Sydney, 10 September 2015 – Building owners globally are increasingly implementing comprehensive Environmental, Social, and Governance (ESG) programs, according to global real estate advisor CBRE.
The results of the 2015 GRESB Global Survey—spanning over 700 participants reporting on the sustainability performance of real estate portfolios—show there is a significant shift towards enhanced responsible property investment (RPI) performance with the majority of responding portfolios achieving GRESB Green Star status for the first time. Two key themes emerging are the widespread adoption of green leases, and attention being placed on health and well-being of building occupants.
Green Leases—The New Norm
According to GRESB, 60% of portfolios report some form of green lease clause in their standard contract. In Australia/NZ this figure is as high as 91%. Given tenants are responsible for up to half of a building’s total energy use and associated greenhouse gas emissions, effective green lease clauses can have a profound effect on a building’s overall performance.
In addition, there is a growing trend among large multinational occupiers to seek the inclusion of green clauses in leased portfolios to facilitate the achievement of corporate sustainability goals. This makes early adoption of green leases sound business sense for building owners, as explained by Justin Halewood, Head, Energy & Environment, Group CRES at Standard Chartered Bank:
“Green leases are one of the foundation stones for an ongoing program to reduce energy and water consumption across the Bank’s footprint. With an ever larger proportion of our portfolio being leased, collaboration with our landlords has become critical to success—green leases provide a platform for those joint efforts. In addition to driving greater uptake of green leases by helping us identify and acquire the most sustainable assets, CBRE are transforming our footprint from grey to green.”
Waking Up to Wellness
Rising up the corporate agenda is the increased attention being paid to the health and well-being of occupiers. According to GRESB, many health and safety plans and actions are in place within the commercial real estate sector, with employee health and safety checks in the last three years up by 11% year-on-year. Nearly all participants in the GRESB report have specific employee policies related to health and safety—95% of all reporting entities have such policies in place. Of all survey participants, 88% actively monitor specific aspects of employee health, safety and well-being revealing that companies are increasingly prioritizing employee needs when making business and real estate decisions.
Australia and New Zealand’s GRESB Highlights
The average GRESB score in all Australia and NZ entities is 69, against a global average of 56. This is a further increase from 2014 of 13%, maintaining the region’s top position in terms of its GRESB score, outperforming all other regions by a large margin.
CBRE Associate Director, Sustainability, Emma McMahon said; “There is an ongoing push from investors in the region for regulation and transparency around asset energy efficiency. Australia’s CBD Program mandates the disclosure of energy efficiency information for commercial office space, and has resulted in a strong uptake of building energy ratings with 87% of Australia/NZ participants have an energy rating. Green star and NABERS rated buildings continue to financially outperform non-rated buildings, which proves that buildings ratings not only provide the market access to consistent, verified and meaningful environmental information, but that sustainable buildings are more attractive to institutional capital.”
Ms McMahon noted that while the focus on optimisation and reduction of energy and water in the Pacific region had remained consistent over previous years, the amount of renewable energy generated by the Australian commercial property market remained very low when compared to the other regions. However, Ms McMahon said there was a significant uptake (approximately 35%) in onsite renewable energy generation in 2015 when compared to 2014.
For Australian/international news or global stories, follow us on Twitter. CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com. About CBRE Group, Inc.
