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SEP 2017

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F E A T U R E A R T I C L E 26 SEPTEMBER 2017 ThE lEadER 1. http://www.bbc.co.uk/news/science-environment-39329304 2. https://www.hillbreak.com/wp-content/uploads/2017/03/real-estate-climate-risk-report-2017.pdf 3. http://www.conecomm.com/news-blog/2016-cone-communications-millennial-employee-engagement-study-press-release 4. http://www.us.jll.com/united-states/en-us/news/3611/millennial-allowance-tenant-improvement-key-to-attracting-tomorrows-workforce 5. http://www.gallup.com/businessjournal/188033/worldwide-employee-engagement-crisis.aspx 6. http://naturalleader.com/thecogfxstudy/study-2/ 7. http://www.worldgbc.org/news-media/world-green-building-trends-2016 and http://www.greensoluce.com/produit/the-sustainability-certifi cation-barometer-2017-edition/ Whatever target is decided, the two most important things are that it is clearly understood across the business, and that it is measured and reported against transparently. CRE teams must link performance- monitoring systems and effi ciency measures to high- level organisational targets, and seek to infl uence the ambition of goals through knowledge of what can be achieved on the ground. Those companies aspiring to be sustainability leaders are typically committing to net-zero carbon or even carbon-positive trajectories. And while the standard green building certifi cations might play a role with these, it's crucial to target the outcomes and impacts rather than the ratings themselves. 2. Know your options It's important to consider what more sustainable real estate choices are available in different markets. CRE professionals should be accessing relevant market research and identifying which are the most committed developers and investors in those markets when it comes to sustainability performance. Contacting the local Green Building Councils (GBCs) can help; there are already over 70 GBCs operating around the globe that have been instrumental in driving up green building supply and demand in their regions. Often a key driver for green buildings will be reducing energy consumption and, consequently, cost. While in many cases increasing the proportion of certifi ed green buildings across a portfolio is a very positive step, it's important to look at performance data to ensure the building is delivering as expected. It is vital for CRE professionals to be aware that green building ratings aren't necessarily the answer to everything; there are lots of green-rated buildings out there that perform poorly for the occupiers and still have high emissions. 3. Know your timescales For CRE professionals managing a complex portfolio, there are key points of intervention that should be considered as part of a strategy to improve sustainability across the board. Lease renewals are often the optimum time to push for improvements within an existing portfolio. Encouraging landlords to make improvements to the energy effi ciency of their properties can deliver signifi cant cost savings for the business. Thanks to the roll-out of minimum energy effi ciency standards (MEES) in the UK, which will prohibit the letting of commercial property below Energy Performance Certifi cate level E, most landlords are well aware of the obsolescence risks and are keen to work with occupiers to de-risk their portfolios. For longer-term strategies, it's important to think how a business's needs might change and to think holistically about assets' respective lifecycles. As we rapidly urbanise, the lifespan of our buildings is decreasing. The current average lifespan of a commercial building is 40 years. As we start to consider buildings (and their constituent parts) as a service rather than an asset, there is an opportunity to encourage circular practices. 4. Innovate Green buildings are a growing market and a global movement; innovating in this sphere will not only deliver savings and improvements in your own portfolio, but can also demonstrate leadership and help position your organisation at the forefront of sustainability. For new acquisitions, CRE professionals can look at green leases that incorporate clauses to assist owners and occupiers with running their premises more sustainably. Specifi c obligations and targets can be set that stipulate the environmental performance and energy effi ciency of the building. There's also plenty of scope to innovate on the monitoring and reporting side of things. As technology advances and monitoring options get more sophisticated, CRE teams can increase their understanding of their portfolios' environmental performance and use this data to drive effi ciency and reduce costs. Julie Hirigoyen is chief executive at the UK Green Building Council.

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