Mapping out steps forward has to start with knowing where you are. That’s the premise of the Disclosure Challenge, an initiative advancing energy and environmental performance benchmarking in Canadian commercial real estate.
With properties ranging from high-performing green buildings to structures with a considerable environmental footprint, it may come as a surprise that the sector’s leaders are eager to disclose the whole spectrum – “the good, the bad and the ugly,” says Akua Schatz, vice president, Market Engagement and Advocacy, Canada Green Building Council (CaGBC). “There was always this sense that the industry might see benchmarking as red tape, but we discovered a lot of interest in driving a more transparent marketplace, where data can inform investment decisions – what we lease and buy, and how we improve buildings.”
Efforts to encourage property owners to gather energy performance data and make it public are part of the CaGBC’s Disclosure Challenge, which was launched in March with three core participants: QuadReal Property Group, Triovest Realty Advisors and Concert Properties. Ms. Schatz describes it as “a call to action for Canada.
“If we are serious about tackling climate change and improving sustainability, the building sector needs to be a key driver,” she says, adding that other large portfolio owners, such as Colliers International and the Minto Group, have since signed on. “The initiative has grown quickly, with over 700 buildings from coast to coast, representing over 118 million square feet of diverse properties, including shopping malls, office towers, residential buildings and industrial complexes.”
There is consensus that energy benchmarking is improving outcomes. “Transparent markets tend to perform better,” explains Jamie Gray-Donald, senior vice president of Sustainability with QuadReal. “We represent pension funds, and for our business, collecting and comparing data is important. We have to look at long-term objectives and set science-based targets that include taking rational steps to help mitigate climate change.”
Transparency can help building owners, managers and tenants make informed choices and guide investments, he says. “We’ve seen examples where we have been able to reduce our energy and carbon footprint significantly, and that motivates people to do even better.” When information is readily accessible, transactions become less risky, and Mr. Gray-Donald believes making building performance metrics public can translate into a competitive advantage for Canadian commercial real estate.
Ms. Schatz welcomes this view – especially since energy data is not always readily accessible. She says, “Even motivated owners and managers find it difficult to collect the data from utilities and tenants, which creates a problem for trying to drive down energy use and create efficiencies.”
Philippe Bernier, vice president, Innovation and Sustainability at Triovest Realty Advisors, explains that when buildings are leased, tenants may be responsible for electricity or natural gas bills, and it can be challenging and time-consuming to access, track and enter data representing the whole property.
There is an opportunity for utilities to agree on and adopt a common electronic data standard to let customers easily and securely access digital energy and water consumption data, he says. “Standards simplify, improve communication and solve countless problems.”
A potential solution lies in expanding partnerships across utility companies, municipalities and provinces, which can enable access to data, states Mr. Bernier, who also advocates for a “harmonized national building environmental benchmarking and disclosure approach, which can reduce red tape and regulatory burdens on the real estate sector.”
Technology advances that enable data collection can help organizations satisfy the interest from tenants, employees, investors and the general public. Data points relating to energy use and environmental performance also connect directly to occupant comfort, efficiency and quality of space, says Mr. Bernier. “To motivate widespread action, we need transparency on where we are doing well or have opportunities to improve.”
Dave Ramslie, vice-president, Sustainability at Concert Properties, has spent much of the last year engaging leadership and staff on a recently launched Sustainability Framework with reporting and transparency core principles. “Access to this kind of data is critical for both setting concrete emission reduction targets and measuring our success in achieving them,” he says. “Further, by being transparent and benchmarking ourselves against our peers, our investors can be confident that their money is with a well managed, progressive enterprise.”
Making this data public can also set the stage for driving policy that incentivizes emissions reductions and energy efficiency, believes Ms. Schatz. “Ultimately, with some participants, we have seen an increase in investments towards improving the performance of their buildings.”
Disclosure Challenge participants now represent over 10 per cent of approximately $800-billion in commercial real estate assets, according to CoStar and JLL Canada statistics. Mr. Bernier finds this development encouraging. “In partnership with suppliers and government, we can guide thoughtful policy and begin to make a positive difference through a growing community of practice,” he says. “Let’s increase voluntary disclosure in Canada from today’s 118 million square feet to one billion by 2020.”
Produced by Randall Anthony Communications. The Globe’s Editorial Department was not involved in its creation.