GRESB 2024 Results: our AP Practitioner’s insight

We are thrilled to announce another year of success for our clients in the 2024 GRESB Real Estate Assessment! As a GRESB Real Estate Partner and a boutique technical ESG consultancy, we congratulate all our clients for their efforts during a year of considerable changes to the GRESB methodology and increasing burden on wider ESG reporting.

Our team, which includes the world’s first-ever GRESB Accredited Professional (AP), has worked closely with our clients to ensure their sustainability performance continues to evolve and improve. This year’s results are a testament to that effort.

Key highlights from our clients’ 2024 GRESB Results:

• Number of entities achieving 5-star ratings: 2 in the Standing Investments Benchmark, 3 in the Development Benchmark
• Number of entities expected to achieve GLOBAL LEADER status: 2
• Average first time time score of new participants: 81 out of 100 (GRESB average was 62 in 2024)
• Average year-on-year improvement across all clients: 43% of entities improved their positioning in their predetermined peer group
• Percentage of clients achieving the GRESB Green Star: 93%

What is GRESB?

Formerly known as the Global Real Estate Sustainability Benchmark, GRESB is the leading ESG benchmark for real estate and infrastructure investments, assessing sustainability performance based on a broad set of environmental, social, and governance criteria. 

Significant changes to the 2024 GRESB Standard

The 2024 GRESB Real Estate Standard reflects several key updates made by the GRESB Foundation to raise expectations for sustainability and improve the granularity of their benchmarks. These changes were designed to align more closely with key stakeholder priorities, placing greater emphasis on measurable, asset-level performance and include:

• enhanced reporting on physical climate risks, resilience, and ESG integration;
• new building certification criteria with more weight on recent certifications; and
• asset-level performance benchmarking at the country level.

These changes mean that comparing year-on-year performance requires understanding not just changes in performance but also updates to the assessment itself. Investors and participants are encouraged to explore beyond top-line scores and engage with more detailed insights in their Benchmark Reports. 

Need support interpreting your 2024 GRESB Results?

If you need help to interpret your GRESB Results and to identify opportunities for improvement, our expert team is here to assist. We have prepared the blog article below to support our readers but don’t hesitate to contact us today at [email protected] for personalised guidance on how to maximise your sustainability impact and prepare for future GRESB assessments.

How to use your 2024 GRESB Results 

The 2024 GRESB Results are now available, and for many organisations, the focus often remains on the top-line scores. While GRESB is widely recognised as a leading ESG rating and reporting tool, the majority of participants fail to fully unlock the true value hidden within their results. Too often, GRESB is viewed simply as a way to demonstrate ESG performance to investors and stakeholders, with participants overlooking the more nuanced insights that the benchmark provides.

However, GRESB is much more than just a scorecard; it offers deep, peer-based benchmarking data that can help drive significant improvements in sustainability strategies. By focusing solely on the final score, participants risk missing out on critical opportunities to refine their ESG approach and align more closely with industry best practices.

At its core, GRESB provides valuable insights into how your entity’s sustainability performance compares to peers, identifies key areas for improvement, and offers asset-level data to inform strategic decisions. By diving deeper into these results, organisations can not only improve their GRESB scores over time but also enhance overall sustainability performance, minimise risk, and increase long-term value for investors.

1. Benchmarking and reporting

One of the primary benefits of GRESB is its role as a benchmarking tool that allows you to measure your sustainability performance against industry peers. By understanding how you compare with similar entities, both globally and within your region, you can gain invaluable context about your strengths and areas that need improvement.

It’s important to note, however, that due to the annual changes made to the GRESB assessment, absolute scores may not directly correlate to absolute improvements in ESG performance. Each year, GRESB revises its methodology and assessment criteria to reflect evolving sustainability priorities, as seen in the 2024 GRESB changes that introduced new country-level benchmarks and climate risk requirements. Because of these shifts, year-on-year score changes may be influenced as much by the assessment’s evolving structure as by your entity’s actual ESG performance.

To get the most consistent understanding of your progress, it’s crucial to focus on improvements within specific ESG categories and KPIs. By examining how your performance within certain environmental, social, or governance areas compares to previous years, you can track genuine advancements despite changes in the overall scoring framework.

Looking ahead, this focus on consistent ESG categories and KPIs will become even more critical. During the 2024 Global Results event, GRESB announced that 10 indicators will be removed from the assessment in 2025, marking another year of significant change in how the benchmark evaluates ESG performance. These upcoming changes underscore the importance of closely monitoring individual ESG metrics over time, rather than relying solely on top-line scores.

How to use this insight:

• Measure progress: Track how your performance has evolved within specific ESG aspects like energy efficiency, emissions reduction, or governance practices.
• Assess leadership potential: Identify areas where your sustainability practices outperform competitors, which can be a strategic advantage when communicating with investors and stakeholders.
• Focus on rankings: Don’t just look at your overall score—examine how your performance ranks within specific peer groups or regions for a deeper understanding of your position in the market.

2. Identification of areas for improvement

GRESB provides an invaluable tool for identifying areas where your sustainability performance may fall short of industry standards or where there is room for further enhancement. By delving into the assessment criteria and scores across different ESG aspects, you can uncover the specific areas that need more attention.

The 2024 GRESB assessment has aimed to “raise the bar” for ESG performance, particularly around asset-level data and physical climate risks. This means that more action may be required to keep pace with evolving industry standards, and the results offer a clear indication of where those efforts should be focused.

Understanding contextualised gaps

One of the most important aspects of interpreting your GRESB results is understanding the difference between your score and the maximum possible score, as well as the gap between your score and the average of the benchmark group. This helps in putting your performance into context and determining the priority areas for improvement.

For example, let’s say your score for the Energy category is 8/14. At first glance, this may appear to be a significant gap – 6 points away from the maximum score. However, if you compare this to the average score of your benchmark group, which is 6/14, you may realise that this is actually a strong performance within the context of your sector. Even though the gap may appear large, in relative terms, it shows that your energy strategy is relatively robust when compared to your peers.

This is why context is so important. Understanding how your scores measure up within your sector, region, or peer group allows you to prioritise improvements more effectively. If your scores are already above average in certain categories, you may choose to focus more on areas with larger gaps or underperformance compared to industry standards.

How to use this insight:

• Identify high-impact gaps: Focus on areas where your score lags behind both the maximum and the average. These are the categories where improvements will have the greatest impact.
• Contextualise your strengths: Don’t overlook areas where your score is already strong compared to peers. These may be strategic advantages, and improving them further may require more effort than it’s worth in terms of incremental improvement.
• Prioritise strategically: Balance the size of the gap with its strategic importance. If an area has a large gap but is less critical to your business or sustainability objectives, it may not need immediate attention compared to a smaller gap in a more material area.

GRESB isn’t just a scoring tool: it offers detailed insights into a wide range of ESG topics, including environmental performance, social responsibility, and governance practices. These insights are particularly important for understanding the materiality of various ESG factors and how they affect both your business and the broader real estate industry.

In 2024, GRESB introduced changes that placed greater emphasis on material ESG issues, such as climate risk, resilience, and building certifications. The results now provide a clearer picture of how these factors impact your overall score and where you can focus your efforts to align with industry best practices.

However, it’s important to recognise that GRESB’s value extends far beyond simply assigning a score. For each component within the GRESB framework (Management, Performance, and Development) participants are allocated to a Benchmark Group. These groups are formed based on key factors such as geography, property type, and investment style, allowing for a more meaningful comparison.

Using these Benchmark Groups, GRESB provides insights into specific ESG elements, irrespective of scoring. For example, take PO1 (Environmental Policy): a participant may achieve maximum points for having 6 environmental topics included in their policy, leading them to believe there’s no further room for improvement. However, the Benchmark Group Insights may reveal something different.

By using the detailed analysis in the GRESB report, participants can see what other entities within their Benchmark Group have included in their policies. Perhaps, while you have 6 environmental topics in your policy, you may discover that 75% of your peers have also included biodiversity in their policies, a topic you’ve yet to address. This insight would point to a key area of improvement, beyond just striving to increase your GRESB points.

This level of insight can be incredibly useful when conducting a materiality analysis for other sustainability reporting frameworks or improvement measures. Understanding what your peers are doing on specific ESG topics, irrespective of your score, provides actionable data that goes far beyond simple ranking.

How to use this insight:

• Engage in targeted improvements: Even if you achieve maximum points for a specific area, use Benchmark Group insights to identify other relevant topics that may be missing from your approach.
• Materiality analysis: The detailed breakdown of ESG topics can inform a broader materiality analysis, feeding into other sustainability reporting initiatives and helping you align with industry trends.
• Stay aligned with industry standards: Ensure your sustainability strategy reflects not only your current performance but also broader industry trends and priorities. Consider areas where your peers are excelling and where you may need to catch up to remain competitive.

4. Asset-level insights

A major enhancement introduced in the 2024 GRESB assessment is the introduction of country-level benchmarking for several key indicators, assessed at the asset level. This change allows for more tailored and nuanced comparisons, considering both the performance of your assets in relation to similar assets in the same geography and property type, as well as the national context.

This more granular approach is essential for organisations with assets across multiple countries. It allows you to assess how your assets are performing not only against industry peers, but also within their specific country context. This is particularly valuable for organisations that operate across diverse regions where local regulations, market conditions, and sustainability challenges vary.

For example, let’s say you have assets in both the UK and Italy. Your data coverage might be lower in Italy (e.g. 50%) than in the UK (e.g. 70%), which may lead you to consider prioritising improvements in Italy to boost coverage. However, by using your Benchmark Group Insights and country-level benchmarking results, you may find that the average data coverage for assets in Italy is 40%, while in the UK it is 80%. This means that, in fact, your Italian assets are performing better in comparison to their country average, even if they are behind the UK assets.

This added insight is one of the most significant successes of the 2024 GRESB methodology changes, allowing for a much more precise understanding of performance. It empowers organisations to avoid misinterpreting performance data based on broad, global comparisons and instead focus on prioritising improvements that align with the national or regional context.

REAL Benchmarks

GRESB has further refined this analysis with the introduction of the REAL Benchmarks tool, which assesses the performance of individual assets. This allows for even more granular performance tracking, enabling organisations to focus on asset-specific improvement opportunities. This tool is especially valuable for organisations that wish to pinpoint which assets are leading or lagging within their own portfolios, and how they compare to both national and international benchmarks.

More information about the REAL Benchmarks tool can be found here, providing further clarity on how it can support your asset-level performance analysis.

How to use this insight:

• Prioritise improvements based on context: Use country-level benchmarking to understand whether your assets are performing above or below average compared to peers in the same region.
• Avoid misinterpretation: Ensure that local conditions are considered when evaluating asset performance, avoiding overemphasis on global averages that may not accurately reflect national or regional priorities.
• Leverage the REAL Benchmarks tool: Use this tool to assess performance at the individual asset level, providing deeper insights into which specific assets need attention and where you’re excelling.

Our conclusions

GRESB results offer far more than just a ESG score/ranking and a reporting tool. By focusing on benchmarking, identifying areas of improvement, gaining industry insights, and examining asset-level performance, you can transform your GRESB results into a powerful tool for enhancing your sustainability strategy.

Understanding how your scores compare to peers, identifying the real gaps in performance, and exploring detailed industry insights will not only improve your sustainability practices but also position your organisation to lead in the evolving ESG landscape. Whether you’re aiming to improve asset performance, align with industry trends, or develop tailored sustainability strategies, GRESB provides the data needed to guide your decisions.