Giving Our Clients The EDGE With Our New Technical Engineering Division

I hope you are having a very happy new year, which will also bring you good health and prosperity. It has been three months since my last update bringing the exciting news of our rebrand to EVORA, recognising our own evolution, as well as that of the real estate industry, being transformed by the impact of sustainability.

A lot can happen in three months, as we experienced in 2016 with some pretty groundbreaking changes around the world. So, not to be outdone, we have some pretty groundbreaking news of our own with the launch of EVORA EDGE, our new technical engineering division.

CRE sustainability consultancy, EVORA, launches EVORA EDGE - its new technical engineering division.Click To Tweet

Technical Engineering Solutions for the Built Environment

EVORA EDGE, being an acronym for Energy, Design, Generation and Engineering, further positions EVORA as a leading full service provider to meet the ever-evolving needs of the commercial real estate sector. EVORA EDGE will complement our current energy and M&E consulting provision with a much more comprehensive breadth and depth of engineering solutions.

I am also delighted to announce that Andrew Cooper, an expert in asset and energy management, and Neil Dady, a senior building services engineer, have merged their respective businesses with EVORA to head up EVORA EDGE. Both Andrew and Neil have joined as Directors and bring a wealth of knowledge and practical experience.

Andrew Cooper & Neil Dady join EVORA as Directors of its new technical engineering division, EVORA EDGE.Click To Tweet

EVORA EDGE will not only significantly strengthen our existing technical offering, which includes the delivery of Part L of Building Regulations, energy audits, EPC work and MEES (Minimum Energy Efficiency Standards) compliance, but will also provide us with a wealth of new services, including:

  • Building services specification and management
  • Compliance with the Heat Network (Metering and Billing) Regulations and with CIBSE CP1(Heat Networks: Code of Practice of the UK)
  • Indoor air quality performance auditing (health and wellbeing)
  • Life cycle assessment including embodied carbon

Please click here to see the full list of services delivered by EVORA EDGE.


Andrew Cooper EVORA EDGE Technical Engineering SolutionsAndrew Cooper

Andrew has over 23 years of property experience. He is regarded as an expert in asset and energy management, and has a background in lease advisory. He is a Chartered Institution of Building Services Engineers (CIBSE) Low Carbon Consultant (in Building Design, Building Simulation and Heat Networks), a CIBSE Low Carbon Energy Assessor (to Level 5, the highest level of accreditation possible) and a MEI Chartered Energy Manager. Andrew comments:

“I have worked as an independent consultant and Deloitte LLP sub-consultant since 2008, and I am delighted to be joining EVORA to help set up its new engineering division. EVORA EDGE will both complement and expand upon the existing technical services offered by company.”


Neil Dady EVORA EDGE Technical Engineering SolutionsNeil Dady

Neil has over 25 years Director-level experience in the building services sector, specialising in air conditioning and mechanical services. He has a wealth of experience in delivering energy audits, identifying inefficiencies and optimising energy performance whilst project managing deliverable solutions. Neil comments:

”Having worked with the EVORA team for many years, I am excited to be joining this dynamic business. EVORA EDGE will bridge the gap between design concepts and engineered projects. Our focus will be on practical solutions with measured and managed outcomes.”


Looking Ahead

This continues to be a very exciting time for EVORA. Our mission from the beginning has been to work with our clients to provide practical solutions whilst providing an outstanding level of service.

Our services now extend to:

  • EVORA – expert commercial real estate sustainability consultancy across Europe
  • SIERA – leading sustainability management software for the commercial real estate investment market
  • EVORA EDGE – industry-leading technical engineering solutions for the built environment

EVORA SIERA EVORA EDGE logos together

EVORA - providing practical sustainability solutions and an outstanding level of service to the commercial real estate sector.Click To Tweet

To learn more about any of the services delivered by EVORA EDGE, or to contact Andrew or Neil, please don’t hesitate to get in touch.

New Guidance on Climate Related Disclosure and Reporting

On December 14th 2016 the Financial Stability Board’s Task Force on Climate Related Disclosure published its long-awaited recommendation report. The report sets out recommendations for helping businesses disclose climate-related financial risks and opportunities.


The report states that the impact that global warming can have on economies is widely recognised.  However, at present, it is difficult for investors to know which companies are vulnerable to climate risks.  It is recognised that without financial disclosure, the financial impacts of climate change may not be effectively priced.  Pricing of risk is an essential function of financial markets.  It it is increasingly important to also understand the governance and risk management context in which financial results are achieved.

At present, it is difficult for investors to know which companies are vulnerable to climate risks.Click To Tweet

The Task Force states that non-financial disclosures should be:

  • Adoptable by all organisations
  • Included in financial filings
  • Designed to solicit decision-useful, forward-looking information on financial impacts
  • Strong focus on risks and opportunities related to transition to lower-carbon economy

The Task Force’s recommendations apply to all financial sector organisations including real estate asset managers and owners. Importantly, it is recognised that large asset owners and asset managers sit at the top of the investment chain and, therefore, have an important role to play in influencing the organisations in which they invest to provide better climate-related financial disclosures.

Recommendations are structured into four categories, as summarised below.

Governance

Organisations should disclose their governance approaches covering climate-related risks and opportunities.

Recommended disclosures:

  • The board’s oversight of climate-related risks and opportunities
  • Management’s role in assessing and managing climate-related risks and opportunities
Organisations should disclose their governance approaches covering climate-related risks and opportunities.Click To Tweet

Strategy

Organisations should disclose actual and potential impacts of climate-related risks and opportunities.

Recommended disclosures:

  • Climate related risks and opportunities the organisation has identified over the short, medium, and long term
  • The impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning
  • The potential impact of different scenarios, including a 2°C scenario, on the organisations businesses, strategy, and financial planning (a clear link to the adoption of science based targets)
Organisations should disclose actual and potential impacts of climate-related risks and opportunities.Click To Tweet

Risk Management

Organisations should disclose how they identify, assesses, and manage climate-related risks.

Recommended disclosures:

  • Processes for identifying and assessing climate-related risks
  • Processes for managing climate-related risks
  • Processes for identifying, assessing, and managing climate- related risks are integrated into the organisation’s overall risk management
Organisations should disclose how they identify, assesses, and manage climate-related risk.Click To Tweet

Metrics and Targets

Organisations should disclose how metrics and targets are used to measure and manage risk.

Recommended disclosures:

  • Metrics used to assess climate risk
  • Scope 1, 2 and if appropriate (3) GHG emissions
  • Targets used to manage climate change risks and opportunities
Organisations should disclose how metrics and targets are used to measure and manage risk.Click To Tweet

To underpin these recommendations, the Task Force also sets out seven principles for effective disclosure.

  1. Disclosures should represent relevant information
  2. Disclosures should be specific and complete
  3. Disclosures should be clear, balanced, and understandable
  4. Disclosures should be consistent over time
  5. Disclosures should be comparable among companies within a sector, industry, or portfolio
  6. Disclosures should be reliable, verifiable, and objective
  7. Disclosures should be provided on a timely basis

The Task Force’s recommendations provide a foundation to improve investors’ and others’ ability to appropriately assess and price climate-related risks and opportunities.   They are wide ranging but also practical in the near term allowing the financial industry to develop and grow capability to report within a structured framework.

For information and if you want to get more involved, a public consultation to solicit views on the Task Force’s recommendations is now open until 12 February 2017 and can be accessed here.


EVORA is uniquely positioned to support commercial real estate organisations in the development and reporting of climate risk strategies through to implementation of management plans and collation and analysis of sustainability data using SIERA – our industry leading sustainability management software.

Please do not hesitate to contact us for more information.

EVORA is uniquely positioned to support commercial real estate organisations in the development and reporting of climate risk strategies.Click To Tweet

Science-Based Targets: Considerations for the Commercial Real Estate Sector

Interest in Science-Based Targets (SBTs) has grown significantly following last year’s Conference of the Parties (COP21) in Paris (which led to a climate change agreement signed by 195 member states) and more recently at COP22 in Marrakech. For a general overview, take a look at Part 1 for a short introduction to Science-Based Targets.

The importance of greenhouse gas emission reductions is expected to have varying implications across different industries. For the commercial real estate sector, there are several issues to consider.

Science-Based Targets: Categorising Emissions

SBT platforms require the input of emissions data, which is then analysed to generate emission reduction targets over time. Greenhouse gas emissions are caused by multiple organisational activities. One way to describe greenhouse gas emissions is through Scopes 1, 2 and 3 according to the GHG Protocol as shown in Figure 1.

Science-Based Targets: Discussions for Commercial Real Estate: Blog Image 1

Figure 1. Scopes and Emission Breakdown (Source: GHG Protocol, 2011)

Science-Based Targets: Discussions for Commercial Real Estate: Blog Image 2

Data on emissions from sources is collected, entered into a model, and then targets for each emission scope are set based on the business’ contribution to the overall 2°C reduction plan (agreed at COP21). This relies on the ability to measure and monitor accurately the different categories of greenhouse gas emissions for an organisation’s activities (Figure 1 – GHG Protocol, 2011). The Better Buildings Partnership (2016) recently made this observation, but specifically mentioned the landlord-tenant split and allocation of emissions as the key challenges. The problem for commercial real estate firms is who is made accountable for the emissions– the landlord, the tenant or both?

The problem for commercial real estate firms is who is made accountable for the emissions– the landlord, the tenant or both?Click To Tweet

Different Approaches

We have been asked by clients to explain how Science-Based Targets actually work in practice. This is a good question. At present, there are many approaches available. Examples include: the Sectoral Decarbonisation Approach (SDA); The Absolute Emissions Compression; The 3% Solution; Climate Stabilisation Intensity Targets (CSI); Corporate Finance Approach to Climate-Stabilising Targets (C-FACT); GHG Emissions per Value Added (GEVA) and Context-based Carbon Metrics (CSO). All have different approaches.

How do Science-Based Targets actually work in practice?Click To Tweet

The Sectoral Decarbonisation Approach (SDA) is currently being considered alongside other approaches within commercial real estate. It was originally developed by the Carbon Disclosure Project, World Resources Institute and WWF. Here, we focus on this approach, but in the future, we will consider other methodologies.

How does SDA work?

In short, this method splits up the carbon reduction pathway to different kinds of sectors and activities and is based on the establishment of business-level emission trajectories that support the 2°C global warming threshold, developed by the International Energy Agency, which limits the total remaining cumulative energy-related CO2 emissions between 2015 and 2100 to 1,000 GtCO2 (IEA, 2014).

The step-by-step approach for setting emissions targets

The steps below provide a summary of how SDA targets are set (this is intended to be an overview, please contact us for more information).

  1. Identify emissions by converting energy use into CO2e
  2. Categorize by Activity Type or Scope
  3. Produce a forecast of business-as-usual for each activity type – what will emissions look like if the business continues without intervention?
  4. Produce a forecast for each activity type based on the emission reduction required to align with the global 2°C carbon reduction target. This becomes your SBT
  5. Compare Business-as-Usual vs. Science-Based Target for the different activities
  6. Combine activity-level analysis to identify an overall target
  7. Track progress over time, engage and review
Science-Based Targets: Discussions for Commercial Real Estate: Blog Image 3

Figure 2. Sectoral Decarbonisation Approach Schematic. Source: Science-Based Targets http://sciencebasedtargets.org/

 

Modelling Methodologies – Some Considerations

Emissions data is not the only input that goes into the model – especially with regard to real estate. There are other things to consider:

  • Scale: What do the emissions cover and what is the timescale – building level or portfolio level?
  • Geography and Location: Where does it apply?
  • Activities: What kinds of activities occur in the building? What activity levels are we expecting to see in the building? What are the occupancy levels like? What does the electricity-use look like?
  • Trends and Changes Over Time: What are the consumption trends and how do we see this changing in the future i.e. rates of change?
  • The Grid and Energy Procurement: Should carbon emissions from the grid be factored into the model? How are regional variations in the make-up of the grid and type of energy procurement taken into account in the emission scenarios?

On the whole, there is the question of what to include or exclude from the model. There is a risk of data over-refinements and normalisation, which could lead to an erroneous not-so-Science-Based result, which could be meaningless as a strategy!

Data Accuracies: Measurement and Monitoring

Target-Setting begins with data. If the data was poor at the outset, it cannot be considered to be a true reflection of what is happening in reality and as a result, any target would be inaccurate. SBTs are only scientific in their alignment to decarbonisation pathways which lead to a limit of 2°C global surface temperature increase, but it is wrong to believe that SBTs can act as the silver-bullet approach to achieve cost-savings and greenhouse gas emission reductions directly.

It is wrong to believe that SBTs can act as the silver-bullet approach to achieve cost-savings and greenhouse gas emission reductions directly.Click To Tweet

Another issue is how to set the baseline for SBTs. Of course, the scale and extent of data matters in this case, especially with the issues of measurement, monitoring and completeness of greenhouse gas emissions data at the building and portfolio level.

Concluding Remarks

Setting SBTs has the potential to convey a message and a common goal; but there is a need to link to the bigger picture.

Other factors should be considered alongside SBTs for maximizing the performance of portfolios through achieving energy and cost-saving opportunities. The setting of SBTs as outlined above does not consider opportunity for improvement. SBTs should be used as the initial framework and its design should be informed by data and sustainability management strategies, as well as the climate science. Performance must also be tracked over time to assess alignment to the target.

In the future, SBTs are expected to be a popular area for development, but for now, take-up is still slow in the commercial real estate industry.


What next? It is clear that there is no one-size-fits-all approach, if you identify any issues on sustainability and data management strategies that you would like to talk to us more about, please get in touch.



Further reading:

We’re Hiring! Senior Sustainability Consultant Required to Support Our Growth

Position: Senior Sustainability Consultant
Salary: Up to £37,000 plus benefits and bonus
Location: London or Bolton, Greater Manchester


Overview

EVORA is a successful sustainability consultancy specialising in commercial real estate, which has also developed a market-leading sustainability management software, SIERA. We have an outstanding team of committed professionals and an enviable client base of international blue chip companies, including global property advisors, institutional fund managers and banks.

To support the exciting growth of the business, we are seeking a highly motivated and talented sustainability professional at Senior Consultant level. This position offers a very exciting opportunity to work with high profile blue chip companies delivering a broad spectrum of sustainability services, offering great career potential.

Passion and a determination to deliver excellence are essential qualities, as is a commercially astute and innovative approach to delivering client solutions.


Purpose

  • Delivery of a broad range of sustainability services to commercial real estate sector clients
  • Client management
  • Support in business development

Core Responsibilities

  • EMS development and operation to ISO certification levels
  • CRC management & GHG reporting
  • GRESB completion
  • Manage large environmental data management programmes, coordinating multiple parties across Europe
  • Monitoring and analysis of energy consumption data
  • Client management

Requirements

  • Degree or Masters in related subject & membership of an appropriate and recognised professional body (e.g. IEMA associate/full member)
  • Creative and resourceful with an ability to laterally apply knowledge to deliver value added solutions
  • Detailed understanding of environmental legislation
  • Second European language desirable but not essential
  • Highly articulate and numerate
  • Advanced IT skills

To apply for this position, please send your CV and a covering letter to info@evoraglobal.com with “Senior Sustainability Consultant Application” as the subject of the email.

Science-Based Targets: A Quick Introduction

This is an introductory post. To find out what Science-Based Targets mean for commercial real estate firms, look out for Part 2. You can join our exclusive mailing list here.


What does it all mean?

Interest in Science-Based Targets (SBTs) has grown significantly following last year’s Conference of the Parties (COP21) in Paris (which led to a climate change agreement signed by 195 member states) and more recently at COP22 in Marrakech.

Climate modelling studies point to the influence of human-driven climate change on increasing overall global surface temperatures. SBTs have been established to support achievement of the agreed target which aims to keep global warming below 2°C compared to pre-industrial temperatures (IPCC, 2013). Thus, it is important to situate CO2 emissions within the framework of the past, present and future (IPCC, 2013) and this represents a long-term commitment in tackling climate change.

Science-Based Targets: The Potential?

There is a lot of potential for SBTs, as their use could bolster corporate action on making long-term greenhouse gas emission reductions, as carbon emissions have been proven to enhance the earth’s greenhouse effect, leading to increasing global surface temperatures.

However, SBTs will only be effective because they align to the Paris Agreement’s 2°C target which is a simple, clear goal that not only conveys the urgency of the need for action, but also allows policy-makers to make decisions which have global significance (Rahmstorf, 2014).

How Scientific is a Science-Based Target?

SBTs are scientific in the sense that they align to the 2°C global warming target, but the process that goes into designing a SBT is complex and resource-intensive and may not be transparent to the user. As with climate modelling techniques, tools used to inform SBTs are still undergoing refinements, and to this end, there are still some issues to consider in terms of their practical applications.

To the user, SBTs appear as a ‘black box’ solution. Information on user activities are inputted into the systems and this is used to generate outputs.  However, to the regular user, little known about how the calculations are made. Understanding on how SBTs work will need to develop before we see widespread use.

Science-Based Targets: A 5-Minute Discussion Blog Image 1

Figure 1. A Black Box. Source: https://en.wikipedia.org/wiki/Black_box

Even without a SBT, it makes sense to seek energy-saving measures, apply sustainability strategies to prevent loss of financial value and improve organizational reputation. If used correctly, a SBT can support development of improvement goals and plans. However, such targets can vary according to the context of use, importantly, the data used to inform the target-setting process at the outset. Moving forward, it will be important to assess the applicability of each SBT approach and how it works in practice.

Final Thoughts

There are multiple SBT methodologies out there and results will differ dependent on the approach taken. At a user level the analogy of cake baking using different ovens can be used.  All ingredients are prepared in the same way, however, different ovens lead to differing results. One questions whether multiple different approaches will help to achieve the common goal or will the complexity cause confusion and possibly even slow progress.

SBTs are still in their infancy.  Profile is increasing but understanding is still low. The initiative is certainly thought-provoking and something to look out for in the future. At the present time, SBTs do not have the same weight in the commercial real estate sector than it does in other sectors and take-up has been slow.


Look out for Part 2 in this series: Science-Based Targets: Discussions for Commercial Real Estate


To talk to us about Science-Based Targets and what they mean for your organisation, please get in touch.


Interesting Links:

Science-Based Targets Initiative

COP22 Marrakech

IPCC: Climate Change 2013: The Physical Science Basis

How Can GRESB Help to Deliver Fund Performance? Key Highlights from Our Exclusive Event

Read this post for some exclusive updates from GRESB that were announced during the event, and to find out how you can make sure you don’t miss out on attending our future events.


Background

EVORA is a GRESB Premier PartnerOn Tuesday 15th November 2016, EVORA ran an important industry event considering the impact GRESB (the Global Real Estate Sustainability Benchmark) is having on the real estate industry. Over 60 attendees from more than 50 commercial real estate firms attended.

As a business that works solely with the real estate sector in providing practical sustainability solutions, EVORA has seen the meteoric rise of GRESB since its initiation six years ago. In fact, we have been working with GRESB and supporting our clients in the completion of the survey since 2011 – we are also a GRESB Premier Partner – and this year we were involved in the completion of 41 submissions. So it’s fair to say that GRESB is a subject that’s close to our hearts!

There is no doubt that GRESB has had a major impact in mobilizing the real estate industry to embrace the issues of sustainability. From its humble beginnings in 2010, 2016 saw 759 participants complete the survey representing US$2.8 trillion of asset value. However, the benchmark survey is complex and challenging to complete and GRESB pretty much has a monopoly in this area of benchmarking the sustainability performance of real estate portfolios.

There is no doubt that GRESB has had a major impact in mobilizing the real estate industry to embrace the issues of sustainability.Click To Tweet

And it was with this in mind, that we decided to run this exclusive invitation-only event, kindly hosted by TH Real Estate and chaired by Sarah Ratcliffe, Programme Director at the BBP, which considered ‘How Can GRESB Help to Deliver Fund Performance?’.

Great representation from industry leaders

We had five outstanding speakers from the industry, each with their own experiences and opinions of GRESB: Abigail Dean, Head of Sustainability at TH Real Estate; Dan Grandage, Head of Sustainability at Aberdeen Asset Management; Mathieu Elshout, Investment Director at PGGM; Erik Ruane, formerly Head of Development and Head of Sustainability at a leading pan-European, real estate fund management group; and last but by no means least, our own Paul Sutcliffe, co-Founder and Director at EVORA.

The results of our pre-event survey

Paul presented the results from our pre-event survey completed by the participants, which provided some interesting findings.

Firstly, the majority agreed that GRESB is both investor-driven and important to investors, which should be no surprise, since this was the original intention of GRESB.

Of greater note, was the far smaller proportion who thought their GRESB rating fairly reflected their sustainability performance and accurately reflected the key issues, highlighting that many respondents feel that greater alignment is required.

Do you think your GRESB rating fairly reflects your overall sustainability performance?Click To Tweet

EVORA - How Can GRESB Help to Deliver Fund Performance? Blog Image 3

Opinions of the Speakers

1. The Benefits

Paul kicked off by re-enforcing that GRESB is a force for good, driving change and focusing on participation. He also highlighted the alignment of the survey to a best practice management system approach (Plan/Do/Check/Act), which from our own experiences, support in driving performance – see our well-received thought leadership piece by Ed Gabbitas on this:

Environmental Management Systems: Plan-Do-Check-Act…Deliver?

Abigail highlighted that GRESB had pushed the industry to improve, whilst enhancing investor insight. Dan and Mathieu also said it supported fund strategy and post-performance evaluation, helping in year-on-year objective and target setting for the funds. Importantly, Erik highlighted that at a more practical level, GRESB had promoted wider utility data collection enabling the funds to better understand performance both at portfolio and asset level.

GRESB has promoted wider utility data collection enabling funds to better understand performance both at portfolio and asset level.Click To Tweet

2. The Challenges

What did the speakers see as the challenges? Paul and Abigail highlighted that scoring rewards the wrong behaviour by being more about coverage of data than efficient buildings, and year-on-year improvements rather than absolute performance. Another key issue was the risk of chasing GRESB points, which may not add value to the fund.

A consistent theme from all the presenters was that one size did not fit all, with specific reference to opportunistic and value add funds that can struggle to perform well in the survey, a key area Sander Paul of GRESB picked up on in the Q&A – keep reading!

EVORA - How Can GRESB Help to Deliver Fund Performance? Blog Image 2

A Lively Q&A Session

Presentations were followed by a lively Q&A discussion with a panel that included Sander Paul van Tongeren, Head of EMEA and co-founder of GRESB, and Olivia Muir, European Analyst at UBS. Olivia, highlighted from an investor perspective the importance of GRESB to provide a due diligence tool for the capital markets, but accepted that the GRESB performance data had to be re-worked to provide appropriate outputs.

EVORA - How Can GRESB Help to Deliver Fund Performance? Blog Image 4Our attendees heard it first! Exciting updates for 2018, direct from GRESB

Sander Paul agreed that one size fits all is not ideal. He advised 2017 would be a period of stability for the GRESB Real Estate Assessment with minor updates, but that there would be changes going forward. GRESB is exploring property type supplements, where ESG-performance would be aligned to the specific nuances of different property types, and potentially regional supplements as well.

New industry working groups will be set up in early 2017 to support in the development of the 2018 GRESB Real Estate Assessment.

However, he did highlight that GRESB also offers a Developer Assessment, which might be applicable to some of the opportunistic and value add funds that consider development activities to be their core business. It is a stand-alone assessment that contains a selection of questions from the Real Estate Assessment.

EVORA - How Can GRESB Help to Deliver Fund Performance? Blog Image 5Sander Paul also spoke of the importance of optimising property portfolios to reduce their environmental impacts to counter the significant risks of climate change. He expressed the need for disruptive technologies to help achieve this, including innovative software solutions, an area we have majored on with the development of our unique real estate focused sustainability management software, SIERA.

Comments were also made that the GRESB scoring had been opaque. Sander Paul advised that the GRESB validation process and scoring model is now available here, and also on their website.

The GRESB validation process and scoring model is now available on their website.Click To Tweet

A great wrap-up by Sarah Ratcliffe

In summing up, Sarah Ratcliffe provided a fantastic analogy of the evolution of GRESB, comparing it to a child growing up and currently being a teenager; slightly spotty, with a number of imperfections and a bit awkward, but with lots of potential!

I’d agree with this and I certainly do believe in GRESB’s potential. However, as an industry, the onus is upon us to ensure that GRESB not only transforms through mobilising the real estate sector, but also that the content – and hence the scoring – is absolutely aligned to material sustainability issues that can impact on fund performance both now and in the future.


This was an invitation-only event to those on our mailing list.

If you did not receive an invitation but would have liked to attend, please click here to join our mailing list now.


To talk to us about GRESB support in 2017, implementing an EMS, or to request a demo of SIERA, please get in touch.


Further reading:


GRESB also offers an ESG Masterclass which focuses on interpretation of the annual GRESB Real Estate Assessment results and the various reporting and benchmarking tools available to real estate investors, companies and fund managers. The program addresses all material aspects of ESG in real estate investment portfolios as covered by the GRESB Real Estate Assessment.

 

The Future of Sustainability In The Commercial Real Estate Sector

The Future of Sustainability In The Commercial Real Estate Sector: A Summary of the 7th Annual 40 Percent Symposium


Read this post if:

  • you had wanted to attend the Symposium but were not able to make it
  • you’d like a quick overview of the key points of discussion throughout the day
  • you heard something about the link between frothy beer and the value of data (?!)
  • you’re interested in the feedback of this year’s attendees
  • you’d like to express your interest in attending the next Symposium in April 2018

Introduction

On Thursday 3rd November, approximately 60 senior commercial real estate and sustainability professionals gathered at the Regent Hotel in Berlin for the 7th Annual 40 Percent Symposium.

Founded in 2011 by John Pike, the aim of the Symposium is to create a one-day, high-quality conference which gives delegates a complete overview of current sustainability issues as they affect commercial property both from an investor’s and occupier’s perspective.

joh-pike“To attend a 40 Percent Symposium is to join a committed and thoughtful audience of like-minded property and investment professionals who understand the need to deliver a sustainable future in property. The 2016 Symposium was our most successful event yet.”

John Pike, Founder and Managing Director, The 40 Percent Symposium

After having been held in London in 2015, this year saw the Symposium make a welcome return to Germany, where the event has always been held in high esteem, not least for the fact that it manages to attract attendees from a broader spread of countries.

This year, we were delighted to welcome attendees from more than 7 countries including the UK, Germany, Sweden, Finland, Portugal, The Netherlands and the USA, all eager to network with their peers and share best practices.


Keynote Address

“Let’s pay more attention to the optimisation of existing buildings’ energy performance…”

The day was kicked off by Martin Brühl, Managing Director of Union Investment and RICS Past President 2015/2016. Mr Brühl delivered a catchy keynote address in which he stressed the importance of optimising the energy performance of existing buildings in addition to the weight that is often placed on the credentials of new builds.

Martin Brühl“Today’s 40 Percent Symposium will mark one essential step towards making sustainability our business as usual… Each of us can contribute to that today, embed what we learn from others in our business routine and tell our clients about it. So our work is cut out and we must succeed. This should be an exciting day.”

Martin Brühl, Managing Director, Union Investment


The Outlook for Political Change in the CRE Sector

The first session of the day saw four experts exploring the following topics:

  • European Union carbon dioxide targets and an outlook on the corresponding regulation changes in Europe and Germany.
  • Thoughts on opportunities and challenges of green policy in the commercial real estate sector.
  • Market perspectives on landlord and tenant relationships and legal implications. Examples beyond pure regulation.
  • How to get tenants on board. Launch of a new sustainability survey to get feedback from real estate users.

The audience showed their engagement early on, with several questions to the panel on the social side of sustainability, including the UK’s Modern Slavery Act, on which one of our sustainability consultants, Louise Russell, has written this informative and well-received blog.

Attendees were also particularly keen to hear more about the work that ECE has done across its shopping centres, which includes collaborating with Philips to develop a new lightbulb.


Economics, Opportunities and Risks, from an Investor Perspective

Next up, these four experts delivered engaging presentations on the following topics:

  • The investors’ long-term risk: without green investment, performance improvement is not possible.
  • How does the enhancement of health and wellbeing in the built environment affect value in real estate?
  • How can the GRESB Assessment support the industry to optimise risk/return profiles of real asset investments?
  • Update on market value of green building certified assets in Europe.

The audience was particularly eager to ask as many questions as possible to Dr. Whitney Austin Gray, Executive Director of Research and Innovation at Delos, following her presentation on health and wellbeing. Health and wellbeing is a topic that is gaining ever more interest each week; is it ‘the next sustainability’?

GRESB was also discussed at length during the panel session and the networking breaks, with many attendees asking us about the support we have provided on multiple GRESB submissions through the combination of our consultancy expertise and our sustainability management software, SIERA.

kay-killman“I thoroughly enjoyed the 40 Percent Symposium, especially the well-balanced mix of investors, developers and other organizations.”

Kay Killman, President, German Green Building Association


Best Practice From Across Europe, Focusing on Innovation

The final session of the day, split into two parts, saw these seven speakers present on the following subject matter:

  • 2050 climate goals for apartment buildings built and realised in 2014.
  • Spondability: Sponda’s signature of responsibility, which takes economic, social and environmental aspects into consideration.
  • Creating green value.
  • How data delivers sustainable value.
  • Turning global challenges into business opportunities.
  • The underestimated energy saving potential: premature pump replacement in existing buildings.
  • Harnessing consumer power.

In many ways, this session is what the 40 Symposium is all about – attendees learning about best practices from their peers.

The audience remained highly engaged right up until the close of the final presentation, keen to learn more about everything from water pump replacements to how seriously Sponda, the Finnish real estate investment company, takes CSR measures.

It was also our chance to shine, with our Managing Director, Chris Bennett, delivering a highly entertaining presentation on the value of data to commercial real estate firms. If you’d like to learn more about the relationship between frothy beer and well-managed sustainability data, you’ll have to get in touch! To whet your appetite, you can watch a short clip of Chris’ presentation in the embedded Tweet below.

frank-rader“For my colleagues and I, this was a fantastic event; well organised and with top content. We had many interesting discussions!”

Frank Räder, Head of Customer Training, Grundfos


The 40 Percent Symposium Will Return in April 2018!

We’re delighted with how well this year’s Symposium was received by all attendees. So much so, in fact, that a placeholder date has already been set for the next one in April 2018!

Based on the excellent feedback of attendees saying that they valued being able to get to Berlin very easily and the opportunity to meet colleagues from all over Europe and beyond, the Symposium will once again be held in Berlin.

Here’s what our partner, Dr. Birgit Memminger-Rieve has to say:

birgitmemminger-rieveTo host the 40 Percent Symposium and bring it back to Germany as an international sustainability conference has been a great experience. Very many thanks to John Pike, who moderated the conference with ease and charm and to the EMA Events team that made sure that our schedule was followed with no delays. I’ve talked to a lot of attendees to get their feedback, which I’d like to summarize here.

The Regent Hotel was a great venue and everyone felt at ease during the day, enjoying and discussing versatile and interesting topics with great speakers from various countries. They say they appreciated having this international symposium in Berlin, giving them insight to the actual political framework, current sustainability studies, and best practice experiences. More practical examples would be good to learn about next time. They also emphasized the excellent networking opportunity during the breaks and at the drinks reception in the evening.

All in all, we’re looking forward to the next Symposium in April 2018.”

Dr. Birgit Memminger-Rieve, Managing Partner, ES EnviroSustain – German consultancy partner to EVORA


To register your interest in attending the next 40 Percent Symposium in Berlin in April 2018, click here now.


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Connect With The Speakers, Sponsors and Organisers of the 7th Annual 40 Percent Symposium

Using Listly, we have created the following list of all the Organisers, Speakers, Sponsors and Partners of the 7th Annual 40 Percent Symposium to connect with, which took place on 3rd November 2016 at the Regent Hotel in Berlin.

This allows you to follow and/or connect with those involved with this year’s Symposium. For example, you can follow some of the speakers on Twitter or, where social media profiles didn’t exist, learn more about the company by visiting its website.

Stay tuned for our full post-event write-ups.


Healthy Buildings In The Information Age

For sustainability as a concept, practice and brand, the digital age has revolutionised the forms and scales of information we are able collect, analyse and compartmentalise about our environments.

Technology has made the invisible visible. With popular discussions surrounding health and wellbeing and the WELL Building Standard, technology is already being applied in exciting ways, such as indoor air quality devices in offices and homes which intelligently monitor and display information for room temperature, humidity, CO2 levels and particulate matter. A smiley face appears if the environment is ideal.

On the one hand, this information has brought a new voice to users of space, such as occupiers within buildings who have the ability to measure and monitor their environments. On the other hand, it is attempting to quantify something that was previously seen as unquantifiable. Nourishment, comfort, and mind are just 3 of the 7 concepts of the WELL Building Standard which seek to analyse occupant health and well-being based on key proxies, such as circadian lighting and access to fruit and vegetables.

The key question is: Would the same conclusions be made without technology?

Highly unlikely.

In a building without intelligent air quality devices, or if a person did not have access to an air quality app in the City of London, it is not possible to identify that CO2 or particulate matter level is above average and therefore intolerable. In this case, people simply coped because they did not know. The fact is, information has made people more in touch with their environments; however at the same time it imposes a structure to what is ideal and not ideal, for example, smiley faces and sad faces.

The message is clear: people are becoming more aware of their environments and technology has triggered new ways of thinking about sustainability.

People are becoming more aware of their environments and technology has triggered new ways of thinking about sustainability.Click To Tweet

For example, tenants and landlords need to have better discussions on how office spaces are being used. It is through technology that better landlord-tenant engagements can take place to embed the issues of sustainability and health and wellbeing into lease agreements, fit-outs, on-going building designs and operation.

So the next time you check the temperature in your office space or reach out to grab a muffin at arm’s length from your desk; think of the ways this information is being captured.

Technology is always watching!

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IEA Energy Efficiency Market Report 2016: Key Takeaways for the Commercial Real Estate Sector

About 10 days ago, the International Energy Agency (IEA) released the long awaited Energy Efficiency Market Report 2016, confirming the agency’s growing support for energy efficiency policies and initiatives worldwide. One of the key themes of the report was the emphasis on the critical contribution that energy efficiency can make to broader energy policy goals.

With investment in energy efficiency in 2015 reaching $221 billion and energy intensity improving by 1.8% in the same year, the IEA confirmed that energy efficiency initiatives have reached a sufficient scale to influence global energy markets. The energy intensity improvement seen in 2015 amounts to triple the average rate seen over the past decade, which is a considerable advance, especially in the context of relatively low energy prices. The progress so far should, however, be seen in the context long term targets – as the IEA emphasizes, substantial further improvements will be required to ensure a smooth and timely transition to a sustainable energy system. Particular emphasis is given to the implementation of policy in areas which are either not regulated or subject to inadequate policies.

Given that an estimated 70% of global energy consumption is not subject to any efficiency requirements at present, the scope for improvement is substantial.

The regulation of previously unregulated areas of energy consumption is, however, not the only way to achieve substantial improvements. While the report analyses energy efficiency in the context of a wide range of sectors (e.g. energy intensive industries, light-duty vehicles, rail, shipping and aviation, envelope, lighting, appliances) the real estate sector clearly stands out. In 2015, the real estate sector (commercial, industrial and residential buildings) accounted for 53% of global incremental investments into energy efficiency; more than the next two largest sectors (transport and industry), combined.

Energy efficiency as the fuel of economic development

The report takes an interesting approach to energy efficiency, prompting readers to think about it as the “first fuel” – an energy resource which is available to all energy system stakeholders in abundance and whose integration into energy development strategies can yield varied but important savings and benefits. The IEA highlights energy efficiency as a means to reduce emissions, help tackle air pollution concerns and climate change, but also praises it for its capability to lower energy expenditure. The report also places a lot of focus on the ways in which energy efficiency can help satisfy growing energy demand, improve energy access and energy security and ultimately contribute to economic resilience and the betterment of living standards. The priorities and goals of stakeholders committing to energy efficiency schemes will inevitably vary based on their specific circumstances.

The main achievement of the Energy Efficiency Market Report 2016 is that it manages to bridge the gap between sectors and stakeholders by portraying energy efficiency as a tool which can not only help deliver existing energy and climate goals but also bring about a broader range of the positive impacts such as those listed above.

Key takeaways for the commercial real estate sector

While being subject to a wide range of energy efficiency policies (including Energy Performance Certificates, Minimum Energy Efficiency Standards and Energy Savings Opportunity Scheme in the UK), the commercial real estate sector retains significant potential for further improvement.

On the one hand, energy expenditure in commercial real estate office buildings, for example, usually accounts for a large share of building service charge costs, providing a strong bottom-up incentive to improve energy efficiency. On the other hand, commercial real estate buildings make up a high share of global energy consumption and are also seen as having a wide range of energy savings opportunities, which raises their importance in the eyes of policy-makers. The combination of these top-down and bottom-up factors is a growing interest in the pursuit of energy efficiency in the sector.

What renders the commercial real estate sector truly unique is the range of market-driven certification, assessment and benchmarking initiatives which set an ever increasing industry standard for resource management and efficiency.

Initiatives such as BREEAM, LEED, HQE, ENERGY STAR and GRESB all reinforce incentives for stakeholders to measure and improve energy performance. Moreover, while energy management only constitutes one aspect evaluated in many of these initiatives, the identification and redressing of inefficiencies can go hand in hand with a stakeholder’s ability to attain higher scores.

So how can commercial real estate assets progress towards their potential for energy efficiency?

Our recommendation is to start with a robust measurement and analysis strategy which can, for instance, be undertaken as part of an asset and/or portfolio energy assessment aligned to standards such as ISO 50001. Such an approach is established on the basis of improving accuracy and completeness of energy consumption data which is fundamental in identifying potential areas to enhance energy management and improve efficiency. Analysis can then form the basis of meaningful performance improvement targets and ongoing monitoring and reporting to ensure continued progress. Such ongoing, documented processes will support in voluntary reporting to indices and certification, which can in turn provide an incentive for further improvements.

The growing interest and participation we have witnessed in voluntary certification, assessment and benchmarking initiatives, such as GRESB, are certainly a very good indicator of the commercial real estate sector’s engagement in energy management.


To gain more insight into the ways in which commercial real estate assets can benefit from becoming more energy efficient, refer to one of the following case studies:

For any other questions and to find out how we can help your organisation, please don’t hesitate to get in touch.


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