green building

Alliance Releases Emerging Trends for Greening Class B and C Existing Buildings

The California Sustainability Alliance is proud to announce an industry report which summarizes the outcome of the Existing Buildings Think Tank Roundtable held in partnership with the USGBC-LA Existing Buildings Committee. Over 70 participants representing building owners and managers, engineers, utilities, government, trade associations, and other industry professionals were in attendance to discuss ideas and emerging trends related to the operation and performance of existing buildings. The Alliance is managed by Navigant Energy Services and funded by Southern California Gas.

The Think Tank Roundtable is an annual, half-day event hosted by the USGBC-LA Existing Buildings Committee and chapter strategic partners typically focusing on Class A buildings. This year, the Alliance sponsored an expanded scope of the meeting to include an afternoon session for Class B and C building owners. The purpose of the Think Tank Roundtable is to share best practices, lessons learned, resources, challenges, and opportunities around topics relevant to owners and managers of Class A, B & C buildings as well as tenants, brokers, government, and building professionals from all sectors. Two industry reports (one for Class A owners and one for Class B and C owners) were produced as a result of the Think Tank event and follow-up interviews with key stakeholders.

Green and energy-efficient buildings demand higher rent, increase tenant productivity, reduce operating costs, and have higher occupancy rates. The upfront cost of green building improvements is a deterrent commonly cited by building owners. However, data show that green retrofits and increased energy and water efficiency increase property values and many upgrades can deliver attractive, short-term returns. During the meeting, industry leaders from the Greater Los Angeles area identified best practices, new opportunities, and existing resources in multiple topic areas to help Class B and C building owners and managers take charge of their building performance. The report summarizes industry leaders’ discussion of these topics:

  • Building Codes and Standards
  • Energy Efficiency and Energy Management Plans
  • Water Efficiency Opportunities
  • Financing Green Retrofits
  • New Building Technologies
  • Building Sustainability Trends
  • Climate Change
  • Other Industry Updates

The recently released reports highlight key outcomes of the roundtable discussions and integrate feedback from additional stakeholders during the months following the event. The findings and objectives of the reports are to:

  • Help utilities understand how to improve their regulatory and incentive programs by providing feedback about how they can best serve these critical yet often under-represented customers.
  • Encourage owners and managers of Class A, B and C properties to improve portfolio-wide energy and water efficiency and implement green building practices.
  • Inspire action to deepen environmental goals in the existing building sector by defining critical challenges and potential solutions, and by inviting key stakeholders to engage in the discussion.
  • Provide resources and education to service providers that are in a position to help building owners design and implement energy and water conservation strategies.

View the full reports here:

Video interviews from multiple experts at the event were also produced.

New Retrocommissioning Program Toolkit for Local Governments

As part of its efforts to help local governments comply with federal and state retrocommissioning codes and policies, the California Sustainability Alliance (Alliance) has developed a Retrocommissioning Program Toolkit specifically for municipal facility use.

Retrocommissioning (RCx) is a method of systematically examining the operation and maintenance of an existing building’s systems in order to identify ways to improve overall building performance. It offers a relatively quick and low-cost way to help building owners ensure that energy efficiency features and equipment specified in the building design are installed and operating as intended - and as required to meet occupants’ needs. 

The Alliance created its RCx Program Toolkit to help local government staff develop and implement a municipal facility retrocommissioning program.  The RCx Toolkit complements existing portfolio management tools and utility management systems, helping the user take the “next step” once a decision has been made to incorporate retrocommissioning into municipal facility standard operating procedures.  Although focused on the performance testing and documentation components, the Toolkit also provides resources, such as model commissioning specifications, to facilitate the entire commissioning process.

In addition to a detailed step-by-step description of the RCx program development processes of planning and preparation, creating data infrastructure, and collecting baseline data, the Toolkit includes necessary tools and resources to implement the program such as:

  • Sample RCx Action Plan;
  • References to common RCx resources and procedures;
  • Model Request for Proposals (RFP) language;
  • The RCx Dashboard, a spreadsheet tool that allows the user to enter basic building information to identify potential RCx candidates and track RCx program accomplishments.

The RCx Toolkit is designed to be flexible enough to be a complementary resource for an energy manager in a large local government or to be the sole RCx Program management tool for facility and public works staff in smaller jurisdictions.  It may be used to facilitate RCx for an entire portfolio of buildings, or for a defined sub-group, such as all fire stations or libraries.  Alternatively, a subset of the Toolkit’s procedures can serve to guide local government staff through retrocommissioning those measures for which that team is responsible, or to provide to its maintenance contractor. 

Depending on a government’s specific situation, the RCx Dashboard can aid in prioritizing buildings and identifying RCx candidates.  Data or analyses from other tools such as the EPA’s Portfolio Manager or a utility management system also function to prioritize the buildings, in which case, the Toolkit can work as a complementary resource library and tracking tool.  For example, for planning a heating, ventilation, and air conditioning (HVAC) system replacement, the Toolkit includes sample retrocommissioning RFP language to ensure the HVAC contractor performs functional tests and provides the required documentation to the project team.  For projects completed by internal staff, such as lighting replacements, the Toolkit’s RCx functional tests can be used to document proper installation and operation of the newly installed lighting system. 

Green Buildings and Productivity

As it happens, “greening” your business could mean a boost for the environment as well as your company’s bottom line. There is now empirical evidence showing the adoption of sustainable policies, including environmental management and product standards, increases employee productivity, creating real and positive impacts on a company.

In the past decade, studies have shown that the improved lighting, ventilation, and general environment of Energy Star and LEED certified buildings lead to a decrease in employee sick days and an increase in perceived productivity, and thereby, economic benefits. A recent study by UCLA professor Magali Delmas and University of Paris-Dauphine’s Sanja Pekovic delves a little deeper and is the first to demonstrate how a company’s environmental commitment affects its productivity. The study, Environmental standards and labor productivity: Understanding the mechanisms that sustain sustainability, was published this September in the Journal of Organizational Behavior. Check it out here.

The findings are surprisingly clear: employee productivity is 16% higher at companies that adopt environmental practices. “Green” companies include those that follow international standards and adopt eco-labels such as “fair trade” and “organic.”

The robust jump in productivity can be attributed to a “virtuous cycle.” As described by Delmas, companies attract top people, then adopt environmental practices, and in turn, attract even better people. Patagonia is a prime example of the cyclical improvement of sustainably-minded companies. It has seen widespread success in the outdoor adventure retail space, is applauded for its longstanding sustainability efforts, and attracts an average of 900 applicants for each open position. After adopting a range of sustainability measures, a boutique hotel in Santa Monica, CA, also saw improved employee health and happiness.

Green companies create motivated employees who receive more training and improved interpersonal relationships. The result is increased employee productivity over conventional firms. Management will hopefully take note of the success of such companies and studies that consistently reveal the economic benefits of sustainability initiatives. As Delmas attests, “Adopting green practices isn’t just good for the environment. It’s good for your employees and it’s good for your bottom line.”  

New Green Tenant Guide Released

The Alliance has released the Green Tenant Guide to assist organizations through the process of greening their operations and staff behavior.The Guide incorporates content based on best practice research and is built on the belief that a sustainability program should be treated like any other venture an organization undertakes; it should make business sense, be measurable, and fit within the organization’s overall mission.  This guide recognizes that every organization’s situation is different and it will help organizations discover what makes the most sense for their situation and their audience in order to do the following:Set clear and feasible sustainability goalsEstablish buy-in and excitementDefine metricsCommunicate resultsThe Green Tenant Guide includes a step-by-step approach, specific strategies for greening a workplace, a sustainability program process checklist and a smart goal setting worksheet.To view or download the Green Tenant Guide click here. 

Occupant Behavior: Five Keys to Meeting Building Environmental Performance Goals

A recent article published on Property Management Software Guide claims occupant behavior – not funding or awareness – is preventing green buildings from reaching their environmental performance goals.  The article, Occupant Behavior: Five Keys to Meeting Environmental Performance Goals, identifies five ways to encourage behaviors that align with environmental performance goals:

  1. Engage occupants before they move in.  Hold an eco-charrette with the future tenants to include their ideas about the building’s design and help them understand the importance of established performance goals.
  2. Take a holistic approach.  It may not be enough to focus solely on energy and water usage. Holistic programs emphasizing sustainability and overall health and well-being have proven to be very successful.
  3. Measure energy use with new technologies.  New social energy management tools can assist in making tenants more aware of their energy use by showing the real-time environmental performance of the building.
  4. Provoke competition.  Social media sites such as Facebook and Twitter can be leveraged to create friendly competition among occupants, floors, or even other local buildings. By setting clear goals and displaying real-time data, facility managers can capitalize on tenants’ competitive spirit in order to reduce a building’s carbon footprint.
  5. Create transparency.  It is important to make energy data available in a way that it is easily understood.  Providing tenants with easy-to-read charts or graphs showing energy usage patterns, data on actual cost savings and shrinking carbon footprints, helps facility managers better engage their tenants.

Ashley Halligan is the author of Occupant Behavior: Five Keys to Meeting Environmental Performance Goals. Ashley is a Property Management Systems Analyst at Software Advice.

Green Appraisal Standards

Green buildings first emerged in the late 20th century and are consistently being recognized within today’s market as positive additions to the real estate industry.  Greater energy efficiency not only increases a building’s value by reducing the property’s carbon footprint, but also saves on overall operating costs.  Despite the obvious environmental and economic savings, the real estate industry is currently lacking a consistent mechanism to account for energy efficiency characteristics in the process of determining property value.  This gap leads to imprecise and often inconsistent valuations of commercial properties.

A green real estate appraisal standard would help close this gap by measuring the efficiency and sustainability value of commercial properties, thereby attaching increased asset value to higher-performing buildings.  This would encourage banks to release capital for more energy efficiency projects, since it would be easier to assess property value based on money and energy savings.  Since capital costs are the main barrier for efficiency upgrades and retrofits, creating a standard and getting banks on board would assist in creating new sources of funding in the efficiency arena.

A building performance data tracking system would also give appraisers a resource for comparable projects. Stakeholders from energy, financing, appraisal, and real estate service industries are currently lacking consistent data about the monetary and energy efficiency benefits of higher performing buildings.  A green appraisal standard will provide these stakeholders with a consistent methodology to assess properties’ energy efficient and sustainable features in determining market value.  This improved standard and data system would also provide incentives for greater investment opportunities into efficiency. Since green building has become such a positive trend, why not add standards that will boost funding sources for efficiency projects and bolster green jobs?

Currently, the U.S. Green Building Council, Natural Resources Defense Council (NRDC) and the Real Estate Roundtable’s Sustainability Policy Advisory Committee (SPAC), have made it a top priority[1] to establish a green real estate appraisal standard.  Through a public comment process, they continue to press the Obama Administration to use their existing legal authority to establish these green standards.

Let us know what you think about a green appraisal standard.

Green Building set to become the “norm” in the construction industry

As the green building movement gains momentum, there is a growing recognition by the financial markets of the magnitude of potential investment opportunities in the sustainable building and construction sector.

A recently published research note by Canaccord Genuity concluded that the adoption of green practices is a significant trend that is likely to become the norm in the global building and construction industry. In recent years, the percent of non-residential building that is “green” has increased rapidly – growing from less than 1% in 2000 to 10%-12% in 2008 – and is expected to reach 20% or more by 2013. Mc-Graw Hill Construction recently estimated that market spending for green building in the U.S. will reach $135 billion by 2015.

The demand-side, supply-side, and regulatory factors driving this transformation include:

  1. the proliferation of green building standards, such as LEED®, ENERGY STAR® and ASHRAE
  2. the realization of financial benefits, including lower energy costs, higher rents and lower vacancy rates
  3. legislative mandates such as green building codes, and incentives such as tax credits, accelerated permitting and equipment rebates
  4. the continuing volatility of energy prices

There were several key developments in 2010 that helped to maintain the momentum of the green building movement:

  • ASHRAE 189.1. The American Society of Heating, Refrigeration and Air-Conditioning Engineers introduced “a new standard for the design of high-performance green buildings” that is expected to result in a 20% or more improvement in energy performance over the standard it replaces. The release of a new standard by ASHRAE is an important development because ASHRAE standards are often referenced in building codes.
  • International Green Construction Code. In March the International Code Council (ICC) launched the International Green Construction Code. This is a green version of the existing ICC codes, which are widely used to define local and state building codes. The ICC collaborated with ASHRAE and the US Green Building Council on the development of the new code, and it is expected to have a significant impact on standardization of building codes at both a national and international level.

The report also highlights the momentum being gained by green retrofits to existing buildings. Existing buildings comprise a much larger market than the new construction market, and several researchers have estimated the potential for retrofit investments could run into hundreds of billion dollars. Spending on energy efficiency has been held back by the recession, but is expected to rebound strongly in the coming years, as building owners respond to regulatory pressures and tenant demand for sustainable workplaces.

Where are California’s greenest office markets?

As shown by our Green Building Barometer, the commercial real estate industry is steadily moving towards a more sustainable foundation. Almost half of California’s Class A office space is now green.

And while the recession has brought the construction of new buildings almost to a standstill, many owners of existing properties are conducting upgrades and efficiency improvements and achieving LEED or Energy Star certifications. The trend is being driven largely by tenants, particularly the large corporations that occupy much of the Class A space in the major metropolitan cities. These organizations are embracing sustainability throughout their business operations, and one outcome of that is increasing demand for greener office space.

When we look at California’s major markets, San Francisco continues to set the pace, with 63% of Class A space now either LEED or Energy Star certified. Orange County has the second-largest percentage, with 52% of Class A space being green, up from 24% in 2008. Sacramento has achieved the most impressive growth, with the proportion of green Class A space increasing from just 9% in 2008 to 29% today. Los Angeles and the East Bay / Oakland are also closing in on achieving 50% penetration of green building, while San Diego is further behind on 41%. The South Bay / San Jose (30%) and Inland Empire (20%) markets have the lowest proportion of Class A space recognized as green. 

For lower-quality office buildings, the amount of Class B office space that is certified as green has doubled over the past year, but the proportion is still low, with green space accounting for just 7.5% of all Class B buildings. Only in two major cities, San Francisco and Sacramento, is more than 10% of Class B space certified green. However, the low number does not mean that green improvements are not taking place in these types of buildings. The economics of these lower-quality and lower-rent buildings are such that it is often unrealistic for them to seek Energy Star or LEED certification. In practice, there are many incentive programs aimed at improving the energy efficiency of older and smaller buildings.

The Energy Performance Score: an MPG for homes

One of the leading contenders in change.org's Ideas for Change in America competition is the notion of an energy performance label for homes that works like the miles-per-gallon sticker that comes with a new car. Called the Energy Performance Score (EPS), the concept heralds from the Pacific Northwest and is more than just an idea, having been developed and piloted by Earth Advantage in 2008, and then adopted on a voluntary basis for new homes in Oregon and Seattle.

The scorecard is similar to the UK's Energy Performance Certificate, which has been mandatory for all buildings on construction, sale or rental, since 2008. Both of these labels go beyond the EnergyStar and ASHRAE EQ energy labels, which measure energy performance, but not CO2 emissions.

The EPS scorecard is completed following a home energy audit by a certified EPS auditor, who reports the home's current score in terms of energy use and carbon emissions.  The scorecard indicates where the home falls in relation to the state average and also how the home would score if all of the recommended upgrades were completed. Earth Advantage report that there has been a lot of interest in the label from across the country:

This comprehensive initiative has attracted national interest. The City of Chicago, City of Houston, Clinton Climate Initiative, U.S. Department of Energy, New York State Energy Research and Development Authority, and the World Business Council for Sustainable Development are all assessing the final recommendations from the pilot report issued in August 2009.

We look forward to seeing versions of the EPS appearing elsewhere in the not-too-distant future.

New SEC guidelines may cause an outbreak of sustainability reporting.

The Securities and Exchange Commission (SEC) has for the first time released guidelines for public companies that define the extent of the disclosures they should make relating to the issue of climate change. This is good news for investors, who rely on comprehensive and accurate information to make their investment decisions. Institutional investors, such as pension funds, have been active in lobbying the SEC to tighten the rules about what a company needs to report when it comes to the risks and opportunities relating to climate change. Groups active in the disclosure debate include the Environmental Defense Fund and CERES. In June 2009, the Investor Network on Climate Risk petitioned the SEC to issue guidance outlining climate-related 'material risks' - such as new regulations, physical impacts, new economic and business opportunities and other climate-related trends - that companies should be disclosing to investors. According to the SEC's news release, the interpretative guidance highlights four areas as examples of where climate change may trigger disclosure requirements:

  • Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.
  • Impact of International Accords: A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.
  • Indirect Consequences of Regulation or Business Trends: Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.
  • Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business.

As the New York Times reports, the new guidelines were welcomed by pension funds and other large institutional money managers:

“We’re glad the S.E.C. is stepping up to the plate to protect investors,” said Anne Stausboll, chief executive of the California Public Employees Retirement System, the nation’s largest public pension fund and one of the parties that petitioned for the guidance. “Ensuring that investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is absolutely essential. Investors have a fundamental right to know which companies are well positioned for the future and which are not.”

In the commercial real estate world, the SEC ruling may provide the impetus for public real estate companies to take seriously the measurement and reporting of energy efficiency and other measures of the sustainability of their real estate holdings. Pension funds are likely to lead the way in pushing for such disclosures from real estate companies with which they undertake joint ventures, as well as from the REITs whose shares they own. Is it only a matter of time before the issuance of a “Sustainability Report” is as commonplace for real estate companies as the annual financial report is today?