2017 GRESB Real Estate Results - Canada

Editor's Notes

1. We had a great year! What gets measured, gets improved ESG has momentum!!
2. Some people who are already leading the way towards this goal
3. Strong Industry Support 67 Institutional Investor members and their fiduciaries - $17 Trillion AUM 175 members from leading private equity firms and REITs globally 16 industry association members worldwide 75 solution providers, data providers and product manufacturer members
4. A lot has changed since we started GRESB Most of you have been on this journey with us for a lot of years and might remember; others have joined the movement in recent years. I am sure some of you in the audience have been at the very first official GRESB launch in 2012. Back then we started with just 198 participating entities, a number that we were very proud of back then. Today we have global and regional launch event in all six continents and we have grown the number of participants to 850. Back then we also asked you very different questions.
5. We want to track these targets on a global level  we need more people in the sample On the listed side we can track exactly what our coverage is  public disclosure
6. We asked you whether you collect any data on your performance. To which your answer today is most likely: YES! Today we ask you precisely about your data coverage. In 2012 we measured Energy data coverage by floor area for the first time and you covered 24%
7. Today you collectively have more than doubled that number and have energy data coverage of 60% of the entire floor area reported to GRESB And the data quality has drastically increased… (table)…and you are able to stream us data automatically via an API
8. We also asked you if you have any sustainability clauses in your lease contracts Back then about 23% of you had them Today….
9. ….about 80% of you incorporate those into your contracts. These are just two small pieces of evidence of the change that happened in this time period. …This change that some of us dare to call market transformation is also evident in the scores that you have achieved over the years. Add annectode about the particular event: In 2012…we were struggeling to sellfill this space…today we could have given away 300 tickets….
10. Earned GRESB’s Green Star six times Achieved our highest score in 2017, ranking among the top 5% of all entities
11. This is a density plot of gresb scores over time for the past 5 years. You tell me what market transformation should look like but I think we can show that we are on the right track. Now lets take the next step together.
12. Flow of GRESB Scores
13. 42 new participants in NA + 20% in 2017
14. Canada remains out front Sector leaderships – current and past Average score = 70 | majority are GRESB 4 or 5 star rated
15. Leaders measure their performance in terms of performance indicators as well as they engage in stakeholder engagement. Of course they score better everywhere but they do so also where there are the most points (PI/SE)
16. Leaders measure their performance in terms of performance indicators as well as they engage in stakeholder engagement. Of course they score better everywhere but they do so also where there are the most points (PI/SE)
17. Leaders measure their performance in terms of performance indicators as well as they engage in stakeholder engagement. Of course they score better everywhere but they do so also where there are the most points (PI/SE)
18. We can track improvements over time GRESB participants set targets We can track both against the UN SDGs Target types: Still…30% of GRESB participants don’t set any energy targets The GRESB participants are only a snapshot of the industry next slide coverage
19. We want to track these targets on a global level  we need more people in the sample On the listed side we can track exactly what our coverage is  public disclosure
20. We want to track these targets on a global level  we need more people in the sample On the listed side we can track exactly what our coverage is  public disclosure
21. GRESB is investor-driven. Investors using GRESB data can make better informed decisions on where and how they want to allocate their capital, and on what material ESG topics they need to engage with their managers. Increasingly (?) they are not just requiring companies and funds to not just list those risks, but explain how they're managing them, and if this is in line with their targets And they all agree that you are (fully) prepared to meet their disclosure demands.
22. Conclusions: Investors will increasingly price and evaluate ESG risks in order to enhance and protect shareholder value.   For that to happen effectively, companies and funds need to not just list those risks, but explain how they're managing them.   Investors are now moving beyond disclosure, demanding tangible improvements in operational performance metrics.   We can increasingly measure and track these metrics and improvements, as we have more coverage and increased, higher quality data.   This leads to material industry insights, supporting our unique joint movement and commitment to evaluating and empowering sustainability practices.
23. GRESB first started motivating change in terms of policies & management Now it’s motivating change with respect to measurement & performance What indicators actually matter?
24. In terms of performance, it’s increasingly moving from energy to carbon Energy is often used as a proxy for carbon as a performance metric because it is more readily available and relates directly to costs. However, evaluating a building’s energy performance alone fails to consider how carbon emissions vary between electricity grids across the country, and between fuels used on site. Building owners, managers, tenants, service providers, and policymakers need to adopt a subtle yet important shift from exclusively addressing energy use to a view that prioritizes focusing on carbon emissions. If the goal of undertaking building improvements is to reduce carbon emissions, we must move towards terms such as “total carbon footprint” and “carbon performance” alongside “energy use intensity” or “energy performance”.
25. We’re already seeing this shift take shape… Federal and provincial carbon targets… Ontario GHG targets (vs 1990): 37% by 2030; 80% by 2050 EWRB: Building owners are required to report their data to the Ministry of Energy by July 1 of every year. The reporting requirement will be phased in over three years, beginning July 1, 2018, with buildings that are greater than or equal to 250,000 square ft. The reporting window will open in early 2018. By 2020: Buildings > 50,000 sf In Vancouver: aimed at individual buildings as and district-scale infrastructure all new buildings all-electric and zero-emissions by 2030 All existing buildings all-electric by 2050
26. Building Solutions: Meet Canada’s climate change targets by investing in and providing incentives for energy efficiency improvements (such as recommissioning, deep retrofits, solar and renewable onsite energy systems, and switching of fuel systems) in existing buildings Strengthen building performance by advancing building energy benchmarking, reporting and disclosure initiatives Invest in net zero buildings by supporting a National Net Zero Building Initiative to create a Canadian standard to guide the industry.  Roadmap for Retrofits demonstrates the critical role that existing buildings play in realizing Canada’s low carbon future provides recommendations to retrofit large buildings that will contribute to achieving a reduction in GHG emissions of 30%-50% by 2030 analyzing how the type, size, age, energy source and regional electrical grid of large buildings in Canada can affect efficiency performance and carbon emissions  identifies the buildings with the largest carbon reduction potential and recommends provincially-specific retrofit pathways
27. Recommendations by building type, age, and location Recommission buildings that have yet to achieve high performance status by optimizing existing building systems for improved control and operational performance; Deep retrofits in buildings to high-performance standards such as LEED, focusing on energy reduction and ensuring that key building systems such as lighting, HVAC and envelopes are upgraded; Incorporate on-site renewable energy systems in buildings; and Work with jurisdictions and the private sector to switch to low-carbon fuel sources in buildings.
28. Although retrofits are important, it’s also important to understand what’s happening beyond the building Ontario grid will slightly increase
29. With this information, you can make prioritized, quantified, and target-driven plans for portfolio carbon reductions and decide where to invest effort This is an example of an actual portfolio plan Shows the decisions that the portfolio made about where to invest their effort Prioritized Quantified Target-driven
30. We can expect to see more of this type of carbon planning in the near future. We are seeing the feds and some private sector clients moving rapidly in this space, especially at the portfolio level Being driven by policies, initiatives, and tools, both new and old. GRESB Portal: new functionality on the portal that allows Real Estate participants to see data and graphs of performance benchmarks at the asset level. Data can be used to compare each individual asset with the portfolio average, peers or to the entire GRESB universe. The analysis can be customized by property type and region.
31. A survey of over 345 CFOs conducted by the Integrated Benefits Institute found only 23% of CFOs* reported making any assessment of whether its benefits were producing positive results, and only 6% said their company calculated return on investment (ROI) of employee health benefits.1 *40% of these CFOs represented companies with at least $2 billion in annual revenues. 1. Integrated Benefits Institute. Finding the Value in Health.; 2015. https://ibiweb.org/?ACT=65&id=8-e1hvHZVFDewku36t0M6wv_Fzuyh1cHeCBOaZRRga9SIdc3xM9ZS2BwEzhPirYczA6Od
32. These interventions rely too heavily on willpower, or self-control, that researchers liken to a muscle that will fatigue with too much use.1,2 This is why efforts to change diet or exercise habits often end in failure. 1. Baumeister RF, Vohs KD, Tice DM. The Strength Model of Self-Control. Gottfredson & Hirschi. 1994. http://assets.csom.umn.edu/assets/166733.pdf. Accessed May 8, 2017. 2. Inzlicht M, Gutsell JN. Running on Empty. Psychol Sci. 2007;18(11):933-937. doi:10.1111/j.1467-9280.2007.02004.x.
33. We had a great year! What gets measured, gets improved ESG has momentum!!
34. We had a great year! What gets measured, gets improved ESG has momentum!!