From Disclosure to Discipline: Highlights from Our GRESB Fundamentals Webinar

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Background of Fundamentals by GRESB

Fundamentals by GRESB serves as a streamlined assessment for real estate entities to report on their core sustainability governance structure and risk management strategy without completing the full GRESB Real Estate Assessment. Fundamentals evaluates core qualitative indicators covering Commitments, Governance, Policies, Risk Assessment, Stakeholder Engagement, and Monitoring. These indicators are all aligned with the GRESB Real Estate Standard and deliver a clear, validated baseline for sustainability management.

Differences

The introduction of Fundamentals provides a new reporting pathway distinct from previous assessments such as GRESB Public Disclosure and the GRESB Real Estate Assessment. Fundamentals scores are purely based on key qualitative indicators, while still maintaining a similar level of high-quality validation methods as the Real Estate Assessment. The absence of reporting asset-level data is intentional; Fundamentals is meant to provide the governance structure and processes needed to effectively collect and manage asset-level data down the road. Additionally, Fundamentals expands the depth of indicators from Public Disclosure to provide more detailed responses and permits the use of non-public information for submissions.

In terms of reporting flexibility, Fundamentals opened for assessment input on July 1, with first validated Fundamentals Reports releasing on August 1. Afterwards, Fundamentals submissions will operate year-round, unlinked to the annual July 1 deadline for Public Disclosure or the Real Estate Assessment. This allows for editing and resubmission of assessments as needed throughout the year: participants will receive updated Fundamentals Reports within two to three weeks of resubmission.

Who It’s For

Reporting to Fundamentals is a recommended starting point for a range of real estate entities seeking a third-party validated assessment of their sustainability program. Although the reasons to participate may vary by entity, we see the following situations as strong cases to participate in Fundamentals:

• Fundraising: For fund managers raising capital for funds without underlying assets, it provides credibility to prospective investors that proper governance and risk management practices are in place to best manage their investments.
• Asset-level Data Limitations (Triple-Net Lease): For firms operating under Triple-Net Lease (NNN) structures with limited access to asset-level data, it allows their sustainability programs to be assessed on qualitative governance and risk management factors rather than asset-level performance, reflecting data access constraints inherent to the lease structure.
• Sustainability Program Development: For firms with standing investments and without a sustainability program in place, it provides a framework to establish a sustainability program, identify governance oversight, practices to manage risks, and to establish repeatable processes for collecting and managing asset-level data.
• Investor Communication: For firms that currently implement sustainability initiatives but lack formal documentation, it provides a structure to communicate practices, and eventually outcomes, to investors.

In all these cases, Fundamentals enables organizations to demonstrate sustainability commitments in a structured framework while providing a streamlined tool to communicate to investors. It also is a useful starting point to prepare firms for eventually reporting to the full Real Estate Assessment.

Connect with the Sustainability practice at Sodali & Co to determine if Fundamentals is the right fit for your firm and investor communication needs.