ASK THE EXPERT: BREANA WHEELER

Breana Wheeler became BRE's director of operations in the United States in June 2016. BRE is a 100-year-old building science research organization focused on making buildings better for people and for the environment. BRE developed BREEAM, the world’s first and leading science-based suite of validation and certification systems for a sustainable built environment.

Wheeler oversees the deployment of the BREEAM family of standards in the U.S. Additionally, she supports technical work on resilience and social impact in BREEAM. Prior to joining BRE, she worked for 10 years as an internal advisor on environmental and sustainability risk management for large, multinational corporations. She discusses the importance of and differences between the certifications.

What's the difference between BREEAM and other programs?

BW: As a science-driven platform, BREEAM has set itself apart from other certification standards with a more holistic and impact-based assessment that emphasizes addressing environmental impacts, occupant health and well-being and the growth and protection of asset value. We understand the value and importance of a robust certification process, and BREEAM utilizes third-party, on-site verification to ensure validity, credibility and, ultimately, accountability. At BREEAM, we believe that certification is a starting point — a tool for providing transparency to stakeholders about risk and opportunity — rather than an end goal. As such, we continuously work with clients to utilize BREEAM to identify liabilities and capture emerging opportunities, building out holistic effective solutions and a meaningful pathway toward sustainable building improvement across the global commercial real estate sector.

Why expand in the U.S.?

The asset-level risks and overall industry threat that the climate crisis poses on commercial real estate are not limited by any geographical bounds, yet countries vary in their proactive response to the issue. The United States has the largest real estate market in the world, which means that it also has the most buildings that need help to address this crisis. The importance of following the science to solve problems has never been more apparent. We’re providing the only science-based standard in the U.S. for understanding holistic sustainability performance in buildings.

Additionally, real estate is a global asset class, and we work with many of the most active investors in the U.S. market on a global scale. These investors are requiring that BREEAM be used in the U.S. market to provide them with consistency across their portfolios and the confidence that BREEAM’s certification provides for assets anywhere in the world. In places like Europe, regulations are far more rigorous than those here. For owners in the U.S. looking to strengthen asset value and attain international capital, utilizing BREEAM gives them a leg up by achieving a standard that meets more stringent international requirements.

Our goal is to provide developers, owners and operators with a science-based definition of what a true sustainable building looks like — taking into account all relevant considerations, from social impact through the long-term financial health of an asset — and the ESG and sustainability efforts that BRE has shepherded in the U.K. have paved the way for us to take lessons learned and apply them to the U.S. market to begin seeing immediate improvements.

How bad is it?

Over the past few decades — and most prominently in the past few years — the climate crisis has shifted from an abstract, theoretical risk, to a clear imminent threat at a global scale that is happening in real time. It’s a widely quoted statistic that the building and construction sector accounts for 40% of global emissions; as such, in the real estate industry, we have a responsibility to mitigate climate risks and the industry’s contribution to this issue, working to drive a positive impact.

We already have the necessary tools to start making meaningful improvements and effecting change through thoughtful, strategic efforts and best practices. Shifting to building and operating sustainable and resilient assets is critical to the long-term survival of the value of the real estate sector — but it’s important to remember that there is a light at the end of the tunnel, and if we take the time to work together with intention, we won’t be operating out of a state of crisis forever.

You discuss "progress over perfection." What is that?

The concept of “progress over perfection” addresses a certain stigma within the industry that often encourages the promotion of assets already achieving high performance (a small percentage of the building stock) without acknowledging areas for improvement and weaknesses within a portfolio. Greenwashing has been a prominent concern across various stakeholder communities, and this concept centers on accountability and transparency for whole portfolio performance, not just the best performers.

With a “progress over perfection” mindset, BREEAM encourages building owners to avoid falling into a pattern of submitting only their strongest performing assets for certification to put on display — instead, BREEAM calls on users to consider the value of submitting all assets within their portfolio to gain better insights into where the gaps in performance are and how to bridge those gaps.

With an eye on 2050 as the very latest that all assets will need to fully decarbonize along with the rest of the economy to avoid catastrophic impacts from climate change, many assets will need time to get the necessary capital allocated and make the changes necessary. That means moving deliberately with a clear plan to achieve that goal. That plan has to be informed by understanding the starting point. Realistically, we don’t have enough time to not take this approach.

What are the financial implications of not maximizing sustainability?

On the one hand, as catastrophic climate events increase both in terms of frequency and in the magnitude of damage done, building owners and operators must address the billions of dollars in losses these events amount to across the market annually. That’s just related to the physical damage these events cause — the economic fallout in an area damaged can cause property values to drop over the long term. While the former might be insurable, the latter is not. At the same time, pending regulations continue to include a mixed bag of carrots and sticks to be enforced across underperforming assets, while offering some credits and benefits to those assets which demonstrate strong performance and recognized improvements.

On a final note, as investor demands strengthen and concerns around greenwashing remain, forward-thinking companies that are implementing strategies to measure performance; holding themselves and their vendors accountable and accurately reporting ESG data will have a leg up in efforts to attain capital from investors both domestically and abroad.

Ultimately, to evade the risk of asset stranding and maintain value in the short- and long-term, players throughout the sector must understand the direct, growing link between climate and financial risks and take the relevant measures to mitigate these risks.