Archive for the ‘Sustainability’ Category
| Newer Entries »Can Real Estate Practices Prevent Oil Spills?
Wednesday, May 12th, 2010
By Mike Tobin
Continuing on the thread of transparency in the real estate market from the last posting, the waters of sustainability can be rather murky…literally in the case of the oil spill in the Gulf of Mexico where we face one of the worst environmental disasters since the Exxon Valdez. It is amazing how within a short period of time (i.e. since the last blog posting), we are forcefully reminded of how perilous the line between our industrial economy and our natural ecology is.
This disaster will inevitably bring forth the heated debate about the risk/reward balance with off-shore drilling. Then, the debate will most likely grow to encompass the risks and rewards of oil drilling in general (we’ll be inundated with “Drill, Baby, Drill!” references again and again). Next, it will expand into a debate about the need for energy independence and renewable energy sources. Finally, it will come full circle to how we need safe/effective/controlled/regulated oil drilling as part of the process to achieve energy independence. Ahh…the same circular arguments we have every few years that are initiated by a disaster of such proportion as to WAKE US UP and get us to start thinking quickly…but acting slowly.
Perhaps, the April 20, 2010 oil spill disaster will be THE tipping point we will look back upon in the future as the time when we started to act quickly to change our current mode of operation. Or maybe not. Regardless, it will definitely be a date and a disaster that will not be forgotten soon and will force us to react.
Now, how does this event relate to transparency in the real estate market and sustainable real estate practices?
The simple fact is that real estate has a major impact on our energy policy and our environment. The United States Green Building Council tracks some handy statistics you can use when connecting the dots:
In the United States alone, buildings account for:
• 72% of electricity consumption,
• 39% of energy use,
• 38% of all carbon dioxide (CO2) emissions,
• 40% of raw materials use,
• 30% of waste output (136 million tons annually), and
• 14% of potable water consumption.
At the very least, this disaster provides a common reference point for corporate America to discuss sustainability. What can be done to prevent such a disaster from happening again? Is there anything we can do to help? What will the future bring?
This is a time when we should take full advantage of our resources to engage corporate real estate managers in discussing these questions and to educate them on the impact real estate has on the global environment. We should be excited about the opportunity to introduce them to sustainable real estate practices.
As real estate advisors, we can and should do our part to help clean the waters and bring sustainable real estate practices into every business. By engaging and educating, we can help people and corporations to see through the murkiness and to act in a positive and sustainable manner to help ensure a disaster like this will not happen again.
Do you think that real estate impacts energy policy and energy independence?
Tags: energy policy, environment, gulf of mexico, oil spill, sustainable, sustainable real estate practices, usgbc
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Sustainability Promises Transparency and Opportunities
Wednesday, March 17th, 2010
By Mike Tobin
Let’s continue down this track of discussing the new clean/green technology decade as I am inspired by the changes and opportunities that await us all.
As discussed last time, the current activity surrounding greenhouse gas policy and regulation will cause a myriad of changes in the way we assess real estate. One of the larger catalysts of change will be the increased level of transparency in the marketplace. The greater availability of operational data will trigger multiple opportunities and challenges for businesses worldwide. Amazingly, this transparency is already taking place due to the efficiency of our capital markets and the desire to get ahead of the competition.
The market’s early adopters are embracing the possibility and inevitability of future regulation by reporting greenhouse gas emissions in the form of disclosure reports like the Carbon Disclosure Project. In reviewing the companies that are already involved in the Carbon Disclosure Project, one will find a lengthy list of formidable companies that are measuring and disclosing this new information. This new level of disclosure is also having a ripple effect as the vendors and suppliers of these companies are being asked for similar data and told that service selection will depend to a degree on the information provided.
Walmart is a case in point of this ripple effect. Last year they announced their 15 point Sustainable Product Index – eight of which are impacted by real estate decisions – and indicated that this will factor into their vendor and product selection. When Walmart says jump, the rest of the market says, “How high?”
Another area of transparency that relates to greenhouse gas emissions is the energy use of buildings. Historically, the market has not had a reliable method to determine the energy efficiency of any given building. That could change in 2010 with the anticipated release of the American Society of Heating, Refrigerating, and Air-Conditioning Engineers’ (ASHRAE) new Building Energy Quotient (Building EQ). This new labeling system will join the US Department of Energy’s (DOE) Energy Star program as the two major programs that can be used to reliably measure the energy performance of a building.
As our society looks for ways to reduce energy consumption, information is the critical first step to help make informed choices and changes. Decision-makers will spur a review of the methodology to select, value, and underwrite property. They will reweight the emphasis placed on different aspects of a piece of real estate and create entirely new aspects.
We have only begun to scratch the surface of the potential changes on the horizon due to the increased transparency in the marketplace. Questions still remain like:
- Will other companies create competing Sustainable Product Indexes to that of
Walmart?
- Will building labels be voluntary or become a national requirement?
- How will financial underwriters take into account an energy rating system?
- What will your corporate real estate’s new GHG emission and energy usage
thresholds become?
As we enter the new decade with the promise of more transparency, what do you see on the horizon?
Tags: ASHRAE, building EQ, carbon disclosure project, DOE, energy, energy star, green, greenhouse gas emissions, sustainable product index, walmart
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Dawn of the Green Technology Decade
Wednesday, January 20th, 2010
By Mike Tobin
Welcome to 2010 and the dawning of the clean/green technology decade – or so we are led to believe! The current administration has ushered in the new decade with some very exciting steps towards embracing a more sustainable and environmentally focused strategy which has the potential to dramatically affect our real estate market. From the notable steps taken by the Supreme Court in the 2007 ruling that the EPA must regulate CO2 and other greenhouse gases to the recent December 7, 2009 announcement in which the EPA has formally determined that greenhouse gases threaten public health and welfare, it is inevitable that business as usual will no longer exist as it relates to greenhouse gas emissions. Congress will need to pass comprehensive greenhouse gas regulation soon otherwise the EPA will be required to regulate these emissions under rules that most experts consider inefficient. It was therefore more of a formality and favorable political opportunity for President Obama to finally, and confidently, put the United States in the middle of the discussions on global warming and limiting greenhouse gas emissions at the Climate Conference in Copenhagen this past month.
Regardless of politics, the winds of change are blowing harder than ever in relation to how businesses address greenhouse gas emissions and other sustainability issues. Leading companies have already put in place a strategic sustainability plan and begun to measure their carbon footprint, analyze their exposure to “dirty” fuels, and assess their capabilities to harness renewable energy sources (among other objectives). All companies could substantially benefit from developing a similar plan to position themselves for the cleaner/greener future.
Within this sustainability plan, the impact on real estate will be profound as companies struggle to adjust to the new regulations and stakeholder expectations, as well as the necessary efforts to take advantage of the myriad of incentives and initiatives surrounding them. This era of change brings with it opportunities for success but it also brings the potential for pitfalls. In order to capitalize on the future, leading companies are diligently working now at the forefront of change to identify both the opportunities and pitfalls.
For example, we all know the key in real estate is “location, location, location”. The new changes on the horizon will affect the playing field for finding the best sites. Site location criteria will begin to focus more on the mix of local fuel sources with an eye toward avoiding areas with “dirtier” fuels and areas with local utilities that have a higher cost to meet compliance. “Dirtier” fuels and higher conformance costs will translate into higher costs to consumers. Also, understanding the feasibility of local renewable energy sources will become more important as this will affect the prioritization of sites that allow a company to tap into the most efficient renewable energy systems that will provide clean, consistent power at relatively stable prices into the future.
As we begin 2010, how are you helping your company or your client prepare for – and capitalize on – the clean tech decade?
Disclaimer: The opinions expressed in CresaPartners’ Blog represent those of our bloggers, and not necessarily those of the firm.
Tags: green, renewable energy, sustainable
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