1. Sustainability Metrics for Commercial Real Estate Assets – Establishing a Common Approach Louise Ellison – Investment Property Forum Patrick Brown – British Property Federation European Real Estate Society Conference Milan, June 2010

2. Introduction Aims Property Industry Alliance/Green Property Alliance Current position Methodology Data Recommendations Conclusions

3. Aims of the work Develop a common framework for measuring and reporting sustainability for property assets Informed by investors, owners and occupiers Focus at the building level Existing tools are the starting point To support the industry response to sustainability

4. Who/what is the Green Property Alliance Property Industry Alliance –IPF, RICS, BCO, BPF, BCSC –Umbrella organisation that enables the organisations to work together on specific issues Green Property Alliance –Sub-group of the PIA focusing on sustainability –Broader membership – CoreNet, UKGBC, BRC –Plus industry – PRUPIM, Hammerson, Drivers Jonas, GVA Grimley, Gardner & Theobald, JLL. –Aims to ensure cross-industry communication

5. Context Many benchmarking systems established Little consistency in metrics No coherent set of data developed Limited ability to compare performance Deters businesses from starting to collect data Weakens industry response to the sustainability agenda

6. Current Position property investors increasingly alert to sustainability as a risk issue and taking steps to monitor it within their portfolios Sustainability benchmarking systems and tools are widely available but measure sustainability using a range of different variables and metrics Existing policy interventions have been disappointing in their ability to make sustainability data more widely available Data is increasingly required for environmental and climate change regulation but is not commonly available in a consistent, analysable format Examples of good practice amongst developers, investors, fund managers

7. Methodology Key sustainability factors identified from previous research –Energy –Water –Waste –Carbon –Normalisation factors for each Limited to UK largely No social factors

8. Methodology Focus on existing benchmarking systems and company reports Desk study –13 benchmarking tools –11 Company reports Physical characteristics What was reported Metrics used for carbon, energy, water and waste Produced a list of common metrics Industry workshop to review

9. Data – Building characteristics Little overlap No data on occupancy levels No clear data on building classification

10. Data - energy All the tools and majority of reports capture the data kWh is the most commonly used metric Energy here refers to that used within the operation of the building

11. Data – renewable energy Captured by majority of tools and reports kWh again used by the majority

12. Data - Water Routinely collected data Most using M 3 Common position should be achievable

13. Data – Water recycling Less commonly captured for company reports M 3 the common metric % of total usage important

14. Data - Waste Commonly reported Little consistency in reporting format Issues arose regarding origination of waste and accountability

15. Data – waste recycling Wide range of metrics used Issue of origination is again key Capturing data Waste by route Tonnes by waste type Facilitie s in place Total in tonnes Recycled proportion of total unspe cified Tools (13)72122 Reports (11) 93222

16. Data - Carbon Commonly reported Clear split in basis of reporting Increasingly important Abstract concept for industry – need resource targets too

17. Recommendations - data ResourceHow measuredMetricPerformance indicator Energy/renewable energy Landlord services/tenant supply metering kWhkWh/m 2 NLA or occupancy/year Water used/recycledReference to billsM3M3 M 3 /M 2 NLA or Occupancy year ratio of total Waste/recycled waste Direct measure or survey tonnesTonnes/occupancy or M 2 NLA/year Ratio to total waste CarbonDefra reporting factors Metric tonnes/ CO 2 e Kg/CO 2 e/m 2 NLA or occupant/year

18. Recommendations - normalisation CriterionMetricHow measured Type of buildingType by useOffice/retail etc OccupancyNumber of occupantsNLA occupied VacancySpace unfilledNLA Days of useDaysDays used per week House of useHoursHours used per day Air conditioning?Yes/No/% with acstated EPC?Yes/no gradeIf yes specify grade/year DECYes/no gradeIf yes specify grade/year Green ratingYes/no gradeIf yes specify grade/year

19. Conclusions Analysis shows some commonality Suggests a level of standardisation in reach A short list but manageable Reveals specific areas for further work –Occupancy levels –Measurement of waste –Standardisation of energy measures –Landlord/tenant split More consistency will encourage reporting List will gradually grow Further discussion with industry