2016 sees the third Sustainability Transparency survey alongside the main GRETI survey. We have extended our coverage by four markets to 37 to now include
Thailand. As in past years the focus remains on environmental issues such as carbon emission reporting and energy efficiency standards.
The overall Sustainability Transparency Index continues to show slow but steady progress for a good number of countries. The Index now stands at 2.99, improving only slightly from 3.08 in 2014. It keeps hovering around the middle of the transparency scale.
17 countries have improved their overall scores. And one country,
Japan, has even joined the group of ‘Highly Transparent’ countries.
Finland, one of the four new entrants, has gone straight into the ‘Transparent’ tier and is now alongside some of the more advanced markets such as
Half of all country index improvements have been driven by the introduction of voluntary minimum energy efficiency standards for existing buildings (seven countries). Notably, on a like-for-like country basis comparing the index of the 28 original countries in 2012, we can identify a slow but steady progress: From 3.06 in 2012 to 2.98 in 2014, to 2.83 this year.
The most ubiquitous environmental transparency instruments are still minimum energy efficiency standards for the design of new buildings – mandatory in 87% of all countries – and market-specific green building certification schemes, where in 68% of all countries building ratings are made publicly available.
This is an encouraging sign and shows that the two cornerstones of environmental performance transparency are available in the majority of global real estate markets. It is worth mentioning that green building rating systems are actually available in all covered countries, if we also count internationally used schemes such as LEED or BREEAM that do not necessarily originate in the countries in which they are used. The LEED system, of all globally applied green building certification systems, is used most widely across the world and provides an even greater transparency, this time between countries.
The least available transparency instrument continues to be the financial performance indicator for green buildings, which is available in only four of the 37 analysed countries –
New Zealand and
This absence of financial indicators in the wide majority of global real estate markets remains a considerable gap for market participants to assess the relative performance of more environmentally robust assets. MSCI-IPD has provided these indicators for four of the covered countries, but there have not been any recent developments that show the extension of these tools to any additional markets, except for
As an encouraging sign, we see the most widely used investor portfolio benchmarking tool, the Global Real Estate Sustainability Benchmark (GRESB), now covering 61,000 assets worldwide, a year-on-year increase of 9%. The average rating stood at 56/100 last year. This is a comparable score to the GRETI sustainability average, which also stands just around the middle of its overall scale of 1-5. Both metrics seem to indicate that there is still a long way for the real estate industry to evolve towards being a more transparent investment environment in regard to the sustainability characteristics of their assets and portfolios.
Rising Real Estate Transparency
in Central and Eastern Europe We look at how transparency improvements in
the CEE Region are changing investor perceptions
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