Multifamily real estate entities reporting to GRESB, the global assessment and benchmark for the ESG performance of portfolios, can expect new criteria next year. The GRESB Foundation has issued a notice of changes to be implemented in 2025 with a promise of more details later this fall.

The slate of ESG indicators, which collectively underpin GRESB scores, will be revamped to better reflect residential operations and management considerations. Some existing indicators will be culled; others will be revised or given new weights within the total score; and new ones will be added.

GRESB calls the move part of a “wider effort to bring greater sector specificity to the standard” and it is also in sync with growing participation from the multifamily sector. Speaking during a recent webinar, Dan Winters, GRESB’s senior director, strategic initiatives, reported that multifamily accounted for the largest share of new respondents to the recently completed 2024 assessment from a property sector perspective.

In its 15th year, more than 2,200 real estate entities, encompassing roughly 210,000 individual assets worldwide, participated in the GRESB assessment. That’s up from 2,084 portfolios, collectively comprised of 170,000+ assets, in 2023.

Winters theorized the ever-expanding roll of reporting entities is tied to investor demand and, particularly, institutional investors’ need to meet targets for the reduction of greenhouse gas (GHG) emissions and prove other types of environmental and social compliance. At the same time, many of those investors are shifting their real estate allocations away from office properties and into other asset classes.

“We’ve got a lot of 2050, 2045, 2040 commitments, particularly from the big pension plans, and they’re looking for partners in progress to drive down their carbon footprints and to report up to their chief investment officers as well,” he said. “We traffic in non-financial data, and we’ve put a framework and process around non-financial measures that are first and second order material to LP (limited partners) and pension plans.”