabilitytoachieveresults,itrequiresthecommitmentofseniormanagementanddedicatedindividualswithfundteams.

Figure09showsthat76%oftheINREVsamplehasseniorrepresentationforsustainability

onmanagementbodies.ThismeansthattheINREVsampleoutperformsboththeaverages

forglobalnon-listedandtheGRESBsample.

TheINREVsampleisalsoinlinewithglobalnon-listedandtheGRESBsampleswhenitcomes

tocommittingdedicatedresourcestosustainabilitywithinfunds.In89%oftheINREVsample,

thereisatleastapart-timeroleresponsibleforsustainabilitywhichmatchestheGRESB

sampleaverageof89%andcompareswith90%fortheglobalnon-listedsampleaverage.

FIGURE 09 / MANAGEMENT ENGAGEMENT AND DEDICATED RESOURCES FOR SUSTAINABILITY

SENIOR DECISION MAKER

ON SUSTAINABILITY IS

MEMBER OF HIGHEST

MANAGEMENT BODY

SOMEONE INTERNALLY

(AT LEAST PART-TIME)

IS RESPONSIBLE FOR

SUSTAINABILITY

0% 20% 60%40% 80% 100%

INREV SAMPLE

GLOBAL

NON-LISTED

SAMPLE

GRESB SAMPLE

SOURCE: GRESB

FIGURE 10 / FREQUENCY OF REGULAR SUSTAINABILITY PERFORMANCE UPDATES TO

HIGHEST MANAGEMENT BODY

0% 10% 30%20% 40% 50%

MONTHLY

QUARTERLY

BI-ANNUALLY

ANNUALLY

OTHER

NONE

SOURCE: GRESB

INREV SAMPLE

GRESB SAMPLE


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PAGE 15


TheINREVsampleismostlikelytoreporttotheirhighestmanagementbodyonsustain-

abilityonaquarterlybasis,accordingto39.6%ofrespondents(Figure10).Thisislikelyto

beinlinewithafundsregularquarterlyreportingtoinvestors.ThisissimilartotheGRESB

surveywhere38%ofrespondentsalsoworktoaquarterlycycle.Afurther18.4%ofthe

INREVsampleexceededthisbyreportingonsustainabilityonamonthlybasis.For6.9%,

thereiscurrentlynoregularreportingtothehighestboardaboutsustainability,whichismuchlowerthantheGRESBsampleof17%.

Policyanddisclosure

Inseekingtoadoptbettersustainabilitypractices,theINREVsamplehasputinplacepolicies

tomonitorandguideonenvironmentalissues.Figure11showsthatenergyconsumption

andmanagementhasbeenthemainfocusfortheINREVsamplewith81.6%havingapolicy

onthisissue.Waterandwastemanagementarethenextmostlikelyissuesforfundsto

putpoliciesinplaceat65.9%and65.4%respectively.Here,theINREVsamplefallsslightly

behindglobalnon-listedandtheGRESBsamplelevelswhichare69.6%and69.2%forwater

managementrespectivelyand68.5%and69.2%forwastemanagement.

Thelowestpriorityisclimatechangeadaption,whichisonlyaddressedwithapolicyby28.1%

oftheEuropeanfundssample.However,thisisinlinewithglobalfundsandsurveysamples.

Itisimportantforfundstodisclosetheirsustainabilityperformancetransparentlyandfully

toinvestors.Figure12(page16)showsthattheINREVsampleisatleastinlinewithaverage

disclosuresforglobalnon-listedandtheGRESBsampleandinmanycasesisoutperforming.

At61.8%,thegreatestproportionofrespondentsincludesadedicatedsectionontheir

corporatewebsite,whichisinlinewiththesurveytotalandslightlyabovethe56.8%average

forglobalnon-listed.

At53.9%,theINREVsampleisaheadofitsglobalcounterpartswhenitcomestoproducing

stand-alonecorporatesustainabilityreports.Thiscompareswith48.5%forglobalnon-listed

and46.2%fortheGRESBsample.

FIGURE 11 / POLICIES IN PLACE TO COVER SPECIFIC ENVIRONMENTAL ISSUES

ENERGY CONSUMPTION /

MANAGEMENT

0% 20% 60%40% 80% 100%

INREV SAMPLE

GLOBAL

NON-LISTED

SAMPLE

GRESB SAMPLE

GREENHOUSE GAS (GHG)

EMISSIONS / MANAGEMENT

WATER CONSUMPTION /

MANAGEMENT

WASTE MANAGEMENT

CLIMATE CHANGE

ADAPTATION

SOURCE: GRESB


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PAGE 16


TheonlyareainwhichtheINREVsampledippedbelowtheaverageforglobalnon-listed

wasforaseparatedisclosuresectioninfundreportingtoinvestors.Theproportionwasstill

goodat43.3%butcompareswith45.1%forglobalnon-listedandtheGRESBsampleat

38.7%.INREVreleaseditssustainabilityreportingrecommendationsinJanuary,whichnow

providestheindustrywithbetterguidanceonwhatinformationtoreporttoinvestors.

Riskandopportunities

Whilesustainabilitymeasurescansupportimprovedperformance,Europeanfundsalsoneed

tostayinformedaboutpotentialriskssuchasthroughclimatechangeorregulation.This

meansthatregularriskassessmentsneedtobeputinplacetomonitortheimpactonthe

propertyportfolio.

FIGURE 12 / FORMATS IN WHICH SUSTAINABILITY PERFORMANCE AND STRATEGY IS

REPORTED TO INVESTORS

SECTION IN ANNUAL

REPORT AND ACCOUNTS

0% 30%20 %10% 50%40% 60% 70%

INREV SAMPLE

GLOBAL

NON-LISTED

SAMPLE

GRESB SAMPLE

STAND-ALONE CORPORATE

SOCIAL RESPONSIBILITY

OR SUSTAINABILITY

REPORT

INTEGRATED REPORT

DEDICATED SECTION ON

CORPORATE WEBSITE

SECTION IN FUND

REPORTING TO INVESTORS

SOURCE: GRESB

FIGURE 13 / RESPONDENTS WHO HAVE PERFORMED SUSTAINABILITY RISK ASSESSMENTS

ON STANDING INVESTMENTS IN THE LAST THREE YEARS

CLIMATE CHANGE RISKS

0% 20% 40% 60% 80%

INREV SAMPLE

GLOBAL

NON-LISTED

SAMPLE

GRESB SAMPLE

OCCUPATIONAL RISKS

FINANCIAL RISKS

REGULATORY RISKS

SOURCE: GRESB


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PAGE 17


Figure13showsthattheINREVsampleistrailingwhenitcomestoperformingsustainability

riskassessments.Assessingclimatechangerisksisaddressedbyonly30%oftheINREV

sample.However,thisisalsothelowestpriorityforglobalnon-listedandtheGRESBsample

at34%and36%respectively.Themajorityofrespondentsfocusonoodrisk,althoughsome

arerethinkingacquisitionsanddisposalsbasedonthepotentialimpactofclimatechange.

Themostlikelyriskmonitoringisforregulatorychangesat58%.Thisisalsoahigherpriority

fortheglobalnon-listedsampleat62%andtheGRESBsampleat64%.Thisisnotsurprising

asregulationhasdrivenmanyrecentsustainabilityinitiativesandfundsareobligedtocomply

sowillensuretheyareinformedofchanges.

Opportunitiescanbefoundthroughtheefciencyofenergyandwateruseinpropertyport-

foliostoimproveoperationalperformance.At52%,aroundonehalfoftheINREVsample

hasanefciencyprogrammeinplaceforenergyand38%forwater(Figure14).Inbothcases,

thesearelowerthanfortheglobalnon-listedsampleortheGRESBsample.Forexample,

59%ofallrespondentshaveanenergyefciencyprogrammecomparedwith52%forthe

INREVsample.ThiscouldbeduetothehighnumberofAustralianandNorthAmerican

respondentswhichtendtobefocusedonimplementingmeasurement.

EnvironmentalManagementSystems

Environmentalmanagementssystemscanenablefundstomonitorsustainabilitydata,review

systemsandbettermanagesustainabilityperformanceattheassetlevel.However,theresults

fromthesurveyshowthatthesesystemsarestillnotcommonplace.At46%,theINREV

samplehasthelowestuseofthemcomparedwithglobalnon-listed at48%andtheGRESB

sampleat50%(Figure15).

FIGURE 14 / EFFICIENCY PROGRAMMES IN PLACE FOR ENERGY AND WATER

ENERGY

0% 10% 40%30 %20% 50% 70%60 %

INREV SAMPLE

GLOBAL

NON-LISTED

SAMPLE

GRESB SAMPLE

WATER

SOURCE: GRESB

FIGURE 15 / ENVIRONMENTAL MANAGEMENT SYSTEMS IN PLACE AT ASSET LEVEL

INREV SAMPLE

0% 45% 47% 49%44% 46% 48% 51%50 %

GRESB SAMPLE

GLOBAL

NON-LISTED

SAMPLE

SOURCE: GRESB


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PAGE 18


Thescopeoftheenvironmentalmanagementsystemswasalsoanalysedwiththelargest

proportionoftheINREVsampleat62.7%monitoringenergyconsumptionfollowedby

waterconsumptionat54.4%andwastemanagementat53%(Figure16).Healthandsafety

fortheusersoftheassetswastheonlyfactorwhichtheINREVsampleincorporatedmore

frequentlyintheirsystemscomparedwithglobalnon-listedortheGRESBsample.

Performanceindicators

Withmanypoliciesinplace,itisalsointerestingtounderstandwhichaspectsofsustainability

respondentsarecollectinginformationon.Dataonenergyuseiscollectedby58.5%ofthe

INREVsampleand60%oftheGRESBsamplemakingitthemostlikelyaspecttomonitor.

DataonwaterismonitoredbyalmosthalfoftheINREVsampleat48.8%butaswithwaste,

theguresfortheGRESBsampleareslightlyhigher.Again,thismaybelinkedtothesample

compositionwithparticipantsfromAmericaandAustraliaquitefocusedondatacollection.

FIGURE 16 / SCOPE OF ENVIRONMENTAL MANAGEMENT SYSTEM

ENERGY CONSUMPTION /

MANAGEMENT

0% 30%20 %10% 50%40% 60% 70%

INREV SAMPLE

GLOBAL

NON-LISTEDSAMPLE

GRESB SAMPLE

WATER CONSUMPTION /

MANAGEMENT

GHG EMISSIONS /

MANAGEMENT

WASTE MANAGEMENT

HEALTH AND SAFETY OF

USERS OF THE ASSETS

BUSINESS TRAVEL

SOURCE: GRESB

FIGURE 17 / DATA COLLECTION FOR ENERGY, WASTE AND WATER

INREV SAMPLE

GRESB SAMPLE

0% 10% 20% 40%30% 50% 70%60%

ENERGY

WATER

WASTE

SOURCE: GRESB


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PAGE 19


Forthecollectionofenergy,thisgurehasbeenbrokendownfurthertounderstandthe

limitationsduetoafundmanagersaccesstotheportfolio.ForthepartoftheINREVsamples

portfoliothatisalsomanagedbythefundmanager,dataiscollectedon34.6%ofthis.This

ismuchlowerthanthe48.6%forGRESBsample.Whenlookingattheportfoliosasawhole,

dataiscollectedon30.3%comparedwith32.5%oftheGRESBsamplestotalportfolio.

Buildingcertification

Buildingcerticatesprovidetenantsandinvestorswithtransparencyaboutapropertys

energyefciencyorsustainability.WhilecerticatesawardedbyorganisationssuchasLEED

andBREEAMaregainingmorevisibility,theresultsofthesurveyshowthatjust10%ofthe

INREVsamplesportfolioshaveachievedcertication(Figure18).Thisisbelowtheachieve-

mentsoftheglobalnon-listedandGRESBsamplesat14%.

WhenitcomestotheproportionofenergycerticatesintheINREVsample,thegurerises

to45%,whichisabovetheratesforglobalnon-listedat36%andtheGRESBsampleat34%.

Thiscanbepartlyexplainedbythefactthatenergyperformancecerticatesareobligatory

inmanyEuropeanjurisdictions.

BREEAMisthemostwidelyusedcerticateintheINREVsampleat79.1%,whichcanbe

partlyexplainedbyitsBritishorigins(Figure19,page20).ThisisfollowedbyLEED,theUS

certicationbody,at20.3%.TheresultsalsoshowthatLEEDismuchmoreinuentialoutside Europeasitcomprises62%oftheGRESBsamplescerticates.

PERCENTAGE OF GREEN

CERTIFICATES WITHIN

PORTFOLIOS

PERCENTAGE OF

ENERGY CERTIFICATES

WITHIN PORTFOLIOS

0 % 10% 30 %20 % 40 % 5 0%

INREV SAMPLE

GLOBAL

NON-LISTED

SAMPLE

GRESB SAMPLE

FIGURE 18 / PERCENTAGE OF SUSTAINABILITY CERTIFICATES WITHIN PORTFOLIOS

SOURCE: GRESB


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PAGE 20


Socialfactors

Thesocialfactorsinvolvedinsustainabilityaremuchhardertodeneandmeasurethan

environmentalfactors.However,thisisbeginningtoberecognisedbyfunds,particularly

throughtenantengagementasexistingandpotentialoccupiersexpectstronglevelsof

commitmenttosustainability.

Figure20showsthatthemostpopularmethodoftenantengagementbytheINREVsample

wasthroughmeetingtenantstodiscusssustainabilityissuesat36.9%.Thiswasfollowedby

tenantsatisfactionsurveysat33%,whichdespitetheirhighrankingaremorecommoninthe

globalnon-listedsampleat40%andtheGRESBsampleat43%.

INREV SAMPLE

GRESB SAMPLE

0% 20% 60%40% 80% 100%

LEED

BREEAM

GREEN STAR

CASBEE

FIGURE 19 / TYPE OF GREEN BUILDING CERTIFICATES ACHIEVE

SOURCE: GRESB

FIGURE 20 / TENANT ENGAGEMENT INITIATIVES ON SUSTAINABILITY

ENGAGAMENT MEETINGSTOOK PLACE

0% 30%20 %10% 40% 50%

INREV SAMPLE

GLOBAL

NON-LISTED

SAMPLE

GRESB SAMPLE

TENANT SATISFACTION

SURVEYS

GREEN LEASES

INTRODUCED

SUSTAINABILITY GUIDE

DISTRIBUTED

HEALTH AND AND

WELL-BEING PROGRAMME

IMPLEMENTED

SOURCE: GRESB


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PAGE 21


Therewasastrongcommitmenttoensuresuppliersmetsustainabilitycriteriawith41%

oftheINREVsamplehavingguidelinesinplace(Figure21).Thiswasjustbelowtheglobal

non-listedandGRESBsamplesat45%.

FIGURE 21 / RESPONDENTS WITH SUSTAINABILITY CRITERIA FOR SUPPLIERS IN PLACE

0% 43% 45%39% 44%41 %40% 42% 46%

GRESB SAMPLE

GLOBAL

NON-LISTED

SAMPLE

INREV SAMPLE

SOURCE: GRESB


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PAGE 22


6 NEWDEVELOPMENTS

Forthisyearsreport,abenchmarkhasbeendevelopedinwhichthesustainabilityperfor-

manceofportfoliosofnewdevelopmentsiscomparedwithintheirpeergroup.

TheINREVsample,whichcomprised48funds,had221newdevelopmentsvaluedat

$13,297billion.TheGRESBsamplehadnewdevelopmentsvaluedat$86,204billion.

Figure22showsthat30.8%ofnewdevelopmentsintheINREVsamplecompletedin2011

gainedgreenbuildingratings.ThisismuchhigherthantheGRESBsample,whichachieved

21.9%.However,at36.9%,theGRESBsamplehasmoregreencerticationinthepipeline

foritsnewdevelopmentscomparedwiththeINREVsampleat30.3%.

Thesurveyalsoaskedaboutthesourcinganduseofsustainablematerials.Figure23

showsthathalfoftheINREVsampleinvestigatesusinglocalmaterials,whichislowerthan

theGRESBsampleat67%.ThemajorityoftheINREVsampletakesresponsibility

toincorporatesustainablematerialswith68.8%havingalistofpreferredmaterialsand

64.6%alsoworkingwithablacklistofmaterialstobeavoided.Theblacklistisseenasless

importantintheGRESBsamplewith45.6%puttingoneinplacebutthisgroupismuch

moreproactivewhenitcomestorecyclingmaterialsat69.8%comparedwiththeINREV

sampleat45.8%.

ACHIEVED ON BUILDINGS

COMPLETED IN 2011

EXPECTED FOR BUILDINGS

TO BE COMPLETED IN

2012 AND BEYOND

0% 10% 30%20% 40%

INREV SAMPLE

GRESB SAMPLE

FIGURE 22 / GREEN CERTIFICATES ACHIEVED OR EXPECTED FOR NEW DEVELOPMENTS

SOURCE: GRESB

INREV SAMPLE

GRESB SAMPLE

0% 20% 60%40% 80%

CONSIDERS SOURCING

AND USING LOCAL

MATERIALS

WORKS WITH PREFERRED

LIST OF SUSTAINABLE

MATERIALS

HOLDS BLACKLIST OF NON-

SUSTAINABLE MATERIALS

TO BE AVOIDED

CONSIDERS USE OF

RECYLED MATERIALS

FIGURE 23 / USE OF MATERIALS IN CONSTRUCTION PROJECTS

SOURCE: GRESB


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PAGE 23


Figure24showsthatthetakeupofrenewableenergysourcesisverylowamongprojects

withintheINREVsample.Photovoltaiccellsarethemostpopularadditionat6.21%while

2.6%haveincorporatedsolarpowerwhilenorespondentshavelookedatwindpower.Take

upwithintheGRESBsampleisalsolowwith4.82%incorporatingsolarpowerand9.06%

includingphotovoltaiccells.

Whenundertakingnewdevelopments,Figure25showsthatrenewableenergyisagain

lowonthelistofprioritieswithonly9.2%oftheINREVsampleincorporatinginitiativeson

thisfrontand21%lookingatwatersavingschemes.ThisisinlinewiththeGRESBsample

at9.70%forrenewableenergybutbelowthe34%forwatersavinginitiatives.

However,understandingtheimpactofsustainabilityinnewprojectsismuchhigheron

theINREVsamplesprioritieswith68.75%undertakingriskassessmentsforsustainability

(Figure26,page24).ThisisslightlyhigherthantheGRESBsampleat66.87%

FIGURE 24 / CONSTRUCTION PROJECTS THAT INCORPORATE ENERGY FROM RENEWABLE

RESOURCES

INREV SAMPLE

0% 2% 4% 6% 8% 10%

SOLAR

WIND

PHOTOVOLTAIC

GRESB SAMPLE

SOURCE: GRESB

RENEWABLE

ENERGIES

WATER SAVING

INITIATIVES

0% 10% 30%20% 40%

INREV SAMPLE

GRESB SAMPLE

FIGURE 25 / SUSTAINABILITY INITIATIVES USED IN CONSTRUCTION PROJECTS

SOURCE: GRESB


26/27

PAGE 24


PERCENTAGE OF

PORTFOLIO INCLUDED IN

SUSTAINABILITY RISK

ASSESSMENT

0% 66% 66.5%65.5% 68%67% 69%68.5%67.5%

INREV SAMPLE

GRESB SAMPLE

SOURCE: GRESB

FIGURE 26 / SUSTAINABILITY RISK ASSESSMENTS UNDERTAKEN IN CONSTRUCTION

PROJECTS


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Documents

INREV GRESB Sustainability Report 2012 1