What is ESG reporting?
ESG reporting refers to the disclosure of Environmental, Social and Governance practices related to real estate activities. ESG reporting may be voluntary or mandated by government or other institution regulations or guidelines. ESG reporting in the real estate industry includes information on:
- Environment: Energy efficiency, CO₂ emissions, water consumption, waste management, use of renewable energy sources and sustainability of buildings.
- Social: Working conditions, diversity and inclusion, workplace health and safety, community involvement, and social impact on the surrounding environment.
- Governance: Corporate governance, ethical standards, information disclosure, internal controls, and risk management.
What is ESG scoring?
ESG scoring, or ESG rating, on the other hand, refers to the assessment of a real estate portfolio's ESG performance by an independent assessment agency that uses the company's own internal analyses or the company's own analytical procedures. The systematic analysis allows to evaluate ESG data and determine how well a property or real estate portfolio performs on ESG factors. The criteria used can vary depending on the scoring method, but basically include aspects such as reducing environmental impact, respecting human rights and ensuring good corporate governance. The scoring method evaluates the company against these criteria and assigns a rating or score, often referred to as an ESG rating. For example, data from ESG reporting can be used for scoring, as this already maps information about the ESG performance of a property.
The most important ESG reportings and scorings
GRESB: Global Real Estate Sustainability Benchmark
This benchmark assesses the sustainability performance of real estate portfolios and investments. The GRESB assessment consists of a survey that real estate companies and investors can fill out to report on their ESG performance.
The results of the survey are then used to generate a score for each participant. This score is used to evaluate the sustainability performance in comparison to other companies.
ECORE: ESG Circle of Real Estate
ECORE is an initiative for ESG compliance in real estate portfolios whose members have developed a scoring standard to make sustainability in real estate portfolios transparent, measurable and comparable. The scoring serves as a basis for continuous optimization toward CO₂ neutrality.
