Australia and New Zealand continue to lead the world in sustainable real estate practices, according to the latest GRESB report.
GRESB, the global real estate sustainability benchmark, assessed 707 property companies and private equity real estate funds globally, representing 61,000 assets and USD $2.3 trillion in asset value.
The Australia and New Zealand GRESB score of 69 was significantly higher than the global average of 56, a result welcomed by the Green Building Council of Australia (GBCA).
“Investors, governments and consumers are demanding more transparency and accountability – and clearly Australian property and construction companies are responding to this demand by making sustainability front-and-centre of all that they do,” says the GBCA’s Chief Executive Officer, Romilly Madew.
According to GRESB, 93 per cent of our region’s companies and funds disclose their sustainability performance annually, compared with 85 per cent globally.
Across Australia and New Zealand, more than half (54%) of the companies and funds obtained green building certificates like Green Star and 87 per cent have an energy rating, compared with 71 per cent globally.
Ninety one per cent of participants have introduced best practice leases that include sustainability-specific clauses, compared with 60 per cent globally.
The GRESB report also finds that disclosure, building ratings and best practice lease clauses also affect real building performance. Despite many years of focus on energy and water efficiency, energy consumption dropped by 1.9 per cent over the reporting period, greenhouse gas emissions fell by 4.3 per cent and water consumption by 2.3 per cent. However, the amount of renewable energy generated by Australian commercial property remains very low.
Three Australian companies were identified as regional sector leaders: Stockland for diversified property, Lendlease for retail and office developments, and The GPT Group for industrial buildings. Lendlease was also named the ‘global sector leader’, coming top of the table of the 707 property companies surveyed.
“Once again, Lendlease is recognised for its steadfast commitment to sustainability. With more Green Star ‘firsts’ than any other organisation in Australia, including everything from the first constructed office to the first public library, it’s no surprise that Lendlease is the global leader in sustainability,” Ms Madew says.
“Stockland deserves applause for achieving the most Green Star ratings for retail centres, for its work on a range of Green Star – Communities projects and for launching Australia’s first green bond. And GPT Group has challenged the industry to upgrade its existing buildings by achieving the first Green Star rating for a building’s operational performance at 800 Bourke Street in Melbourne.
“Australia’s property and construction industry has moved well beyond regulation. Increasingly, both small and large companies are reacting to the signals set by the market leaders – and understand if they want to be competitive, they must embrace sustainable business practices,” Ms Madew adds.
GRESB’s Head of Asia Pacific, Ruben Langbroek, says the use of green building certification programs, such as Green Star, and energy ratings, such as the National Australian Built Environment Rating System (NABERS) have become standard practice in the Australian property market.
In March, the GBCA announced a partnership with GRESB to advance reporting on environmental, social and economic performance in Australia’s real estate sector.
“Superannuation funds and large foreign institutional investors are increasingly engaging with their Australian and New Zealand investment managers to evaluate ESG performance, and are demanding reliable data on energy efficiency and sustainability to help guide their decision-making,” Mr Langbroek says.
“These GRESB results once again confirm that the Australian property and construction industry is heading in the right direction. What was once seen as a ‘back-of-house’ responsibility for building managers to reduce costs is now understood by the industry as an opportunity to create brand value, encourage innovation, create new revenue streams, secure stakeholder confidence and, above all, mitigate risk,” Ms Madew concludes.