As many of us are approving our GRESB data and sending them off for Response Checks, we have a brief moment to reflect on the process for our organization. Reflection is an important step; it provides a moment of clarity having just completed the review process. At this very moment, while we have earned a deep exhale, we also take note of our pain points. Two important questions come to mind:
What went well this year - and how can I apply that to other areas?
What was a struggle - and what can I do to make this less of a struggle next year?
With asset-level data collection, you likely had some challenges this year. I suspect this was a struggle for more than a few organizations. Every year we face the issue of data coverage, especially in the multi-family real estate world. This year, however, the impact of Covid-19 remained a factor. It resulted in several utilities that reliably provided aggregate data in the past, failing to push that data out in the time frame needed for GRESB reporting this year. When pressed, they may have pointed to benchmark reporting requirements that were extended and seemed puzzled when we pleaded that we need the data for more than just ordinance compliance. The good news, if they failed to push out the data for you, they failed to push it out for everyone, most likely.
You also may have struggled during the review with the quality of the data received. This issue, in particular, can pose additional issues with so many organizations setting reduction goals and attempting to track progress towards those goals. There are a couple of strategies, however, that can help: data assurance and data verification.
The most rigorous of these is data assurance. Essentially this applying the same methodologies and standards found in financial data to your ESG data. This also requires the use of an independent, professionally accredited auditor. Within this data validation process are two types or levels of assurance:
Limited Assurance: This is the most common type used for ESG data validation as there is a reduced evidence collection phase of the process due to the reduced assurance risk. Often this takes the form of increased reliance on inquiries of the person gathering the data and the analytical procedures used.
Reasonable (Positive) Assurance: This is a more rigorous verification of the data, which provides a higher level of assurance regarding material misstatements. This process requires additional evidence collection around the controls and testing of controls as well as potential external sources.
Most ESG reporting schemes do not require data validation to the level of assurance but instead call for data verification. Data verification refers to the data being subject to a process of evaluating the completeness, correctness, and conformance/compliance against a method or procedural requirement. Typically this requires a specific process that extends the evaluation of data beyond procedural or contractual compliance to determine the analytical quality of the specific data set.
The inclusion of data verification requirements provides the report preparer with a greater degree of confidence in the accuracy of the data received. The greater the level of confidence in the data, the increased value of the disclosures made with that data. While you still have to review the data, the process is made easier with data that has been previously verified or assured.
In addition to the data itself, participation in the GRESB Response Check Process can also be a valuable exercise. If you are not familiar, the Response Check provides the submitter a high-level review of your assessment response before final submission. This past year, the deadline was set as June 1, and there was capacity for 300 Response Checks. Just a few days prior, there were still a few openings to participate in the Response Check.
The Response Check process is not necessary for all of your submittals if filing multiple GRESB reports, so long as most of those reports are fairly similar. In the Response Check process, a member of the validation team will review the response and, after reviewing the submittal, provide a one-hour discussion call in addition to a feedback report highlighting issues found during the process. While it does not guarantee you a better GRESB score, it does help ensure that the submission is not missing important details and provides an opportunity to obtain clarification on the indicators against which your submission will be scored.
If you are submitting GRESB this year, chances are you already have the date circled on your calendar, but the GRESB portal closes on July 1 for 2021 submissions. During August, the validation, scoring, and benchmarking of submissions will occur, and in September, the participants will be informed of their performance initiating the review period. In October, the public results will begin to roll out for participants and investors.
That timeline provides an important trait: when you receive your final results, you have already missed three-fourths of the year upon which next year’s results will reflect. This means opportunities to increase green certifications, increase data coverage, and include data verification have potentially already passed for next year's submission, making it more important that you be thinking about next year’s report now.
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Stay well!
Chris Laughman is the ThirtyNine Blog author, a blog dedicated to reducing the impact of the built environment. When not blogging, Chris is helping the real estate industry reduce energy and water impact as the Vice President of Sustainability for Conservice, the Utility Experts. Whether Multifamily, Single Family, Student Housing, Commercial, or Military, we simplify utility billing and expense management by doing it for you. Our insight into your utility consumption provides an opportunity to identify risks. Leveraging innovation and experience, we ignite solutions with real impacts and track performance to ensure the trendline stays laser-focused on the goal. To get there, we must build relationships within our organizations and outside of our organizations building the critical mass needed to truly make a difference. We have before us a tremendous opportunity. Standing shoulder to shoulder, we will get this done. Contact me at claughman@conservice.com for more information.