GRESB Green Bond Guidelines for the Real Estate Sector update and Green Bond market update

1. Green Property Bonds
Market Status and Sector Guidelines
© 2016 GRESB B.V.
Greenbuild 2016
Los Angeles, CA
Dan Winters, CRE
Head of North America

2. Green Bond Market Growth
Continued year-over-year expansion
Market firmly established in 2013 (4x growth)
2014 expansion coincided with release of the Green Bond Principles
Strong pace seen in 2016 YTD
1
0
5
10
15
20
25
30
35
40
45
50
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
as of 3Q

3. Asia-Pacific
12%
Europe
55%
Global
5%
North
America
28%
Asia-Pacific
42%
Europe
29%
Global
2%
North America
27%
Geographic Diversification
Early EU domination | rise of Asia Pacific and North America
Increasing number of issuers in
North America and Asia Pacific
Asia-Pacific demonstrating
strongest growth in 2016
2
as of
3Q16
2015

4. Green Property Bond Issuance
Real estate market share – trailing 4 years
Vasakronan issued first corporate green property bond issuer (2013)
YTD 2016 issuance has equaled 2015 total market volume (3Q16)
3
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2013 2014 2015 2016
REITs
Governments
Corporates
Non-Green Property
$ Billions

5. Green Property Bonds
2016 YTD Issuances
4
MarketScope
Commercial Real
Estate
10 issuers
Listed Real Estate
Companies
Digital Realty Trust
Unibail-Rodamco
Vornado
Muni / Corporate /
Financial Services
55 issuers
Municipals
Ille de France
University of Virginia
Mass. Dev. Authority
Corporates Skanska
Telus
Banks
ABN AMRO
Dev. Bank of Japan
TD Bank
GSEs
Berlin Hyp
Fannie Mae
NWB Bank

6. Property Bond Issuers
Corporates and financial institutions enter market
Corporate issuance is current driving force in green property market
YTD 2016 real estate issuance surpassed 2015 total market volume 5
0
2000
4000
6000
8000
10000
12000
2013 2014 2015 2016
Corporates Governments REITs
$ Billions

7. Observations: Metrics Used
Identifying eligible green projects in prospectus (pre-issuance)
6
Real Estate
Companies
Mostly global building
certification schemes
At least 50% of issuers
use mix of local +
global certification
rating systems
ESG factors pursued are
broad-based
In Common
Identify building
certification schemes
and levels
Approx. 60% specify
energy reduction /
improvement goals
Majority have second
opinions or similar
external review
Corporate /
Financial Service
Objectives / disclosures
range widely to include:
3rd party certifications
carbon reduction targets
social goals
1 in 3 issuers blend
regional and global
green building schemes
Energy ratings tied to
country benchmarks

8. Building Certifications
LEED is the most commonly specified building certification system
Commercial Real Estate
6 issuers (US focus)
Wider range of certification levels
“Hedging on outcomes”
Corporate / Financial Services
35 issuers (global scope)
Tighter range focused at high end
“Pushing the market”
Based on prospectus review 7
0
1
2
3
4
5
6
7
Certified Silver Gold Platinum
0
5
10
15
20
25
30
35
40
Certified Silver Gold Platinum

9. Real Estate Industry Guidance
GRESB Green Bond Guidelines
8
Developed as sector guidance complimenting
the Green Bond Principles
Provides framework for the full spectrum of
real estate issuers and investors
Drawn from GRESB Green Bond Working
Group recommendations
Property bond originators
Underwriters and placement firms
Green bond investors

10. Similarities with Green Bond Principles
GRESB Green Bond Guidelines
9
Use of
Proceeds
Project
Evaluation /
Selection
Process
Management
of Bond
Proceeds
Investor and
Stakeholder
Reporting
Used across multiple bond types:
Green Use of Proceeds Bond
Green Use of Proceeds Revenue Bond
Green Project Bond
Green Securitized Bond
Spans the full range of construction
and real estate investment activities

11. Green Bond Application
Guidelines used in all stages
10
Metrics /
KPIs
Prospectus
(pre-issuance)
Process:
project evaluation
and selection
Reporting
(post-issuance)
Description:
actual use of
proceeds

12. Key updates in 2016
GRESB Green Bond Guidelines
11
Social factors and KPIs added to eligible criteria list
Implemented suggestions on ways to increase transparency and
credibility -- company track record and ongoing monitoring
Guidance on relating entity’s sustainability targets to green bond
framework
Reporting metrics and procedures to communicate environmental
impacts and ESG exposure
1
2
3
4

13. Takeaways
Green bond market prospects to 2020+
Green Bond market demonstrating consistent year-over-year expansion
Real estate sector is a rapidly growing green bond asset class
GRESB offers industry-tailored guidelines to assist bond market participants
GRESB Assessment provides benchmark and track record
GRESB Green Bond Working Group further evolves industry best practices
12

14. Case Study Discussion
Vasakronan and Digital Realty Trust
13

15. Questions & Comments
?
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