ULI: Everybody's Talking About Sustainability, Part I

This is true, coming from people and organisations that regularly take sustainability issues into consideration on a day-to-day basis. Two such people were Alvaro Portela, CEO of Sonae Sierra and Sarah Cary of British Land, panelists for the session entitled “Sustainability: From Bandwagon to Salvation”. Mr. Portela spoke in a compassionate manner about the objectives and achievements of Sonae Sierra's sustainable development strategy. The title screen to his presentation displayed “passionate about innovation”, which to me set the tone. The company implements an Environmental Management System, which has been certified by ISO 14001 since November 2005. The EMS encompasses Sonae Sierra's environmental policy an provides a framework for development strategy, objectives, legal requirements, and operational processes. Environmental performance is measured, monitored, acted upon, and audited. People are provided with training and feedback is communicated throughout this process, allowing for continuous improvement. Good environmental and sustainability management is woven into the company's strategy and ethos.

In a more tangible sense, the company invests in technology such as photovoltaic solar panels, systems for groundwater and rainwater re-use, and efficient lighting systems as an example. Energy and cost savings per annum, and payback in years are important metrics compared to the initial cost of investment. In some cases, payback was within one to three years. In the case of an investment in photovotaic solar panels, the payback was nine years compared to the thirty-five year expected use of the panels.

The benefits of the company's approach, Mr. Portela described, were the ability to enhance reputation, facilitate planning permission, reduce environmental impact, and save costs. He placed emphasis on the need to protect the planet. Struan Robertson, co-head of Investment Banking at Morgan Stanley raised a question from the audience. He identified what he believed to be the four drivers of sustainability 1) requirements from tenants, 2) requirements from government, 3) cost savings, and 4) saving the planet. He asked Mr. Portela why he seemed to put #4 first. Mr. Portela replied candidly that by saving the planet first, it implies the other three. Environmental responsibility and sustainability as a way of life for an investor or developer anticipates the needs of tenants, government regulation, and leads to cost savings in the long run.

Sarah Cary, a Sustainable Development Executive from British illustrated the same by identifying the various stakeholders and their needs. Regulatory requirements surrounding new and existing buildings drive energy efficient requirements, carbon reduction, and taxation. Regulation is expanding and may impact not only energy use, but also water use and transportation effects. Occupiers drive sustainability through their desire to reduce operating costs. Sustainability is likely to be a significant influencer in the future when occupiers are faced with a choice. Ms. Cary referred to investors as another driver of sustainability and pointed to a number of indices that have been created to assist investors identify, compare, and measure the performance of property companies with strong sustainability credentials. British Land is not alone in its implementation of environmental and sustainability policy – its peers, national and global sustainable buildings councils also influence innovation. Ms. Cary highlighted British Land's goals to stay ahead of regulation by setting internal energy efficiency and carbon reduction targets well above those of the current government.

One of the best and most curious examples of British Land's development approach Ms. Cary presented was 201 Bishopsgate and Broadgate Tower. We often hear about green roofs, which have become a popular way of restoring some foliage and plant life as the environment has become more built up. In the case of this office development near Liverpool Street Station, which was built over a derelict site, a brown roof of rubble and sparse vegetation was installed on the roof of he low rise building on the development. This was to mimic the original derelict site and provide an area familiar to birds and wind blown species that had naturally colonised the former site. This demonstrates a compassionate thoughtful approach, catering to the specific site and needs of the surrounding ecosystem as opposed to a reflexive reaction to a trendy fad. Another interesting piece of information presented by Ms. Cary was the study of the carbon footprint through the lifecyle of a building. Their study indicated that 35% of the lifetime carbon footprint was in the “embodied” carbon – meaning in the structure, central plant and façade, roof, and fit-out. 65% of the carbon footprint was generated from the operation of the building.

Another question from the audience challenged the panelists about environmental impact of customers or end users travelling to their properties. Although 201 Bishopsgate and Broadgate Tower are situated near the London Underground system, transport-wise it still impacts congestion. Certainly in the case of Sonae Sierra's shopping centres, they are relying on a larger catchment area of deep-pocketed shoppers driving to their centres. Mr. Portelo mentioned that Green Travel Plans had been launched at some of their centres (the objective of which was to promote the use of sustainable travel methods to and from their centres for the benefit of staff, tenants, suppliers, visitors, the local community, and the environment). The spectrum of issues is vast and it is easy to attach one's self to particular areas and focus on them. Highlighting that the operation of a building, not just the fabric of the building itself contributes more to its lifetime carbon footprint brings to light the need for occupiers to take some responsibility as well. Investors speak with the financing and investing decisions they make – do they support sustainability-minded and responsible companies or not? Consumers can speak by the spending and travel choices they make. The question about the impact of getting to and from buildings links the impact of transportation to the impact buildings make. But the studies now show that buildings contribute to 40% of carbon emissions. So do we focus on the buildings or the transportation we use to get to them?

The audience was attentive and there was certainly not enough time to discuss and debate the issues. The topic of sustainability is far-reaching beyond energy efficiency, biodiversity, cost savings, and staying ahead of the competitors. Collaboration and communication between owner and occupier can lead to efficiencies, helps ensure that the requirements of both tenant and landlord are best met, and hopefully in the long run use is sustained. Sustainability is also about the integration of buildings with their communities and the interaction between them. Property functions well with sustainable businesses occupying them and people using them in a manner that can extend into the long-term.

This article first appeared on www.compositionadvisory.com/ideas.