15 May 2017
As the property industry’s green leaders gear up for another year of GRESB reporting, the Green Building Council of Australia (GBCA) has surpassed 700 certifications and registrations under the Green Star – Performance rating tool.
GRESB, the Global Real Estate Sustainability Benchmark, assesses the environmental, social and governance performance of property funds globally.
The Green Star – Performance rating tool was launched in October 2013 at the now 4 Star Green Star-certified Sydney Opera House.
Following this, we worked with GRESB to create a Green Star – Performance portfolio pathway for the industry. This has encouraged the industry to embrace both GRESB and Green Star.
In 2016, GRESB surveyed a record 759 real estate companies and funds, representing more than 66,000 assets and AUD $3.7 trillion in gross asset value.
Australia was applauded for its “unbroken streak of global leadership” with a world-leading average score of 74, compared with the global average of 60.
Investors are increasingly turning to GRESB ratings for assurance that their asset is being well managed.
And, as assets with Green Star ratings are rewarded within GRESB, the property industry is accelerating its commitment to transparency, accountability and ongoing sustainable operations.
Charter Hall recently registered 179 projects to achieve Green Star – Performance ratings, and will have the largest Green Star-rated portfolio in Australia.
Managing Director and Group CEO, David Harrison says this portfolio rating is important to Charter Hall, as it “provides a consistent cross-sector benchmark to enhance our buildings’ operational performance and deliver our tenant customers a consistent high-performing product”.
Green Star – Performance assesses the operational performance of buildings against nine environmental impact categories: management, indoor environment quality, energy, transport, water, materials, land use and ecology, emissions and innovation.
Rating the entire portfolio of assets will help Charter Hall to “set targets” as the company continues to “enhance and invest in high-performing buildings that meet the expectations of our investor and tenant customers,” David adds.
Asset owners are using the rating tool to assess the performance of assets well beyond commercial offices – and 45 per cent of ratings are now for retail properties.
Vicinity Centres used Green Star – Performance last year to achieve 92 ratings, representing 100 per cent of Vicinity’s portfolio. Melissa Schulz, General Manager Sustainability, says the process helped Vicinity Centres to “benchmark individual centre performance following the consolidation of our asset portfolio”.
“We found it really helpful in highlighting existing areas of best practice, which we are now rolling out across the broader portfolio to drive performance improvements,” Melissa adds.
Vicinity Centres plans to use the rating tool to “measure changes in our performance in the future”.
Melissa says the broad, holistic definition of sustainability within Green Star is “additionally appealing” and “aligns nicely with Vicinity’s own sustainability agenda”.
Dexus Property Group has 76 Green Star – Performance ratings, and Paul Wall, Group Sustainability and Operations Manager, says the rating tool has been a conversation starter with customers and helped his team collect data for “an asset class that has historically been difficult to obtain”.
“Having credible metrics to start the discussion with our industrial tenants allows us to open up a broader discussion about energy efficiency and renewable energy which can provide benefits including cost reductions and energy security,” Paul explains.
Using the baseline data and rating as a starting point, Paul says Dexus talks to tenants about the range of funding initiatives that can reduce the capital cost of an energy saving initiative.
“We have a strong customer focus and leverage our experience and range of products to create additional value and help our customers achieve more.”
Paolo Bevilacqua, Frasers Property Australia’s General Manager Sustainability, agrees with Paul’s assessment.
“The industrial sector in particular has lacked a credible, rigorous third party certification scheme for some time and Green Star – Performance has well and truly filled this gap,” he says.
Frasers Property continues to grow, having held the honour of the first portfolio rating in Australia, and now has 70 Green Star – Performance ratings under its belt.
The rating tool has been an “instrumental part” of the company’s sustainability strategy and GRESB performance, Paolo says.
In 2016, Frasers Property Australia’s GRESB performance improved for the fourth year running – and Frasers Property topped the table of all diversified office/industrial/non-listed funds.
“Green Star – Performance has been a key contributor to our continual improvement in GRESB over recent years,” Paolo explains.
“The rating tool has allowed us to benchmark our properties at an asset and portfolio level, enabling more informed decisions as we develop asset plans and sustainability strategies to improve our performance,” Paolo says.
Investors, tenants and owners increasingly regard superior sustainability as an indicator of quality. And that is driving more companies to seek Green Star ratings as they demonstrate their commitment to green, not greenwash.
The GRESB reporting period is open until 1 July 2017.