GRESB 2025 and Beyond: Regulatory Changes and Investor Expectations

The GRESB 2025 Real Estate Standard advances ESG benchmarking by balancing stability, innovation, and predictability. With global regulatory scrutiny tightening—particularly across the U.S. and Europe—GRESB’s revised framework focuses on outcome-based evaluation, sector-specific metrics, and improved data granularity.

This year’s framework introduces:

1. New recognition for energy-efficient assets (now scored),
2. Granular reporting for renewable energy (unscored, but strategic),
3. Embodied carbon criteria (for 2026 scoring),
4. Biodiversity and nature strategy alignment with TNFD,
5. A separate residential supplement offering tailored indicators.

These enhancements aim to future-proof real estate portfolios while providing a roadmap toward credible, validated decarbonization.

Key Update 1: Operational Energy Efficiency Now Pays Off

GRESB will now reward portfolios with energy-efficient assets, even if year-over-year improvement is minimal. This update, targeting Indicator EN1, is critical for portfolios nearing optimal performance but previously penalized under Like-for-Like scoring.

Why it matters:

• Recognizes one-year data for highly efficient assets.
• No new reporting fields—purely methodological.
• Increases competitiveness for early adopters of energy optimization technologies.

Key Update 2: Renewables — Quality Over Quantity

In alignment with RE100, GRESB now collects more granular data across four new fields:

• Procurement Type
• Market-Based Claim
• Proximity
• Vintage

This enhancement prepares the market for scoring adjustments in 2026–2027, ensuring renewable energy claims reflect their actual climate benefit.

Purpose and Impact:

• These indicators are unscored in 2025 but will shape future scoring from 2026 onward.
• They are critical for verifying the actual climate benefit of renewable energy procurement.

This enhanced disclosure will help differentiate firms making credible net-zero efforts from those relying on superficial offset strategies.

Key Update 3: Embodied Carbon — Testing Before Scoring

GRESB’s 2025 update brings a sweeping focus on embodied carbon, though the actual score changes come into effect in 2026. The groundwork laid this year includes seven new indicators and updates.

Highlights:

• Expected -5.3pt impact for Development Component portfolios if no action is taken.
• Upfront carbon targets and lifecycle stage breakdowns are now collected.
• Encourages carbon transparency in major renovations and new builds.

Key Update 4: Biodiversity and Nature Strategy Aligned with TNFD

In response to the release of the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations in 2023, GRESB introduced a new unscored indicator in 2025 focused on biodiversity and nature-related strategies. This marks a significant step toward integrating nature-related risks and dependencies into ESG assessments.

Key elements reported include:

• Dependencies on natural capital
• Risks and opportunities related to biodiversity
• Corporate strategies and mitigation actions

Key Update 5: Residential Sector Supplement Introduced

GRESB recognizes that the ESG challenges and materiality factors for residential properties differ significantly from those in commercial real estate. In response, the 2025 Standard introduces a standalone Residential Supplement designed to address these sector-specific needs without altering the core scoring for non-residential portfolios.

Key updates included in the supplement are:

• Removal of Non-Relevant Indicators: Indicators such as TC3 (tenant fit-outs and refurbishments) and TC4 (green lease clauses) are deemed inapplicable to residential settings and have been excluded for residential scoring purposes.
• Introduction of New Residential-Focused Indicators: These cover critical topics such as tenant access and equity, liveability, community safety, affordability, and ESG responsibilities embedded in lease agreements.
• Weighted Scoring Adjustment: The impact of these indicators on a participant’s GRESB score is adjusted dynamically based on the percentage of residential assets in their portfolio. A fully residential portfolio receives full weight for these indicators, while mixed portfolios receive a proportionate weighting.

List of Newly Introduced Residential Indicators:

• RES1: Focuses on fair attribution of housing and ensuring accessibility for individuals with physical or socio-economic limitations.
• RES2: Measures walkability and liveability features, offering insight into community integration and quality of life.
• RES3: Evaluates crime monitoring efforts and safety strategies within residential asset locations.
• RES4 and RES5: Address affordability concerns, capturing both the existence of pricing strategies and the proportion of affordable housing units.
• RES6: Assesses the inclusion of ESG-related clauses in residential lease contracts, adapted from the original TC4 framework.

Timeline and Action Plan for Global Portfolio Leaders

GRESB’s 2025 updates represent more than an annual refresh—they initiate a multi-year transformation in real estate ESG assessment. To stay ahead, global real estate leaders must adopt a proactive approach to data readiness, portfolio alignment, and stakeholder transparency.

Roadmap to 2027: GRESB Milestones by Year

• 2025: Pilot phase begins for embodied carbon, renewable energy data, TNFD biodiversity strategy, and residential indicators.

These indicators are collected but not scored, allowing participants to prepare without score penalties.

• 2026: Scoring begins for embodied carbon and ESG clauses in green leases (TC3, TC4).

The optional residential supplement may begin influencing investor interpretation of ESG performance.

• 2027: New building certification scoring framework comes into effect, based on refined criteria. Potential full integration of the Residential Supplement into the main GRESB scoring methodology.

By acting now, asset managers can not only mitigate score risks but also showcase leadership in ESG transparency. GRESB’s evolution is a signal: the race to resilient, verifiable sustainability is accelerating.