Simplifying sustainability reporting
The real estate industry has made significant progress in embedding sustainability into investment strategies. However, for investment managers, the challenge is now in execution. As ESG reporting requirements continue to expand, the complexity of delivering consistent, high-quality data is becoming increasingly difficult to manage.
For Aneta Rusiniak, Vice Chair of the INREV Sustainability Committee and Head of Sustainability for Real Estate Europe at Invesco, the scale and fragmentation of ESG reporting expectations is a defining issue for the current industry.
‘The biggest challenge today is the complexity and volume of ESG data, combined with the number of different investor requests,’ she explains. ‘Across portfolios, ESG data requires a high level of diligence, technical expertise and judgement, from collection and validation through to interpretation.’
At the same time, requests for that data continue to increase, often in slightly different formats and with varying requirements. In practice, this creates a significant operational burden.
‘Teams spend a lot of time aligning definitions and reconciling data,’ Aneta says. ‘The same information is often reformatted multiple times, and there is still a reliance on manual processes where systems are not fully aligned.’
The result is inefficiency across the reporting process, but more importantly, a shift in focus away from where value should be created.
‘It becomes harder to focus on what matters most, which is using ESG data to inform investment decisions and drive performance.’ At the core of this issue lies a lack of a widely adopted common standards. While progress has been made on ESG disclosures, inconsistencies in definitions, boundaries and methodologies continue to limit comparability across funds and portfolios.
‘Even for core metrics such as energy or carbon, differences remain,’ Aneta notes. ‘This makes it difficult to ensure we are comparing like for like.’
This challenge is echoed by Aleksandra Njagulj, Global Head of Sustainability Real Estate, DWS, who stated ‘Consistency in ESG measurement and reporting is the precondition for everything else: credible valuations, meaningful benchmarking, and investment decisions that genuinely reflect sustainability performance. The ESG SDDS moves the market in that direction, and its value grows as adoption does.’.
For investment managers, the consequences are clear. Effort is duplicated across reporting requests, resource requirements increase, and ensuring data consistency and quality becomes more challenging. At the same time, the ability to draw meaningful comparisons across funds is constrained.
‘A key need for the industry today is for managers and investors to align on how ESG data is structured and shared,’ Aneta says.
The INREV ESG SDDS is designed to respond directly to this need, providing a common structure and set of definitions for ESG reporting.
‘The ESG SDDS offers a practical foundation for more consistent and comparable reporting,’ she explains, ‘that can act as a central reference point for ESG data exchange, helping reduce fragmentation and improve transparency.’
For managers, its value lies in its potential to simplify processes and reduce duplication. Rather than responding to multiple bespoke questionnaires, the ESG SDDS framework can provide a consistent baseline.
‘In practice, it would be beneficial if the ESG SDDS could be shared annually alongside sustainability reports, and used as a default response to investor questionnaires, Aneta adds. That would significantly reduce the need for multiple formats.
This reflects a broader shift in thinking. The goal is not to create a perfect framework, but to drive convergence across the industry.
‘The real value comes from the industry aligning around one approach and building consistency over time.’
This view is further reinforced by a growing focus on data quality and materiality as Miriam Kittinger, Senior ESG Manager Real Estate, Swiss Life Asset Managers stated:
‘Focusing on material underlying ESG data, rather than relying solely on aggregated scores or ratings, drives a deeper understanding of what truly matters for asset value and risk management. A harmonised, industry-backed set of KPIs makes this possible, and the ESG SDDS is a key enabler of a more mature and future-proof reporting ecosystem.’
Aneta’s role within the INREV Sustainability Committee has provided further insight into how this alignment can be achieved. As part of the ongoing development of ESG SDDS, she sees a strong focus on ensuring the framework remains practical and usable in day-to-day operations.
‘It is a highly collaborative process,’ she says. ‘We are working to improve consistency and clarity while ensuring the framework evolves alongside market and regulatory developments.’
Wider adoption of a common approach could have a significant impact. For investment managers, it would enable a more efficient ‘report once, use multiple times’ model, reducing the need for repeated data requests and freeing up time for analysis and integration.
For investors, the benefits are equally clear: improved comparability, greater transparency and better insight into sustainability performance and risk.
Ultimately, this shift would allow the industry to move beyond data collection towards meaningful data usage.
‘You can have as much data as you want,’ Aneta concludes. ‘But the real value comes when that data is consistent, comparable and actually used to inform decisions.’
For managers still hesitant to adopt the ESG SDDS framework, her message is clear. ESG data will remain complex regardless of approach. Without alignment, inefficiencies will persist. With it, the industry can begin to reduce fragmentation and build a more consistent and workable system over time.
Learn how the INREV ESG SDDS works to build transparency and consistency in sustainability data, or contact Professional.Standards@inrev.org for any questions.
