Disclosure Challenge: Prominent real estate

REVEALING PROGRESS

CAGBC’s Disclosure Challenge Advances Building Performance Benchmarking

IN 2019, THE Canada Green Building Council (CAGBC) launched the Disclosure Challenge initiative to support data accessibility and transparency in the Canadian real estate market. The Disclosure Challenge called on real estate leaders to publicly disclose all their buildings’ available energy, greenhouse gas (GHG) emissions and water data regardless of the building’s overall efficiency. The participants’ commitment to the program demonstrated a heightened awareness of and need for data transparency to help the real estate sector substantially reduce energy consumption and carbon emissions. In the first year of the Disclosure Challenge, five large portfolio owners collectively holding more than CAD $50 billion in managed real estate assets participated: QuadReal Property Group; Triovest; Concert Properties Ltd.; Colliers International; and the Minto Group. In 2022, six additional commercial property owners/managers representing $60 billion CAD in managed assets joined, including: Kingsett Capital; Brookfield Properties; LaSalle Investment Management; Golden Properties; Shape Properties; and Hudson Pacific Properties. As well, the City of Ottawa was the first municipality to come on board.

In the first year, Disclosure Challenge participants disclosed available information from more than 700 building assets representing more than 11 million square metres (118 million square feet) of building space. For the years 2019 and 2020, data was collected on 935 and 914 buildings respectively, with approximately 17 million square metres (183 million square feet) of building space profiled each year.

The participants’ building performance data was reviewed and validated for accuracy and then made publicly available through an online visualization tool. Those buildings with complete performance data were graphically displayed in the tool and compared to overall national averages.

The visualization tool can filter the displayed buildings based on type, age, energy efficiency ratings, GHG emissions intensity and region. With this publicly available tool, CAGBC demonstrates how performance data can be effectively and dynamically shared when consistent data disclosure requirements are in place.

There are three years of data available within the tool, including during 2020, when the COVID-19 global pandemic directly impacted building occupancy. Through this data, the Disclosure Challenge enables real estate owners to identify trends

and insights related to energy use in office and multi-residential buildings, including uncovering changing energy carbon intensity values for buildings in Alberta.

DATA DILEMMAS The involvement of leading real estate players helped to dispel the notion that the sector was reluctant to share data, helping put the real estate sector in a more positive light when it comes to sustainability leadership. In addition, the Disclosure Challenge demonstrated that disclosure and data sharing is possible for public or private real estate managers in any jurisdiction in Canada.

Nevertheless, there can be barriers even when motivated participants want to collect and share data, especially for specific building types. Only a small portion of industrial and warehouse building types were able to submit complete wholebuilding performance information. It was also a consistent issue for retail buildings, which encountered issues that included tenants paying their utility bills, campusstyle energy distribution where one energy meter feeds multiple buildings, and a lack of direct data connections between the utility providers and data management systems.

While industrial and warehouses made up a significant portion of the total space, a greater percentage of the buildings in the Disclosure Challenge were offices and multi-use residential buildings (MURBs), which generally did not experience these issues to the same degree. However, finding a solution that enables better whole-building data collection regardless of the building type will be important in ensuring the full benefits of data collection and monitoring.

Despite issues, the ongoing Disclosure Challenge demonstrates how data transparency and data sharing can help the development of effective policies, programs and actions to improve energy efficiency and lower GHG emissions. Globally, other jurisdictions are already taking advantage of data disclosure and benchmarking to identify opportunities for energy efficiency

TRANSPARENCY MEANS LEAVING NO ASSET BEHIND

Chis Pyke, Senior Vice President of the U.S. Green Building Council, draws a solid line between transparency and the ability to achieve greenhouse gas (GHG) emissions reductions. He voiced his “leave no asset behind” mantra during the online release of the 2022 GRESB results — benchmarking the environmental, social and governance (ESG) performance of real estate portfolios worldwide — earlier this fall.

That begins with a baseline measurement of every building’s emissions profile, which can then be tied to an improvement strategy and provide the starting point for measuring progress. As high-performance green and smart buildings become increasingly common, he argues there’s less to learn from looking at them. Rather, for sustainability professionals, there’s much to relish in the challenges that underperforming assets present.

“We have gotten very good at making better assets. Better assets are actually quite similar to each other and are getting more and more similar to each other,” Pyke asserted. “There is a long tail of underperformance in any given portfolio. That’s where the opportunities are. We need to know which assets are currently superior — that’s great, we know how to do that — and, increasingly, we need to have a way to assess, scope and improve the lowperforming assets.”

“It’s really about how we invest in, finance, incentivize and innovate around the brownest of our buildings and how we keep them moving forward,” concurred his co-panellist Sukanya Paciorek, a Senior Principal with the Rocky Mountain Institute. “There is a lot of work to be done in that space, including building metrics, labelling systems and benchmarking tools that work for those types of portfolios and those types of buildings.” – REMI Network

and to grow their retrofit economy. For Canada to replicate their success and supercharge the retrofit economy, reliable and consistent access to whole-building data across a wide range of building types is paramount.

INSIGHTS In 2020, more complete performance data was available for office and multi-unit residential buildings (MURBs), as well as larger data sets for Alberta, British Columbia and Ontario. The following insights for these building types were noted: • Overall, the median site energy-use intensity (EUI) was 242 kilowatt-hours per square metre per year (kWh /m2/yr for participant office buildings, which was better than the national median of 294 kWh/m2/yr or 18% more energy efficient.

• Overall, the median site EUI was 240 kWh/m2 /yr for participant multiresidential building. National comparisons were not readily available for participant

MURB buildings in 2020.

• GHG emissions intensity for both office and MURBs varied between regions. For buildings in the Disclosure Challenge from across the country, the median value for office buildings was 24 kilograms of carbon dioxide equivalent per square metre per year (kgCO2e/m2 / yr, and the median value for multiresidential buildings was 32 kgCO2e/m2 /yr.

• These values ranged from a high of 111 kgCO2e/m2 in Alberta to a low of 15 kgCO2e/m2/yr in British Columbia for office buildings, and a high of 65 kgCO2e/m2/yr in Alberta to a low of 25 kgCO2e/m2/yr in British Columbia for multi-residential buildings.

• Median values for GHG emission intensity vary significantly between regions and locations, due to the variety of energy utility providers and fuel sources used for electricity generation.

Comparing participant office buildings to these median values indicated that they performed well, with 76% (220 out of 289) that were lower than the national

GHG emission intensity median value.

• Age of the buildings indicates that median site EUIs have improved for office buildings over time due to improvements in design and construction, while MURBs demonstrated a decline in energy efficiency. The median for pre1990 office buildings (190) was 257 kWh/m2/ yr versus post-1990 office buildings (105) at 213 kWh/m2/yr, which was a 17% improvement. The multi-residential pre-1990 median (94 buildings) was 234 kWh/m 2 /yr compared to the post-1990 median (49 buildings) at 256 kWh/m2/yr, for a 9% decline in performance.

CONSISTENCY CRITICAL In the absence of consistent requirements and support for building performance data disclosure and benchmarking, owners and operators, tenants and policy-makers lack a clear picture of buildings’ overall energy use and GHG emissions. This blind spot hampers environmental footprint assessments and the development of plans to improve the energy efficiency and lower the emissions profiles of Canada’s buildings.

Ensuring access to accurate and detailed performance data for all building types could result in better insights into operational performance, operational drivers and highperformance thresholds. Regulations,

CANADIAN PORTFOLIOS GAINING GRESB PRESENCE

KingSett Capital has emerged as the global leader among 59 mixed office-residential real estate portfolios benchmarked in the 2022 GRESB survey of environmental, social and governance (ESG) practices and performance. This year, 1,820 entities worldwide, including private companies, property funds and REITs, reported to the annual assessment, which considers 60 indicators across 14 components of activity.

The GRESB real estate database now captures 150,000 individual assets in 74 countries collectively valued at about USD $7 trillion. The total number of respondents has increased by more than 237% during the past decade, while average scores for those reporting over that entire period have climbed from a range of 45 to 54 in 2013 up to 81 to 85 in 2022.

This is KingSett’s eighth year of GRESB participation and the second consecutive year it has been atop the office-residential category. The company also attained a five-star ranking for the fifth consecutive year, meaning that its GRESB score is in the top quintile (20%) of the total field of participants.

“We are grateful to our people, partners and customers who helped make this achievement possible,” says Jon Love, Chief Executive Officer of KingSett Capital. “We are committed to our ESG strategy and continue to expand our efforts and ambitions, seeking to make an impact and build long-term value for all our stakeholders and communities.”

Other notable Canadian results include: QuadReal Property Group, which posted the top score in the Americas region for diversified portfolios with office, retail, industrial and residential properties; and Oxford Properties Group, Triovest and BentallGreenOak, which were all Americas region leaders in the separate development benchmark for ESG attributes in design, construction and renovation.

The five companies are veterans of the GRESB assessment, witnessing a steadily growing contingent of Canadian participants. Enrollment has nearly doubled over the course of the COVID-19 pandemic — climbing from 30 in 2019 to 59 reporting entities this year, and with 44% year-over-year growth from 2021 to 2022.

That’s a trend throughout the Americas region, as the United States gained 79 new respondents for a 26% growth rate, and Brazil recorded a 170% jump from 7 to 19 entities. The influx is also deemed a major cause for a drop-off in the region’s average GREB score, which dipped to 72, down from 73 in 2021.

“The first year of reporting to GRESB can be extremely challenging,” Reid Morgan, Manager, Member Relations, for GRESB’s Americas region, observed earlier this fall during an online summary of the results. “Another critical contributing factor to lower overall scores this year was the significant change in how buildings were used in 2021 as compared to 2020. With workers starting to return to the office and businesses reopening, we saw a decrease in likefor-like scores in the energy, water and GHG emissions aspects.”

Still the data bodes optimistically for the future. This year, the firstyear reporters collectively posted an average score of 58.3, while the average score for entities in their second year of participation was 68. At five or more years of participation, the average scores hit or surpassed 81.

The participants’ commitment to the program demonstrated a heightened awareness of and need for data transparency to help the real estate sector substantially reduce energy consumption and carbon emissions.

reporting frameworks (such as GRESB among others) and/or tenant and owner demands are raising performance expectations and making them a part of normal building operations. As a result, data-driven insights will be critical in identifying performance requirement levels and setting operational targets on a building-by-building basis.

Data transparency and benchmarking are a crucial stepping stone to a decarbonized built environment. With greater levels of data transparency, new opportunities for building performance analysis would be gained. Increased transparency and data sharing would also support the development of new and innovative policies and programs that could drive change at scale.

Key recommendations for governments to consider include the following:

• Implement national building energy data disclosure guidelines that align to the

Disclosure Challenge’s ask; • Support the use of Energy Star Portfolio

Manager for data collection and benchmarking and require direct connections to utility data to make collection and sharing of data easier; • Mandate building data sharing as a prerequisite to associated support program approval; and, • Develop a user-friendly system for energy efficiency and GHG emissions intensity labelling that works for all buildings and owners.

Establishing a common building data, labelling and transparency approach is a step that building owners, occupiers and policy-makers must take together. zz The preceding is an excerpt from the Canada Green Building Council report, Full Disclosure,

Real Estate’s Climate Leadership in Action.

The complete text can be found at www.cagbc. org/news-resources/cagbc-news/disclosurechallenge-2022/.