Canadian pension funds

Canadian pension funds look to GRESB guidance

Wednesday, September 11, 2019

Oxford Properties Group and Ivanhoé Cambridge have been benchmarked atop their North American peers in the 2019 GRESB Real Estate Assessment, which this year plotted the environmental, social and governance (ESG) performance of 1,005 companies, funds and REITs worldwide that collectively hold more than 100,000 assets worth in excess of USD $4.1 trillion. Global results released earlier this week identify the two companies — both real estate arms of Canadian pension funds — as regional sector leaders for their private retail and diversified office/retail portfolios.

“Oxford’s participation in GRESB helps us better understand and implement global sustainability best practices across our portfolio. It also helps us demonstrate our sustainability leadership to our customers and partners,” says Darryl Neate, director of sustainability at Oxford Properties.

“Our participation in GRESB over recent years has helped broaden our corporate social responsibility and accelerate the progress of our initiatives,” a statement from Ivanhoé Cambridge concurs. “GRESB is one of the key tools we use to build an in-depth understanding of the performance of our global portfolio of assets.”

That’s done through rigorous reporting and scoring in seven variously weighted categories: management; policy and disclosure; risk and opportunity assessment; environmental monitoring/management; performance indicators, including energy and water consumption and waste diversion; building certifications; and stakeholder engagement.

Sector leaders emerged from strong competitions, as GRESB administrators report just a 6.4-point differential between the highest and lowest scores for the top quintile of participants. This year’s global average score was 72 out of 100, with the North American average edging slightly higher to 72.1. That’s an improvement on both fronts — up from the 2018 global average of 68.4 and the North American average of 70.

Drilling down to performance indicators, greenhouse gas (GHG) emissions dropped last year, but with a lower rate of reduction than in 2018 — and deemed lagging the pace necessary to achieve the Paris Climate Agreement target. Energy consumption also increased by 0.2 per cent in 2019, following three consecutive years of decline. While Canadian participants have traditionally recorded lower energy intensity rates than their contemporaries in the United States, they are significantly outnumbered in the North American region.

A more detailed breakdown of Canadian performance and experiences will be presented in Toronto next week. For now, GRESB administrators are highlighting a 10-year trajectory that has taken ESG reporting into the mainstream of investment decision making and established GRESB as a standardized mechanism for gauging risk exposure and potential gains that flow from a rigorous ESG protocol.

“It’s a story that demonstrates how top-down demand for ESG transparency encourages a bottom-up response from managers that drives the spread of sustainability best practices around the world,” maintains Sander Paul van Tongeren, co-founder and managing director of GRESB.

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