Building Strategies & Sustainability
WINTER 2012
ENERGY EFFICIENT SOLUTIONS FOR NEW CONSTRUCTION & RETROFITS
Looking back
PM 40063056
at 2012 The year in review
+
Verifying sustainability Under-floor air distribution
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GL AHOLT LLP
CONSTRUCTION LAWYERS www.glaholt.com
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contents
Building Strategies & Sustainability ENERGY EFFICIENT SOLUTIONS FOR NEW CONSTRUCTION & RETROFITS
Volume 2 Number 4 • Winter2012 Publisher | Chuck Nervick
chuckn@mediaedge.ca 416.512.8186 ext. 227 Co- Publisher | Paul Murphy paulm@mediaedge.ca 416.512.8186 ext. 264 Editor | Scott Anderson Senior Graphic Designer | Annette Carlucci
annettec@mediaedge.ca
Graphic Designer | Jennifer Carter
jenc@mediaedge.ca
Production Manager | Rachel Selbie
rachels@mediaedge.ca
Circulation Manager | Lina Trunina
circulation@mediaedge.ca Contributing Writers Peter Love Karen K.Y. Liu Trish Morrison Nick Paschke Melanie Steiner Published by
President | Kevin Brown
kevinb@mediaedge.ca
Vice-President | Chuck Nervick
chuckn@mediaedge.ca
5255 Yonge St., Suite 1000 Toronto, Ontario M2N 6P4 Tel: 416.512.8186 Fax: 416.512.8344 www.mediaedge.ca Building Strategies & Sustainability is published four times a year by MediaEdge Communications Inc. Subscription Rates (Canada): 1 year $50*, 2 years $90*, single copy $12*. US 1 year $75. International $100. Plus applicable taxes*. For other inquires please contact the Circulation Department 416.512.8186 ext. 232 Reprints: No part of this magazine may be reproduced in any form – print or electronic – without written permission from the publisher. Requests for permission to reprint any portion of this magazine should be sent to paulm@mediaedge.ca. © COPYRIGHT 2012 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1917-8026.
COVER STORY
FEATURES
8
6
Green construction Under-floor air distribution
22
Regulations Refined Alternative Compliance Paths
A year in review
DEPARTMENTS
COLUMNS
4
Editor’s note Retrofit funding debate heating up
12
Project profile A task of Olympic proportions
16
Corporate sustainability Verifying your green plans
18
Legal corner Dispute resolution
20
Environmental intersection The worry-free way to energy retrofits
/bssmediaedge /buildstrategies /mediaedgebss Winter 2012 3
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Editor's note
Retrofit funding debate heating up
L
Looking back on 2012, you realize just how much hot air there was. And that was not even on the political front. A hotter than usual winter in Central Canada as well as scorching hot summer days painted the environmental picture. And now a report released by the Toronto Environment Office predicts that we could see an increase in the number of above-30C days over the next three decades. The amount of days with high humidity readings will also increase. And on the f lip-side winters are also seen getting warmer with more rain accumulating in the winter months. With this projected change in the climate over the next few decades, concerns are rising over whether everybody – from governments and big corporations down to individual building owners and homeowners – have prepared well enough for this climate change. Some Toronto city councillors are also concerned that money from funds usually earmarked for energy retrofits could be diverted to other projects as the local government looks to pare down its massive deficit. But this is wrong thinking. Money needs to be spent today to protect the environment and the planet for the challenges of tomorrow. There are various retrofit programs available to businesses big and small to fund energy efficiency programs. Take the time to look into these programs now. After all, the cost of retrofitting now is only a small amount compared with waiting to act after it is too late.
Scott Anderson Editor Building Strategies & Sustainability
Building Strategies & Sustainability ENERGY EFFICIENT SOLUTIONS FOR NEW CONSTRUCTION & RETROFITS
Visit us online at
www.bssmagazine.ca
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Green construction
Textile troubleshooting Photos courtesy of DuctSox Corp.
Temperature Fluctuations Can Undermine Under-Floor Air Distribution
Centre for Interactive Research on Sustainability at University of British Columbia.
By Nick Paschke
U
Under-f loor air distribution (UFAD) works well in theory, but not always in a p p l i c a t i o n . C o n c e p t u a l l y, a i r conditioning is distributed through an under-f loor cavity and f loor-mounted diffusers rather than the conventional a r ray of overhead ducting and diffusers. Bu i ld ing occ upa nts ca n t hen regulate airf low within a controlled zone by adjusting the applicable air diffuser. The raised f loor configuration i s a l s o c o n v e n i e nt f o r h o u s i n g communication cabling, wiring and even utility piping, which can more easily be installed, maintained and retrof itted through removable f loor panels. However, design assumptions didn’t always translate into reality in many early UFAD systems. Disruptions in pressurization, t urbu lence and temperature gains (known as thermal decay) as air travelled through underf loor plenums compromised performance. Energy gain combined with poor distribution, resulting in temperature variables of as much as f ive to 10 deg rees Fa h renheit at
discharge points, which was far from the designers’ goal of a one- to threedegree variable across the entire space. In a typical example, the HVAC system would be tasked unnecessarily to satisf y perimeter set-points in warmer areas requiring more cooling. Si nc e bu i ld i n g p e r i me te r z one s require roughly three times more cooling per square foot than interior space, occupants within zones nearest the HVAC system discharge would be chilled from the cooler temperatures. Notably, a n of f ice bu i ld ing in Dallas, Texas reported a 12-degree Fahrenheit temperature differential
within its 25,000-square-foot f loor plate and UFAD. As a result, the airconditioning system was deployed at 100 per cent fan and cooling capacity, creating higher energy costs. As a solution, textile ducts are now being introduced inside the UFAD to transfer and distribute the supply air to exact zones of the system. Recent tests have shown that textile ducts can be more energy-efficient because the linear dispersion conf iguration distributes air uniformly over the length. This results in better mixing than in metal ducting with registers spaced every 10 feet.
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Green construction
Properly mixed airf low within the plenum improves performance of floor mounted diffusers by avoiding warmer temperatures that can cause vertical t h ro w a nd d e - s t r at i f ic at ion . A combination of non-vented and vented sections of an under-floor textile duct system can be configured to distribute airflow nearest the perimeter to serve the higher demand zone first. As airflow transfers to interior zones, the thermal decay warms up the airflow and reverses the cold core/warm perimeter syndrome that plagues UFAD systems. In the Dallas office building example, introduction of the under-floor textile duc t n a r ro w e d t he te mp e r at u r e differential from 12 to four degrees F. With the cool air being distributed at the perimeter zone, the building operator could reduce the fan speed to 70 per cent and cooling capacity to 60 per cent, providing some operational budget relief. Col l iers Inter nat iona l recent ly specified textile duct inside the UFAD system in a new 120,000-square-foot office tower for a Toronto-area software developer. This follows the experience in a circa-2005 property the same tenant occupies, where ongoing temperature fluctuations are attributed to the UFAD design. The facilities managers are now contemplating a retrof it/upgrade to install textile ducting. “We considered several options to improve UFAD's temperature control, but I really like the idea of textile duct because, so far, it appears to curb thermal degradation and offer so much more installation and reconfiguration flexibility than meta l duct r uns and other alternatives,” said Bill Blackburn, vicepresident of Design and Construction with Colliers International. Textile duct will also be used in the UFAD system slated for the Centre for Interactive Research on Sustainability (CIRS), now under construction on the University of British Columbia campus. The 62,000-square-foot (5,675 square metres) building will be one of a handful of regenerative buildings in the world and has been billed as the most sustainable building in North America.
Engineering firm Stantec specified UFAD for the living environmental laboratory's four floors. Additionally, textile duct was specified to increase air dispersion efficiency and indoor air comfort. To the south, textile duct is part of the U FA D i n S e a t t l e Un i v e r s it y 's $55-million library renovation and addition. This helps maintain tight temperature control tolerances, thus reducing energy costs, according to Seattle University's lead buildings control technician, Patrick McCurdy. While a conventional overhead system typically supplies 13°C (55°F) air and cools from top to bottom, the library's
HVAC equipment supplies warmer 18°C (65°F) and uses air displacement to cool the bottom five feet of the addition's 18-foot-high areas. BS&S Nick Paschke is New Product Sales Manager with DuctSox Corp, a manufacturer of textile air dispersion products. For more information, see the web site at www.ductsox.com. The Iowa State University study Thermal Comparison Between Ceiling Diffusers and Fabric Ductwork Diffusers for Green Buildings can be found at http://www3. me.iastate.edu/bglab. The preceding article is reprinted from Canadian Property Management, July 2012.
Winter 2012 7
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8 Building Strategies & Sustainability
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covEr story
A year in review A look at 2012 from a sustainable point of view By Scott Anderson
If you were to sum up 2012 it could be the “Year of hot air”. After all, weird and whacky weather – a hotter than usual winter in Central Canada and the so-called “Super Storm Sandy” along the U.S. east coast -dominated headlines on the environmental front. But these phenomena a lso demonst rated just how ser iously everybody – individuals as well as corporations – must take the environment seriously. The hot air also came from the political front as citizens and politicians lined up across Ontario in the great battle against wind turbines. This came as the country forged ahead with its plans to reduce its greenhouse gas emissions. In September, Canada’s Environment Minister Peter Kent unveiled f inal regulations for reducing greenhouse gas (GHG) emissions from coal-f ired electricity generation. The regulations apply a stringent performance standard to new electricity generation units and old units that have reached the end of their economic life. In the fi rst 21 years, the regulations are expected to result in a cumulative reduction in GHG emissions of about 214 megatonnes. “Canada already boasts one of the cleanest electricity systems in the world, with three-quarters of our electricity supply emitting no greenhouse gases,” said Kent. “These regulations will further strengthen our position as a world leader in c lean elect r icit y production, while continuing to grow our economy and create jobs.” T he gover nment sees reducing emissions from coal-fired electricity -which is responsible for 11 per cent of Canada’s total GHG emissions -- as an
impor ta nt step towa rds meet ing Canada’s 2020 target of reducing greenhouse gas emissions. Under the Copenhagen Accord, Canada has committed to reducing its greenhouse gas emissions by 17 per cent from 2005 levels by 2020. The new performance standard for coal-fi red electricity generating units will come into force on July 1, 2015. T h is ca me a mont h a f ter t he government said Canada was half way towards meeting its 2020 greenhouse gas emission target. “Using a sector-by-sector approach, our government has taken action on two of Canada’s largest sources of emissions: electricity and transportation,” said Kent. “The Harper Government has been working hard to reduce emissions, and this has helped set the stage for the progress we’ve achieved this year.” Kent said Canada has contributed to the projected emission reductions by regulating greenhouse gas emissions from the transportation and electricity sectors, and will continue to work with its partners to reduce emissions from other sectors, including oil and gas. Meanwhile, Ontario was trying to do its part in phasing out coal f ired electricity by 2014 and increasing renewable energy like wind, solar and biomass, but it faced resistance across the province as residents lined up to fight the wind turbines noting the health disadvantages from the structures. The resistance came despite a report a year earlier that concluded there is no direct health risk from wind turbine sound at Ontario's regulated setback distance. The study analyzed the latest findings on low frequency noise and infrasound from wind turbines. In addition, three experts in the field of noise, vibration and acoustics reviewed and validated the report. The Ontario government also found itself in some hot water after it moved ahead with plans for a natural gas plant.
In September, Chris Bentley, Minister of Energy, said an agreement had been reached between the Ontario Power Authority and TransCanada Energy to relocate a proposed 900-megawatt natural gas plant originally planned for Oakville to lands at Ontario Power Generation’s Lennox Generating Station site near Bath, Ont. “The decision not to move forward with the plant at the original Oakville site was made after hearing overwhelming concerns from local residents and local elected officials. We heard concerns from families and we responded,” the minister said in a statement. “Over the coming days and weeks you will read and hear lots of numbers related to the cost of the plant relocation. The only accurate cost to taxpayers for this relocation is $40 million.” Pundits were quick to question that math, however, with various reports estimating the real costs to move the plant was between $200 million and $700 million. And Ontario also faced another headache af ter the World Trade Organization prel imina r y repor t suggested Ontario's Feed-in-tariff system was discriminatory against foreign suppliers of equipment for renewable energy generating facilities. The Feed-in-tariff system — established in 20 09 - requires pa r ticipating electricity generators in Ontario to source up to 60 per cent of their equipment in the province if they want to be eligible for subsidies. Despite this, a rooftop solar project at Jamieson Laboratories' manufacturing plant in Windsor -- one of the largest rooftop solar projects to come online since Ontario's Feed-In Tariff program -- was introduced. Ontario politics were also thrown into disarray when Ontario Premier Dalton McGuinty said he was stepping aside and suspending parliament. This halted Winter 2012 9
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NAT0
cover story advancement on all government decisions until Queen’s Park opens for business again. In a show of combined strength The Canadian Construction Association (CCA) and the Canada Green Building C ou nc i l (CaGBC) si g ne d a Memorandum of Understanding that commits the two organizations to work closely for the promotion of green building practices throughout Canada. The MOU was signed during the CaGBC Board of Directors meeting in Ottawa in June by CCA chairman Raymond Brunet and CaGBC co-chairs Peter Busby and Liz Johnston. "What this MOU does is send a very strong, powerful signal to our members and to the construction industry at large that our industry has now fully entered the green era, where construction designs and construction practices must conform to the demands and expectations of Canadians for greater susta inabi l it y,” Br unet sa id in a statement. "We have a vision that environmental think ing and env ironmenta l consideration becomes as standard as safet y considerations are on ever y jobsite. That will take time and a lot of work - but this agreement will help us to pave that way". Buildings in 2012 Despite the political dramas, there was progress on the building front in 2012 – this was outlined in the Fall issue of Building Strategies & Sustainability. RBC Waterpark Place, which is slated for completion in the fall of 2013, saw much progress in 2012. This 930,0 0 0-square-foot off ice development will be Royal Bank of Canada’s new national headquarters for its Canadian Banking business and located between Bay and York Streets on the north side of Queens Quay Boulevard. The building, developed by Oxford Properties, will be Toronto’s first LEED Platinum office tower in Toronto. RBC WaterPark Place will offer high performance and high efficiency features, including deep lake water cooling, dedicated outdoor air system, vision glazing, and best in class plumbing and lighting features. And Toronto-Dominion also got into the green act with its green roof project at its f lagship Toronto-Dominion Centre. T he ro of cov er s most of t he
22,000-square-foot roof and is made up of creek sedge grass, a plant species adaptable to the shady conditions of the site and hardy enough to thrive in the Toronto climate. In the Greater Toronto Area, Siemens Ca nad a pl a ns to bu i ld its ne w 110,000-square foot, LEED certified headquarters in Oakville, Ont. The Gold LEED-certif ied building is scheduled for completion later this year. Outlook for 2013 With 2012 almost behind us, what do the prospects look like in 2013? According to RBC economist Robert Hogue, “Ontario’s economy was holding its own despite the weaker environment in which it operates this year and he expects “only minor improvement in 2013 with real GDP growing at a marginally faster rate of 2.3 per cent.” However, Hogue suggests spending restraint in the public sector continues to limit growth in the Ontario economy. He notes that government spending on goods a nd ser v ices, a nd capita l investment declined in 2012. “ W h i le ne c e s s a r y to i mprov e government fiscal situations, corrective budgetar y measures will generate substantial headwinds for the Ontario economy, which could well persist through the medium term,” he wrote in a report. The Conference Board of Canada painted a bleak view for Canada moving into next year. “The inf luence of a grim global environment, coupled with a heavy dose of fiscal restraint, will result in Canada's economy muddling along
through the rest of this year and into 2013,” said Pedro Antunes, director, Nationa l and Prov incia l Forecast with the Conference Board. Antunes noted that “the swift postrecession rebound that occurred in 2010 and 2011, driven by a strong domestic economy, has mostly expired through the first half of this year” as problems in Europe and economic issues in the United States “have eroded consumer con f idence a nd slowed business investment and job creation.” Atunes concluded that “Canada is embarking on a period of fiscal austerity” with public sector spending – which has helped the economy over the past decade – being curtailed as federa l and provincial governments try to bring deficits under control. “The weakness in government spending is partly due to a substantial decline in public infrastructure spending. But with the end of the stimulus program, business investment is picking up the slack. Strong investment in resources has bolstered private capital investment in machinery and structures back to its pre-recession peak; going forward, growth is expected to remain strong.” The Ontario Construction Secretariat expects the Ontario Construction industry to show growth over the next few years. At a recent conference the OCS’s chief executive officer Sean Strickland suggested that between 2013 and 2016, the OCS expects the industrial and commercial construction sectors to increase about 4.6 per cent, while the institutional sector will increase by 1.3 per cent. BS&S
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PROJECT PROFILE
A task of Olympic proportions
The green roofs at Millennium Water By Karen K.Y. Liu
M
Millennium Water is the largest green development project in British Columbia, covering nine city blocks in the South East False Creek in Vancouver. The City of Vancouver required 50 per cent of the site (approximately 2 hectares) to be green. It was first constructed as the Athletes’ Village for the 2010 Winter Olympic Games. After the Games, the eight residential buildings on the waterfront were transformed into Vancouver’s landmark urban village. This urban renewal project was conceived, planned, de sig ne d a nd const r uc te d w it h sustainability in mind, managing the environmental, social and economical
impacts of the development. The result was the first completed Leadership in Energy and Environmental Design (LEED) certif ied Gold sustainable neighbhourhood in Canada. It has since become an icon for sustainable-built environment and serves as a new standard for green building in Canada. One of the most notable features of this sustainable community is the respect for green space and habitat for wildlife. The design team created a series of courtyards within the development, each was designed to have a unique character to meet the future intended mixed demographic of this f lourishing neighourhood with
outdoor terraces, urban agriculture, lawn areas for unstructured play or relaxation, water features and children’s play areas that promote social interaction. Edible plants were incorporated in much of the landscape to increase public awareness on where food comes from while other plant materials were selected to attract pollinators and support wildlife. The rooftops played an important role in the overa l l sustainabilit y of the development. Solar hot water systems were installed on several of the buildings to reduce energy usage. The City of Vancouver challenged the design team with the requirement that 50 per cent of
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the total roof area was to be vegetated to further increase green space in the development. The combination of landscape at grade and green roofs made Millennium Water one of the greenest communities in Canada. The design philosophy of the green roofs in Millennium Water was “usability and accessibility.” Most rooftops are covered with intensive systems that are functional and accessible (10,500 m2 or 57 per cent of total green roof area). These rooftops provide useful green spaces for the residents to relax and meet. Extensive systems cover the rest of the rooftops that are inaccessible (7,100 m2 or 38 per cent). They provide many economical and environmental benefits to this urban community. Some green roofs are also set up for urban agriculture (800 m2 or five per cent), supporting wildlife and biodiversity. To celebrate the Winter Games, the landscape architects designed giant motifs of Olympic athletes competing in eight different winter sports such as hockey, skiing, and skating on the extensive green roofs. The figures, which were created by
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placing perennials with red foliage within motifs outlined with aluminum border, contrasted well with a low-profile green background. Only reclaimed water and no potable water was used for irrigation and water features on the green roofs as part of the water conservation efforts. In fact, most of the extensive green roofs do not have irrigation systems so it was important to choose the right types of plants that are heat and drought tolerant and require little maintenance. Also, the rooftops were completed near the end of handover (JulySeptember 2009), so there was little time for the plants to establish and flourish for the Olympics (February, 2010). The landscape architects used an innovative and extensive green roof system to meet these challenges. It consisted of a pre-cultivated vegetated mat placed on 75-mm-thick engineered growing medium, a drainage/filter mat and a root penetration barrier. The vegetated mat consisted of a mixture of sedum species that had been established in the nursery. The mats were unrolled on the roof to
provide an “instant green” roof. The high vegetation coverage of mature plants greatly reduced establishment time on the roof to ensure a good looking roof during the Olympics, and also reduced irrigation and weeding needs. Sedums are lowgrowing perennials that require no mowing/trimming and minimal nutrients, e.g. an application of a slow-release organic fertilizer in spring once a year is sufficient. In addition to plants with red foliage, a layer of red lava rock was placed in the aluminum border to make the giant winter athlete motifs stand out. The green roofs at the Millennium Water not only provide year-round visual interests, but also many benefits to this urban community: Energy savings: A research project at the British Columbia of Technology showed that a typical extensive green roof with 75-100mm of growing medium could reduce the heat flow through the roof by about 85 per cent in the spring/ summer and 45 per cent in the fall/winter on average in Vancouver. The green roofs at Millennium Water will likely reduce
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PROJECT PROFILE
the energy demand for space conditioning at similar levels. Roof longevity: The green roof protects the roof membrane from physical (e.g. maintenance foot traffic, hail storm…etc.) and chemical damages (e.g. ultraviolet radiation, heat aging, thermal stresses from diurnal temperature fluctuations… etc.). These help to improve the longevity of the roof membrane. The plants consist mostly of perennials that will flourish for years to come. Acoustic buffering: The plants and substrate can affect the propagation and buildup of sounds through surface absorption. The sound insulation of the pre-cultivated sedum mat used was determined to be between 10 dB in the low frequency range and 30 dB in the high frequency range. This is beneficial in reducing outdoor noise pollution generated by aircrafts, elevated transit systems and industrial operations, for example. Stormwater management: The green roofs were designed to minimize irrigation needs and thus conserve water. Indigenous and drought-tolerant plants, which require significantly less water than conventional planting, were used extensively on the green roofs. More than 80 per cent of the annual rainfall (over 1 m) in Vancouver fell between October and May. Rainwater from the roofs is harvested and collected in underground cisterns at each building. They were sized accordingly (from 150 m3 to 300 m3 depending on the building’s footprint) to capture the runoff in the wet
winter season for reuse in the dry summer period. This reclaimed water is used for feeding the water features, landscape irrigation (including the green roofs) and toilet flushing. Also, the water features in the landscape ingeniously serve both an amenity for the residents and help re-circulate/aerate the reclaimed water to prevent it from being stagnant. Food production: About 5 per cent of total green roof area is reserved for urban agriculture and it is distributed among various buildings. Only locations that receive at least five to six hours of direct sunsh ine a re selected for u rba n agriculture. Pathways, hose bibs, garden sheds and composters were installed around these areas to facilitate gardening activities and food production on the green roofs. Edible plants such as a variety of herbs, strawberr y, blueberr y and raspberry bushes were integrated into the landscape in the urban agriculture areas, which were designed to be parceled off for residents interested in growing their own food in the future. Fruit trees such as figs, cherry, apples and kiwis are distributed in various parts of the green roof. In addition, the green roofs also include plants such as sunf lowers, black-eyed Susan and Echinacea that provide food to birds, bees and insects. R ec re at iona l u s e: T he de sig n philosophy for the green roof was “usable and accessible”. The intensive portion of
the green roof provides an accessible informal space for the families to get together. The courtyards contain wooden structures and informal tables and benches to create an open space for residents to gather and mingle. There are many children play areas on the green roofs and there are also lawn areas for residents to gather and play. Some green roofs are located on higher level terraces and patios. There are safety railings and proper access to these gardens. These roofs contain green space and paved patio areas for recreational uses such as sunbathing, barbecues, and parties. These open green spaces and recreational spaces are important for urban dwellers in high density living environments. Horticultural therapy application: The green roof was designed to stimulate the senses and allow the residents to relax and rejuvenate. Water features such as fountains, waterfalls, flowing channels and ref lective ponds were integrated harmoniously into the landscape in the green roofs. The sound of flowing water has long been known to induce calming effects and reduce stresses. A variety of plants with fragrant blossoms and foliage such as lilac and roses were selected to provide pleasing, natural perfume to stimulate the senses in the “fragrant gardens” part of the green roof. Ornamental grasses that came in different colours and heights to mimic nat ura l g rassland were included in the landscape design. Their foliage ruff les in the wind, creating rhy thmic movement and sound that is calming and therapeutic. Winding paths were incorporated to allow residents to explore and enjoy the landscape fully. Resting and sitting areas were integrated throughout the green roof to encourage residents to linger and take in the therapeutic effects of the landscape. Urban agriculture areas further provide the residents with gardening opportunities, which help connect them with nature. BS&S Dr. Karen Liu is the Director of Research and Development, with Xero Flor Green Solutions in Vancouver, B.C. She has been conducting green roof research since 2000 as a research officer at the National Research Council’s Institute for Research in Construction. She established the first North American field facility dedicated to green roof research and conducted several field studies across Canada to examine the climate sensitivity of green roof technology.
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corPoratE sustainaBiLity
Verifying your green plans Confirming your company’s progress in its sustainability journey By Peter Love and Melanie Steiner
T
Th is is the fourth in a series of articles designed to assist you in the design, implementation, marketing and now v e r i f ic a t ion of y o u r c o mp a n y ’s sustainability journey. The fi rst of this series identified and briefl y described nine basic steps to design a successf u l sustainabilit y program: • Prepare an initial plan • Build you team • Select a leader • Secure senior executive support • Identify and research “best practices” in your industry • Benchmark current sustainability performance • Set targets • Defi ne activities/milestones • Include other stakeholders
The second article started by noting the most important step to successfully implementing sustainability projects was to understand the culture of the organization. It then went on to identify 10 steps that will lead to the successful implementation of your program: • Know key business leaders, the business objectives and key barriers they are facing • Build from the existing level of sustainable literacy • Secure an executive champion within your organization • Align sustainability Key Performance Ind icators (K PIs) w it h overa l l corporate business objectives • Clear, transparent and rigorous project management
• Gain momentum by delivering/ documenting a prof itable sustainability win (celebrate wins!) • Be persistent • Lean on the executive champion • Get t he ana ly sis r ight and be passionate • Take time for yourself, take vacation The third article outlined eight steps t o m a r k e t i n g y o u r c o m p a n y ’s sustainability journey: • R e c o g n i z e t h a t m a r k e t i n g sustainability is an evolving and labile area of corporate practice • S c a n “ m a r k e t i n g c o r p o r a t e sustainability” for the most learning on what works • Audit what competitors are saying about their sustainability initiatives • Benchmark stakeholder perceptions
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corPoratE sustainaBiLity of your corporate sustainabilit y performance now • Establish your marketing objectives overall and for each target audience • Identify marketing partners to work with to develop your messaging • Pre-test major commun icat ions elements • Assess your progress over time, while adjusting your strategy and tactics as needed Now, let’s look at verifying your sustainability journey. More and more, we are seeing organizations undertake assurance related to non-financial or sustainability information. This is for a variety of reasons, including: • Giving management comfort that your sustainability data is accurate • Regulatory requirements (e.g., on greenhouse gas emissions in certain provinces) • Can increase transparency scores with rating agencies • Help to mitigate reputational risk associated with external reporting • Increase credibility of your data to ex terna l sta keholders including shareholders who are starting to rely on sustainability data as part of investment decision-making • Trend towards integrated reporting, requiring more robust non-financial data. Confidence suffers when information provided is not fit for purpose. Assurance can be used as a tool to help companies confirm the accuracy of their nonfi nancial or sustainability data, which c a n i n t u r n a s sist i n en ha nce d management decision-mak ing and stakeholder relations. One of the most important fi rst steps if you are planning on embarking on assurance or verif ication of your sustainability data is to make sure you are prepared. If there are found to be “material” errors in your data, you will not be able to obtain a clean opinion. T h is is why ma ny orga n iz at ions undertake a sort of pre-audit – also called a readiness assessment – before the actual audit in order to identify any deficiencies and to rectify them prior to the audit taking place. A pre-audit can be conducted using a t h i rd pa r t y ser v ice prov ider, or alternatively through a company’s Internal Audit department. During this process, the auditor will assess your sustainability data to make sure it is
a p p r o p r i a t e (e . g . , c a p a b l e o f verification). In other words, the data will need to be identifi able, capable of being evaluated or measured against audit criteria, and capable of being subje c te d to e v idence-g at her i n g procedures required for the audit. Once you are ready for the audit, there are a number of key items to consider, including the following: • Selecting a third-party evaluator (qualifications, experience) • Planning the audit – selecting your metrics, reporting criteria and level of assurance • U n d e r s t a n d i n g t h e t y p e o f i n f o r m a t i o n a n d b a c k-u p documentation the evaluator will want from you • Using the results to improve your program • Commu n icat ing t he resu lts to employees, shareholders, broader community. In selecting a third-party auditor, you should ensure that the fi rm chosen has both the technical and audit-related skills required. As a leading practice, many companies are creating blended teams comprised of a combination of accountants, sustainabilit y experts and engineers to cover all bases. In some instances, auditors will have to be accredited to carry out the services required (e.g., regulatory audits). You shou ld do a t horou gh c he c k of r e q u i r e me nt s b e for e h i r i n g a ny outside firm. One of the common fi ndings auditors see in both internal assessments and external audits is not properly defi ning the metrics and criteria for the audit. Th is is a critical fi rst step in audit planning. In terms of metrics, most organizations do not verify their entire sustainabilit y repor t. You shou ld determine which metrics you want verified (e.g., greenhouse gas emissions, percentage of waste to la nd f i l l, philanthropic contributions, etc.). In choosing what metrics you want audited, you should think about the objectives of assurance, who your audience is, and what is material to them. There is not a “one size fits all” approach. Rather, each organization needs to think about what makes sense for them and their sustainabilit y program. Then you w il l need to determine which criteria you will be
using to audit against (e.g., ISO, Greenhouse Gas Protocol, etc.). You can also self-select your metrics and criteria, as long as they are objective, measurable, complete, and relevant. The next step is determining which assurance standard you will be using. The best known global standard is ISAE 3000, which is used to audit nonfi nancial information. It is important to note that this is an accounting standard and can only be used by accountants. Other standards do exist and it is important to understand which one suits your needs. Additionally, you will need to choose the level of assurance you want: reasonable, limited or a combination of both. Reasonable assurance is a higher standard, and will require a higher degree of testing. First time reporters tend to use limited assurance until they feel they are ready to move to reasonable assurance. Overall, you will need to get yourself and your team well prepared for the audit. You will be asked for lots of back up documentation including policies, procedures, calculations, invoices and more. You should expect a bit of a bumpier ride in the fi rst year as you work to enhance your processes and cont rols a rou nd susta inabi l it y reporting. Part of the benef it of auditing your sustainability data is to provide you with process improvements that help to increase efficiencies. Many auditors provide a management report alongside the audit opinion, which can be used internally to help you make improvements to your program. You should request this as part of the audit. The audit opinion can be used externally to communicate to your stakeholders what exactly you have had audited, and the level of assurance used. We w i s h y o u w e l l o n y o u r sustainability journey. Please share your success and lessons with us and others. BS&S Peter Love and Melanie Steiner are volunteer directors with Rethink Sustainability. Peter is an Adjunct Professor at York University’s Faculty of Environmental Studies and serves on various forprofit and not-for-profit organizations. Melanie Steiner is the Chief Risk Officer of PVH Corp based in New York, one of the largest apparel brands globally. She was previously the Market Leader for Ernst & Young’s Climate Change and Sustainability Services program. Winter 2012 17
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Legal corner
Dispute resolution
Choosing the best option for your dispute By Trish Morrison, Borden Ladner Gervais LLP
C
Construction projects, regardless of size, involve risks that often lead to disputes. These disputes, whether they are over poorly defined scope, delays or cost overruns, have led to an increase in the complexity and number of legal cases. In an effort to reduce the cost and delay associated with litigation, parties are turning to arbitration or mediation to resolve these disputes. Often, these p r o c e s s e s a r e s t ip u l at e d i n t h e construction contract, but they can also be agreed to by the parties when the dispute arises through a separate dispute resolution agreement. “A lter nat ive d ispute resolut ion” processes, such as arbitration and mediation, offer an a lternative to traditional litigation but it is important to fully understand these processes to determine which is best suited for a specific case. Mediation is appropriate for situations in which both parties are prepared to compromise and, with the help of a neutral person, reach a timely and mutually satisfactory resolution. Arbitration may be more appropriate when parties need to reach a f inal decision and there is no likelihood of negotiating a settlement. Time commitment Mediations are usually able to be held sooner than an arbitration hearing and tend to conclude within a few days. Mediation briefs are often exchanged and provided to the mediator in advance, which allows the parties to better understand the other’s position prior to the mediation session. A rbitration hearings, however, usually last longer t ha n a med iat ion a nd i nvolve a considerable amount of time in advance for discovery of documents and limited examinations for discovery. Under both processes, the parties have the flexibility of agreeing to an appropriate schedule, rather than a schedule dictated by the litigation procedural rules. Cost Mediation can be much more cost effective than either litigation or
arbitration but only if it results in a resolution. The three main cost components of mediation include internal business costs for preparation and attendance, the cost of lawyers or other advisors to prepare and attend, and the cost of the mediator and the session room. The arbitration process tends to involve a longer process, presentation of evidence, possible discoveries, legal submissions and expert reports. This inevitably leads to significantly higher costs than mediation, more similar to the cost of litigation. Preserving the business relationship The biggest advantage of mediation over arbitration is that it avoids the adversarial process and, therefore, preserves the business relationship. Mediation can focus more on the business interests of the parties than on their legal positions. By not dwelling on the different views of how the dispute arose, the parties are able to meet in a neutral environment, with an objective mediator and concentrate on creating a solution to their dispute. The mediator will assist the parties in identifying the strengths and weaknesses of their case while discovering the underlying interests at the heart of the dispute. Control In mediation, the parties maintain control over how the dispute will be resolved. A mediator has no authority to impose a settlement or to tell the parties how the dispute must be resolved. The parties must agree on the final outcome. Often, mediation accomplishes more in a single session t ha n mont hs of meet i ng s a nd e xcha ng ing cor respondence. In arbitration, the final outcome is based upon the decision of the arbitrator and the parties are bound by it even if they don’t agree with it. To help ensu re a succe s sf u l mediation, keep the following in mind:
• Plan to spend a concentrated period of time in the mediation and do not plan on conducting other business during or between sessions. • Consider the cost of avoiding future litigation or arbitration. • Have an understanding of the issues that is akin to that of the other party. • Resist setting a “bottom line” or “top dollar” settlement number until the mediator has discussed the case with you. • Ensure there is sufficient information. Exchange mediation submissions, documents and relevant information in advance. • Be prepared to address technical issues. Have an expert available to discuss any reports with the mediator and other party. • Each party should be represented by someone having settlement authority to allow a final settlement to be reached. • Discuss internally the concept of settlement and possible options beforehand. Think about benefits that might be negotiated in addition to payment of money. • Maintain a flexible attitude about your settlement options. • Determine objective and rationale bases for your settlement proposals. • Come to the table with an open mind. • Leave extra time in case sessions are constructive but more time is needed to reach a settlement. Mediation and arbitration are both effective processes for parties wanting to resolve disputes outside of court. However, i f t here is a common motivation to settle the dispute on a timely basis while preser ving the business relationship, there is little to lose a nd e ver y t h ing to g a in by attempting mediation. BS&S Trish Morrison is a partner and the Regional Leader of the Calgary Construction Group at Borden Ladner Gervais LLP. You can reach Trish at (403) 232-9472 or pmorrison@blg.com
18 Building Strategies & Sustainability
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Green on the inside Sustainable arch itects Building an ener gy efficient offic e
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ENVIRONMENTAL INTERSECTION
The worry-free way to energy retrofits Transferring the technical and financial risks to energy service companies Public sector organizations across North America have been using performanceba s e d solut ions s uc h a s Ener g y Performance Contracts (EPCs) to undertake their energy efficiency upgrades for the last 25 years. The federal government has used them since 1992 to attract $320 million in private sector financing to upgrade the energy efficiency of their buildings. Today, these buildings are saving about $43 million per year. Many of the municipalities, schools, universities and schools (the MUSH sector) across Canada have undertaken similar projects. Some of the reasons these institutions are improving the energy efficiency of their buildings are obvious – saving money and the environment. But there are other important benef its with employment being one of the biggest – energy efficiency projects are labour intensive and the vast majority of this labour is local. Politicians love this but so do most other people as almost everyone today has a relative or knows a friend who is looking for meaningful employment. I refer to these three benefits as the three E’s of energy conservation: Employment, Economy and Environment. There are many other reasons why property managers and their tenants are investigating energy conservation as part of their progress to going green. A recent survey by McGraw-Hill found that companies that are going green reported 93 per cent greater ability to attract talent, 81 per cent saw greater employee retention, 87 per cent an improvement in workplace productivity, 75 per cent improvement in employee health and 100 per cert saw an increase in goodwill/ brand equity. A recent Harvard Business Sc hool a r t ic le found t hat “ H igh Sustainability” companies significantly outperform their counterparts over the long term, both in terms of stock price and performance.
T
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So with all these benefits, why is there still so much untapped energy efficiency that can be cost effectively achieved? One of the main reasons is capital availabilit y. Fully 42 per cent of respondents in an industry survey identified this as the top barrier to capturing potential energy savings, double the second most cited barrier. One solution is to use an Energy Performance Contract. This is an agreement between a building owner and an energy service company (ESCO) w he r e b y t he E S CO t a k e s f u l l responsibility for identifying, financing, implementing, commissioning and verifying the energy efficiency project. This is done by guaranteeing that the energy savings will be sufficient to finance the cost of the project over the life of the contract. In this way, the technical and financial risk of the project is transferred from the building owner to the ESCO. The figure below is an illustration of how this works. Before the contract, the owner is paying more than they should for their energy use. During the contract, the energy savings realized are used to pay the capital cost of the energy efficiency project. At the end of the project, the owner pays the reduced energy bills.
In addition to transferring risk, this type of contract has many advantages over the more traditional fee-based model. In addition to reducing pressure on capital funding allocations, it is a turnkey approach with one contract managing many activities. It is also less expensive than alternative financing models when all the staff/management costs are included. EPCs can be structured in many ways to suit the specific needs of the client. Interestingly, it is also used to at least pa r tia l ly address the deferred maintenance backlog faced by many propert y owners. In this t y pe of arrangement, the energy savings from the EPC can also be used to fund nonenergy deferred maintenance priorities such as roofs, parking areas, etc. This is typically achieved by extending the terms of the EPC contract. There are thousands of successful EPC projects across North America. A lthough most of them a re for institutions in the public sector, there is a growing use of this solution in the private sector. One of the most high-profile examples is the Empire State Building. The energy-efficiency upgrade is part of a $500-million building retrofit. The initial $20-million energy retrof it
Source: Office of Energy Efficiency, NRCan, Ottawa)
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ENVIRONMENTAL INTERSECTION
energy efficiency upgrade that resulted Take the worry and risk out of your in savings of $245,000/year or about 40 next energy efficiency upgrade project per cent of the base. Comfort conditions, and investigate the many advantages of life safety, accessibility and elevators using an Energy Performance Contract. were also improved. You’ll be glad you did. BS&S For more information on Energy Performance Contracts including Peter Love is an Adjunct Professor at York further background on these and other University’s Faculty of Environmental Studies and successful case studies, go the web site Co-founder/President of the Energy Services CARMA_CondoBusiness_01-19-2009_CS2--F.pdf 2/3/09 5:41:35 PM www.energyservicesassociation.ca Association of Canada.
s
project has resulted in 38-per cent energy reduction which exceeded the guaranteed savings. Closer to home, the TD Centre in Toronto undertook a $30-million retrofit in 1999. This was done while the building was fully occupied without disturbing the 20,000 tenants. The focus of the project was on creating a comfortable, healthy and productive working environment while also saving money. Another example is the update of the 30-year-old Dorchester Square building in dow ntow n Ca lga r y. Upg rades included an automated building system, variable speed technologies and HVAC upgrades. Final savings were more than $90,000/year which are $20,000 more than was predicted. The mile-long Vista Cargo Terminal building (with 125 bay doors) near Toronto’s Pearson Airport is another recent successful project. Energy savings of 17 per cent were achieved and the building is performing above the guaranteed level. And in Ottawa, League Asset’s Trebla building recently completed a $2-million Winter 2012 21 11002_Carma_2011.indd 1 12039_BS&S_Winter_resize_2012.indd 21
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regulations
Alternative compliance paths for international LEED projects Refined ACPs provide options for green building certification
A
A new set of Globa l A lternative Compliance Paths, or Global ACPs, are now available for all commercial projects pu r su i n g LEED g re en bu i ld i n g certification using the 2009 versions of the rating systems. Global ACPs offer a flexible method for projects around the world to demonstrate compliance with the LEED credits that are traditionally more challenging for projects outside of the U.S. "Global consistency and a regional approach mean providing flexibility in referenced standards while ensuring that LEED certification signifies the same level of excellence worldwide," said Scot Horst, senior vice-president, LEED, USGBC. "By focusing on global standards and solutions, these Alternative Compliance Paths make LEED increasingly flexible and ensure a common language for all green buildings." The use of LEED outside the U.S. continues to grow rapidly. In 2012, projects outside the U.S. pursuing LEED certification make up more than 50 per cent of all f loor area of all
registrations. As the most widely recognized and used green building program, LEED is certifying 186,000 square meters of commercial building space each day, comprising more than 49,100 LEED-certified and registered projects in 135 countries. With a growing stock of existing buildings throughout Europe, members of the LEED International Roundtable including Finland, France, Norway, Poland, Romania, Spain, Sweden and Turkey, led by Green Building Council Italia, are working to address the growing needs of this sector in their area by developing LEED credit options that address geographic and regional issues. These specific Regional Alternative Compliance Paths are being developed for projects in Europe pursuing the 2009 version of LEED for Existing Buildings: Operations & Maintenance. This global approach to technical development of the rating system is just a beginning. Additionally, new Regional Priority Credits have been released for projects using the 2009 versions of LEED for
New Construction and are for use in Argentina, Brazil, Chile, Colombia, Mexico and Turkey. Regional Priority Credits are not new LEED credits, but instead are existing credits that are desig nated as being pa r t ic u la rly important for various regional issues. If project teams achieve a Regional Priority Credit, they receive a bonus point in addition to their project's total points. The additional LEED points available encourage projects to pursue credits that address unique regional environmental priorities. Regional Priority Credits will be expanded to additional countries and rating systems in the future. The LEED International Roundtable is an advisory group of green building councils and non-profits representing 21 countries (soon to be 28 countries) work i ng to st reng t hen LEED's international focus to make the rating system more effective globally. BS&S To learn more about the Global and Regional ACPs, visit www.usgbc.org/leed or email international@usgbc.org.
22 Building Strategies & Sustainability
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