Asia Pacific Capital Markets Hub 2024 - 2025

ESG Ratings: Providing Industry Benchmarks for ESG Performance As ESG reporting is now considered as a basic requirement, some Asia REIT markets have adopted ESG ratings as an advanced option to meet institutional investors’ higher demands for quantitative ESG analysis. The Global Real Estate Sustainability Benchmark (GRESB) is a leading global ESG rating agency focusing on the real estate and infrastructure sectors. It aligns deeply with international disclosure standards and global initiatives and is also compatible with more than 260 international, national, and regional green building standards. With its systematic, quantifiable, and transparent ESG indicator framework, GRESB has become a core tool for measuring asset managers’ performance across the full lifecycle of REITs, providing participating REITs with dynamic quantitative benchmarks to align with global ESG best practices. By the end of 2024, Japanese J-REITs had achieved near-universal participation in GRESB assessments, covering 99% of their market value. The market value participation rates for Singapore S-REITs and Hong Kong REITs also reached 86.7% and 94.3%, respectively. Additionally, both the world’s first Asia-Pacific Green REITs ETF (co-issued by the Singapore Exchange and UOB) and Japan’s first ESG REITs ETF use GRESB rating data as a reference for constituent stock selection and weight allocation. REITs with strong GRESB ratings demonstrate greater resilience against risks and can also leverage low-cost green financing tools (such as sustainability performance-linked loans) to achieve a balance between long term risk and investment returns.

4.2 ESG Practices in the Chinese Mainland REIT Market

4.2.1 ESG Information Disclosure System ESG Policies Are Being Introduced Intensively, With Disclosure Requirements Becoming More Specific and Standardized The ESG information disclosure system in China has been steadily improved in the past two years due to coordinated efforts by relevant regulatory bodies. The China Securities Regulatory Commission (CSRC) has issued a series of regulatory rules and guidelines to clarify requirements and supervisory measures for corporate ESG practices. Stock exchanges have also released related guidelines and manuals to provide listed companies with specific guidance for ESG information disclosure.

34 Cushman & Wakefield