Beyond the Essentials: Navigating GRESB, SFDR, CSRD, and More.
For some time now, we have seen increasing pressure on the real estate industry to prioritize sustainability. The disproportionate impact of emissions from the built environment has become a common criticism from major players within the industry. This has since translated into the introduction of various mandates and frameworks that mean sustainability is no longer an optional business process. With this is mind, it is critical to be familiar with the various sustainability reporting frameworks.
With net zero targets looming and sustainability requirements becoming more stringent, it is now essential for firms to embrace robust Environmental, Social, and Governance (ESG) reporting frameworks.
On the face of it, sustainability reporting can be overwhelming. Since curating a similar list in 2020, numerous frameworks and standards have evolved and emerged. It can be complicated, and time-consuming, to keep up.
This updated selection of frameworks aims to streamline the focus for organizations, highlighting those that are not just influential but essential for navigating the current and future demands of sustainability reporting.
Do you need help simplifying your sustainability reporting process and meeting these evolving demands? Discover how we can help your organization not only comply but excel in ESG-Berichterstattung, touch base with us hier.
Key Frameworks Covered:
- Globaler Nachhaltigkeitsbenchmark für Immobilien (GRESB)
- Offenlegungsverordnung für nachhaltige Finanzen (SFDR)
- EU-Richtlinie zur Nachhaltigkeitsberichterstattung von Unternehmen (CSRD)
- International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards & International Sustainability Standards Board (ISSB)
- US SEC Climate Disclosure Rule
- UK Sustainable Disclosure Regulation (UK SDR)
- Additional Voluntary Frameworks
- Global Reporting Initiative (GRI)
- Carbon Disclosure Project (CDP)
- Dow Jones Sustainability Indexes (DJSI) and S&P Global Corporate Sustainability Assessment (CSA)
Which ESG disclosure framework is right for you?
Without knowing the intricacies of each framework, it is impossible to understand which needs to be applied to your business.
From more general corporate reporting and climate-specific reporting, to aligning financial requirements with evolving sustainability disclosures, and real estate-focused benchmarking, there may be too much choice. We’ve outlined the top sustainability reporting frameworks below – used by our global client base – to help you and your business focus on what you need to.
There is no single ‘perfect’ ESG reporting framework. But, we hope our guide will get you as close as possible, based on your location, operations, stakeholder and investor requirements, and critically, your end goal.
Here is snapshot of the frameworks we will cover, download the full infographic hier.
Now let’s jump in:
1. Global Real Estate Sustainability Benchmark (GRESB)
GRESB is a leading, industry-driven organization assessing the ESG performance of real assets globally, including real estate portfolios. Founded in 2009, it has rapidly become a benchmark for environmental, social, and governance performance in the real estate sector. The framework evaluates both asset-level and entity-level practices, providing a comprehensive view that helps investors and stakeholders gauge the sustainability performance of their investments.
GRESB’s annual survey is akin to an industry barometer, offering insights that go beyond conventional financial metrics—factors increasingly critical to long-term investment returns and resilience in the real estate sector.
GRESB Reporting Metrics and Scoring System
Teilnehmer an GRESB assessments report on a variety of indicators such as energy consumption, greenhouse gas emissions, water usage, waste management, and social responsibility policies. The scoring system is designed to measure not just the data’s breadth but also the strategic approach towards sustainability and the implementation of practical actions to manage the asset’s ESG issues effectively.
GRESB scores are on a scale from 0 to 100, with higher scores indicating better ESG performance. The scores are divided into different components:
- Management Component: Evaluates leadership, policies, and organizational ESG management.
- Performance Component: Beurteilt measurable results in managing key ESG issues relative to the sector.
- Development Component: Focuses on sustainability considerations in property developments.
An average score typically falls around the mid-range (50s), but achieving a score above 70 is considered good and reflects a strong commitment to ESG principles. Scores in the upper quartile (above 75) indicate leadership status and are often pursued by organizations looking to set benchmarks in sustainability. Read our Blog for more intel on GRESB timeline.
Measurabl and GRESB
Als Globaler GRESB-Partner, Measurabl plays a pivotal role in guiding real estate companies through the GRESB-Berichterstattung maze. Our platform streamlines data collection, management, and reporting, making it simpler for firms to participate effectively in GRESB assessments.
Measurabl’s clients consistently outperform average industry scores, demonstrating significant improvements in their sustainability outcomes. For instance, in the 2023 GRESB assessment, our clients saw an average score increase of three points, with 55% improving their scores year-over-year, and an impressive 87% earning Green Stars.
This success is not just about higher scores but about driving real change. Through our tools and insights, clients are able to enhance their operational efficiencies, reduce environmental impacts, and improve stakeholder relations—key factors that elevate their market standing and appeal to investors.
Are you ready to elevate your GRESB performance and drive real sustainability change within your organization? Kontaktieren Sie uns to learn how we can help you achieve and surpass your sustainability goals.
Who Reports | Key Metrics Reported | Berichtszeitraum | Region | Ziel |
|---|---|---|---|---|
Real estate companies (asset managers, investors, developers)
| Energy, GHG emissions, water, waste, social indicators
| Annual
April 1 – July 1 | Global
| Assess sustainability performance and benchmark against peers
|
2. EU Sustainable Finance Disclosure Regulation (SFDR)
Die Europäische Union Offenlegungsverordnung für nachhaltige Finanzen (SFDR) is a driver of transparency and responsibility in the landscape of sustainable finance. SFDR, designed to combat greenwashing and provide a robust framework for sustainable investments, has undoubtedly made a significant impact. This framework differs from the others in this list, as it is a mandatory reporting framework. All financial institutions operating in the EU are subject to reporting under the SFDR. However, adjustments are needed to accommodate the diverse nature of real estate investments.
- SFDR challenges financial institutions to disclose their Environmental, Social, and Governance (ESG) practices, aiming to ensure transparency and consistency. While SFDR serves as a welcome framework against greenwashing, its standardized approach may not perfectly align with the complexities of real estate investments. This divergence refers to the lack of support for transition strategies employed to decarbonise a building portfolio, distorting investment needed for real carbon reduction.
Measurabl offers expertise in navigating the intersection of SFDR requirements and the unique challenges of real estate investments. By providing customized solutions, Measurabl bridges the gap between SFDR’s framework and real estate investment criteria.
Despite challenges, SFDR stands as a promising North Star, guiding investors towards responsible and sustainable investments. Its impact extends beyond European borders, catalyzing a global shift towards responsible finance. However, for real estate investments operating on extended horizons, compliance with SFDR can be challenging.
As we strive for a greener future, the integration between SFDR and Measurabl offers investors regulatory guidance and tailored solutions. As we strive for a greener future, the integration between SFDR and Measurabl offers investors regulatory guidance and tailored solutions. If you need support, reach out to one of our sustainability reporting experts and we will contact you right away.
Who Reports | Key Metrics Reported | Berichtszeitraum | Region | Ziel |
|---|---|---|---|---|
Financial market participants, financial advisers
| Principal Adverse Impacts (PAIs) on sustainability factors, sustainability risks, promotion of environmental or social characteristics, and sustainable investment objectives
| Continuous (regular updates required)
| Applies to any global fund that holds European investments and markets those investments to the European market. Meaning that you can have American investment funds that fall under the scope of SFDR.
| Enhance transparency in the market for sustainable investment products and protect against greenwashing
|
3. EU Corporate Sustainability Reporting Directive (CSRD)
Der CSRD mandates sustainability reporting for European companies, including the real estate sector. It aims to enhance corporate transparency and accountability, driving sustainable business practices across the EU. This, similar to the SFDR, is a mandatory reporting framework for large companies based in the EU or with an annual turnover of above €150 million in the EU.
Over 50,000 organizations of all sizes are now required to consider the Directive since it took effect in January 2024. The overarching goal of the CSRD is to make corporate sustainability reporting more common, standards-based, and closer to financial accounting and reporting.
The directive is intended to provide insight into a company’s sustainability impacts, risks and opportunities, including its sustainability strategy, targets and progress, and implications for products and services.
The earliest reporting deadline is expected to be early 2025, which once seemed distant, but is fast approaching.
Measurabl has been working with its clients since the CSRD was proposed to conduct a materiality assessment, set ambitious ESG targets, implement ESG strategies, and maximize transparency and auditability. Don’t be the one left behind!
Who Reports | Key Metrics Reported | Berichtszeitraum | Region | Ziel |
|---|---|---|---|---|
EU companies, large companies that are public interest entities (PIEs)
| ESG factors, climate change impact, board diversity, supply chain due diligence, others
| Jahr
| Europäische Union
| Ensure consistency and comparability of sustainability information provided by companies
|
4. International Financial Reporting Standards (IFRS) S1 and S2 Sustainability Disclosure Standards: International Sustainability Standards Board (ISSB)
In response to the growing demand from investors and other stakeholders for more transparent and accountable sustainability practices, the IFRS launched the ISSB in 2022. The ISSB introduced two pivotal standards, S1 and S2, in June 2023, which are designed to integrate sustainability reporting into the financial statements of companies. This integration helps bridge the gap between ESG performance and financial performance, ensuring that sustainability becomes an integral part of corporate financial discourse.
The Importance of S1 and S2
- S1 (General Sustainability-Related Disclosures): IFRS S1 sets a global baseline for sustainability disclosures, requiring companies to report on a wide range of sustainability issues. This standard ensures that all financial market participants have access to consistent and comparable data on corporate sustainability efforts, facilitating global benchmarking.
- S2 (Climate-Related Disclosures): Aligned with the TCFD, IFRS S2 focuses specifically on climate-related information. This standard requires companies to disclose the impact of climate-related risks and opportunities on their business, promoting detailed transparency and helping stakeholders make informed decisions.
Strategische Vorteile
Vertrauen der Anleger
By standardizing how ESG metrics are reported, S1 and S2 enhance investor confidence. Investors can now assess ESG metrics with the same rigor they apply to traditional financial metrics, enabling more informed decision-making.
Global Benchmarking and Strategic Alignment:
These standards provide a common language for sustainability reporting across different jurisdictions, allowing companies worldwide to be assessed on a level playing field. They align a company’s strategic focus with long-term value creation, investor interests, and global sustainability goals.
Vorbereitung auf zukünftige Regelungen
Early adoption of these standards positions companies as leaders in sustainability, ready to meet future regulations and exceed stakeholder expectations.
Sustainability Reporting Frameworks and Measurabl’s Role in Streamlining Data Management
As a platform that specializes in streamlining the data management and reporting process for ESG metrics, Measurabl supports companies in adapting to these new standards. With features designed to tackle the specifics of S1 and S2 reporting. While directed to Capital Markets, all businesses should be aware of new waves of sustainability standardization in this way. Measurabl’s advisory services team can support any questions on this front, erreichen Sie uns hier.
Standard | Who Reports | Key Metrics Reported | Berichtszeitraum | Region | Ziel |
|---|---|---|---|---|---|
IFRS S1
| Any company of any size, public or private, can report using the ISSB standards
| General sustainability-related disclosures
| Jahr
| Global
| To set a global baseline of general sustainability-related disclosures for the capital markets
|
IFRS S2
| Companies required to provide sustainability information to investors
| Climate-related disclosures aligned with TCFD
| Jahr
| Global
| To provide detailed guidance on climate-related disclosures and ensure transparency and accountability in reporting
|
5. The U.S. SEC Climate Disclosure Rule: An Overview Amid Legal Challenges
SEC Climate Disclosure Rule Current Status |
|---|
Recently, the SEC’s climate disclosure rule has encountered legal challenges that have led to a temporary pause in its enforcement.
|
The U.S. Securities and Exchange Commission (SEC) has introduced a rule mandating SEC-registered domestic and foreign companies to disclose climate-related information within their filing documents, such as registration statements and periodic reports, including the annual 10-K reports. This rule is designed to enhance transparency in how climate change could potentially impact business operations, providing investors with reliable data to make informed decisions. The disclosures required under this rule encompass a range of elements:
- Climate-Related Risks: Companies must detail the actual or potential material impacts of climate-related risks on their strategy, business model, and outlook.
- Governance Practices: Information about governance practices related to climate-related risks and the associated risk management processes must be provided.
- Emissions Reporting: Material Scope 1 and Scope 2 greenhouse gas emissions need to be disclosed. Accelerated filers are required to provide an assurance report at the limited assurance level, with large accelerated filers transitioning to a reasonable assurance level after a specified period. Smaller and emerging growth companies are exempt from this requirement.
- Finanzkennzahlen: Climate-related financial statement metrics and related disclosures must be included in a note to audited financial statements.
- Mitigation and Adaptation Activities: Companies should also disclose information about their efforts to mitigate or adapt to material climate-related risks, including any targets and goals, as well as the use of transition plans or scenario analyses if applicable.
Who Reports | Key Metrics Reported | Berichtszeitraum | Region | Ziel |
|---|---|---|---|---|
SEC-registered public companies
| Climate-related risks, greenhouse gas emissions (Scope 1 and Scope 2), climate-related financial statement metrics, and progress towards climate-related goals
| Jahr
| USA
| Enhance and standardize public companies’ disclosures regarding climate-related risks and impacts, providing investors with consistent, comparable, and reliable information
|
Exploring Additional Sustainability Reporting Frameworks: Enhancing Transparency and Performance
In addition to the core sustainability frameworks shaping the global real estate and finance sectors, several other frameworks play a pivotal role in driving corporate responsibility and environmental stewardship. These frameworks, including the UK SDR, Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP), and the Dow Jones Sustainability Indexes (DJSI) coupled with the S&P Global Corporate Sustainability Assessment (CSA), offer businesses additional avenues to showcase their commitment to sustainability.
UK Sustainability Disclosure Requirements (UK SDR)
The UK’s Financial Conduct Authority (FCA) has made a significant move with the introduction of the UK Sustainability Disclosure Requirements (UK SDR) in January 2024. This regulation marks a critical step forward in enhancing the transparency and accountability of sustainable investments within the UK.
The UK SDR sets out 4 new sustainability labels, making it easier for consumers to understand the sustainability objectives of investment products. This initiative aims to provide clear, reliable information and prevent misleading claims about the sustainability of these products.
Distinguishing itself from the EU’s SFDR, the UK SDR offers a tailored approach with its unique labels and detailed disclosure requirements, emphasizing the UK market’s specific needs. This regulation showcases the UK’s commitment to leading in sustainable finance, ensuring that investments are not only green in name but in action and impact.
This additional insight into the UK SDR highlights the evolving landscape of sustainability regulations, emphasizing the importance of adaptability and informed decision-making in the rapidly growing field of sustainable finance.
Global Reporting Initiative (GRI)
The GRI framework is a cornerstone of corporate social responsibility, providing a comprehensive approach to reporting across all ESG dimensions. Recognized as the official standard of the UN Global Compact, GRI’s detailed focus on social and governance issues sets it apart, promoting a balanced view of sustainability. Its adoption enhances transparency and strengthens stakeholder engagement, pivotal for companies committed to ethical and responsible business practices. Measurabl’s platform offers specialized support for companies navigating GRI reporting, ensuring that their disclosures reflect their sustainability achievements accurately.
Carbon Disclosure Project (CDP)
Der CDP stands out for its specific emphasis on environmental transparency, particularly around climate change, emissions, and water security. By facilitating detailed disclosures, the CDP enables companies to demonstrate their climate resilience and leadership, appealing to investors and stakeholders focused on environmental sustainability. Measurabl simplifies the CDP reporting process, automating the calculation of energy use and emissions, thereby helping businesses to communicate their environmental initiatives effectively and transparently.
Dow Jones Sustainability Indexes (DJSI) and S&P Global Corporate Sustainability Assessment (CSA)
Recognized globally, the DJSI represents the gold standard in ESG benchmarking for publicly listed companies. It offers a comprehensive evaluation of sustainability performance, influencing investment and corporate decisions. The CSA’s annual methodology updates ensure that the assessment remains relevant and aligned with current ESG priorities. Participation in the DJSI and CSA demonstrates a company’s dedication to sustainability excellence and long-term value creation. Through Measurabl, firms can accurately track and report their ESG data, positioning themselves for inclusion in these prestigious indices.
Unser Ansatz | Who Reports | Key Metrics Reported | Berichtszeitraum | Region | Ziel |
|---|---|---|---|---|---|
UK Sustainability Disclosure Requirements (UK SDR)
| UK companies, banks, insurers, and asset managers
| ESG impacts, including climate change, waste and resource use, social factors, and governance structures.
| Jahr
| Großbritannien | Improve transparency around companies’ sustainability practices and impacts, guiding investment towards sustainable activities and contributing to the UK’s green finance strategy
|
Global Reporting Initiative (GRI)
| Alle Organisationen
| Comprehensive ESG metrics across economic, environmental, and social domains
| Jahr
| Global
| Promote transparency and accountability in sustainability reporting, providing a balanced approach to ESG.
|
Carbon Disclosure Project (CDP)
| Companies, cities, states, and regions
| Climate change data, GHG emissions, water security, forest risks
| Jahr
| Global
| Encourage environmental transparency and action towards a sustainable economy by measuring and understanding their environmental impacts.
|
Dow Jones Sustainability Indexes (DJSI) & S&P Global Corporate Sustainability Assessment (CSA)
| Publicly listed companies
| ESG performance in terms of economic, environmental, and social criteria
| Annually for CSA, varies for DJSI inclusion
| Global
| Assess and rank companies based on their sustainability performance, highlighting leaders in each industry sector.
|
Durch Hebelwirkung Measurabl’s expertise and technology, companies can navigate these complex frameworks more efficiently, ensuring that their sustainability efforts are recognized and rewarded in the marketplace.
Embracing both mandatory and voluntary sustainability reporting frameworks signifies a company’s commitment to a sustainable future. Measurabl remains at the forefront, guiding businesses through this evolving landscape, enabling them to achieve transparency, compliance, and excellence in their sustainability initiatives.
Einnahme Measurabl steps to sustainable success
We have finally arrived at a point where it is impossible for the real estate industry to avoid accountability. Companies who seek to enhance their ESG performance and thereby optimize financial performance must act now. Standards and frameworks are set and will continue to evolve. Incorporating Measurabl’s technology and platform, also means incorporating our guidance and extensive knowledge.
Real estate organizations can attempt to navigate the complexities of sustainability reporting, but expert support makes this whole process much einfacher. From GRESB reporting to comprehensive ESG disclosure, Measurabl empowers companies to drive sustainable growth and create long-term financial value.