Varma achieves four-star rating in Global Real Estate Sustainability Benchmark (GRESB)

Varma substantially improved its ranking in the GRESB real estate sustainability assessment, earning four stars and placing among the top ten in the northern European benchmark group. In particular, ambitious climate targets and systematic sustainability management propelled Varma to a strong result in the assessment.

Varma dramatically improved its ranking in the Global Real Estate Sustainability Benchmark (GRESB). GRESB is a global tool and framework for assessing and benchmarking the sustainability performance of real estate, infrastructure and investment assets, allowing investors to compare their sustainability performance. Real estate investors use the international tool to assess and develop their sustainability efforts.

The GRESB assessment examines the sustainability of the entire direct real estate portfolio. It looks at sustainability-related risks and opportunities, energy and water consumption, greenhouse gas emissions and environmental management systems, as well as the company’s corporate sustainability principles and how they are managed.

Varma is one of Finland’s largest real estate investors, with real estate assets worth approximately EUR 5.0 billion. Varma owns more than 4,000 rental apartments and roughly 70 commercial premises throughout Finland.

This year marks the third time that Varma takes part in the GRESB assessment, and the company scored 82 points out of 100. In 2019, Varma’s first year of participating, the company earned 68 points. Varma’s peers – a group of 113 investors – received 69 points on average. Varma earned the Green Star designation for its sustainability work and ranked in 10th place out of altogether 113 northern European investors.

“We’ve been going full steam ahead in our real estate sustainability work, and it now shows in the tremendous improvement in our GRESB outcome. We have reduced the emissions from our properties by no less than 47 per cent since 2015, and we work continuously to promote circular economy, among other things. In addition, an increasing number of our properties will be environmentally certified in future,” says Sampsa Ratia, Varma’s Investment Director, Head of Real Estate.

Full points for sustainability policies and management

In the GRESB assessment, investors are given a star rating from one to five. This year, for the first time, Varma achieved 4 stars out of a possible 5. The star rating is calculated relative to the performance of peer reporting entities annually.

“We are pleased and proud of how well we did in the assessment. For us, what is more important than the number of points, however, is that we can use the assessment as a tool for developing the sustainability of our real assets. It is also nice to get an outside party’s assessment of how our sustainability compares on global level,” says Johanna Haikala, Real Estate Investment Manager and co-ordinator of Varma’s real estate sustainability work.

According to the assessment, Varma still has some room for improvement, for instance, in the coverage of consumption data, in assessing the economic impacts of climate-related risks and in engaging tenants and lessees.

Varma scored particularly high points for, among other things, its sustainability policies and the management thereof. Varma targets a carbon-neutral investment portfolio by 2035.

“Our goal is for the electricity and heating in our properties to be fossil-free by 2025 and 2030, respectively. We intend to cut the emissions of our housing portfolio in half by 2023, for instance, by using geothermal heating,” explains Haikala.

Varma is currently switching to heat pumps as the heating source for a large part of the properties in its housing portfolio. Heat pumps and solar panels will be installed in 36 apartment buildings,

“In some apartment buildings, geothermal heating will replace district heating entirely, which is also economically sensible, now that the cost of district heating is rising,” Haikala points out.

The GRESB Real Estate Assessment (REA) is a global assessment that is carried out annually. This year, 1,520 companies and funds from 64 countries participated in the assessment. The assessment is based on the 2020 reporting year.

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