EPRA makes a record number of Awards to listed property companies for using best practices in sustainability reporting before the assessment's extension to broader ESG disclosure in 2019
The European Public Real Estate Association (EPRA) made a record number of Awards to European listed property companies for meeting its Best Practices Recommendations for sustainability reporting (sBPR) at its annual conference in Berlin on Wednesday. Awards will switch to a broader assessment of the sector’s disclosure on environmental, social and governance (ESG) performance from next year.
Consultants JLL reviewed the public reporting of 125 EPRA members and 14 non-members to gauge their adoption of sBPR and to make three categories of Award for the highest levels of compliance. A total of 65 companies won Awards this year compared with 55 in 2017, corresponding to 73% of the total market value of all companies included in this year’s assessment. Among the EPRA members, 52% of them received an Award, meaning they disclosed at least a dozen sustainability metrics. Companies that did not report according to the sBPR guidelines declined to 17% of the survey sample from 32% in 2017.
Dominique Moerenhout, EPRA CEO, said: “The number of Award winners has doubled since we first started monitoring compliance with the sBPR in 2012. This year’s outstanding results highlight how the listed property sector is raising transparency standards on the vital question of sustainability and proactively demonstrating its commitments in this field. We can see further evidence of this in the promising take-up in broader ESG reporting, to meet the guidelines that will be the basis for assessing Awards from next year. Huge credit must go to the work of the Sustainability Committee and EPRA’s team on this year’s impressive results.”
A total of 50 companies won the highest Gold Award, a 35% increase rise from 2017. Of these, seven made significant improvements in their sustainability reporting after achieving no Award last year: Aroundtown, Entra, Hispania, Merlin Properties, Mobimo, Standard Life Investments Property Income Trust and UK Commercial Property REIT. Forty-six Gold Award winners reported on all 16 sBPR measures, while four companies – British Land, Citycon, Klépierre and Unibail-Rodamco-Westfield – won Gold Awards for the seventh consecutive year in 2018.
In 2018, 81% of EPRA members reported at least one sustainability performance measure compared with 68% in last year’s survey.
The 16 performance measures assessed by JLL to qualify for an Award encompass: energy (fuels; electricity; district heating and cooling); direct and indirect greenhouse gas emissions; water; waste and certified buildings. This year’s review also includes a dozen measures relating to social and governance performance, including gender diversity; employee development; health and safety; community engagement and Board composition; as well as selection and conflicts of interest . While these metrics were not scored this year, from 2019 onwards they will contribute to the companies’ overall score.
EPRA’s Awards next year will be judged according to compliance with all 28 ESG reporting metrics. This year’s results showed that already companies have starting reporting using the new set of guidelines on the broader ESG disclosure. JLL’s review showed that 86% of companies reported at least one social performance measure, commonly on gender diversity, while 74% reported all performance measures on governance.
Olivier Elamine, Chair of the EPRA Sustainability Committee and CEO of alstria office REIT, said: “Leading listed property companies are already exploring how best to gauge their impact and contribution to society, not just at a corporate level but at an asset level. EPRA has provided them with the tools to do so, while continuing its work through feedback reports, engagement with companies and education initiatives such as seminars and workshops. Our task for the coming year will be to first, double our efforts to encourage compliance with the ESG metrics and second, and more importantly, to deliver the tools that will allow stakeholders to access the data generated by companies in an unbiased way, in order for the industry’s disclosure to reach the next level.”
Matthew Tippett, National Director at JLL, added: “Legal disclosure requirements in each national jurisdiction are becoming less of a factor in determining if companies win Awards. This shows that the listed real estate sector is getting ahead of the curve in its ESG responsibilities without the need of regulators and laws to oblige companies to measure their impact on society and the environment. Our work in supporting EPRA’s Sustainability Awards dates back to 2012, during which time the improvements have been impressive. This year is no exception.”