Last year saw numerous developments in the electric-vehicle space, from manufacturers like Tesla, Ford, and Porsche.
In addition to the developments, carmakers made claims about how fast they’ll be introducing new electric and hybrid vehicles over the next few years — partially in response to tightening efficiency and emissions standards.
Some manufacturers have revised their earlier estimates and are planning to reach electrification targets sooner than expected.
The electric-vehicle market made big gains in 2019, across multiple car manufacturers — and the industry has even bigger plans for the years to come.
Rivian, for example, closed out the year with an extra $1.3 billion in investments. Tesla turned a profit, debuted the Cybertruck, delivered the first Model 3s built in its Shanghai plant, and announced a boosted range on its Model S and Model X. On the luxury end of the spectrum, the Audi E-Tron went up for sale, Porsche started production on the Taycan performance car, and Lamborghini announced its first hybrid supercar.
While plenty of tangible EV-related developments happened in 2019, it was also a year of promises made. As of late last year, auto manufacturers had pledged to spend a total of $225 billion developing new EVs in the near future, via The Wall Street Journal.
Increasingly restrictive emissions and fuel-efficiency regulations around the globe — but not so much in the US — are compelling carmakers to roll out vehicles more able to fit within those restrictions. Accordingly, in recent years, manufacturers have advertised a whirlwind of plans and timelines for bringing more EVs to market.
Scroll down to read more about what automakers see in their EV future.
Toyota — whose cars currently make up more than 80% of the global hybrid vehicle market, according to Reuters — announced plans to generate half of its sales from electrified vehicles by 2025, five years earlier than it previously estimated. Despite having its own battery-making operation already, Toyota will partner with Chinese battery manufacturers to meet demand.
Last year, Volkswagen said it will spend more than $30 billion developing EVs by 2023. The manufacturer also aims for EVs to make up 40% of its global fleet by 2030. Not to mention, Volkswagen plans to reach its target of 1 million electric cars produced by the end of 2023, two years ahead of its prior predictions.
In 2019, General Motors said Cadillac will be its lead brand when it comes to electric vehicles. Cadillac’s president said the majority of the brand’s models would be electric by 2030, and left open the possibility that the lineup would go entirely electric by then. He also confirmed that Cadillac would roll out a large Escalade-like electric SUV, which it expects to begin manufacturing in late 2023.
Last year, Ford unveiled the Mustang Mach-E, an electric crossover that gets its name from the company’s iconic sports car. But that wasn’t the only EV Ford had plans for. In 2018, Ford’s CEO said an increased investment in electric-car initiatives would result in a 2022 model lineup that includes 40 electric and electrified vehicles.
In 2019, Ford Europe said it will offer an electrified option for all of its future nameplates and announced at the Detroit Auto Show that a fully electric F-150 would launch in the coming years. The Blue Oval also showed off a lineup of 17 hybrids and EVs — both family haulers and commercial vehicles — it plans to bring to the European market by 2024.
Last year, Volvo released its first electric vehicle, the XC40 Recharge, which it expects will go on sale in the US in the fourth quarter of 2020. The brand also doubled down on its pledge to generate 50% of its global sales from EVs by 2025 and promised that, by the same year, it will reduce the total carbon footprint of each vehicle manufactured by 40%.
Plus, Volvo said it will release a new EV every year for the next five years. This is all part of the Swedish company’s plan to become fully climate neutral by 2040.
Honda revealed its Honda E city car in 2019, and also said every model it sells in Europe will be at least partially electrified by 2022. That’s a big jump from Honda’s earlier projections of a full lineup of electrified cars by 2025. The fully electric Honda E and hybrid Jazz, known as the Fit to US consumers, will jumpstart the initiative.
In 2017, BMW Group projected that electrified vehicles — a term that doesn’t necessarily equate to fully electric vehicles — would account for 15% to 25% of its sales by 2025.
In working toward that projection, BMW Group unveiled the electric Mini Cooper SE last year, targeting it toward “urban mobility.” In June, the Bavarian brand said it will offer 25 electrified vehicles by 2023, two years earlier than it had initially planned. One of those new models — an electric version of the 1 Series hatchback — may arrive as early as 2021.
BMW also projects a twofold increase in electrified vehicle sales by 2021, as compared with 2019, and a 30% growth in those sales year over year through 2025.
Nissan launched the Leaf Plus with a longer range last year, and plans to introduce eight new electric cars by 2022.
At last year’s Tokyo Motor Show, the brand unveiled the concept version of its new Ariya EV, and Car and Driver reported late last year that a production version could make it to the US by 2021. Nissan claims the high-performance crossover will travel 300 miles on a single charge and go from 0 to 60 mph in less than five seconds.
Fiat Chrysler Automobiles
In 2018, Fiat Chrysler announced it would invest $10.5 billion in electrification through 2022. By that year, FCA plans to offer at least 12 hybrid and all-electric powertrain options and launch more than 30 electrified nameplates. As part of that effort, the company announced a $4.5 billion investment in new and existing plants last year that would allow it to produce at least four plug-in hybrid Jeep models.
FCA began making good on that promise when it displayed plug-in hybrid versions of the Compass, Renegade, and Wrangler at the Consumer Electronics Show earlier this month.
In 2017, Daimler, the parent company to Mercedes-Benz, unveiled plans to plunge more than $11 billion into developing its EQ series of electric cars, with the aim of introducing more than 10 EVs by 2022. The company also plans to offer at least one electric option in every Mercedes-Benz model series. Last year, Daimler confirmed that an all-electric G-Wagen is in the works.
In the past decade, the topic of “sustainability trends” has been a subject of great discussion. As we approach a new decade with our climate in crisis, it becomes more important than ever to keep up with and invest in the latest in sustainability efforts- particularly in the world of business. We asked over one hundred eco-minded business leaders what they saw as the sustainability trends that will shape the next decade. Here are the top ten trends they identified. From relying on renewable energy to eating smarter, we were excited to see that they were largely positive and optimistic!
1. CHANGES TO ENERGY PRODUCTION
One of the most talked about sustainability trends is reducing our dependence on fossil fuels. Fossil fuels are nonrenewable sources of energy and are the leading contributor to climate change. In the United States, they’re to blame for more than 80 percent of greenhouse gas emissions — and 98 percent of CO2 emissions alone.
As of 2017, fossil fuels accounted for 80 percent of the energy in the US. While this number seems depressing, this is the lowest share since 1902! Renewables now account for 11 percent, the highest share since the late 1910s.
This is a promising reminder of the fact that collective efforts to invest in and improve our energy infrastructure are having a meaningful impact, and many of you felt hopeful that solar and wind energy will become far more commonplace in the next decade.
Caio Bersot at EnergyRates.ca reminded us that not only are solar and wind energy technologically promising, the trends towards micro-generation of electricity in homes using these renewable energy technologies is also extremely promising. Whether wind turbine, solar panels or even geothermal energy, renewable energy tech is becoming increasingly affordable. This will probably enable people to invest in renewable energy sources without having to spend too much on installation costs.
2. REDUCTION IN OUR ENERGY CONSUMPTION
Another one of the most promising sustainability trends in business is reducing energy consumption. Electric vehicles (especially to fuel freight transportation), LED lighting, smart homes, and LEED certified buildings were all mentioned frequently as critical areas of forward progress because they change how we consume energy (and how MUCH electricity and fuel we consume).
Catherine Pears at Wavelength Lighting shared that in commercial spaces, the installation of LED lighting is less of a fleeting trend and more of a necessary shift required of any energy-efficient building. Legislation in cities like New York City and Berkley, California are already implementing requirements for lighting upgrades to commercial buildings above a certain size— because there is simply no need to be wasting so much energy by keeping traditional light sources (like CFL and incandescent) in place. Now that LEDs have caught up to traditional lighting in terms of price point, and actually pay themselves back in a short amount of time, the choice is pretty clear: choose LEDs and save energy and money.
Liz Jeneault of Faveable saw electric vehicles as the most promising trend. In the coming year and beyond, we absolutely will see people purchasing more plug-in hybrid and fully electric vehicles. Everyone is familiar with Tesla, but automakers across the board are offering or developing more eco-friendly options. Many of the vehicles are coming in the form of an SUV. The SUV segment continues to rise in popularity, as people want just the right of amount performance, comfort, and spaciousness. They don’t want the gas guzzlers of the past, however.
That’s why new vehicles like the Audi e-tron have been such a big hit. The SUV is fully electric, but offers excellent performance. I definitely feel having more zero-emissions vehicle options out there will help consumers make smarter choices for the environment. Reducing our personal carbon emissions is a great way to help address global warming. Since many of us drive so much, opting for a plug-in hybrid or fully electric vehicle can have a big impact.
Caio Bersot also highlighted trends towards a smart home. People buy personal assistants, motion sensors, smart lockers and bulbs, cleaning robots, and smart appliances all the time. The main reason is that such devices make your life more comfortable and practical. However, brands are starting to notice the importance of adding sustainability to the mix. Smart home gadgets will become each time more energy-efficient, be it by using less electricity or for actively preventing you from spending more energy than you should. This will include smart light bulb kits, smart power strips, smart thermostats, smart energy monitors and even smart curtains.
3. PLANT BASED EATING
The next in our series of sustainable trends attempts to mitigate the environmental impact of our diets. Many responses to this question were optimistic about recent trends towards plant-based eating and meat substitutes. It’s no secret that eating meat has a big impact on the planet. Within the United States, agriculture and forestry together accounted for 9.0 percent of U.S. greenhouse gas emissions in 2017 (not to mention the negative impact that agriculture has on soil and waterways). What does this have to do with meat? 26 percent of the earth’s land is actually used for livestock grazing and one-third of the planet’s arable land is occupied by crop production used entirely as livestock feed.
According to John Moss, of English Blinds, the rise of veganism is perhaps the main sustainability trend to watch over the next decade. Nestle, the world’s largest food conglomerate, states that “the plant-based food trend is here to stay,” and America’s top takeaway marketplace GrubHub states that demand for orders of plant-based food have reached an all-time high. In fact, GrubHub’s data indicates that orders of vegan food increased 19% in the first half of 2017 compared to the same period of 2016, and GlobalData identified a 5% rise in the number of data subjects identifying as vegan between 2014 and 2017.
The ability to eat vegan without spending huge amounts of time and money doing so has also increased exponentially in recent years, making this a much more viable option for people who might have previously ruled it out due to time or financial constraints, which is helping veganism as a whole to snowball.
Sylvain Rochon was particularly favorable towards simulated meat substitute products like the Impossible Burger and lab-grown meat.
The “meatless meat” market is growing very quickly because most people don’t care whether their burger or steak is made of actual meat or not. They like the taste and texture and how it feels. These companies like Impossible Foods figured out a way to put vegetables together to simulate color, texture and taste of meat. Since real meat is environmentally problematic and expensive to produce, most people, taste and texture being equal, would prefer to buy the less expensive alternative “veggy-meat” than the real thing.
Lab-grown meat, once ready for mass production and cost-effectiveness, can be an amazingly effective alternative to real meat, giving rise to designer meats. It is much easier to alter muscle cells in a lab environment for taste, texture, color and shape than to do that on a real live animal. So expect different varieties of muscle cell cultures to emerge as sources for future meats without the need to harvest any cells from animals anymore.
And, just like vertical farming in controlled environments, lab-grown meats can be produced within city borders, near distribution centers. This is all great for the consumer’s health, our wallets and the environment, and it is all made possible by the massive amount of investment made in artificial intelligence plus automation over the past few years.
4. REGENERATIVE AGRICULTURE
While many were focused on plant based eating trends, others felt that regenerative agriculture, to support both plants and livestock production, is the more important game changing wave of progress.
Lucinda Cramsey of Moink Box highlights,there are only 60 years left of top soil on this earth if we do not take a step toward regenerative farming. I was born a poor farmer in LaBelle, MO, where I still live today. I’ve seen how big ag. companies abused the family farm, and their land. Without our top soil, we have no food. Without food, we have nothing as humans.
Regenerative agriculture – defined as a system of farming principles and practices that increases biodiversity, enriches soils, improves watersheds, and enhances ecosystem services – is an antidote to our current depletion of topsoil.
Regenerative Agriculture aims to capture carbon in soil and aboveground biomass, meaning that it can feed the planet while simultaneously reversing current global trends of atmospheric accumulation.
Nonprofit Regeneration International claims that transitioning 10% to 20% of agricultural production to best practice regenerative systems could sequester enough carbon dioxide to reverse climate change. That seems like a bold claim, but many independent farmers have been astounded by the results they’ve seen. Take, for example, Gabe Brown who moved to regenerative practices on his ranch in Bismark, North Dakota. Organic matter and rainwater uptake tripled while he was able to handle five-times the number of cattle he used to.
With big brands like Patagonia, Dr. Bronners and Justin’s Nut Butters behind the regenerative agriculture movement, this trend certainly holds promise.
5. CHANGES TO OUR RELATIONSHIP WITH PLASTIC
Many felt that the tides were finally turning on our relationship with single use plastic, in large part driven by the growing awareness of ocean plastic pollution and its impact on ocean life, acidification and the food and water we consume.
Louis Watton of Shiply shared, I believe that cutting down on excess plastic packaging has been and will continue to be the biggest sustainability trend over the next decade, and will have a big impact on both businesses and consumers.
The packaging industry is the single largest producer of plastic. In 2015 there was roughly 146 million tonnes of plastic produced for packaging (over twice the amount that was produced for building and construction) and 141 million tonnes of that plastic is wasted – as such, targeting this industry is very important in the fight for sustainability.
As long as high profile programs such as Blue Planet 2 continue to bring attention to the undeniable negative impact such massive plastic production and waste has on our planet I believe consumers will be hyper-aware of the products they buy and how they are packaged.
John Moss of English Blinds echoed these sentiments. The consumer-led drive to cut down on the use of nonrecyclable plastics is already well underway and this is a trend that is only going to strengthen and snowball in the coming decade. We’re already in a position where a significant number of consumers across all demographic groups are willing to call out businesses of every caliber on the needless use of disposable plastics, and/or vote with their feet when it comes to leaving stores with poor plastic credentials without making a purchase.
Robert Piller of Eco Marketing Solutions reminded us that much damage has already been done. [Plastic reduction] will continue to trend, but will it help reverse ecological challenges? Well, that remains to be seen. The damage done so far is staggering, as between 4.8 and 12.7 million metric tons of plastic materials end up in oceans each year (National Center for Ecological Analysis and Synthesis), and 100,000 mammals and 1 million seabirds are killed each year by consuming plastics (The Ocean Conference). Fixing this problem would require every business and consumer to go green in a big and bold way.
6. CHANGES TO RECYCLING AND COMPOSTING
While strides have been made with composting and recycling in the US and worldwide, both have major challenges. Between the China Ban (and our even more problematic recycling practices before the China Ban) and composters struggling to accommodate (and now banning) materials like bioplastic that add no nutrients to their output, our system of sustainable waste management needs an overhaul.
Many responses were optimistic about technologies that can help us improve both recycling and composting in the future.
Jeff Kneal of The Critter Depot reminded us that our longstanding approach to composting (designed largely for yard waste) is not ideal going forward. One of the biggest trends is composting with black soldier fly larva. Black soldier fly larva are create a highly nutritious compost, that performs better than chemical fertilizers. Black soldier fly larva can also compost meat, fish, and other complex proteins, making them more efficient than worms. BSFL will consume and produce about twice their body weight per day, reducing landfill, and the need for large trash trucks. And, because of their protein, black soldier fly larva are also great food sources for reptiles and chickens.
These types of innovations can help us significantly improve industrial composting, and the output from industrial compost.
Most respondents recognized that recycling is essential to sustainability long-term. We will continue to produce goods out of metal, glass, plastic, paper and other materials – and when these items are at the end of their life, recycling them into new useful goods is optimal.
Improving single stream recycling involves three things:
(1) improved sorting technology, so Materials Recovery Facilities can better and more cleanly sort even more waste items into separate, usable materials. An example of an innovation here is that currently needed – MRFs cannot accept plastic bags because they are so flimsy and get caught in the gears of machinery. Investments are being made to better sort this material out at the front of th sorting line. If successful, plastic film (a material that is technically fairly easy to recycle) could start being accepted curbside nationwide!
(2) improving reclaiming and remanufacturing with recycled content, so manufacturers can readily and effectively use the materials. For example, printing on recycled plastic and paper can be challenging. Colors are less vibrant. Advancements that enable manufacturers to produce goods made with 100% post consumer waste that are still excellent for printing.
(3) developing end materials and products that can be made easily with this recycled content.
For example, as highlighted by Ronald D’souza of Angel Jackets, several brands have taken the initiative of producing sustainable t-shirts made out of plastic water bottles, including the significant brand Ralph Lauren. The most notable benefit of such trend is that it replaces harmful human-made polystyrene with waste plastic bottles that would otherwise be dumped in the ocean. “Approximately 18,834,000,000 are dumped in the landfills every year. While, each plastic bottle can take up to 700 years to perish. Although this method of recycling plastic is still in its developing phase, in the next decade, we will witness more products made of plastic bottles, including Jackets, pants, bags, hats, and most wearable and even customers would opt for such items. Recycling plastic, especially for creating something sustainable is undoubtedly a positive step that will help us reverse the looming ecological challenges the world is facing.
7. GOVERNMENT REGULATION AND POLICIES
The single issue that garnered pessimism about progress was the role that governments play in pushing true, long-term progress when it comes to sustainability.
Though globally, there are a lot of countries whose political leaders have made the planet a core priority, many lamented the fact that this is not true of the US’s current administration. Many did, however, recognize that 2020 is just around the corner and that a new wave of optimism could emerge with our next election – [I’m] not at all confident under the current US administration. I’m somewhat optimistic if we see a new administration elected in 2020. Others also highlighted the role that local and state politicians have played in the US to keep environmental progress going during this time.
8. CONSUMER AWARENESS AND YOUTH ADVOCATES
Even those who felt hopeless about politics voiced optimism of just how passionate the next generation of consumers and citizens is when it comes to climate change and marine plastic pollution.
There is hope of the impact this will have on companies and governments.
Dr. Nardia Haigh shared, Greta Thunberg’s Fridays for Climate movement is reinvigorating people who have worked on climate change for many years, activist investors, and other social movements in related areas. The breadth of industries affected will continue to grow. Climate change activism is no longer of concern just to energy companies, but it stands to affect all kinds of companies as these activists are consumers, students, investors, entrepreneurs, parents, and leaders. All this appears likely to make climate change a strategic issue for all companies, and therefore competition on the basis of one’s climate change credentials will continue to grow.
Sarah Hancock of Best Company shared a similar sentiment. In my opinion, the sustainability trend that will have the biggest impact on business and consumers in the next decade is the increased awareness, education, and action surrounding sustainability initiatives.
People are and will continue taking to social media and the streets to demand action from governments and businesses on environmental issues. Up-and-coming Gen Z’ers will continue to be important influencers in these movements. Expectations for companies to address issues such as climate change, deforestation, and waste will continue to grow. Consumers, especially younger ones, will increasingly shift their loyalties to companies they perceive to be acting on these issues.
As a result, I expect to see many businesses increasing their sustainability commitments through more responsible recycling practices, efforts to become more energy efficient, and donations to environmental causes. A growing number of organizations will likely take the next step and put in the necessary work to gain B Corporation status as well.
9. THE MOVE TO SLOW FASHION
Sheri Turnbow of Bespoke Southerly was one of the many respondents that highlighted the exciting trends towards sustainability in the fashion industry. Fashion is considered one of the largest industry polluters in the world.
Textile factories produce toxic wastewater, synthetic fibers get released into the ocean through washing, fast fashion has created a culture of disposable clothing where very little is recycled and most ends up in landfills — 92 million tons of solid waste dumped in landfills each year.
As a result of these issues, we are seeing trends, particularly among smaller entrepreneurial brands to implement systems to reduce waste at all stages of fashion production. Possibly the most prominent of these is the made to order model. Made to order means each garment is made when the customer orders it – so cut one at a time vs. creating vast amounts of inventory that may never be sold. This model also enables personalization and customizations of clothing that is increasingly popular with millennials.
Steven Li of The Rising echoed these sentiments. High fashion, including Burberry and Gucci can afford to source sustainable materials, but brands like H&M will have a hard time following suit. Consumers are more aware of their environmental footprint than ever before, and when it comes to fashion, consumer decisions will most certainly weigh in the sustainability of the brands they buy from. Fashion has long been an industry optimized for the end product. Supply chains often top emissions charts and it’s good to see brands are pivoting to be more sustainable.
In his legal commentary posted on April 1, 2019, my colleague, Rick Jones, a partner with Dechert LLP, a leading law firm serving the Commercial Real Estate Debt Market, opened with “I’m finally writing about climate change… not because 97 out of 100 scientists are shouting at us incessantly about the need to do something, but because I am dead certain that there are real and fairly immediate risks associated with the public reaction to the perception or awareness (take your pick) of the climate change risk which will drive regulatory intrusion on both the state and federal level, will drive legislation and moreover, will inform market reaction to lenders, investors, developers and their properties because of their climate change posture or profile.”
The esteemed Mr. Jones continues: “Where do we start? We are already seeing some commercial real estate owners begin to adapt to regulatory change. Look at the fantastic engineering marvel which is the Hudson Yards, built 40 feet above sea level, with its storm management system and its fortress-like power system designed to survive a mega storm. That’s expensive. It was clearly purpose driven. We should ask what made them, a bunch of smart folks, put up the money. I guarantee it wasn’t frivolous. I would suggest to you that it’s a sign of things to come. More generally, we are also seeing more solar, more green building technology and more innovations in engineering and in general more willingness to pay real money to address environmental concerns.”
New York has a wet climate, and water – from hurricanes, flooding, storm surges and even blizzards – is one of its primary environmental challenges throughout the year. Of course, buildings in NYC also endure seismic activity, high heat loads in the summer, power outages, manmade disasters like those produced by terrorist attacks as well as high humidity and year-round precipitation.
On the Pacific coast, seismic considerations are a primary concern as well as danger from wildfires, flash floods, and drought.
For most of my career serving the real estate industry, I have primarily conducted due diligence and providing underwriting and financial feasibility analyses for buyers, investors, lenders and capital market participants.
We usually start with a checklist of due diligence and underwriting items which typically includes:
reviewing historical operating statements and related reports,
abstracting leases and tenant correspondence records,
getting a title abstract, checking the flood zone,
obtaining and reviewing a property condition assessment (PSA) and a Phase 1 environmental site assessment (ESA), and
evaluating all legal and contractual arrangements that may affect the income and expenses of the property.
But, if you are like most real estate investors, you have missed one item which affects all properties and portfolios: the risk resulting from climate change and sea level rise as well as man-made hazards: You still do not know how sustainable and resilient the income and future value from your investment is.
Beginning about five years ago, my clients started to ask questions regarding the potential effect of climate change and sea level rise on the sustainability and resiliency of the property.
It is important to note that the risk to real property assets – which are immovable by their nature – exists regardless of whether you believe humans have caused climate change, or not.
In fact, my client chose to divest of assets in Miami in order to buy assets in locales without the risk of sea level rise and our screening process involved an informal, yet substantive, assessment of the risk from climate change – no matter the location of the property.
In an article entitled “What does resilience mean for commercial real estate” by Ryan M. Colker published in the September/October issue of BOMA Magazine, he opens with the following observation:
“Around the world, the frequency, intensity and impacts of natural disasters are increasing. These events can significantly affect the social, economic and environmental functionality of communities. The ability of commercial buildings and the businesses they house to adequately prepare for such events and quickly return to full operations—a quality known as resilience—contributes significantly to a community’s ability to bounce back. In addition to the community-wide impacts, the state of individual buildings also can affect the long-term viability of the businesses that occupy those buildings.”
For a multi-family, commercial or industrial building, we at Emerald Skyline define building resilience as “the ability of the systems and structure to protect, maintain or restore the value of, functionality of, and income generated by a property after a damaging event or calamity – whether it is from a weather event or a man-made circumstance – within a pre-determined acceptable timeframe.
A widely-cited 2005 study by the Multi-hazard Mitigation Council (MMC) of the National Institute of Building Sciences “documented how every $1 spent on mitigation saves society an average of $4.
In a 2018 interim update report by the MMC found that costs and benefits of designing all new construction to exceed select provisions in the 2015 IBC and the IRC and the implementation of the 2015 International Wildland-Urban Interface Code (IWUIC) resulted in a national similar benefit of saving $4 in future losses for every $1 spent on additional, up-front construction costs.
In a report published last month (April 2019) by the Urban Land Institute (ULI) and underwritten by Heitman LLC (Heitman) entitled “Climate Risk and Real Estate Decision-making,” the authors note that:
“In 2017, the year Hurricanes Harvey and Maria hit the United States and storms battered northern and central Europe, insurers paid out a record $135 billion globally for damage caused by storms and natural disasters. This figure does not represent actual damages, which in the United States alone equaled $307 billion, according to National Oceanic and Atmospheric Administration estimates.”
In the Foreword, Ed Walter, Global CEO, ULI, and Maury Tognarelli, CEO, Heitman, highlight the need to address sustainability and resiliency:
“Failure to address and mitigate climate risks may result in increased exposure to loss as a result of assets suffering from reduced liquidity and lower income, which will negatively affect investment returns. At the same time, investors who arm themselves with more accurate data on the impact of climate risks could help differentiate themselves and benefit from investing in locations at the forefront of climate mitigation.”
And the industry – especially among institutional investors – is taking note. “Many leading investment managers and institutional investors are undertaking flood, resilience, and climate vulnerability scans of their portfolios. These mapping exercises seek to identify the impacts of physical climate risks on their properties, including sea-level rise, flooding, heavy rainfall, water stress, extreme heat, wildfire, and hurricanes. Potential impacts being considered range from physical access and business disruption for tenants to the effects that longer-term temperature increases or increased wear and tear on buildings could have on operating and capital expenditure requirements. The ultimate objective for the investment community is to understand how climate will affect asset liquidity and, as a result, returns, in terms of both income and capital growth.”
The results of the survey conducted in preparation of this report, the researchers found that industry participants continue to rely on insurance companies to cover potential losses from physical damage due to a natural disaster – but they astutely point out that insurance “does not protect investors from devaluation or a reduction in asset liquidity.” They categorize the climate risks either physical or transitional risks as follows:
“Physical risks are those capable of directly affecting buildings; they include extreme weather events, gradual sea-level rise, and changing weather patterns.
“Transition risks are those that result from a shift to a lower-carbon economy and using new, non-fossil-fuel sources of energy. These include regulatory changes, economic shifts, and the changing availability and price of resources.
“The location-specific physical threats posed by factors such as sea-level rise, hurricanes, wildfires and forest fires, heat stress, and water stress are among the most easily observable risks to real estate investment. They are a particular concern since many key markets for real estate investment are in areas exposed to the physical impacts of climate change.
These risks and their potential impact on real estate is summarized in the following table.
So far, according to the ULI report, “…most investment managers and investors for directly held assets currently use insurance as their primary means of protection against extreme weather and climate events.” However, “leading companies in the industry … are modifying existing decision-making and management processes to add climate and extreme weather-related factors to those being considered alongside other risks and opportunities.
The National Infrastructure Advisory Council (NIAC) in a 2009 repot characterized resilience as having four key features known as the “4-Rs”:
Robustness: the ability to maintain critical operations and functions in the face of crisis.
Resourcefulness: the ability to skillfully prepare for, respond to and manage a crisis or disruption as it unfolds.
Rapid recovery: the ability to return to and/or reconstitute normal operations as quickly and efficiently as possible after a disruption.
Redundancy, back-up resources to support the originals in case of failure that should also be considered when planning for resilience
From the Whole Building Design Guide, a program of the National Institute of Building Sciences (NIBS), understanding the relationship between Asset (Building) resilience and the community’s resilience requires an understanding of the distinctions and relationships between risk, resilience and sustainability as follows:
Risk is expressed as the relationship between a particular hazard or threat that may degrade, or worse, devastate, the building’s security, operations and functionality and the consequences that result from this degradation of performance.
Resilience is the ability of a building or asset to recover from, or adjust, easily to misfortune or change. The ability to prepare and plan for, absorb, recover from, or more successfully adapt to actual or potential adverse effects as reflected in the aforementioned Four Rs.
Sustainability of an asset is determined by its ability to meet the needs of the present while being able to maintain its functionality over time without not being harmful to the environment or depleting natural resources.
The following diagram created by Mohammed Ettouney and Sreenivas Alampalli in their books on Infrastructure Health in Civil Engineering, presented the relationship of threat, vulnerability and consequences to risk as follows:
The physical review of the property is conducted in conjunction with the Phase I environmental site assessment and the property condition assessment and includes a review of the property’s resiliency features like hardened walls, raised electronic and network connections, secondary systems.
No building operates in a vacuum: Its resiliency, in particular, is directly connected to its location and is directly affected by the surrounding neighborhood, the community, and natural and man-made risks (hazards).
Based on a property-specific assessment including use of mapping services, our team of professionals evaluate a building’s resiliency and sustainability resulting in a rating from 1, not resilient or sustainable (High Risk) to a 5 (Highly Resilient). Our objective is to provide investors with the information they need to make prudent investment decisions that account for the physical, environmental and social risks to the cash flow stream and market value of the building.
At the conclusion of our procedures, we identify land and building improvements that would enhance a property’s resiliency and sustainability. The economics of each improvement or enhancement is assessed in a cost-benefit analysis.
We then evaluate the tradeoffs between performance of a building over its life-cycle and the cost of improving the building systems to ensure its sustainability and resiliency. Accordingly, we evaluate the total cost of ownership (TCO) by determining the capital cost of the property including any improvements plus the present value of the future expenses of operations, maintenance, utilities and the estimated cost to recover from a calamity.
“Solar generation and electricity storage technology are rapidly evolving sustainable energy alternatives. The combination of solar power generation and electricity storage is being utilized in projects around the world”
BOCA RATON, FL, May 1, 2018 – FOR IMMEDIATE RELEASE
Today, Emerald Skyline announced that it will develop land located in southern Arizona for the purpose of solar generation and electricity storage technology research. The project, Emerald City Solar, recognizes that both solar generation and electricity storage technologies are rapidly evolving and will continue to become more cost effective. The southern Arizona project will include research and development facilities to continue to evaluate new technologies as they emerge. It is expected that the total generation of the solar farm will continue to increase along with the value per kilowatt hour of the electricity generated as new technologies are deployed. Emerald Skyline believes the future of renewable energy is in the storage technology and will be exploring novel ways of delivering and storing energy. They have assembled a world-class team to conduct research and development to drive innovation and advanced sustainable technologies to manage surplus renewable power for use on demand and supply of power.
The site of the solar farm development enjoys the best solar profile in the United States and is near major urban centers including San Diego, Los Angeles, and Phoenix. The electricity generated could be sold to the local electric power utility company at prevailing Power Purchase Agreement rates of about .07 per kilowatt hour (KwH). However, through the use of proven electric storage technology, the value of the electricity could be significantly increased through the selling into the power grid during peak demand periods at much higher spot market prices. Selling power in this manner is called Regulation Services.
Deployment of electricity storage is increasing at explosive rates and has been described by the Edison Electric Institute (EEI) as a game changer in the industry. Several new companies can provide large battery-based storage units and have the operating systems required to interact with the electricity grid. Through storing electricity and injecting the stored power into the grid during peak demand periods the cost of peaking power can be greatly reduced. By selling power into the grid during peak demand at much higher prices the value of the solar power farm can be greatly enhanced.
“As a sustainability and resiliency consulting and LEED project management firm, this partnership enables us to collaborate with a host of industry partners to not only produce energy but also to test and demonstrate the benefits of solar energy storage technologies. When electricity storage is not available, excess solar electricity is wasted. When storage is installed, the excess energy can be saved and subsequently used to reduce the use of a fossil fuel,” reports Abraham Wien, LEED AP O+M, Director of Architecture & Environmental Design for Emerald Skyline.
To find out more information about Emerald City Solar or electricity generated from renewable sources such as solar and the current development in electrical energy storage technologies for a greener tomorrow, please contact Abraham Wien at email@example.com or call us 305.424.8704.
Astrid Stawiarz Getty Images for UN Global Compact
Evidence is mounting to show that the frequency and ferocity of extreme weather events is intensifying on a global scale. From severe droughts to powerful storms, we are living in an increasingly changeable, uncertain, and unpredictable world.
You don’t have to believe in climate change to accept this new reality. Resilience and the ability to manage challenges impacting us and our environment are of far greater importance to both business and society. Take the recent destructive hurricanes in the U.S. and the Caribbean, or the devastating floods in Nepal, India, and Bangladesh that represent a stark example of this new reality and of our growing vulnerability.
The role of business within this new reality is changing. Businesses have a critical role to play in helping solve the challenges we face through providing services and solutions that support society. In fact, businesses that do not adapt their models run the risk of eroding trust and ultimately, forfeiting customer loyalty.
Uncertainty in the world—from extreme events, to declining natural resources, to the changing skills required for employment—gives forward-thinking C-suite leaders an opportunity to adopt conscious capitalism through the incorporation of key elements like trust, collaboration, and stakeholder orientation into day-to-day business practices. And, as consumers increasingly demand that their brands reflect these objectives, companies that want to remain competitive will need to adapt by joining the circular economy.
At its most basic, the circular economy replaces the current wasteful linear economic model. Instead of organizations relying on finite resources, they conduct sustainable business. They find renewable resources. They remove waste at every stage, from sourcing to recycling—creating a business model that restores and regenerates, rather than depletes and throws away. They look at how products are made, who makes them, and where, as well as how those same products are recycled or sustainably retired. In fact, adopting a circular economy model is not simply about products and services but also the way we do business as companies. It presents an opportunity to move beyond simply meeting sustainability standards to a solution that transforms the current model of business and one that can create a competitive advantage for the leaders.
Leading companies are still innovating, but now in a way that takes responsibility for their effect on people, the environment, and the state of our world. And they have realized that—contrary to popular belief—doing so can still be profitable. Accenture research shows a potential $4.5 trillion reward for achieving sustainable businesses by 2030. And a number of companies are already making progress toward this aim.
Rubicon Global, for instance, a pioneering U.S.-based waste management company that connects customers directly with independent waste haulers, is disrupting the current waste disposal model to reduce waste to landfill, while passing on $1 million in savings to its clients across 80,000 locations.
Nike, another leading example, is rapidly transitioning toward its closed-loop vision with a bold target for FY2020: zero waste from contract footwear manufacturing going to landfill or incineration without energy recovery. To date, 70% of all Nike (NKE, -0.43%) footwear and apparel incorporates recycled materials, using 29 high-performance, closed-loop materials made from factory scraps.
As the circular economy and conscious capitalism take hold, the C-suite is taking note: 64% of UN Global Compact CEOs say sustainability issues play a central role in their strategic planning and business development, while 59% of CEOs report that their company can accurately quantify the business value created through their sustainability initiatives, up from 38% in 2013.
The circular economy, a critical aspect of this change, is already happening—so much so that the World Economic Forum Young Global Leaders, in collaboration with Accenture Strategy and in partnership with Fortune, recognize leaders through The Circulars, the world’s leading circular economy award program. The Circulars, presented each year at the World Economic Forum Annual Meeting in Davos, attracts entries from individuals and organizations across business and civil society, from global giants such as Unilever to innovative startups such as Method. A winner at The Circulars in 2015, Method was built on wholly circular and sustainable principles, ensuring 75% of its products are cradle-to-cradle certified, meaning they are designed and produced in a socially and environmentally responsible way. Method has eliminated countless toxic chemicals from homes by using natural inputs.
These are just a few examples of organizations driving value through circular economy innovation—there are many more. In a world in which conscious capitalism is becoming mainstream, the circular economy has a significant role to play in enabling businesses to make the transition whilst continuing to deliver value to customers, shareholders, and society. As more businesses take the lead, the opportunity that the circular economy represents will become a reality.
How do you approach your decisions — by thinking primarily of yourself? Or do you consider how your actions will affect the beliefs and lives of others? Some Christians never stop to think that their choices can hurt or destroy someone else’s faith. They justify their behavior, saying God doesn’t convict them for it.
Paul blames the “stronger” Christian for these shipwrecks. He says we’re responsible not only for our actions, but also for the effect of those actions. In the end, we are to care more about the “brother for whose sake Christ died” than about our own wants or desires (1 Corinthians 8:11).
Because our faith is on display before the world, God promises rewards but insists on responsibility. One of the rewards is freedom from condemnation. But that freedom doesn’t mean license to do as we please without considering those who watch our example. Through the Spirit, we must discern the greater good and act on it.
As St. Paul’s teaching relates to climate change and sustainability, Dan Misleh, executive director of the Catholic Climate Covenant, advises, “How we take care of creation will dictate how we care for one another and vice-versa. The Catholic approach holds that we are concerned about both God’s good gift of creation and the impacts of environmental degradation on people, especially those most vulnerable: the poor at home and abroad. As Pope Francis said in Laudato si; “We are faced not with two separate crises, one environmental and the other social, but rather with one complex crisis which is both social and environmental. Strategies for a solution demand an integrated approach to combating poverty, restoring dignity to the excluded, and at the same time protecting nature.’ For Catholics, this is not just about saving the polar bear but also saving ourselves from our own destructive habits.” (From “The Faith Community and Climate Change, A Q&A with Dan Misleh” by John Gehring, Commonweal, April 27, 2017)
In answer to the question, “Are Catholic bishops and clergy rallying behind the Pope’s message or has it been a cautious reception?”; Mr. Misleh replied:
“I think many are embracing the challenges of Laudato si.’ I’m encouraged by the leadership of Catholic leaders like Archbishop Dennis Schnurr in Cincinnati, who is supporting our Catholic Covenant Energies program, in which we bring our education and energy efficiency expertise along with financing to help parishes and schools reduce their energy use, save money and take advantage of the opportunity to educate parishioners, students, and parents about the importance of caring for creation and caring for the poor. I also think of Cardinals Cupich (Chicago), O’Malley (Boston), and Dolan (New York), who have benchmarked all archdiocesan buildings, begun solar installations, and systematically enrolled parishes in energy-efficiency programs.”
Also of note, “during this Year of Creation (2017) — unique to the Diocese of Burlington — Catholics throughout Vermont are encouraged to reflect upon the pope’s encyclical, “Laudato Si’,” and to discover Christ in all living things. From the red clover to the hermit thrush to the Green Mountains, all these gifts that surround us bear the stamp of God and are entrusted to our care, not only for personal benefit but the benefit of all those who share our common home and all those who will inhabit it after us.” (Vermont Catholic, Spring 2017)
The Church of England has created “ChurchCare,” a comprehensive source of information for everyone managing a church building in support of all those in parishes, dioceses and cathedrals caring for their buildings today and for the enjoyment of future generations.” It’s national environmental campaign exists to enable the whole Church to address – in faith, practice and mission – the issue of climate change. As the Archbishop of Canterbury, Justin Welby, is quoted: “Actions have to change for words to have effect.” (See www.churchcare.co.uk)
In another example of faith in action, the Florida East Coast Baptist Association has promoted “Green the Church” to amplify green theology, promote sustainable practices in the member churches and increase the power and potential of the national climate movement.
Although not all churches and dioceses are responding with the same level of commitment, the call to putting faith in action is being heard and answered by many:
In addition to evaluating all of the buildings for water use, energy efficiency and greenhouse gas emissions, the Archdiocese of Chicago has done a significant amount of work in making its buildings energy efficient. St. Joseph College Seminary, for example, has high-efficiency lighting control and heating systems and is LEED Gold certified. The field operations center for Resurrection Cemetery has been heated with a solar system since 1978. The rooftop solar system deployed at Old St. Mary’s School generates an average 40 percent of the building’s energy needs during the summer months.
As part of the effort to adapt St Patrick’s Cathedral in New York to the structural and environmental standards required of the 21st century, the building has been integrated with a state-of-the-art geothermal plant. The new plant allows the cathedral and adjoining buildings which total 76,000 square feet to regulate temperature with increased efficiency and a reduction in CO2 emissions. The Cathedral’s new plant is capable of generating 2.9 million BTU’s per hour of air conditioning and 3.2 million BTU’s per hour of heating when fully activated. Richard A. Sileo, Senior Engineer with Landmark Facilities Group, a member of the design team, says in a release: “We conducted a feasibility study and found that a geothermal system let us meet our goals with the smallest impact.”
At a more grass roots level, The Record, Archdiocesan news for Central Kentucky Louisville) reports on green practices of parishes and faith communities its September 21st, 2017 issue highlighted in an educational and inspirational event held on September 12th entitled “Caring for Creation: Stories of Success from Several Faith Communities:”
The Sisters of Charity of Nazareth (Kentucky) said during the event that they have made significant strides in developing and implementing green initiatives sincethey added a commitment to care for creation to their mission statement in the mid-1990s. The statement reads in part: “Sisters and Associates are committed to work for justice in solidarity with oppressed peoples, especially the economically poor and women, and to care for the earth.”
The Congregation of nuns has committed to reduce their greenhouse gas emissions to zero by 2037.
They have also committed to becoming a “zero waste campus,” meaning that everything is either compostable or recyclable and nothing is sent to a landfill. They are already performing “waste audits” to determine how to eliminate waste.
Francis of Assisi parish has created an Ecological Stewardship committee that has held educational presentations on ecological sustainability, encouraged recycling and reusing cups, instead of foam cups, at parish events (which infuses a sustainable mindset among parishioners); and provided funds to convert lights at its homeless shelter from incandescent bulbs to compact fluorescent lights and is currently working to switch to LED lighting.
The parish cluster of St. James and St. Brigid reported at the Sept. 12 event that parishioners created a Creation Care Team last year under the guidance of the Catholic Climate Covenant.
The Creation Care Team has focused on decreasing overall energy usage, expanding recycling and supporting the St. James School Green Club, which tends anorganic vegetable and pollinator garden on campus, said Cynthia Dumas, one of the members of the Creation Care Team.
The parish bulletin also includes weekly articles on environmental issues and updates about what the care team is doing, Dumas said.
Whether it is at the direction of the archbishop, bishop or other Church leadership, or from the motivation of parishioners seeking to bring sustainability to their faith community, every action that puts into practice the Pope’s teachings on the care of creation contributes to making the world a better place for all. As the mission outreach and communication coordinator for the Diocese of Burlington envisions: “If the Diocese of Burlington’s Year of Creation is successful in raising awareness of and action toward ecological justice, it can serve as an encouraging example for other Catholic dioceses and communities of faith throughout the country and the globe. There are an estimated 1.2 billion Catholics on Earth — just think of what could be achieved if we committed to caring for the created world together.”
Then, as all faiths and faith communities grow in awareness and begins to truly adopt sustainable practices – not just at the parish, but also in the home, at work or school, and make it a priority in our politics – we can change, and quite possibly, save the world.
Faith-based organizations that help religious communities become sustainable include: Catholic Climate Covenant, Florida East Coast Green Union, Forum on Religion and Ecology, Interfaith Power and Light, The Green Seminary Initiative and Green Faith.
“Climate change is the most serious issue facing humanity today. It is already seriously impacting economies, ecosystems, and people worldwide. Left unchecked, it will cause tremendous suffering for all living beings.” From the International Dharma Teachers’ Statement on Climate Change, 1/8/2014
“Because creation was entrusted to human stewardship, the natural world is not just a resource to be exploited but also a reality to be respected and even reverenced as a gift and trust from God. It is the task of human beings to care for, preserve and cultivate the treasures of creation.” Saint Pope John Paul II, The Church in Oceania, 2001, n.31
“For the Church of the 21st Century, good ecology is not an optional extra, but a matter of justice. It is therefore central to what it means to be a Christian.” Dr. Rowan Williams, Archbishop of Canterbury, Church Care, Church of England
“We are convinced that there can be no sincere and enduring resolution to the challenge of the ecological crisis and climate change unless the response is concerted and collective, unless the responsibility is shared and accountable, unless we give priority to solidarity and service.” From the Joint message from Pope Francis and Ecumenical Patriarch Bartholomew on the World Day of Prayer for Creation, September 1, 2017
‘Ecology’ (from the Greek oikos) refers to the Earth as our home; our place of wellbeing. For Christians, ecological stewardship is the conviction that every gift of nature and grace comes from God and that the human person is not the absolute owner of his or her gifts or possessions but rather the trustee or steward of them. These gifts are given in trust for the building of the Kingdom of God. Christians are called to appreciate the spiritual and theological significance of the Earth and to exercise ecological stewardship of the Earth and its resources. The gifts of creation are not simply there for human use, but have their own dignity, value and integrity.
In April 2016, Muslim leaders delivered the Islamic climate change declaration. From an article announcing its’ release, “Islam teaches us that ‘man is simply a steward holding whatever is on earth in trust’,” says Nana Firman, Co-Chair of the Global Muslim Climate Network. “The Declaration calls upon all nations and their leaders to drastically reduce their greenhouse gas emissions and support vulnerable communities, both in addressing the impacts of climate change and in harnessing renewable energy.”
“Mahatma Gandhi urged, ‘You must be the change you wish to see in the world.’ If alive today, he would call upon Hindus to set the example, to change our lifestyle, to simplify our needs and restrain our desires. As one sixth of the human family, Hindus can have a tremendous impact. We can and should take the lead in Earth-friendly living, personal frugality, lower power consumption, alternative energy, sustainable food production and vegetarianism, as well as in evolving technologies that positively address our shared plight.” From the Hindu Declaration on Climate Change
“In the Jewish liturgy there is a prayer called Aleinu in which we ask that the world be soon perfected under the sovereignty of God (le-takein ‘olam be-malkhut Shaddai). Tikkun ‘olam, the perfecting or the repairing of the world, has become a major theme in modern Jewish social justice theology. It is usually expressed as an activity, which must be done by humans in partnership with God. It is an important concept in light of the task ahead in environmentalism. In our ignorance and our greed, we have damaged the world and silenced many of the voices of the choir of Creation. Now we must fix it. There is no one else to repair it but us.” by Rabbi Lawrence Troster
So, all of the world’s major religions and all of the spiritual leaders of the world agree: Being a faithful steward in the care of His Creation is a religious and spiritual mandate: It is our obligation. But then we see churches that run the air conditioning full blast – when only a few people are present or we witness waste in water consumption, food preparation and other church, school and ecological waste in related parish activities. I think this lack of prioritization among every pastor, priest, rabbi, imam, swami and teacher, not just the leadership of a few, as evidenced by the failure to make every building occupied by a religious or spiritual institution sustainable.
As Saint James tells us “Who is wise and understanding among you? By his good conduct let him show his works in the meekness of Wisdom.” (James 3:13)
Hartford Institute estimates there are roughly 350,000 religious congregations in the United States. This estimate relies on the RCMS 2010 religious congregations census. Of those, about 314,000 are Protestant and other Christian churches, and 24,000 are Catholic and Orthodox churches. Non-Christian religious congregations are estimated at about 12,000.
According to the Catholic Climate Covenant in their presentation on the Catholic Covenant Energies program, “there are an estimated 70,000 Catholic-owned buildings in the United States.” Considering that the Catholic Church represents less than 10% of all religious congregations in the U.S., the opportunity for reducing the carbon footprint through sustainable practices in our churches, synagogues, mosques, schools, day care centers and other facilities operated by religious congregations is enormous. The Covenant calculates that by implementing proven and affordable conservation measures, Catholic-owned buildings can reduce energy use in buildings owned by 25% saving the Catholic Church $630 million in energy costs, “reducing energy use by an equivalent of 8.7 million tons of coal.”
Now, imagine if all faith denominations practiced what they preached – and not just in the United States but throughout the world! The Church and all religious denominations would then make a real – and positive – impact on the lives of all people, reducing suffering and promoting the cause of social justice. Further, the savings from lower utility bills and other sustainable practices can be diverted to core Church ministries like education, youth outreach and the care of the least in their community. Finally, through the implementation of sustainable practices, parishioners would learn how to be sustainable in their personal lives – saving on their utility bills helps the poor afford other necessities – life food or medicine.
So, what is a congregation to do?
In his book, “Inspiring Progress: Religions’ Contributions to Sustainable Development,” Gary Gardner, provides five capacities in which religion can help meet the challenge posed by climate change and sea level rise:
Engage members of faith-based groups
Moral authority – offer ethical guidelines and religious leadership
Provide meaning by shaping world views and new paradigms of well-being
Share physical resources; and
Build community to support sustainable practices
And then there is the key to the Kingdom, be sustainable. Here are some of the most cost-effective steps any parish can take to begin the process of becoming a sustainable religious community. These steps can help reduce energy bills, tackle climate change and build a more sustainable future.
Air seal doors, windows and any other drafty locations which reduces the waste of energy used to heat or cool the facility;
Employ energy efficiency technology that optimizes energy performance which includes LED lighting, occupancy sensors, and insulating hot water storage tanks.
Be prudent in energy use: adjusting the thermostats 1 degree lower in the church, parish hall or other facilities can cut heating costs 5 percent over the course of a heating season. Setting the air-conditioning a few degrees higher has an equal effect; and
Improve water use efficiency by using low-flush toilets and urinals in parish facilities, landscaping with plants that don’t require a lot of water, collecting and reusing water for irrigation, employing detection devices to fix leaking pipes and plumbing (Installing high-efficiency plumbing fixtures and appliances can help reduce indoor water use by one-third, saving on water and sewer bills, and cutting energy use by as much as 6 percent);
Choose local suppliers and contractors who employ sustainable practices like energy efficiencies and use of “green” products;
Identify and employ wider, imaginative ways – like a temporary farmer’s market, reversible accommodation for classes, meetings and other uses to use church properties when not engaged in worship; and
Reduce, reuse and recycle.
Then, there are larger projects – like replacing HVAC equipment and appliances that are near the end of their functional life; adding solar panels, installing a geo-thermal plant, replacing vehicles with fuel-efficient, electric, hybrid or alternative fuel vehicles and encourage use of mass transit, carpooling and telecommuting.
The Catholic Climate Covenant and its sister organization, Catholic Covenant Energies, a non-profit organization which is working with the Archdiocese of Cincinnati and similar for-profit organizations like Commons Energy which is working with the Archdiocese of Vermont are available to provide financing.
Now is the time for our religions to take the lead in bringing sustainable practices to their properties, to their parishes and to their community… From the first letter of Saint John (3:18), “Little children, let us not love in word or talk but in deed and in Truth.”
The workplace has evolved exponentially over the past decade, from large, uniform workstations and offices to efficient open plans and auxiliary areas. Technology has advanced from desktop computers and landlines, to laptops, and mobile apps. Innovation in technology has driven an increase in employees’ productivity and efficiency, and innovation in design has strategically followed.
However, effective and engaging workplace design doesn’t stop with a response to technological and real estate needs. It must go further, supporting the creation and integration of a company’s culture, brand identity, and overall community.
The most integrated cultures are co-created by leaders and teams. They are shared, organic, and capable of evolving. An authentic culture cannot be forced, but can be encouraged and supported. Without direct participation and buy-in from those involved, a company’s culture can end up a “mission statement on business card” or a “tagline on a wall” – noticed upon move-in, but quickly forgotten thereafter.
We have been fortunate to see these principles in action with a number of our key clients. In particular, technology companies are dealing with cultural change on almost a daily basis as a result of rapid growth. For example, one financial technology client has an ever-adapting nature and willingness to learn. Their leadership embodies an approach that has allowed exceptionally talented people of various backgrounds to come together with a unified and understood purpose.
The ethos of any company is the driving force. People connect over shared stories and experiences. Our job as workplace designers is to clearly understand the experiences of each and every client. What are their company’s particular drivers and values? How we can create a space that reflects and enhances those values and support the natural curation of their culture?
BUILDING BRAND AWARENESS
Understanding a client’s brand in the context of external perception and internal practices are two crucial elements to designing a meaningful workplace. Through visioning and programming interviews, we find that office staff often seeks their work environment to “walk the talk.” It has to be authentic and reflect the reasons why they joined the company, and offer opportunities to highlight how their contributions matter.
As a first step, we typically will create overlapping layers of an “experience map” to begin building a workplace design that contributes to the client’s ethos. We map out various use scenarios through points of view, such as anticipating the tour our client may give to a candidate or business partners, an all-hands meeting, or an event for external community engagement. These maps overlap with curated moments where people can connect to individual stories or testimonials that are both inspirational and aspirational.
We recently worked with a technology company whose focus is on physical activity and health, and we incorporated design elements to encourage movement. For example, we designed meeting spaces with treadmills, social and collaboration spaces along popular walking routes, and adaptable spaces with natural light, comfortable temperatures, and views. Since the company offices are spread between buildings within a dense urban location, we leveraged the city as a vital active conduit to tie both the company’s brand and connect staff with their customer base. Allowing workflow through the neighborhood created a first-hand brand awareness that extends beyond the interior office environment.
Technology has allowed the traditional office to transform into a dynamic working environment. The workplace is no longer built on “my” office or “my” desk, but has developed into “our” space: a place for community.
Technology has provided flexibility, choice, and options to employees – giving everyone the ability to decide where, how, and when they work. Yet, the reduction of individual workspace has created a need for smaller neighborhoods within the larger community. To help alleviate the possibility of feeling “crowded” it is essential to effectively distribute varied opportunities for different work styles, while providing adequate support and shared spaces.
All of these factors have prescribed that companies establish community guidelines, the rules of engagement for the workplace. These guidelines address issues from etiquette to functionality.
Our Minneapolis office recently relocated and moved to an activity-based “free address” work environment with no assigned seats to untether talent from desks and empower employees with choice. Etiquette guidelines were created to assist in this new environment, including:
Individuals are expected to clear their workspace of all materials if out of the office for more than four hours, and when they leave at the end of the day, so the location can host another user.
Meeting rooms have different behaviors and etiquette associated with them. For instance, huddle rooms are non-reservable and dedicated to more informal, spontaneous meetings or calls.
Project storage, personal storage, and office supplies have centralized home bases outside of the immediate workstations to prevent duplication and waste.
As an overall goal, the new workspace recognizes the value of a variety of workstyles: from large group meetings to spontaneous interactions to individual heads-down work. The studio supports this spectrum of work with project rooms, huddle rooms, pin-up spaces, and focus rooms.
Community guidelines present the parameters for employees to respect each other and their work places and to follow the “Platinum Rule”: treat others the way they want to be treated.
Many building owners and managers take into account the interior and exterior of a building itself when considering sustainable initiatives, but just as important is the area surrounding the building. Landscaping can make a tremendous difference in the sustainability and qualification for LEED certification of a project. Sustainability is certainly an integration of many different factors, and landscaping is a significant one.
Through employing different strategies, landscaping can be practical, functional, and aesthetically pleasing. There are different factors that affect the level of landscape sustainability. Two of the most important are the types of vegetation chosen and the amount of potable water required to keep the plants healthy, otherwise known as irrigation. Not only can efficient landscape design provide noteworthy credit toward achieving LEED certification, but it can also provide substantial water-energy savings. This should be a great motivator for owners and managers to look to their landscaping for improvements to their bottom line.
As stated in a study conducted by the California Sustainability Alliance, water is a necessary resource for any landscape to survive and function. However, not all landscapes are created equal. Climate, weather conditions, and vegetation grown can all impact the amount of water required to sustain life. Typically, if non-native plants are chosen, irrigation will be needed because they cannot survive on local precipitation levels alone. Thus, researching plants with a low water need specific to the project’s local climate is of the utmost importance.
Many states have online databases for irrigation friendly plants. Since we are located in the tropical climate of South Florida, here are just a few of the many trees, plants, flowers, and grasses that are ideal for reducing irrigation demand as found by the Florida-friendly Plant Database:
Jamaica Caper Tree
Purple Love Grass
All of the above vegetation has a medium to high drought tolerance. There is also a resource listing the Plant Hardiness Zones for the entire nation available through the USDA. Once a project’s Plant Hardiness Zone is found by zip code, one can search for plants that thrive within that particular zone.
Choosing native vegetation is a step in the right direction, however without active management of landscape irrigation with adjustments to precipitation levels, the savings of native vegetation alone could potentially be nominal. To fully benefit from using indigenous and drought-resistant vegetation, the irrigation system must be managed. This is why the integrated process of landscape operation, management, and maintenance is so crucial.
Low-volume irrigation systems are a broad classification of systems that provide water more directly to the ground instead of spraying in the air where water can be lost to wind or evaporation.
This is a great starting point when choosing a system that fits a specific sustainable project need. By slowly releasing moisture, these systems greatly reduce runoff1.
Rainwater collection and re-use for landscape irrigation is another method to decrease water-energy expenditures. This harvested water can also be used for non-potable purposes such as toilet flushing.
The benefits to native vegetation and water efficient landscaping are plentiful. As previously stated, huge savings in water-energy can be achieved as well as the following:
Reduces the heat island effect which occurs when dark building and paving surfaces absorb the sun’s energy and re-radiates it throughout the day and night raising the ambient air temperature
Conserves natural resources and provides a habitat for native wildlife
Improves HVAC efficiency which is achieved through the shade generated by the proper selection and placement of trees and shrubs
Minimizes landscape maintenance requirements allowing the building owner to save on labor and materials
Undoubtedly, landscaping can play a huge role in the overall sustainability of a project, whether that is a retrofit or new construction. The take-home message should be to plan ahead and strategize when it comes to landscaping and irrigation. Also, having a water efficient landscape does not necessitate elimination of beauty. Use the abundant resources available online or through a professional and be responsible with water use. Water is in fact our most precious natural resource and it is our obligation to conserve.
 California Sustainability Alliance. Water-Energy Savings from Efficient Landscape Design in California. July 2015.
by Paul L. Jones, CPA, LEED Green Associate, Principal, Emerald Skyline Corporation
One key obstacle to overcome for commercial buildings is the incongruous lease structure. Under the most common commercial lease structures (Modified Gross and Net), the costs of a sustainable retrofit are borne by the owner while the cost savings from reduced utility bills and maintenance costs as well as the improved indoor environment inure to the benefit of the tenant.
The solution is to create a lease structure that equitably aligns the costs and benefits of efficiency, sustainability and/or resiliency between building owners and tenants, known as a Green Lease (also known as an aligned lease, a high performance lease or an energy efficient lease). In short, a green lease facilitates cooperation between landlords and tenants to make their buildings and individual spaces energy and water efficient.
Last month, the US Department of Energy acknowledged property owners, tenants and brokers who are leaders in using green leases to save energy and water in commercial buildings. In a July 2nd National Real Estate Investor article entitled “The Greening of Leasing,” Susan Piperato interviewed Jonathan Saltberg and Jaxon Love of Shorenstein Properties which was one of the “Green Lease Leader” honorees.
Figure 1 Source: National Real Estate Investor, 7/2/2015; Institute for Market Transformation
According to Jaxon Love: “We survey our tenants annually on sustainability and track interest and satisfaction with our program. In 2014, 66 percent of our tenants indicated that green building operation is important or very important to their company; 68 percent of tenants indicated that our green building operation is good or excellent.”
Further Ms. Piperato reports that Shorenstein Properties has cut energy use by 16.2% and cut carbon emissions by almost 15% which is in-line with industry expectations of a 10% to 20% savings in energy and water monthly.
According to Meaghan Farrell, energy and sustainability service, Jones Lang LaSalle (JLL), “Green leases combine the productivity, comfort and sustainability features that tenants are looking for in office space while supporting landlord priorities of improving the triple bottom line and occupancy rates. In addition to achieving both tenant and landlord objectives, green leases have social, economic and environmental implications for companies operating in today’s global economy. Green leases truly are the future of commercial real estate.” (10 Reasons to Sign a Green Office Lease, Meaghan Farrell, Environmental Leader, 10/22/2014. http://www.environmentalleader.com/2014/10/22/10-reasons-to-sign-a-green-office-lease/#ixzz3GtXfESRz)
Green leases not only bring congruity to the financial requirements necessary to do a sustainable retrofit of a building but also to encourage owners, tenants and their employees who occupy the building to employ sustainable building operations.
The JLL Energy and Sustainability Services team has identified that collaboration by tenants and landlords in negotiating and executing a Green Lease results in the following ten benefits (Shorenstein Properties notes that the collaboration required to create a green lease is the first benefit of the program):
Reduce the utility (power and water) consumption, reduce maintenance costs and save money
Improve working relationships between landlord and tenant
Support tenant and landlord corporate sustainability initiatives
Enhance corporate image/brand (especially important for retailers, manufacturers and large public companies and financial institutions)
Demonstrate vision and thought-leadership
Improve civic relations – with climate change, municipalities appreciate buildings and companies that help the community become sustainable and resilient
Contribute to LEED and other green certifications which is increasingly important for buildings to maintain and improve their competitive position
Improve employee productivity, recruitment and retention through proven that daylighting and other sustainable strategies
Generate additional savings and benefits through waste stream diversions
Do the right thing for the earth and humanity in order by reducing the building’s carbon footprint
As stated by Adam Siegel, VP – Retail Industry Leaders Association (RILA), “Green leasing is a process to identify lease provisions that can potentially be modified to address both landlords’ and tenants’ sustainability goals. These provisions tend to foster efficiency improvements that can save both parties money.”
As reported by the RILA Retail Green Lease Primer, lease provisions that modify a standard lease agreement to a green lease fall into five primary areas:
Provide for improvements to the base building shell and common areas;
Provide for improvements to the tenants’ interior spaces consistent with the building’s permitted uses;
Encourage efficiency investments by allocating the benefits derived to the party that is making the investment;
Facilitate the sharing of energy and water usage and waste generation data increasing required for compliance with municipal benchmarking regulations or LEED/Energy Star certification guidelines; and
Clarify who has the rights and responsibilities to make sustainable improvements in spaces like the rooftop.
According to the Shorenstein Properties team, the Green Lease provisions that they are working to incorporate into all of their leases include: Energy alignment; tenant sub-metering, energy information sharing, building performance certifications and green building standards.
Extend/lengthen the lease term which reduces waste associated with tenant replacement and improvements;
Expense reimbursement methodology (.In an article published in the September/October 2010 issue of The Leader, Elizabeth King Fortsneger, a CPA and LEED AP, states: “If the goal is to keep both owners and tenants motivated to support the building’s green initiatives, the modified gross lease, net utilities with sub-metering and possibly an expense stop (full service except the tenant pays utilities) may be a viable alternative.”);
Permitted use that define allowable/restricted uses for the leased premises;
Leased premises tenant build-out specifications;
Capital improvement provisions that allow the landlord to amortize and recover capital costs associated with qualifying sustainable improvements to building and common areas;
Include low-cost efficiency project expenditures in the definition of operating expenses for tenant reimbursement;
Align tax benefits and other monetary incentives for building improvements with the investing party (landlord or tenant);
Submeter each tenant space for electricity, natural gas and water with billing of tenants based on the submeter readings where state codes and utility tariffs allow it (According to Mr. Love, “…submetering…gives the tenant direct responsibility for and control over their energy (and water) cost. The economic incentive to save energy is a powerful motivator.”);
Utility data sharing whereby the tenant provides energy and water consumption data to the landlord monthly while the landlord provides the tenant with periodic reports on the performance of the whole building. As more cities require benchmarking information from landlords, the ability to gather the necessary information from tenants is a necessary condition for regulatory compliance;
Specify sustainable maintenance policies, procedures and materials for use in tenant spaces;
Specify sustainable maintenance policies, procedures and materials for use in common areas;
Define tenant obligations to participate in recycling programs which facilitates the sustainability objective of reducing waste that goes into a landfill; and
Allow rooftop or general access and control to install energy generation systems (solar power) and/or other sustainable improvements.
NOTE: For existing tenants, green lease provisions can be added to the existing lease through a “green lease addendum” that replaces or supplements portions of the lease by adding terms and incentives.
As with every lease, both landlords and tenants need to work together to develop the green provisions appropriate to the property, its use and the tenant space. Quantifying the costs and benefits may require a green diagnostic review/assessment which provides a baseline understanding of the current property operations for inclusion as benchmarked sustainability criteria in green leases, or current lease addenda.
Working with an advisor like Emerald Skyline Corporation whose principals understand both commercial leasing and sustainability can help facilitate the negotiations and the accomplishment of both your investment objectives and your sustainability goals.