In today’s competitive private equity real estate landscape, ESG is no longer optional – it’s essential. Sustainability is fast becoming a core part of the investment proposition, moving beyond compliance into a key value driver. However, despite the growing ESG appetite amongst investors, regulators and tenants, investment managers face challenges around data collection, standardised KPIs, and regulatory validation.
RLB, alongside Scaler, recently co-hosted an ESG roundtable in London with senior leaders from 19 organisations across real estate, finance, and the built environment to discuss key challenges and opportunities ahead. Emerging themes focused on how ESG can add value, the practicalities around managing data, and how GRESB can be a strategic starting point.
Why KPIs matter for ESG in real estate
Investment managers are selling a financial product. At its core, is a financial product as an intangible instrument backed by a set of KPIs, and that’s important to consider when looking at ESG.
Historically, those KPIs have been asset class, strategy, geography and return on investment. ESG, on the other hand, has been framed as an outcome – net zero commitments, GHG reduction pathways, decarbonisation targets. These are all important, but they don’t function well as transactional levers. Investors need something more concrete.
The problem we have had in the past is that, while most investment managers are reaching for EU taxonomy for their KPIs, if you ask them how they calculate that each one will likely give you a different answer. We have not been able to calculate that KPI in a consistent way that the regulators, institutional investors, lenders and valuers all agree as being calculated in a trustworthy way and therefore carries value.
This is why a cross-industry working group is currently working on defining consistent sustainability KPIs. If we have KPIs that are credible, standardised and recognised by regulators and auditors then sustainability shifts from being a marketing claim to a financial feature of the product.
Even if your fund isn’t yet in scope for mandatory reporting, adopting regulator-recognised KPIs voluntarily makes sense:
- You future-proof your investment products
- You give auditors, investors, and lenders confidence
- You put yourself ahead of peers who are waiting until compliance forces their hand
You can still track other ESG data points that matter to your business. But to transact on sustainability, you need the metrics that regulators, auditors, and investors recognise.
How ESG KPIs can add value
Traditionally, if you bought underperforming (brown) assets, refurbished and reposition them into prime (green) assets you would measure success through uplift in rental income or yield compression.
Now, under the EU Taxonomy, for a refurbishment to be counted as sustainable there needs to be a 30% reduction in primary energy demand (PED). This is where ESG becomes a value driver – you can justify higher management fees because you’re delivering additional performance.
Practical data management: keep it simple and scalable
One of the biggest challenges we see is around data collection. Too often, organisations treat data collection as a one-off exercise, rushing to gather information in the lead-up to a submission deadline. The reality is that effective ESG reporting requires ongoing, embedded processes that are revisited and refined regularly.
Data collection should be cyclical. You need to build in processes that bring the relevant key stakeholders together and test how the data collection works in practice. Be proactive. Revisit processes frequently, fix what isn’t working, and don’t be afraid to completely rethink an approach if necessary. This way you reduce the chances of returning six months down the line to find data gaps or a tracker hasn’t been updated in months.
The second thing to consider is that simplicity nearly always wins. Designing a data collection strategy can feel overwhelming and complex, but the most effective systems are those that are straightforward, autonomous and easy for everyone to follow. Overly complicated processes often become barriers to good data.
GRESB as a strategic starting point
The Global Real Estate Sustainability Benchmark (GRESB) provides a rigorous and consistent framework to measure ESG performance at both the asset and portfolio level. Since 2009, it has become the premier provider of sustainability data and benchmarks across real assets, relied upon by more than 150 institutional and financial investors worldwide.
A strong GRESB score demonstrates not only ESG leadership but also robust governance, responsible management, and financial resilience. It influences capital allocation, risk perception, and investor confidence – making it a powerful differentiator in today’s competitive market. Put simply, a high GRESB score can amplify your portfolio in a competitive market.
1 September saw the release of the 2025 GRESB preliminary results – the first insight for investment managers to gauge how their assets and portfolio are performing against industry benchmarks. For many investment managers, this is also an indication that they might need to start making plans to improve areas such as data collection and reporting process management to achieve a better score in the next cycle.
Success with GRESB – how RLB can help
Despite its clear benefits, GRESB reporting is complex, time-consuming, and can be overwhelming for teams already balancing multiple priorities.
This is where RLB can help. We bridge the gap between ambition and achievement. As ESG and sustainability specialists, and a member of the GRESB Partner Program, we go beyond advisory – we are hands-on partners in delivery.
- Upskilling and knowledge transfer: We provide expert-led training and guidance to give your team the clarity and confidence to navigate GRESB reporting. By enhancing your knowledge, we help you lead by example, drive performance, and unlock new opportunities.
- Data collection and automation: We deliver automated ESG data solutions that seamlessly capture information from meters, invoices, spreadsheets, emails, and APIs.This standardises your data into a GRESB-ready format, saving time and reducing errors.
- Scoring methodologies and insights: We break down the scoring system, revealing where your portfolio can capture additional points. Our practical insights help you benchmark against peers and identify strategies that enhance performance.
- Tailored solutions for private equity real estate: We understand the unique ESG pressures facing PERE firms—from investor scrutiny to regulatory shifts.Our tailored strategies reduce risk, ensure compliance, and enhance long-term value.
The future of sustainable finance in real estate
Right now, climate transition KPIs are leading the way. But this approach will expand and, as an industry, if we shift the ESG narrative from reporting and reduction to KPIs and value creation, we won’t just meet compliance, we’ll build financial products that investors actively seek out.
Sustainability is no longer a side-reporting exercise. It is the product. And if you’re not treating it that way, you’re leaving value on the table. In today’s real estate market, ESG performance can be the differentiator that makes all the difference, and GRESB provides the benchmark that investors trust. While the reporting process can be complex, the benefits of achieving a high score are significant: stronger governance, reduced risk, greater investor confidence, and enhanced long-term value and resilience.
With the right guidance, GRESB reporting becomes more than a compliance exercise—it becomes a structured way to understand performance, identify opportunities, futureproof portfolios and gain competitive advantage. We are ready to support you to navigate this journey with clarity and confidence, and translate sustainability performance into lasting impact.
Read more about how we can help you achieve success with GRESB and move ESG reporting into strategic advantage.
For GRESB enquiries, please contact: gresb@uk.rlb.com
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