Sustainability reporting in the Canadian corporate real estate sector has moved a step closer to sharing a methodology for measuring economic, environmental, and social performance with comparable organizations around the World.
In 2008, a Global Reporting Initiative study determined that in the Construction and Real Estate Sector sustainability reporting was not well established compared to other sectors such as financial services and utilities.
The Global Reporting Initiative (GRI) is a non-profit organization that has developed the Worlds most widely used corporate sustainability reporting framework. There are over 1,000 organizations that use the GRI format either formally or as a guideline. In Canada the Federal Government is encouraging GRI Guidelines for the financial and mining sector as well as Canadian companies operating in other countries.
There are real estate companies in Japan, Australia, the United States and Europe that prepare sustainability reports. No Canadian real estate company currently publishes a Corporate Social Responsibility (CSR). According to Michael Brooks, Chief Executive of the Real Estate Property Association of Canada (REALpac), many UK REIT and Australian LPTs (REIT equivalents) prepare sustainability reports, and they are the world leaders. Those that do report usually use the GRI standard reporting format (G3).
The GRI study concluded that the primary concern of the 16 companies that participated in the study was addressing climate change issues, in particular, CO2 emissions. It also reported that the companies in the study didn’t have a comprehensive approach for accounting for economic, social and environmental performance.
Following its established process for preparing an industry specific reporting format, the GRI has invited a stakeholder group to participate in the development of supplementary guidelines for the Construction and Real Estate Sector Supplement (CRESS). This working group will develop specific and material disclosure metrics for global real estate entities over the next 18-24 months.
On April 16, 2009 REALpac, which represents over $150 billion in Canadian investment real estate, announced on its website that it has been selected to participate in the GRI CRESS initiative. The invitation was facilitated through its membership in REESA, a global network of country real estate associations. The British Property Association is the only other sector organization represented in the CRESS stakeholder group.
REALpac has invited Oxford Properties to also participate in preparation of the CRESS guidelines. According to Brooks, Oxford Properties is one of the leaders in the sustainability space with their Sustainability Intelligence initiative. He said “REALpac is pleased that Oxford has agreed to partner with them to bring the owner’s perspective to the process”.
Guiding principles for its sustainable intelligence initiative, a sustainability scorecard and a plan are the three elements of Oxford Properties reporting posted to their website. The scorecard shows performance information dating back to 2005.
In 2008, Oxford Properties calculated its corporate greenhouse gas (GHG) inventory in accordance with recognized standards and best practices. It then set an ambitious goal of reducing GHG emissions in all of the properties they directly own and manage, on a per square foot basis, by 20% over 2006 levels by the year 2012
Brooks expects that Darryl Neate, Director of Sustainability at Oxford Properties will bring valuable ‘process experience’ to the GRI CRESS stakeholder group due to experience he gained at the Canadian Standards Association (CSA).
Once completed, Brooks said the GRI CRESS will be suitable for use by every public real estate company and REIT listed on the TSX or TSX-V as well as many of the pension funds, banks and life insurance companies with real estate assets, and some large private companies.
Companies with substantial real estate holdings such as large retailers, like Canadian Tire or Shoppers Drugs Mart, are not currently considered for inclusion in the CRESS although Brooks said the intended application of the Supplement will be clarified as part of the process.
One such company, Loblaw Ltd. is reported in Partners in Project Green as having recently issued its second Corporate Social Responsibility (CSR) report which includes sustainability. In developing its format, Loblaw engaged the Canadian Business for Social Responsibility (CBSR) group.
On its website the CBSR is described as a globally recognized source for corporate social responsibility in Canada, and the Canadian representative in a world-wide network committed to corporate social responsibility.
Brooks indicated that metrics for reporting carbon emissions was not likely to be part of the GRI CRESS and would follow a separate path. The Green House Gas Protocol (GHG Protocol) and ISO 14064 is used by many organizations, including Oxford Properties, for calculating GHG emissions.
The GHG Protocol is described on its website as the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions. The GHG Protocol is a decade-long partnership between the World Resources Institute and the World Business Council for Sustainable Development.
Commenting on what may appear to be an increasingly confusing mix of sustainability reporting, emission accounting, green building rating systems and corporate ‘green brands’, Brooks said that the ‘truly green’ will shake out from those that are interested in branding alone. He added, “integrity and sincerity will be the key.”
A global standard format for reporting CSR available to the public and shareholders alike would also provide clarity about the sustainable performance of corporations of all types including real estate.