sustainability metrics for commercial real estate assets – establishing a common approach louise...
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Sustainability Metrics for Commercial Real Estate Assets – Establishing a Common Approach
Louise Ellison – Investment Property Forum
Patrick Brown – British Property Federation
European Real Estate Society Conference
Milan, June 2010
Introduction
• Aims• Property Industry Alliance/Green Property Alliance• Current position• Methodology• Data• Recommendations• Conclusions
Aims of the work
• Develop a common framework for measuring and reporting sustainability for property assets
• Informed by investors, owners and occupiers• Focus at the building level• Existing tools are the starting point• To support the industry response to
sustainability
Who/what is the Green Property Alliance
• Property Industry Alliance– IPF, RICS, BCO, BPF, BCSC– Umbrella organisation that enables the organisations
to work together on specific issues
• Green Property Alliance– Sub-group of the PIA focusing on sustainability– Broader membership – CoreNet, UKGBC, BRC– Plus industry – PRUPIM, Hammerson, Drivers Jonas,
GVA Grimley, Gardner & Theobald, JLL.– Aims to ensure cross-industry communication
Context
• Many benchmarking systems established• Little consistency in metrics• No coherent set of data developed• Limited ability to compare performance• Deters businesses from starting to collect data• Weakens industry response to the
sustainability agenda
Current Position
• property investors increasingly alert to sustainability as a risk issue and taking steps to monitor it within their portfolios
• Sustainability benchmarking systems and tools are widely available but measure sustainability using a range of different variables and metrics
• Existing policy interventions have been disappointing in their ability to make sustainability data more widely available
• Data is increasingly required for environmental and climate change regulation but is not commonly available in a consistent, analysable format
• Examples of good practice amongst developers, investors, fund managers
Methodology
• Key sustainability factors identified from previous research– Energy– Water– Waste– Carbon– Normalisation factors for each
• Limited to UK largely• No social factors
Methodology
• Focus on existing benchmarking systems and company reports
• Desk study– 13 benchmarking tools– 11 Company reports
• Physical characteristics• What was reported• Metrics used for carbon, energy, water and waste
• Produced a list of common metrics• Industry workshop to review
Data – Building characteristics
Building details metric Capture
data net lettable area
gross lettable area
total floor area M2
total usable floor area
date of last refurbishment
Tools (13) 8 5 1 6 Reports (11) 8 1 1 5 3
• Little overlap• No data on occupancy levels• No clear data on building classification
Data - energy
• All the tools and majority of reports capture the data• kWh is the most commonly used metric• Energy here refers to that used within the operation of
the building
metric number
to capture data
kWh gj epc not specified
Benchmarking Tools (13)
13 6 2 1 4
Reports (11) 9 6 2 1
Data – renewable energy
• Captured by majority of tools and reports• kWh again used by the majority
metric Number
to capture data
kWh gj minimum % from renewables or onsite
unspecified
Benchmarking Tools (13)
10 5 2 1 2
Reports (11) 8 4 2 2
Data - Water
• Routinely collected data• Most using M3
• Common position should be achievable
metric Number to
capture data
M3 or M3pa total withdrawn by source
millions litres
kilo litres or kl/m2
unspecified
Benchmarking Tools (13)
8 4 1 3
Reports (11) 11 6 1 1 2 1
number to capture data
M3 or M3 pa millions litres/m2 p.a.
% total volume recycled
facilities in place
unspecified
Benchmarking Tools (13)
8 3 1 1 1 2
Reports (11) 4 1 1 2
Data – Water recycling
• Less commonly captured for company reports• M3 the common metric• % of total usage important
Data - Waste
• Commonly reported• Little consistency in reporting format• Issues arose regarding origination of waste and
accountability
Waste number to capture data
tonnes to landfill/ incineration
net waste to landfill
total waste in tonnes
kg/m2/ year
Waste by route
unspecified
Benchmarking Tools (13)
7 1 2 1 3
Reports (11) 9 2 1 3 2 1
Data – waste recycling
• Wide range of metrics used• Issue of origination is again key
Capturing data
Waste by route
Tonnes by waste type
Facilities in place
Total in tonnes
Recycled proportion of total
unspecified
Tools (13) 7 2 1 2 2
Reports (11)
9 3 2 2 2
Data - Carbon
• Commonly reported• Clear split in basis of reporting• Increasingly important• Abstract concept for industry – need resource targets too
Carbon metric Number to
capture data
defra grid mix standard and fuel emissions standards
ghg protocol not specified
Benchmarking Tools (13)
10 5 3 2
Reports (11) 9 2 7
Recommendations - data
Resource How measured Metric Performance indicator
Energy/renewable energy
Landlord services/tenant supply metering
kWh kWh/m2 NLA or occupancy/year
Water used/recycled
Reference to bills M3 M3/M2
NLA or Occupancy yearratio of total
Waste/recycled waste
Direct measure or survey
tonnes Tonnes/occupancy or M2 NLA/yearRatio to total waste
Carbon Defra reporting factors
Metric tonnes/CO2e
Kg/CO2e/m2 NLA or occupant/year
Recommendations - normalisation
Criterion Metric How measured
Type of building Type by use Office/retail etc
Occupancy Number of occupants NLA occupied
Vacancy Space unfilled NLA
Days of use Days Days used per week
House of use Hours Hours used per day
Air conditioning? Yes/No/% with ac stated
EPC? Yes/no grade If yes specify grade/year
DEC Yes/no grade If yes specify grade/year
Green rating Yes/no grade If yes specify grade/year
Conclusions
• Analysis shows some commonality • Suggests a level of standardisation in reach• A short list but manageable• Reveals specific areas for further work
– Occupancy levels– Measurement of waste– Standardisation of energy measures– Landlord/tenant split
• More consistency will encourage reporting• List will gradually grow• Further discussion with industry