All aboard for the ESG data challenge

With ESG centre stage at this year’s Annual Conference, the Research and Performance Measurement Open House Breakout session zeroed in on INREV’s exciting new pilot project aimed at solving the ESG data challenge. IQ was in the room.

Delegates listened with rapt attention to Iryna Pylypchuk and Connor van Leeuwen explain how INREV’s Asset Level sustainability KPI data collection project was progressing.

Following initial discussions with the industry in late 2021, the INREV Management Board signed off the pilot in September last year. INREV’s team then got to work quickly. Having aligned the pilot to the existing Asset Level Index to provide bottom-up intelligence, the first task was to build the infrastructure for the key ESG KPI metrics data collection on the INREV Data Platform.  

The pilot features data points focused on energy use intensity, renewable energy, carbon intensity, green building certification and energy labels – most of which reflects data outputs from existing established sources such as GRESB. This reduces the burden on reporting for all contributors who already submit to GRESB as well as using established methodologies. The aim of the project is to link the collected ESG data to the overall characteristics and financial reporting information already provided to INREV at an asset level.  

Data collection began in February with the first findings available in April. The pilot already includes data coverage for between €35 billion and €40 billion of assets, depending which variable is addressed. There is good coverage across sectors when compared against the INREV Asset Level Index's overall – approximately 37% for residential, 16% for offices and just over 10% for both, retail and industrial/logistics. There is also a sound spread of geographic data with the Netherlands contributing the lion’s share and equivalent to around 40% of the Dutch subset of the Asset Level Index. France and Germany are also well represented, reflecting 17% and 13% of their respective subsets of the Index This is a significant feat given that it’s not easy to capture all of this data, but the level of support from the industry highlights the collective will that exists to make progress.

The pilot adopts well-established methodologies such as the CRREM decarbonisation Pathways, plotting energy use intensity and carbon intensity, broken down by sector and country in temporal snapshots of 2022, 2030 and 2050. It does the same thing in relation to energy certification and labelling of buildings using commonly referenced energy ratings.

The first cut of the data offers some useful early insights about the sustainability related state of the market and how assets in the sample compare in the overall scheme of things. The data, transparency and analytics that it brings  could be a game changer in helping the industry to better understand the steps required to ensure it is doing everything in its power to meet wider net-zero targets by 2050. For individual market participants, the pilot will be an invaluable tool to assess the ESG performance of their real estate assets and, through attribution, their portfolios as well as understand how they compare to the rest of the market and their peers. Understanding how your assets fare is the message from INREV so that contributing members could be well informed on the timing and prioritisation of asset specific action required across their portfolio. This management information will inform and improve decision-making, enabling them to reach their own sustainability targets and reduce, or avoid their exposure to stranded assets.