Corporate Responsibility

The state of sustainability performance measurement: A conversation with Nils Kok

Posted by: Will Teichman Will Teichman
on May 23, 2013
Nils Kok, co-founder and Executive Director of GRESB

Nils Kok, co-founder and Executive Director of GRESB

A growing number of institutional real estate investors, state and local governments, and other stakeholders are sharpening their focus on the sustainability performance of commercial properties.  Two leading indicators of this trend are the rise in building energy benchmarking laws and the growth of the Global Real Estate Sustainability Benchmark (GRESB). Today, I wanted to look at GRESB in particular.

GRESB is an investor-driven organization focused on protecting and enhancing shareholder value by soliciting information on sustainability best practices from property owners. It now has 35 members with institutional capital totaling $3.5 trillion — up from 19 members with $1.7 trillion in institutional capital in 2011. Members include institutional real estate investors and investment managers, and all major real estate industry associations.

GRESB is best known for its annual Survey and Benchmark Report, which discloses sustainability performance data voluntarily submitted by commercial property companies and funds worldwide. The survey has gained significant momentum over the past year. Some 443 companies participated in the 2012 GRESB Survey, up 31 percent over 2011. These companies provided information for their 36,000 properties, up from 21,000 properties in 2011. Kimco has participated in the survey since its inception, and will submit our fourth disclosure this summer.

But why is interest in sustainability performance increasing, and why now? We interviewed Nils Kok, co-founder and Executive Director of GRESB to find out. He leads the annual GRESB Survey and Benchmark Report. But his involvement in real estate finance and environmental economics spans much further.

Nils is a visiting scholar at University of California Berkeley and Associate Professor in Finance at Maastricht University in the Netherlands. He has published some of the most notable research on the financial implications of sustainability in commercial and residential buildings, including “The Economics of Green Building” earlier this year. He presents his research worldwide at academic and industry conferences, and works with large institutional property investors and policy makers to take action based on his findings.

We asked Nils several questions aimed at giving our listeners a better understanding of current trends in sustainability disclosure and research, which you can jump to using the time codes below. Or, listen to the interview in full.

  • 1:10 Why did you start GRESB, and what is the organization’s purpose?
  • 4:58 What are institutional investors doing with the information in GRESB’s Benchmark Report?
  • 8:21 Give us an example of a question in the GRESB Survey that tells investors how a company is mitigating a risk or exploiting an opportunity through energy efficiency strategies.
  • 10:22 Are there broader inferences investors can make about a company based on the GRESB Benchmark Report?
  • 12:30 What else are you working on as a professor and researcher in the U.S.?
  • 14:27 What did you find about rental rates in your most recent study, “The Economics of Green Buildings?”
  • 16:55 Why have many of the efforts to quantify the financial benefits of green buildings focused on the office and hotel sectors, and not retail?
  • 19:37 What are some of the biggest benefits the retail industry stands to gain from green buildings?
  • 23:44 A number of states and municipalities have passed whole-building energy benchmarking and disclosure laws in the past five years. Where is this data collection headed?
  • 27:57 What’s one factor that retail property owners should be considering when it comes to sustainability?

You can also download the podcast to take it with you on the go, or read the transcript.

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