ESG on the mind: how a standardised template can streamline reporting

The non-listed real estate investment industry has seen a significant increase in the focus on ESG measures in recent years. This shift is driven by a growing awareness of real estate's impact on the environment and society, as well as legislative measures promoting sustainability and transparency. 
As a result, reporting on ESG performance has grown in importance – but not necessarily with the standardisation the industry needs for this process. Read on to learn more about a template that aims to make the ESG reporting process more efficient and effective. 

Call for transparency 

Regulations such as the SFDR and CSRD have petitioned for greater transparency and accountability in ESG reporting. As a consequence of these developments, there has been an increase in reporting requests from investors to investment managers. Each request often comes with its own set of templates and requirements, leading to a wide variety of reporting formats. This diversity in reporting has resulted in substantial time and resources on the managers’ side, who are tasked with completing various, sometimes overlapping, templates.

Introducing the INREV ESG SDDS

To address this challenge and improve efficiency, INREV developed the ESG Standard Data Delivery Sheet (SDDS). This new template is designed to standardise the reporting process of ESG information, making it simpler and more streamlined for both investors and investment managers. 

Adopting the ESG SDDS offers a diverse range of benefits:

1.   Efficiency: reduces the time and effort spent on ESG reporting by providing a standardised format.

2.  Transparency: enhances the clarity and consistency of ESG data, facilitating better communication with stakeholders.

3.  Comparability: enables easier comparison of ESG performance across different assets and portfolios.

4.  Focus on improvement: allows managers to dedicate more resources to improving ESG performance rather than on administrative tasks. 

5.  Compliance and alignment: ensures alignment with regulatory frameworks, INREV Guidelines and industry definitions, visualised in a detailed mapping.

Structure and features of the ESG SDDS

The ESG SDDS template consists of two main input tabs: asset-level and vehicle-level. It focuses on 28 required environmental KPIs, ensuring that the most critical aspects of ESG performance are covered. For investment managers with more ambitious sustainability goals, or investors requiring more comprehensive sets of data, the template also offers the option to report additional recommended environmental and social KPIs.

One of the features of the ESG SDDS is its alignment with GRESB. This means that data submitted to GRESB can be easily transferred into the SDDS, reducing the reporting burden. Additionally, the SDDS has been mapped against major frameworks, such as the CSRD and SFDR, ensuring comprehensive and compliant reporting.

Investor feedback

The ESG SDDS has already seen early adoption by several investors. For example, The ESG SDDS has already seen early adoption by several investors. For example, Derk Welling, Senior Responsible Investment & Governance Manager at APG Asset Management says, "We have been using the INREV SDDS for a while, and the recent updates will ensure that we continue to do so, especially with the addition of a new asset-level data section, comprehensive and consistent ESG reporting through the brand-new ESG SDDS template, along with references to SFDR."

Jérôme Berenz, Head of Indirect Investments at Pimco Prime Real Estate, noted, "The new ESG reporting template is a strong framework that considers critical KPIs and multiple reporting dimensions in a centralised manner. It represents a significant step towards more standardised processes across the industry and an important win for both managers and investors.”
Amilcar Grot, Senior Portfolio Manager, Achmea Investment Management, added, "The new INREV ESG SDDS is improving the way investors receive and evaluate information from managers, making investment analysis effortless and efficient."

The introduction of the INREV ESG SDDS marks a significant step forward in the non-listed real estate sector’s journey towards greater sustainability and transparency. By adopting this standardised reporting template, investors and investment managers can look forward to more efficient and effective ESG reporting processes.

For further information or questions about the INREV ESG SDDS, visit our website or reach out to professional.standards@inrev.org.