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Sustainable & Responsible Property Investing in 2007Gary Pivo, MRP, PhDUniversity of ArizonaUNEP FI Property Working GroupInstitute For Responsible Investment
Property’s Triple Bottom Line• Economic Accounts
– Investment returns, public fisc, productivity • Environmental Accounts
– Global warming, biodiversity, water quantity and quality, natural hazards, open space, congestion, brownfields, infrastructure and public services
• Social Accounts– Obesity, worker wages and benefits, worker safety,
respiratory illness, affordable housing, urban revitalization, segregation, unemployment, crime, history & culture, aesthetics, childcare, infrastructure
What is Sustainable & Responsible Property Investing?
A definition • SRPI includes portfolio, asset, or
property mgt. practices that go beyond minimum legal requirements to produce social or environmental gains without harming financial returns and other business performance metrics.
• SRPI involves 3 core strategies: – Acquiring good properties (e.g. energy star)
and avoiding bad ones that can’t be improved (e.g., housing adjacent to freeways),
– Managing properties to improve their social or environmental merits (e.g, recommissioning),
– Being a better company for your employees, community, and environment (e.g., flextime for parents).
SustainableCities and Buildings
Real Estate
Investing
CorporateSocial
Responsibility
SociallyResponsible
Investing
ResponsiblePropertyInvesting
For real estate that world is SRPI, and it lies at the nexus of …
SRPI fulfills two professional responsibilities
• Your fiduciary duty to act wisely on behalf of investors.
• Your ethical duty to not do to others what is hateful to you.
The idea was encouraged in 1996 by the UN Habitat Agenda
• “We…endorse the universal goals of ensuring adequate shelter for all and making human settlements safer, healthier and more livable, equitable, sustainable and productive…[enabled by] socially and environmentally responsible corporate investment by the private sector.”
And it’s consistent with the 2005 UN Urban Environmental Accords• Energy conservation• Recycling• Dense, mixed-use, walkable neighborhoods• Coordinated land use, transportation, & open space• Jobs• Parks • Trees• Wildlife• Transit• Fewer cars, better air• Fewer toxic chemicals• Safe drinking water• Water conservation
Two examples
• Learning Links Centers, LLC
•Morley Igloo Regeneration Fund
A negative example
• Childhood Asthma Linked to Freeway Pollution– investigators show that proximity to
freeways poses a respiratory risk.– For every 1.2 K (3/4 mi) the students
lived closer to the freeway, asthma risk increased by 89 percent.
The Lancet, Feb. 17, 2007
SRPI comes in various formats• LPs & LLCs – Learning Links• REITs – Boston Properties• REIT Mutual Funds – Uniplan Forward Fund• Private Funds – Rose Smart Growth Fund• Private Funds of Funds – Heron Urban Fund• Certificates of Deposit – Shore Bank Community
Development CDs
SRPI REITs• Brandywine Realty Trust
USGBC member and LEED building owner
• Boston Properties US EPA energy star partner and NAREIT Leader in the Light
• Simon Properties Carbon Disclosure Project participant
• Equity Office Properties General Growth Properties DJWSI and FTSE4Good constituents
• Others
Which are best in class?• Boston Properties (office)
Best workplace for commuters, Energy Star, FTSE4Good +140% over 3 yrs
• Brandywine (office & industrial) Commuters, Energy Star and USGBC; +33% over 3 yrs
• Liberty Property Trust (office & industrial) WasteWise, Energy Star, USGBC +33% over 3 yrs
Types of SRPI activities• Policies and Programs
– SRPI benchmarking and reporting
– SRPI officer and committee
– Resource conservation policies
– Responsible contractor policies
– Corporate engagement– Community engagement
• Investments– Urban Funds– Brownfields Funds– Workforce & Low Income
Housing Funds– Historic Preservation Funds– Union Built Funds– Green Buildings & Smart
Growth Funds– Community Investing Funds– Best in Class REITs and
Investment Managers– Separate Accts and Direct
Investments
Examples by property type
Office CalPERS Green Wave
Kennedy Union Only Industrial ProLogis Carbon Trading
Transwestern Energy Mgt Residential Learning Links Teachers
Phoenix Genesis Workforce Housing Fund
Retail PRUPIM for Youth
EBL&S Transit Development
Specialized SRPI Investments• Urban Funds• Brownfield Funds• Historic Preservation Funds• Low Income Housing Funds• Community Development Funds• Green Building and Smart Growth Funds• Union Labor Funds
Are there common practices?
The 2005 Principles for Responsible Investment
Project
Principles for Responsible Investment
UNEP FI/Global Compact, 2005
Common Environmental Practices• Setting energy, water, waste, GHG targets
• Building recommissioning
• Obtaining 3rd party endorsements (e.g., DJWSI)
• Using renewable energy
• Preparing habitat conservation plans for projects
• Training occupiers on conservation
• Supporting urban forestry
Common Social Practices• Providing fair benefits and wages
• Investing in urban revitalization and affordable housing
• Pursuing local hiring and training
• Seeking design and service awards
• Supporting community organizations
• Maintaining good health and safety records
Common Governance & Mgt Practices• Adopting an SRPI policy• Using supply chain screening• Communicating SRPI work via the website or annual
report• Designating an SRPI Officer and Committee• Conducting staff training around RPI issues• Using risk analysis, lifecycle costing,
& value engineering• Publishing SRPI guides for developers
& property mgrs.
What is driving the growth of SRPI?
• The SRI Industry– A US$2.7 trillion worldwide industry– 10% of which equals 81% of US REIT market cap
• The Principles for Responsible Investment– A commitment by 149 financial leaders with US$6
trillion AUM to consider ESG in their decisions– Many, like CalPERS, F&C, CBUS, own property– Has spawned the UNEP FI Property Working
Group which is working to apply the PRI to property investing
• The Global Reporting Initiative– Sustainability reporting guidelines
– 2000 companies are involved including several property firms (Lend Lease, Swire)
– Forthcoming Property Sector Supplement
• The Global Carbon Movement– Buildings + homes + transport = 54% of CO2
– Carbon Disclosure Project (225 investors/$31 trillion incl. State Street, CalPERS, bcIMC, VicSuper) engaging the FTSE 500 (incl. Simon Property, Mitsubishi estate, Swire…) on carbon issues
– Government oversight like the EU 2002 Directive on Energy Performance of Buildings and 2006 Energy End Use Directive
• The Green Building Movement
– 20-30% annual growth in US homes
– New funds by Hines, Thomas, Rose
– CalPERS Green Wave
– 10,000 LEED® registered projects by end of 2009
Some of the drivers
• The $2.7 trillion SRI Industry• The Principles for Responsible
Investment signed by 149 financial leaders with $6 trillion AUM
• 225 investors w/ $31 trillion involved in the Carbon Disclosure Project
So who’s involved with SRPI?
Some leaders around the world• UK: “Hermes believes that a comprehensive and
clearly articulated approach to “Responsible Property Investment” is an essential step to addressing the growing CSR changes that exist within the property investment market.”
• AUS: “Colonial First State Property regards sustainable property investment and management as a fundamental aspect of its business…”
• USA: “At Cherokee, we are committed to cleaning up pollution and creating healthy, vibrant communities while providing strong performance for our investors”
Leaders around the world
• France – Caisse des Depots, Klepierre• Japan – Mitsubishi• US – CalPERS, Cherokee, Kennedy • Australia – Investa, Lend Lease, Colonial• UK – PRUPIM, Land Securities, Morley• China – Swire Pacific• Holland – Wereldhave• Korea – Korea Land
What are the most important property characteristics?
2006 SRPI Delphi Project
• What is the relative importance of various criteria for judging the social and environmental responsibility of real estate investments?
We began with a question
There were 45 experts• From Real Estate, SRI, Government,
Banking, Professions, Foundations, Labor• From US, Canada, UK, Australia, Germany• 21 years of experience on average• Titles include President, Chairman,
Director, COOs, CFOs, VPs, Professors, & Principal
• 75% have master’s degrees or above• Gender balanced but not
diverse
Their chargePlease rate a list of potential criteria in two ways:
• Materiality or their importance for the financial performance of real estate investments, and
• The Public Interest or their importance to our environment or society and therefore of interest to socially conscious investors and society at large
• with 5 being most important and 1 being least important.
10 examples of the 66 criteria• Bicycle trails and facilities • Carpooling services • Childcare onsite or close by• Accommodations for the disabled• Open space, parks or plazas nearby • High level of public transport services• Central location • Historic and landmark preservation • Public art• Alternative energy sources used
The procedure
• Criteria were drawn from sources on sustainable and responsible real estate
• In Round 1, the panel could add criteria
• In Rounds 2 & 3, the panel saw the group median and frequencies from the prior round:
Rating 1 2 3 4 5 Median
Bikes 4 11 29 3 4
Carpool 1 1 6 32 7 4
Consensus was measured using Coefficients of Concordance
Round Materiality Public Interest
Interpretation Confidence in Ratings
1 .33 .28 Weak Agreement
Low
2 .47 .39 Weak to Moderate
Agreement
Low to Fair
3 .60 .55 Moderate to Strong
Agreement
Fair to High
And Mean Average Deviation
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Round 1 Round 2 Round 3
MaterialityPublic Interest
Findings: the top rated criteriaEnergy conservation 4.6/5
Transit oriented 4.1/4.9
Central location 4.9/4.1
Water Conservation 4.9/4.3
Daylight & ventilation 4.4/4.2
Density, mixed-use, walkable 3.9/4.4
Compliance 4.1/4.1
Urban revitalization 3.8/4.3
Flexibility 4.0/4.1
Top 5 RPI Criteria
Materiality
• Central Location
• Energy Efficiency
• Public Transport
• Compliance
• Flexibility
Public Interest
• Energy Efficiency
• Public Transport
• Global Warming
• Water Conservation
• Renewable Energy
SRPI Factors4.0-5.0, 3.0-4.0, 2.0-3.0, mixed; No LEED® Coverage
• Auto Dependence– Transit, Central, Dense Mixed Use and Walkable,
Carpooling, Bike Trails and Facilities• Energy Conservation
– Energy Efficiency, Daylight and Ventilation, Renewables, Local Sources
• Worker Well Being– Parks & Open Space, Sense of Community & Place,
Childcare, Handicapped Accessible, Amenities for Parents• Urban Revitalization and Reuse
– Urban Revitalization, Flexibility, Suburban Redevelopment, Brownfield, Not farmland
SRPI Factors4.0-5.0, 3.0-4.0, 2.0-3.0, mixed; No LEED® Coverage
• Corporate Responsibility– Compliance, Disclosure, Supplier Engagement
• Environmental Quality– Water, Recycling, Global Warming, Sustainable
Materials, Wildlife, Wetlands, Trees, Ozone, Historic/Cultural, Native Plants, Runoff, Ridges and Views, Eco-Restoration, Public Art
• Good Neighbor and Local Citizen– Aesthetics, Local Impacts, Displacement, Considerate
Construction, Undue Influence
SRPI Factors4.0-5.0, 3.0-4.0, 2.0-3.0, mixed; No LEED® Coverage
• Social Equity & Community Development– Community Development, Stakeholder Engagement,
Community Input, Affordability, Fair Labor Practices, Union, Local Low-Income Training, Promotes Diversity, Indigenous People, Philanthropy & Volunteering
• Credentialing– EPA Partner, Green Certified, SRI Pariah Tenants,
SRI Mortgagee
• Health and Safety– Security, Risk of Injury, Natural Hazards, Gyms/Showers,
Evac/Aid Training, First Aid Equipment, H&S Signage, Visitor Insurance
SRPI Factors4.0-5.0, 3.0-4.0, 2.0-3.0, mixed; No LEED® Coverage, SOCIAL
• Auto Dependence– TRANSIT, CENTRAL, DENSE MIXED & WALKABLE,
CARPOOLING, BIKE TRAILS & FACILITIES• Energy Conservation
– Energy Efficiency, Daylight and Ventilation, Renewables, Local Sources
• Worker Well Being– PARKS & OSPACE, COMMUNITY & PLACE, CHILDCARE
HANDICAPPED ACCESSIBLE, PARENT AMENITIES• Urban Revitalization and Reuse
– URBAN REVITALIZATION, Flexibility, Suburban Redevelopment, Brownfield, Not farmland
SRPI Factors4.0-5.0, 3.0-4.0, 2.0-3.0, mixed; No LEED® Coverage, SOCIAL
• Corporate Responsibility– COMPLIANCE, DISCLOSURE, SUPPLIER
ENGAGEMENT
• Environmental Quality– Water, Recycling, Global Warming, Sustainable
Materials, Wildlife, Wetlands, Trees, Ozone, HISTORIC/CULTURAL, Native Plants, Runoff, Ridges and Views, Eco-Restoration, PUBLIC ART
• Good Neighbor and Local Citizen– Aesthetics, LOCAL IMPACTS, DISPLACEMENT,
CONSIDERATE CONSTRUTION, UNDUE INFLUENCE
SRPI Factors4.0-5.0, 3.0-4.0, 2.0-3.0, mixed; No LEED® Coverage, SOCIAL
• Social Equity & Community Development– COMMUNITY DEVELOPMENT, STAKEHOLDER
ENGAGEMENT, COMMUNITY INPUT, AFFORDABILITY, FAIR LABOR, UNION, LOCAL LOW-INCOME TRAINING, DIVERSITY, INDIGENOUS PEOPLE, PHILANTHROPY/VOLUNTEERING
• Credentialing– EPA Partner, Green Certified, SRI PARIAH TENANTS,
SRI Mortgagee
• Health and Safety– SECURITY, RISK OF INJURY, Natural Hazards,
Gyms/Showers, EVAC/AID TRAINING, AID EQUIP., H&S SIGNAGE, VISITOR INSURANCE
Some other combined scores
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Pariah TenantsLow-Income Training
Natural Hazards
Considerate ConstructionFair Labor
DisclosureSecurity
ChildcareRecyling
Aesthetics
Some things in the public interest are not material
0 1 2 3 4 5
Carpooling
Alternative Energy
Ozone Protection
Env Restoration
Runoff
Wetlands/Riparian
Prime Farmland
Wildlife Habitat
Public Interest
Materiality
Leading social criteria
0.0 1.0 2.0 3.0 4.0 5.0
Involuntary displacementFair Labor
AffordabilityCommunity Input
SecurityCommunity Relations/DevelopmentServices Close for Working Mothers
ChildcareHandicapped Accessible
Sense of Community & PlaceHealthy Building
Urban RevitalizationPublic Transportation
Can SRPI pay its way and be neutral or positive for returns?
In theory SRPI involves doing good and doing well“We will continue to act responsibly as
investment managers on behalf of investors and clients, implementing environmental strategies which are cost effective and positive or neutral on returns”
-- Colonial First State Property
Hypotheses• Low Cost / No Cost• Proven Models• Improves Competitiveness –rents, service charges, property
comfort and functionality, market share, retention, differentiation, brand value
• Lowers costs - operating, insurance, refurbishment• Attracts more or more affordable capital • Future proofs against risk and depreciation• Pleases investors; proxy for superior management• Improves shareholder, stakeholder relations • Attracts talent• Eases permitting, gains credits and subsidies • Pre-empts new regulations• Reduces fines and torts• Reduces universal externalities
But are they true?Conservation Urban
RevitalizationCompetitiveness ?
XXXX?
X
X EfficiencyLower Risk ? Answers investors ? Hedge resolutionsEmployee R&RCapital cost/supply X Favorable regulators ?
Published research• Worker productivity• Water and energy conservation• Flexible interiors• Neo-traditional neighborhoods• Natural hazard mitigation• Tree planting and greenbelt protection• Construction waste recycling• Urban revitalization• Transit oriented development• Walkable, mixed use, infill “places”• Community engagement
Business case by SRPI activityYield Risk Cost Permits Brand
Low Inc HousingGreen Bldgs.Central
Childcare
Transit
Think about who benefits• Tenants – utility charges, comfort, employee
R&R, productivity, retail sales…• Owners/Managers – NOI, rents, risk,
vacancies, churn, depreciation, appreciation…• Lenders and mortgage investors – default risk• Developers – GLA, lease-up, permitting, bldg
costs, public incentives/grants, capital… • Insurers - risk• Fund Participants, General Public, and Future
Generations – misc.
Urbanism in NCREIF Returns
Property Type
Related SRPI Criteria
Total NPI (income + appreciation)
Total for office, apt, retail
CBD Office, 20 yr.
Energy, Transit, Central, Walkable, UrbanEnergy, Transit, Water, Central, Walkable, UrbanEnergy, Walkable
6.46
High Rise Apartments, 5 yr
12.95 10.62
Neighborhood Retail, 20 yr.
5.89
8.68 8.90
Future demand for denser residential environments
Myers and Gearin, Housing Policy Debate, 2001
0
5
10
15
20
25
30
Support TownHouse
Construction
PreferTownhousePersonally
Actual DenseOwner Units
UK Regeneration Properties,Total Annualized Returns, ‘81-’02
J. of RE Portfolio Mgt, 2006
Retail Office Industrial
IPD UK Universe
11.49% 9.65%
10.59%
N=67
9.09%
Eight City Regeneration Universe
15.50%
N=76
12.60%
N=46
Value for REITs from EnergyStar®(Nadeau, Cantin and Wells, 2003)
Measure Premium per $MM assets
Market Value
(millions)
Percentage of Total Market Value
EStar Partner $16,026 $51.67 3.66%
Benchmarking $6,437 $20.75 1.47%
Both $22,463 $72.42 5.13%
Energy Efficiency
$45,564 $146.89 10.40%
Returns on Energy Conservation
Invest-ment
per SF
Rate of Energy Savings
Annual Savings per SF
Savings per
100,000 SF
Office Building
Asset Value Increase at a
10% Capitalization
Rate Simple Payback
$0.01 5% $0.14 $13,500 $135,000 Immediate
Operations & Maintenance $0.05 9% $0.20 $19,800 $198,000 4 months
Lighting $1.04 16% $0.36 $36,000 $360,000 3 years
Heating, Ventilation & Cooling $1.21 9% $0.21 $20,700 $207,000 6 years
All Combined $2.30 40% $0.90 $90,000 $900,000 2.5 years
Janitorial Services
Profitability of Energy and Water Investments
Lawrence Berkeley National Lab 2004
Change in Return on Equity in Small Apartment Building
E. Mills, Lawrence Berkeley Lab, 2004
Investment Return on Equity
Low flow shower-heads +0.6%Low-flow toilets +0.2%Clothes-washer +0.4%Energy Package +3.1%
Changes in Valuations near Dallas Light Rail Stations, 1997-2001
Clower, Australasian J. of Regional Studies, 2002
Land Use Control DART
Office 11.5% 24.7%
MFR 34.8% 42.0%
Retail 30.4% 28.3%
Industrial 21.5% 13.0%
National demand for housing near transit
Center for TOD, 2004
Cost of LEED buildingswithin the same range and non-LEED
Davis Langdon, 2004
RICS Green Value Report 2005
Financial Measure No. of Cases
Comparison to
Financials
Absorption Rate 456
+8-15%Rent +4-8%IRR +4-8%
A new effort at proof
UNEP FI Property Working GroupFinancial Case Studies Project
Can You Help?
Eco Efficiency Retrofits Equity Office Properties REIT, USAAXA, Building Retrofits, FranceCdD, Building Retrofits, France
Investment Screening Forward Uniplan, USA
Green Building Caisse des Depots, FranceHines Green Building REIT, USAJonathan Rose Companies, USALiberty Property Trust, USA
Social Capital Ethical Property Company, UK
Benchmarking Hermes, UKInvesta, AustraliaPRUPIM Carbon & Utility Bureau, UKCdD Water Use Follow-up, FranceCalPERS, USAGPT Group, Australia
Urban Revitalization Canyon Johnson Urban Fund, USA
Affordable Housing Community Development Trust, USA
Union Labor Kennedy Multi Employer Trust, USA
Tutoring Learning Links Centers LLC, USA
Crime Prevention PRUPIM 4 Youth Program,UK
Brownfields Cherokee, USA
Good Practice Cases Hermes, UK
Waste Management Hermes, TheCentre at MK, UKPRUPIM, Malls at Cribbs Causeway, UKF&C, Clean Sweep, UK
Wildlife PRUPIM Grass Roots Program, UK
Energy Procurement PRUPIM Buying Force, UK
Renewable Energy PRUPIM Green Park Wind Turbine, UK
Environmental Mgt. PRUPIM, Corporate ISO 14001, UK
Safety CdD Safety Review, France
Disclosure Investa, AustraliaHermes, UKPRUPIM, UKKorea Land Corporation Mitsubishi Estate Mgt Co. (CDP) Simon Property Group (CDP)
Leaders’ views on SRPI2007 Survey of Senior Real Estate Executives
Sponsored byBOMA, ULI, NAREIT, RER
Conducted byU of Arizona and IRE, Inc.
Not Done
Planned or Under
Consideration Implemented
% % % Value Statement 39% 18% 43%Strategic Planning 36% 22% 42%Learning/Management Systems 55% 29% 16%
Conservation 24% 23% 53%Responsible Contractor 50% 16% 34%Women or Minority Owned Businesses 52% 13% 35%
Committee for Sustainability or CSR 68% 12% 19%
Social or Environmental Accounting 59% 15% 26%
Targets and Benchmarks 69% 19% 13%Disclosure 65% 18% 18%Stakeholder Engagement 44% 11% 45%
Are you using…?
Not Invested
Planned or Under
Consideration Invested
% % % Brownfields 52.4% 17.0% 30.6%Green Bldgs 35.1% 32.4% 32.4%TOD 31.8% 16.9% 51.4%Infill or Revitalization 22.3% 15.5% 62.2%
Are You Invested In…?
Other activities by your organization?• Advisors
– Affordable housing bonds
– Flex time
– Investments in low income neighborhoods
– Charitable giving
• Developers
– LEED and BOMA GO Green
Other activities• REITs
– Mixed use buildings and charter schools
– Help for kids with cancer
• REOCs
– Service on local boards
– Infill projects
– USGBC Portfolio Program Pilot
Other activities
• Sponsors– Ethical standards for managers
– LEED office space for ourselves
– Shareholder engagement on ESG policies
SRPI Stage
% Non Responsiveness 7.1%Compliance 17.0%Efficiency 37.6%Strategic Proactivity 29.1%Sustaining Organization 9.2%
Your SRPI Stage?
Mean Cost avoidance 3.8Concern for risk and return 4.6
Peer activity 2.8Employee recruitment/retention 3.2
Internal leadership 3.8Business advantage 4.2Opportunities to outperform 4.3
Moral responsibility 4.1Voluntary codes of behavior 3.9
Stakeholder pressure 2.7Investors 3.0Customers 3.7
Drivers
Mean Lack of information 3.3Lack of products to invest in 3.4
Insufficient financial performance 3.9
Insufficient tenant demand 3.7
Legal Restrictions 2.7Internal resistance within your organization 2.4
Incompatible with fiduciary duty 3.2
Barriers
Your Future Interests
3% 2% 5% 35% 40% 14%
2% 3% 5% 34% 40% 16%4% 9% 13% 46% 19% 10%
27% 27% 17% 20% 8% 1%19% 21% 21% 29% 8% 2%5% 3% 10% 40% 31% 11%
Info on our activitiesand investmentsInfo on opportunitiesConferencePay for dataWorking groupIncrease allocation
%
StronglyDisagree
%
ModeratelyDisagree
%
SlightlyDisagree
%
SlightlyAgree
%
ModeratelyAgree
%
StronglyAgree
Other comments• Developer: “Extremely relevant and timely.”• Developer: “…would love to know
more…even though I don't know that…other executives in my organization would….I personally see it as an important change…and would love to participate in enlightening…my organization [and] industry.
• REIT: “Good luck on your journey. It’s a good one.”
• Sponsor: “Very little info circulating on this issue.”
Other comments• Sponsor: It is not our goal “to include strategies that
do not focus on a disciplined investment approach that maximizes returns and fulfils our benefit promises to members. Socially and environmentally responsible investing, does not currently meet those needs and therefore we cannot seem to include them as a viable strategy. We are investors, not community representatives. Sadly, there has been a lot of press suggesting that public pension funds should invest in a socially or economically responsible way, however, I think that type of thinking can destroy the funding levels of pensions plans. The only focus any pension fund should have is to invest as a sophisticated investor does. Our social and environmental concerns and issues should be addressed and dealt with separately.”
Two implementation challenges
What are the Roles and Responsibilities?
Who pays and who gains?
Investors Fund Managers
Asset Managers
Property Managers
•Set Goals
•Adopt Policies
•Make Allocations
•Select Managers
•Engage Managers Introduce Resolutions
•Monitor Results
•Define Strategy
•Set Investment Criteria
•Keep RPI Performance Accounts
•Produce Performance Reports
•Property Plans
•Justify Retrofit Opportunities
•Monitor & Benchmark Property Performance
•Tenant Outreach
•Energy Management
•Supplier Engagement
Where do you get the data?
Data Sources Project
SRPI Factors4.0-5.0, 3.0-4.0, <3.0; No LEED® Coverage
• Auto Dependence– Transit, Central, Dense Mixed Use and Walkable,
Carpooling, Bike Trails and Facilities• Energy Conservation
– Energy Efficiency, Daylight and Ventilation, Renewables, Local Sources
• Worker Well Being– Parks & Open Space, Sense of Community & Place,
Childcare, Handicapped Accessible, Amenities for Parents• Urban Revitalization and Reuse
– Urban Revitalization, Flexibility, Suburban Redevelopment, Brownfield, Not farmland
Putting factors into actionFACTOR Indicator Measure Data Standard
Auto Dependence
Transit Service
Distance to Station
US BTS AtlasCoStar, Inc.
US EPA
< ¼ mile
Auto Dependence
Central Location
In/out of CBD
Inside CBD
Energy Conservation
Portfolio Efficiency
Mean ENERGY STAR®
Ratings
% Rated
% Certified
Measurement Questions• Should credit be given for Continuous Progress
or a Standard of Achievement?
• Should screens be Comprehensive or focused on Leading Indicators?
• Should we rely on Self Disclosure or Third Party Verification?
SRPI Working GroupsBOSTON COLLEGE• Cal PERS• TIAA-CREF• BC Investment Mgt Corp.• AFL-CIO Investment Trust• Rockefeller Foundation• Methodist Church Pension
Board• GE Real Estate• Kennedy Real Estate Counsel• BOMA• Urban Land Institute• Real Estate Roundtable
UNEP FI• Morley• Hermes• Caisse des Depots• Prudential• F&C• AXA• Lend Lease• Investa• Land Securities
Impediments to real estate funds being SRI certified• SRI Indices don’t cover private funds
• There’s a lack of property expertise in the SRI industry
• There’s no recognized accrediting body
• Past single building focus of green building agencies
• No agreed on definition and priorities
• A need to collate and collect new property level data
• Perceived fiduciary conflicts
• Lack of economic research
8 steps to a stronger sector• Cluster together and attest to principles • Work on metrics and data sources• Collect, recognize, and market leaders• Encourage disclosure• Share links to models • Research the risk/returns• Launch new products• Bridge with leading SRI & RE orgs.
