The sustainability indices in the Real Estate sector

26/03/2021

The sustainability indices in the Real Estate sector

One thing we have learned about the current situation is the importance of creating healthy spaces. Every day, more and more enterprises promote people’s internal and external health and wellness. They are doing it through policies that have a positive repercussion in employee’s habits and behaviours and via actions that push forward healthy aspects.

An example of this commitment is the growth of socially responsible investments, also known as ESG. In Spain, sustainable funds have increased reaching the 45% of total investments. There’s proof that companies with ESG criteria obtain better results, are profitable and resilient. Therefore, ESG is a competitive advantage that is more necessary than never.

GRESB, a sustainability index

GRESB can be used to learn about a company’s environmental, social and government investments. This sustainability indicator was created in 2009. It is used as an evaluation and comparative method to value and measure the quality of infrastructures in relation with sustainability. Additionally, GRESB elaborates a ranking of funds and property businesses committed with the environment and has become a benchmark in the Real Estate market.

This index uses a methodology that consists in comparing the performance of different regions, investments, and types of properties. The GRESB Real Estate Score represents the management and compliance rate of ESG strategies and actions by businesses and funds in relation with the GRESB world. This scoring allows investors to gather information about the ESG performance in the Real Estate sector.

What dimensions does it evaluate? In opposition to other GRESB, it scores and ranks the company’s integral behaviour:

  • Asset’s environmental footprint: efficient actions and procedures to monitor and reduce environmental footprint.
  • Direct social impact: the entity’s impact in its interest groups and the direct effect of the different activities on society.
  • Sustainable governance: sustainable policy, procedures and focus from an organization and entity perspective.

According to Tomás Higuero, CEO of Aire Limpio, “the trend has just started, and COVID-19 has consolidated this movement. In fact, many Real Estate investment vehicles are emerging turning upside down the capital assets. On the other hand, he assures that “the use of ESG initiatives affects directly on reduction of financial and reputational investment risk. Nevertheless, it also contributes to improve the operative return of assets through a better distribution to its managers and investors”.

Benefits for users

One of the most valued aspects for employees when going back to offices is security and health. GRESB considers that buildings that have been designed following the health and wellness philosophy improve its occupant’s experience. These properties promote productivity and increase talent attraction and retention.

At Colonial we develop an ESG policy as one of our main goals. We focus on corporate growth and value creation for our shareholders. The ESG criteria are necessary to create a long-term strategy focused on quality, with low risk and an interesting return on investment. Our actions are structured in three areas: corporate, social, and environmental governance. Therefore, we are focusing our efforts in creating eco-efficient buildings with minimum environmental impact.

As a sign of the company’s commitment, we participate in these ESG indices and rankings. The results are a key tool to improve and promote the organization’s performance in this area.

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