Five-Minute Brief: Sustainability Reporting Trends in the Canadian Real Estate Market

Quinn+Partners reviewed the sustainability reports of 17 publicly listed Real Estate Investment Trusts (REITs) with a combined market cap of over CAD 40 bn and 11 private real estate companies managing more than CAD 350 bn in assets. As mandatory sustainability disclosure rules advance towards adoption, we wanted to provide our insights on the state of the sustainability reporting landscape for the Canadian real estate market. Here is what we found.

Reporting Frameworks

Voluntary sustainability disclosure frameworks are readily used by most Canadian real estate companies. REITs commonly use the Sustainability Accounting Standards Board (SASB) Standards (82%) and align with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations (71%), which in our experience are the preferred public market investor frameworks. The Global Reporting Initiative (GRI) continues as the most used standard for private entities, with nearly three-quarters of private companies aligning their disclosures with both the GRI and TCFD recommendations.

As global trends toward mandatory disclosure requirements advance, five REITs have indicated their intent to align with International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards. This shift is expected to become more widespread as public companies begin to voluntarily report to Canadian Sustainability Disclosure Standards (CSDS) 1 and 2, which were finalized in December 2024 and are substantially aligned with the IFRS sustainability standards.

Materiality Assessments

Materiality assessments are helping companies prepare for mandatory disclosure requirements. A strong majority of both REITs (82%) and private companies (73%) have undertaken materiality assessments. Among private companies, nearly half recently conducted their assessments in 2022 or 2023, while most REITs carried out assessments in 2021 or earlier. Notably, 29% of REITs indicated plans to update their materiality assessments in 2024. We expect these assessments to include a more sophisticated analysis of both sustainability- and climate-related risks and opportunities. As well, we expect leading companies to report on the positive and negative societal impacts of their businesses through a double materiality lens.

Greenhouse Gas (GHG) Data

GHG emissions and energy performance are reported transparently across the industry. Most companies provide detailed GHG data in their sustainability reports, with additional information on metrics, methodology and data quality/coverage typically included in appendices. 76% of REITs reported over three years of data, compared to 64% of private companies. Nearly three-quarters of companies reported on select scope 3 emissions, particularly those from tenants occupying owned buildings. GHG data assurance is also becoming standard practice with 71% of REITs and 36% of private companies verifying environmental data in their reports. Only one REIT verified social data in 2024.

GHG Targets and Decarbonization

53% of REITs and 82% of private companies disclose GHG reduction targets in their sustainability report with most targets including a long-term net-zero target. Of companies that have set targets, 44% of REITs and 33% of private companies indicate they align with the Science-Based Targets initiative (SBTi). Scope 3 targets are also gaining traction, with approximately 50% of targets including select GHG emissions categories. Many companies have also set interim targets (up to 2035) ranging from 30 – 68% GHG intensity reductions to maintain progress against their long-term reduction targets. However, while our perspective is that credible reduction targets are costed and financed, disclosing decarbonization capital requirements for transition planning is not yet a mainstream practice.

Climate Disclosures

Climate-related disclosures are expected to grow in prominence in 2025 due to the recent release of CSDS 1 and 2, which are voluntary and effective for reporting periods beginning on or after January 1, 2025. Nearly 90% of REITs and 75% of private companies currently report on climate-related risks and opportunities. However, less common is the inclusion of scenario analysis, which explores how different climate scenarios could impact future business operations. Given the amount of uncertainty currently in the market, we anticipate this becoming more prevalent, going forward to strengthen foresight and strategic resilience.

Green Building Certifications

Green building certifications remain a prominent aspect of sustainability programs in the real estate sector. Across private companies, the average portfolio certification rate (by number of properties) reported was 86%, with LEED and BOMA BEST as the leading certifications. Health, occupancy well-being and accessibility certifications such as Fitwel and Rick Hansen are also gaining traction. Approximately one-quarter of companies have aligned at least one property with the Zero Carbon Building certification, reflecting a growing commitment to net-zero development.

Sustainable Development

Over half of private companies are now disclosing waste diversion and materials circularity practices in their construction methods. Reporting on embodied carbon and biodiversity is also becoming more widespread, as real estate companies expand their sustainability programs from a standing portfolio focus to future assets.

Ready to Improve Your Reporting in 2025?

At Quinn+Partners, we support businesses and investors excel in a changing world through effective, credible sustainability disclosure to their stakeholders. To receive further information on key findings and insights from our Canadian commercial real estate sustainability reporting research, please get in touch.