KBS has consistently worked over the years to prove that going green is not only possible — it’s just good business.
Energy Star, LEED certification and the UL Verified Healthy Building Program have played an integral role in our company portfolios. These various certifications have been among the many ways KBS has demonstrated a steadfast, continuing commitment to ESG transparency and improved performance.
A designation that’s not as well known in the U.S. is “GRESB.” Its mission is to “collect, validate, score, and independently benchmark ESG data to provide business intelligence, engagement tools, and regulatory reporting solutions for investors, asset managers, and the wider industry.” GRESB scores CRE and infrastructure companies based on how well they comply with industry best practices for ESG sustainability.
This is KBS’ first year participating in the GRESB assessment. With plans to participate annually, the company is demonstrating its continuing commitment to ESG transparency and improved performance according to Marc DeLuca, CEO and Eastern regional president of KBS.
“KBS views sustainability among its top values as a real estate owner and operator. The ranking from GRESB validates our initiatives over the past several years,” says DeLuca. “The firm is honored to be recognized among some of the world’s largest real estate companies.”
In 2023, KBS received a Green Star designation — a recognition for sustainability reserved solely for Real Estate Assessment participants. Unlike the GRESB Rating, which is a relative one, the Green Star accolade is based on absolute performance.
The reality is that building construction and operations are responsible for 37% of global carbon emissions and 34% of energy demand according to the United Nations Environment Programme. What’s more, they’re a significant contributor to pollution, resource depletion and a loss of biodiversity. Therefore, it’s become important for CRE companies to try to alleviate stress on the global environment.
Pursuing independent, third-party auditors and audits, such as GRESB, may be helpful.
Each year, GRESB assesses the ESG performance of participating assets worldwide, providing clarity and insights to financial markets on complex sustainability topics. There are three components to the ESG assessment: Management, Performance and Development. Management looks at strategy, leadership, policies, risk management and stakeholder engagement. Performance evaluates ESG benchmarks from asset-level data. Development focuses on the design, construction and renovation of buildings as well as how ESG is integrated into operational processes.
GRESB standards are reaching deep saturation globally. Real Asset Advisor reported that in 2023, its assessments “grew to include 2,084 real estate portfolios, 172 infrastructure funds and 687 assets, collectively representing $8.8 trillion in gross asset value (GAV).”
Organizations submitting to GRESB provide asset-level data regarding ESG indicators. GRESB returns detailed business intelligence of the organizations’ performance as compared to their peers. It also provides suggested actions for improving sustainability performance and ways to better communicate that status with stakeholders.
According to GRESB, 98% of investors use ESG data in their investment process. Investors and global stakeholders have begun to place a premium on strong ESG performance.
According to the results of a nine-year study conducted by Kroll, a risk and financial advisory firm, ESG leaders have higher investor returns than their lagging counterparts. This makes reliable ESG data even more imperative so that everyone in the industry can get a comprehensive appraisal of an organization’s current and future financial risks and opportunities.
To meet an investor’s request for ESG data, it may be in the best interest for CRE and infrastructure companies to understand GRESB scorings, rankings and assessments and get the process started as quickly as possible. It requires a lot of time and resources to participate.
“The GRESB assessment is a big undertaking to complete, but it shows KBS’ strong commitment to responsible corporate leadership and sustainability to its stakeholders,” says Apaulo Malloy, ESG manager for KBS. “To navigate the process successfully, you need buy-in from all departments within your company. Then company data is gathered and organized, identifying what’s relevant to the assessment, including energy consumption, greenhouse gas emissions, water usage and certifications. Finally, an online GRESB assessment questionnaire is completed.”
While KBS completed both the Management and Performance portions of the GRESB assessment, Malloy admits that the company’s “main focus is on reducing energy consumption and waste with the goal of shrinking our footprint in those areas 5% by 2025.”
“Reviewing the benchmarks for this year, it’s evident that the industry’s dedication to ESG principles is stronger than ever as showcased by the continued increase in participation and broader data coverage,” says Sebastien Roussotte, CEO of GRESB. “We applaud investors and managers in the real assets sector for their resolute pursuit of sustainability.”