Australia sets new record as world-leader in real estate sustainability rankings

10 September 2019

Australian property companies have improved their sustainability performance and increased their lead globally, while maintaining their ranking as the best in the world in the internationally recognised 2019 GRESB Real Estate Assessment results for the ninth year running.

GRESB is the global benchmark for environmental, social and governance (ESG) performance of real assets, defining and measuring standards for sustainability performance.

In 2019, GRESB assessed a record 1,005 property companies, REITs, funds and developers, comprising more than 100,000 assets worth in excess of AUD $6 trillion.

Australia set a new record, achieving the highest score of any country to date of 81, up from 76 in 2018, once again recording the best result of all countries. The global average also increased climbing to 72 from 68 in 2018.

Green Building Council of Australia (GBCA) CEO Davina Rooney said Australian companies were providing global leadership and continued to raise the sustainability bar.

“Australian property companies have set a new benchmark in this year’s GRESB results for outstanding sustainability performance,” Ms Rooney said.

“Having provided global leadership from their position at the top of the international rankings for nine years now, these companies have continued to innovate, to work even harder and to achieve even better results. 

“This helps drive improvements in performance not only here in Australia but right around the world and we commend their efforts, which are critically important to shaping our collective future.

“The voluntary, industry-led, tools and initiatives we deploy, in partnership with our members, like the Carbon Positive Road map and independent Green Star certification, support Australia’s property companies in their pursuit of new levels of sustainability excellence.

“That’s why we continue to evolve our rating tools, as we are currently doing through Green Star - Future Focus, to ensure they keep pace with the new heights industry is scaling, while also broadening accessibility so more companies can realise the benefits strong ESG performance delivers.

“GRESB’s standardised reporting and measurement are invaluable as they give companies, investors and governments a clear picture on progress as well as regional and global positions, helping to focus efforts going forward to meet our climate goals.”

In releasing the results, GRESB pointed to the overall strong improvements but cautioned that more is needed to meet key global goals and achieve the transition to a low-carbon, resilient and more sustainable future. 

GRESB noted that a slow-down in the rate of like-for-like GHG emissions, meaning it will not be enough to meet the 1.5-degree target set out by the Paris Climate Agreement.

“Even in the face of present challenges, we remain optimistic because of the breadth and depth of the sustainability ecosystem that has grown up since the inaugural Real Estate Assessment in 2009. Looking back, it has been a remarkable decade of movement building that has laid the groundwork for exponential progress to be made in 2020-2050,” says Roxana Isaiu, Director Real Estate at GRESB.

Scott Mosely, Managing Director of Lendlease Funds Management Australia said: “GRESB provides Lendlease and our investors with an independent assessment of sustainability performance as we track emerging environmental, social and governance trends as part of our investment strategies. For example, human health and wellness, as well as climate change resilience, are growing trends now being tracked by GRESB.” 

“For more than a decade our portfolios have integrated sustainability into their strategies and investors are increasingly looking to align their investment strategies with good social and environmental outcomes. Tenants are actively seeking out workplaces that are aligned with their sustainability credentials, which in turn helps them attract and retain the best people.”

Rod Fehring, CEO of Frasers Property Australia, said “This is our eighth year of year-on-year improvement so there’s a lot to be proud of. There is also more work to be done. 

“GRESB, underpinned by Green Star, provides an appropriately rigorous framework for continuous improvement in the design, delivery and operation of the properties we create, on our way to a decarbonised built environment and socially, environmentally and economically resilient communities.”

Dexus CEO, Darren Steinberg said: “It’s rewarding to be recognised for our continued leadership in sustainability, reinforcing our commitment to deliver world-class, sustainable properties.

“Our strong sustainability performance is a result of the effective integration of ESG factors across our business operations to manage risk and generate long-term value for Dexus and our third party capital partners.”

David Yates, Executive General Manager, Sustainability said: “We have consistently delivered on what we set out to achieve when it comes to our sustainability targets and have already progressed our 2030 net zero emissions target.

“Our ambitious 2030 target, combined with our continued focus on improving energy efficiency and enhancing our customers’ experience, all contributed to our GRESB results this year.

“Our perfect scores achieved across social and governance factors demonstrate that we are focused on creating long-term value for our people, customers and communities, supported by an inclusive workplace culture.”

Mark Steinert, Managing Director and CEO at Stockland, said: “We are proud to have been awarded Global Sector Leader status for the fourth year in a row, demonstrating our continued leadership in sustainability.

“We have 45 Green Star ratings across our Commercial Property portfolio and 27 Green Star Residential and Retirement Living assets.

“For over a decade Stockland has been committed to assessing and managing the physical and transition risks related to climate change for our assets, communities and customers. We are proud this has been recognised by the global benchmark GRESB.

GRESB’s global leaders for Australia are:

Overall Global Sector Leaders (Achieved highest score for its sector)

·       Office – Private: Australian Prime Property Fund Commercial, Lendlease

·       Retail – Private: Australian Prime Property Fund Retail, Lendlease

·       Diversified - Office/Retail – Private: Dexus Wholesale Property Fund, Dexus Property Group

·       Developer – Residential: Frasers Property Australia Pty Ltd - Development Assets, Frasers Property Australia Pty Ltd

·       Developer – Industrial - Goodman Group (GMG), Goodman Group

Global Sector Leaders (Achieved highest score for the combination of nature of ownership and sector)

·       Office – Listed: Dexus Office Trust, Dexus Property Group

·       Industrial – Listed: Frasers Logistics & Industrial Trust, Frasers Logistics & Industrial Asset Management Pte. Ltd.

·       Diversified - Office/Industrial – Private: Frasers Property Australia Pty Ltd - Investment Properties, Frasers Property Australia Pty Ltd

·       Diversified - Office/Retail – Listed: Stockland

GBCA member Sekisui House Reit, Inc., Sekisui House Asset Management, Ltd. also achieved Asian Regional Sector Leader status in Diversified - Office/Residential. 

In addition to their Overall Global Sector Leader status for Developer – Industrial, Goodman Group also achieved Regional Sector Leader status in Asia for Industrial – Private, Goodman Japan Core Partnership (GJCP).