A third of Europe's listed property companies received awards this year for reporting and applying key sustainability metrics in accordance with the Best Practice Recommendations of the European Public Real Estate Association (EPRA). This represents a doubling of the number of winning firms since the standards were introduced in 2012.
Philip Charls, EPRA CEO, said: 'Sustainability is the defining issue of our time and one that big investors are increasingly taking into account before they decide to commit capital to listed property companies. Therefore, it is heartening to see how many have committed the resources to raising their reporting standards. When the first sustainability BPR survey was carried out five years ago only 18% of firms achieved an EPRA Award. In 2016 that has risen to over a third, or 36%, and the vast majority of those companies – 71%, have achieved the highest gold standard.'
The findings were presented at EPRA's Annual Conference in Paris on Wednesday. Commenting on the findings during a press conference, Matthew Tippett, director in JLL's Upstream Sustainability Services, noted that the majority of companies obtaining awards won gold. 'Three companies have gone from nothing to a gold medal.'
In the first year of the Awards there was a clear relationship between portfolio size and the average scoring against the survey criteria, he added. Five years later, these boundaries have vanished, as more small and large companies do equally well in reporting against the guidelines.
Similarly, although EU countries have different legal obligations to disclose on environmental data, geographical location has no clear impact on the probability of winning an EPRA Award. However, of the five countries with over seven EPRA members, German companies tend not to disclose their environmental data, compared with 88% in France, 71% in the UK, 50% in Sweden and 43% in Belgium.
Tippett: 'The EPRA sBPR Awards have helped sustainability reporting gain momentum amongst publicly listed real estate companies. Quality disclosure of environmental performance sends a clear message to shareholders that companies are effectively managing environmental risks and opportunities. This year 36% of companies received an award which we see as a positive sign.'
Call to broaden the group
Olivier Elamine, chair of the EPRA Sustainability Committee and CEO of alstria office REIT said: 'Whilst more companies reported using the sBPR for the first time this year, we would like to see a further broadening of this group, so there are fewer non-disclosers in 2017. We also urge companies to report using like-for-like performance measures, which will increase the consistency and comparability of the data for investors – the ultimate goal of the EPRA Sustainability Best Practice Recommendations.'
The public disclosure of sustainability reporting for 98 companies in the FTSE EPRA/NAREIT Developed Europe Index and 20 non-Index members of EPRA, were reviewed by JLL consultants to assess the allocation of Gold, Silver and Bronze Awards according to best compliance with the sBPR.
The performance measures monitored by JLL encompass: electricity; district heating and cooling; direct greenhouse gas (GHG) emissions; indirect GHG emissions; water; waste (by weight); and waste (by proportion).
This year the EPRA sBPR Awards were broadened to include a new category recognising the ‘Most Improved Reports to acknowledge the effort by companies that have substantially improved this year.
