Improved access to tenant data on energy consumption propels all five Dutch sector funds to highest GRESB ranking for first time ever

Bouwinvest has again made huge improvements in the sustainability of its real estate portfolio with all of its Dutch funds awarded the highest possible ranking, for the first time ever this year, from the global real estate sustainability benchmark GRESB. Bouwinvest’s Dutch Retail and Healthcare Funds were awarded five stars, elevating them to the same category as the company’s three other Dutch funds which are ranked amongst the 20% best-performing real estate vehicles worldwide. The highest possible ranking received from GRESB, which compares some 117,000 real estate assets worldwide, was undoubtedly down to Bouwinvest’s success last year in obtaining energy consumption data from its tenants.

Bouwinvest originally set a goal in 2017 for all five of its Dutch sector funds to score a minimum of four stars by 2020. After achieving that goal last year, the company has now significantly outperformed its original target with its latest GRESB scores. "Our scores were already high so it is credit to all involved that we were able to improve on these again this year" says Bernardo Korenberg, Head of Sustainability & Innovation at Bouwinvest. "We have been able to continue to improve our performance and all five Dutch funds are now in the top 20% globally - a unique achievement for our team." Bouwinvest works closely with its tenants to make its properties more sustainable, and they have played a key role in that process, he adds. "They supply all their data to us and are largely responsible for making their own operations sustainable. Understandably they, too, are setting increasingly high standards.”

Launched in 2009, GRESB measures the sustainability score of thousands of properties and now has 1,520 real estate investors representing $5.7 trillion in assets under management taking part in its annual survey. Bouwinvest has been involved in GRESB since its creation. Performing well within this benchmark is in line with its motto to realise ‘real value for life’. It does this by contributing to a sustainable, liveable and accessible urban environment while improving pension benefits, generating both social and financial returns.

GRESB’s sustainability criteria consist of two parts. First, the management component examines, among other things, how sustainable an investment manager’s policy and strategy is, how its risk management has been set up and how it interacts with its stakeholders. Second, the performance test assesses how an investment manager can use its data to steer its tenants on sustainability and  reduce energy consumption, greenhouse gas emissions and waste. Cooperating closely with tenants is essential in order to score well on the second part of the test as most improvements are achieved by the occupiers themselves.

The Retail Fund not only obtained five stars for the first time ever this year, but also achieved the largest increase measured in points. “We have made great progress over the past two years in obtaining more data on energy consumption from our tenants," says Collin Boelhouwer, Director, Dutch Retail Investments. "We already have the answers to some questions, such as how much electricity is used to light hallways in our shopping centres, but our tenants are responsible for their own energy consumption and manage their own contracts.” The coronavirus crisis created an opportunity to obtain more data, he adds. "We had a lot of contact with our tenants during the lockdowns and discussed this issue with them. As a result, our tenants are now more willing to share their data with us.”

Landlords need to have a clear insight into the energy consumption of their tenants to be able to take the best steps to lower energy use, Boelhouwer says. That applies, for example, to solar panels, which have now been installed on various properties owned by the Retail Fund. The Fund makes the investment and gets a fee from its tenants who, in turn, see a reduction in their energy bills. “Energy savings from solar panels are the low-hanging fruit,” says Boelhouwer. “It’s much more difficult to ensure that tenants make sustainable investments when they renovate their spaces.”

Bouwinvest’s Dutch Healthcare Fund also received five GRESB stars for the first time ever this year when it too improved its performance in terms of insight into tenant data. It is generally quite difficult to get statistics on water and energy consumption and waste processing from healthcare institutions, according to Dutch Healthcare Investments Director Erwin Drenth. “Most healthcare institutions have other problems on their minds due to staff shortages and the coronavirus crisis. They also buy their energy via collective contracts, so their energy bills are relatively low and cutting consumption is therefore not at the top of their list. But we have explained to them that obtaining a better insight into their energy usage is in everybody’s interest.” Drenth aims to have access in due course to the energy consumption data of the entire healthcare portfolio through so-called energy management systems which facilitate ways to effect reductions. 

The biggest challenge of all  is to realise reductions in energy consumption, says Bas Jochims, Director Dutch Office & Hotel Investments. "Bouwinvest has created roadmaps for all its Dutch funds where we set out how we aim to achieve our goal of meeting the Paris Climate Accord by 2045, five years earlier than agreed. GRESB is an excellent benchmark to help us determine whether we are on the right track.” Jochims’ funds rank among the two best performers worldwide and he knows from experience that the greatest progress can be made when a building is due for maintenance work. 

Obtaining access to data on tenants’ energy usage is also a main challenge for Michiel de Bruine, Director of Bouwinvest’s Dutch Residential Fund. "It is crucial to have an insight into this data and be able to monitor it so that we can actively help our tenants to reduce their usage. We also need to convince them that they, too, will ultimately benefit from sharing the data." Huge steps are already being made at building level, but this must now be extended to apartment level, De Bruine notes. “The rollout of our roadmaps to make our portfolio Paris Proof is in full swing and the installation of solar panels on our residential properties is also progressing well. The level of ambition in our team is high.” 

Participation in the GRESB benchmark is very important to Bouwinvest, says Korenberg. “Our clients demand it. Our high GRESB score demonstrates that we are serious about sustainability, enabling us to attract and retain clients.” The testing process is also good for internal processes and teambuilding, which is just as important, says Korenberg. "We are constantly asking ourselves where we stand and what we can work on.” 

Nevertheless, Bouwinvest needs to continue making its own choices, Korenberg argues. "We should not blindly follow the benchmark in designing our strategy. There may be good reasons to settle for a lower score due to cost considerations, for example.” Bouwinvest's strength is precisely that it can take decisions autonomously, adds Drenth. "It's great that our score is so high, but improving on the last 10 percent is the hardest part so you have to be careful that you don’t focus on that too much. I'd rather drop to third place in the rankings with measures that are good than lift our score just up a little bit by ticking off a checklist."