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VOL. 33 NO. 6

DECEMBER 2018

Editor-in-Chief Barbara Carss barbc@mediaedge.ca Publisher Sean Foley seanf@mediaedge.ca Editor, Greater Michelle Ervin Toronto Area & Beyond michellee@mediaedge.ca Contributing Writers Andrew Chisholm, ASHRAE, International Energy Agency, Mark Hutchinson, Peter Love, Tiff Macklem, Jiri Skopek, Task Force on Climate-related Financial Disclosure, Kim Thomassin, Barbara Zvan Senior Designer Annette Carlucci Wong annettec@mediaedge.ca Web Designer Rick Evangelista rickr@mediaedge.ca Production Manager Rachel Selbie rachels@mediaedge.ca National Sales Maya Merchant mayam@mediaedge.ca

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editor’snote SURVIVAL STORIES, whether true or cinematic, often begin the same way, when people with a diverse range of allegiances and personality types find themselves in precarious circumstances and consider their options. One contingent favours staying in place to await rescue, thus avoiding the hardship and potential danger of the unknown; the other admits to misgivings about leaving sanctuary, but argues that no one will be coming to their rescue.

Spoiler Alert! The latter group almost invariably makes the right choice. History tells us that those who have the resolve to accept and endure are more likely to emerge on the other side of privation.

From a pre-rollout vantage point, there is no guarantee that carbon tax will deliver as promised, but neither is there proof — as some provincial Premiers contend — that it "does nothing for the environment". Meanwhile, the weight of evidence indicates that it is time to try something.

Simple observation also confirms that people with a diverse range of allegiances and personality types can work together productively. In commercial real estate, that happens every day.

Generalists with eclectic backgrounds typically flourish in property management, while other streams of our multidisciplinary industry tend to employ staff more uniformly rooted in finance, law or engineering. Collectively, they aim for satisfied tenants, secure investments and efficiently operating buildings with minimized impact on the environment, and that regularly involves balancing each other's interests.

That's not the foremost reason Canada's Expert Panel on Sustainable Finance has placed the buildings sector atop the list of markets and enterprises poised to drive lowcarbon economic growth, but it's a supportive dynamic for an envisioned market transformation.

As we report in this issue, leading economic analysts project a healthy return on investment from reducing greenhouse gas (GHG) emissions and bolstering resilience to climate change. On the flipside, they warn of the calamitous risk of doing nothing.

The Expert Panel includes the real estate and infrastructure sectors among the most promising catalysts and is exploring financial mechanisms to give them a "targeted nudge", while efforts like the Task Force on Climate-related Financial Disclosure and GRESB are working on quantifying risk and better informing investors.

As a literal shelter from the storm and a cornerstone of Canadians' investment income, real estate's stake in climate change resilience is indisputable. Of course, property management, operations and design are an equally important part of the strategy. Sustainability champions on those fronts likewise share their insights in this issue.

Barbara Carss barbc@mediaedge.ca @BarbaraCarss

Copyright 2018 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 0834-3357 Authors: Canadian Property Management Magazine accepts unsolicited query letters and article suggestions.

Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor.

Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Property Management makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada

Canadian Property Management | December 2018 5

contents

Focus: Green Buildings, Sustainable Management & Operations 8 Global Energy Use Snapshot: Consumption is rising due to the steady addition of floor space, but building systems and appliances are becoming more energy-efficient.

12 Smart Cities: Forging digital connections between buildings and urban infrastructure.

16 Distributed Energy Resources: An interactive electricity grid provides new possibilities for building operations.

20 GRESB & Transparency: Canada's Expert Panel on Sustainable Finance calls for the kind of information GRESB has been collecting.

23 Climate-related Financial Disclosure: Financial services industry responds to new framework for reporting risks.

28 Driving the Low-Carbon Transition: The buildings sector is well placed to reap returns, but requires some investment supports.

34 Capital Initiatives: Two Ottawa-based institutions, the Bank of Canada and Carleton University, implement energy-saving upgrades.

37 Conservation Conversation: A combination of Departments operational adjustments, new technology, demand response and consumer attitude unlocks 5 Editor’s note energy savings.

40 LEED v4.1: The proposed next iteration of the rating system adds rigour and focuses on performance outcomes.

6 December 2018 | Canadian Property Management

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greensnapshot

GLOBAL GAINS & DRAINS

Technological Advances Help Check Surging Energy Demand As one of the 30 member countries of the International Energy Agency, Canada contributes to its annual global snapshot of energy efficiency trends and indicators. Energy Efficiency 2018, Analysis and outlooks to 2040, follows the release earlier this year of IEA's projections of Canada's energy efficiency potential to 2050. Both reports underscore the buildings sector's status as a major energy consumer and leading opportunity for energy efficiency gains. The following excerpt tallies some successes and failures in keeping surging energy demand in check, and explores where greater savings and spinoff economic benefits may lie – Editor.

BUILDINGS AND APPLIANCES were responsible for about 30% of global final energy use in 2017. Building energy use increased 0.8% from 2016 and rose 20% between 2000 and 2017. Structural factors such as increases in floor area, occupancy and access to services along with increases in activity, including changes in population, climate and the use of appliances drove much of this growth.

Yet, since 2000, global energy consumption in buildings has decoupled from the growth in floor space and economic output. This shows that people and businesses are able to make use of energy services more efficiently and at greater value than ever before. Energy use per floor area, an indicator of energy efficiency, has improved each year since 2000 at an average annual rate of 1.6%, while floor area increased by 3% per year.

In 2017, residential buildings consumed more than three times the energy consumed by end-uses in non-residential buildings. However, growth in nonresidential energy consumption since 2000 has outpaced the residential sector by a factor of two, mainly because of significant structural impacts, namely

8 December 2018 | Canadian Property Management

economic growth. Energy intensity per floor area has improved by 1.7% a year on average since 2000 in residential buildings and 1.6% in non-residential buildings.

COOLING AND APPLIANCES DRIVE USAGE Space cooling and appliances are the two fastest-growing end-uses in buildings.

Energy consumption for space cooling has nearly doubled since 2000. Energy intensity per floor area in the residential sector increased by more than 80% since 2000. Energy consumption by appliances has grown by 58% since 2000. Space heating, water heating, lighting and c o ok i ng h ave a l so exp e r ie nc e d improvements of more than 20% in energy intensity per floor area since 2000.

Emerging economies — Brazil, China, India, Indonesia, Mexico and South Africa — have largely driven global growth in energy use in buildings. On average, they've experienced a 43% increase in buildings energy use alongside an increase in total floor area of 22% since 2010.

China and India have experienced rapid increases in energy use for space cooling, doubling since 2010. Space cooling energy intensity per floor area increased by 71% in China and 42% in India. This trend is

also seen in Southeast Asia, where space cooling energy use increased by 66% and space cooling energy intensity per floor area has grown by 35% since 2010.

Energy efficiency improvements have saved almost 14 exajoules (EJ) of additional energy use in buildings and appliances since 2000, equivalent to the total energy consumption of Brazil.

Without these improvements, global building energy use would have risen by an additional 12%.

These savings have come from both the residential and non-residential sector, with space heating comprising a significant amount of the energy savings in both sectors. In the non-residential sector, about one quarter of the savings have come from lighting improvements.

MORE SAVINGS AVAILABLE Despite these impressive savings, considerable potential for cost-effective energy efficiency was not achieved between 2000 and 2017. For example, if the least efficient refrigerators in the world (around 30% of the stock) had been subject to minimum standards and reached the efficiency of the global average (a 30% reduction in energy

greensnapshot

consumption), around 170 petajoules (PJ) of energy would have been saved in 2017.

Cost-effective opportunities for continued improvement in building and appl ia nce energy eff iciency a re significant. The International Energy Agency's Efficient World Scenario (EWS) suggests that the average building in 2040 could be 39% more efficient per floor area than current buildings, resulting in a 1.3% decrease in energy use compared with current levels. This improvement would require energy intensity (energy use per floor area) to improve, on average, by 2.2% per year between now and 2040, a slight step-up from the average annual rate of 1.6% since 2000.

These opportunities will largely come by increasing efficiency in cooking, space and water heating, which together could deliver 24 EJ of energy savings to 2040. A worsening in space cooling and appliance energy intensity since 2000 is due to increased equipment and appliance use, particularly in emerging economies, as opposed to equipment and appliances becoming less efficient. In the EWS, space cooling and appliances could each achieve energy intensity improvements of 4%, even with increasing access to space cooling and greater appliance ownership.

The majority of energy savings in the EWS come f rom extending a nd strengthening heating and cooling measures. For space heating, if all countries were to achieve best practice market averages (such as in Japan and

Scandinavia), global heating energy consumption could be cut in half, helping to achieve nearly half of the total building energy intensity improvements in the EWS. The EWS implies a doubling of total efficiency by 2040, which in some countries leads to an absolute reduction in building energy use and in others, limits energy use growth to just above current levels.

INVESTMENT OPPORTUNITY Total incremental spending on energy efficiency investments for buildings increased by 3% in 2017 to USD $140 billion. Energy efficiency investment growth only slightly outpaced total investment in building construction and renovation, which grew by 2.5% to USD $5 trillion in 2017. The growth rate of energy efficiency investment as a share of total investment has slowed from the 6-11% annual growth rates observed from 2014 to 2016.

Achieving all of the cost-effective potential for improving building and appliance efficiency in the EWS presents a significant investment oppor tunity for gover nments and energy service companies worldwide.

Under t he EWS i ncrement a l investment r ises from USD $140 billion to nearly USD $220 billion between now and 2025, with average annual investment growing to more than USD $360 billion between 2026 and 2040.

Space heating and cooling represent more than half of the average annual investment required in the EWS, with appliances and lighting responsible for nearly 40%. Much of the space heating and cooling investment is d evo t e d t o i m p r ov i ng b u i ld i ng envelopes, thus reducing the need for heating and cooling.

Such measures require investments larger than those for appliances and lighting, which are typically based on m a ny sm a l ler i nvest ment s by individua l consumers. T hese a re conser vatively h igh estimates of investment requirements; innovation and economies of scale are likely to reduce the cost of the additional efficiency.

The replicable and scalable nature of building energy efficiency projects that have predictable retur ns ca n be aggregated to appeal to third-party financiers. Much of the existing finance and business model innovation for energy efficiency is linked to buildings, providing the basis for further innovation and investment growth.

Market-based instruments (MBI), such as white certificate and obligation schemes, are policy measures that can drive increased investment and business model innovation. The amount of investment generated by MBIs has increased sixfold over the last ten years, with most countries with MBIs in place achieving public/private leverage rates of Canadian Property Management | December 2018 9

greensnapshot up to 200% (i.e. every one dollar of public investment triggers up to two dollars of private sector investment).

New approaches are also are being introduced in the United States to achieve energy efficiency at scale in the buildings sector. For example, in California, energy efficiency policies have mandated that at least 60% of the savings achieved in obligation schemes needs to be delivered by third-party service providers. This has spurred new approaches, including payfor-performance programs, which when

couple d wit h pr ivat e f i na nci ng instruments are able to drive innovation and lower costs for energy efficiency service delivery.

REGULATION YIELDS RESULTS Globally, 34% of building energy consumption was covered by mandatory energy efficiency policies (e.g. codes and standards) in 2017 — more than 32% of residential and 43% of non-residential buildings energy use. At the end-use level, lighting and cooling are leading the

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way with mandatory policy coverage around 80%.

Recent increases in coverage in space cooling have come from countries such as Jordan and Peru that introduced new standards and labelling programs effective in 2017. Cooking is the lowest covered end-use due to the unregulated nature of traditional biomass. Only 4% of global cooking energy use is covered by mandatory policies.

To gen e r a t e ef f ic ie n c y ga i n s , governments have not only introduced a n d i n c r e a s e d t h e c ove r a ge of mandatory policies, but also improved the performance levels or strength of these policies. The Efficiency Policy Progress Index (EPPI), the IEA’s integrated metric capturing changes in policy coverage and strength, indicates that efficiency improvements in residential end-uses since 2000 have been limited.

Refrigeration and space cooling h ave s h ow n t h e l a r ge s t p ol ic y progress, through a combination of g row i ng p ol icy cover age a nd increasing strength in some countries.

The European Union, India and the Un it e d S t a t e s r e g u l a r ly r ev i s e p er for m a nc e re qu i rement s for products, which continuously improve the strength of these policies.

Lighting has also shown strong prog ress, a result of subst a nt ia l efficiency improvement programs coupled with mandatory programs to phase out inefficient technologies.

Most of the rapid increases since 2010 have been the result of widespread implementation of minimum energy performance standards (MEPS) in major emerging econom ies, particularly China.

While policy coverage and, to a lesser extent policy strength, have been improving since 2000, concerted effor t is needed to broaden a nd deepen efficiency policies to achieve the full opportunity available in the EWS. By 2040, most buildings will need to be either highly efficient new buildings or have deep energy r e t r o f it s . G l o b a l ly, t h i s m e a n s energy intensity per f loor area will h ave t o i m p r ove a t a n ave r a ge annual rate of 2.2%, up from 1.6% per year since 2000. zz The complete text of Energy Efficiency 2018, Analysis and outlooks to 2040 can be found at www.iea.org/efficiency2018.

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SMART CITY INFILL People, Services, Buildings and Infrastructure Densify Digital Connectivity

By Jiri Skopek THE RACE IS ON. Almost every city in the world is aiming to be smart.

Smart cities offer a wide range of benefits, from cost savings to liveability, safety and security, resilience and sustainability. London and Singapore lead in terms of their budget, vision, leadership, financial incentives, support programs and a people-centric approach.

Sma r t cities a re the inevitable reflection of the technological and the entrepreneurial progress of the 4th industrial revolution — defined as the combination of cyber-physical systems, the Internet of Things and the Internet of Systems.

Smart cities are gaining their own momentum, fuelled by communication advances and innovations such as G5, autonomous vehicles, drones and blockchain. The predicted economic impact of smart cities, estimated at 3% growth over the next decade, justifies this interest.

In an urban ecosystem that integrates digital technology, knowledge and 12 December 2018 | Canadian Property Management

assets, the goal is to improve services and efficiency, fuel the economy and deliver a better quality of life to citizens.

Easier said than done.

The current focus of smart cities is on social aspects — linking people to services. The prevailing theory is that smart city strategies start with people, not technology. Applications that strengthen the social fabric are what attract young talent and innovators, and result in increased linkages between the physical, digital and human spheres.

Establishing digital connections between people and the built environment shapes where people live and work. Most smart cities focus on mobility, but those that have the greatest number of applications — such as New York, Los Angeles, London, Singapore, Shenzhen and Seoul — have branched out into multiple additional domains. Extending the focus beyond mobility gets a city closer to creating a virtuous circle of benefits.

For example, applications such as telemedicine a nd remote patient

monitoring help seniors age at home and help people with disabilities navigate the urban environment. Smart street lighting and networks of cameras that monitor streets for suspicious behaviour can help to prevent crime or terrorist attack.

Many of these applications are becoming ubiquitous — available to anyone with a smartphone — and reaching close to 90% of the population in many higher-income cities. The services-to-people approach also enables citizen groups and businesses to co-create social services and economic projects. To the extent that these are of an innovative nature, they generally involve ever expanding linkages and sharing of data.

P r og r a m s i n Eu r op e such a s Amsterdam Smart City use connectivity to empower citizens in developing smart city projects. Others, such as Decidim, Barcelona or Reykjavík Smart City, enable online consultation with citizens to hear their ideas on services and operations of the city.

greenprogress

PORTAL TO PUBLIC WORKS As the public and private sectors, academia and civil society race to produce and avail themselves of smart technology, there’s more to smart c it i e s t h a n j u s t a p l e t h o r a o f appl icat ion s l i n k i ng cit i z en s to services. To derive the fullest benefits, another category of digital connection is critical: between buildings and the v a r i o u s e l e m e n t s o f a c i t y ’s infrastructure.

Smart metering of energy and water, smart parking, automated garbage pickup and waste-stream sorting, and emergency response services are just some examples of digital connections between buildings and infrastructure.

To the extent that they are intrinsically interdependent, all of the critical infrastructure to keep a city running can also be optimized with digital technology.

Both London and Singapore have attained their status among the world’s smartest cities by initially making

mobility a top priority. However, transportation is just one area where a city’s physical infrastructure can be closely integrated.

Power, f uel, wat er, fo o d , t ele c om mu n ic a t ion , u r ba n fo o d production, finance and security are activities that can interoperate with one another. This has a compounding effect on optimizing efficiencies.

REAL ESTATE IMPLICATIONS Smart cities have implications for real estate. For one thing, these are the cities that attract a high-end demographic of information innovators — companies a nd p e ople who dem a nd sm a r t workplaces and homes. In today’s fullemployment economy, employers need to focus more than ever on differentiating their real estate, not just their wages.

Smart buildings in a smart city will be critical for attracting occupiers seeking to retain this highly educated talent.

Building owners and investors are now just beginning to see smar t

building operational savings from cloud-based analytic and diagnostic t o o l s , w h i c h facil it ate ongoi ng commissioning, controls that reduce heating and lighting where spaces are unoccupied, efficient use of elevators, a nd space opti m ization t h rough enhanced adaptability.

There are other advantages from linking buildings to public and/or pr ivat e sm a r t cit y ser v ic es a nd infrastructure. For example, there are operational savings from being able to detect water leaks or alert a waste hauler to pick up only when a bin is full.

Smart meters allow energy usage to be monitored remotely, which leads to cost savings through elimination of l a b o u r- i n t e n s ive m a n u a l m e t e r reading. Some utilities even give their customers reduced rates if they allow t he ut i l it y to m a ke moment a r y, unobtrusive adjustments in electricity loads during peak hours by remotely powering down their customers’ less Canadian Property Management | December 2018 13

greenprogress critical systems during periods of heavy demand on the grid.

Utilities may be the biggest winners when it comes to l in k ing sma r t buildings with smart infrastructure and using the predicative analytics of smart grids to match capacity to demand. As photovoltaics and battery storage become commonplace, smart buildings may become the virtual power pla nts providing both the ut i l it y a nd ne c essa r y resi l ienc e against power cuts or brown-outs.

MUNICIPAL SAVINGS AND EFFICIENCIES For municipal governments, the smart city approach offers a wide range of other opportunities for savings and efficiencies. Municipal governments around the world must recognize that cities are both major contributors to cl i mate cha nge a nd h igh ly v u l nerable to it s ef fe ct s. Urba n areas consume more than two-thirds of the world’s energy and generate roughly 70% of its greenhouse gas (GHG) emissions.

The McK insey Global Institute analysis indicates that digital tools

a nd appl icat ions cou ld help, on aver age, t o cut g r e en hous e ga s emissions by 10 to 15% and reduce water consumption by 20 to 30%.

Smart technologies that link with b u i l d i n g s m a k e it p o s s i b l e t o streamline services such as waste collection and reduce the amount of non-recycled solid waste per capita by 15 to 20%.

Li n k i ng to sma r t bu i ld i ngs is impor tant for a city’s emergency management and resiliency to guide emergency services routes and use resources more efficiently during emergency situations or evacuations.

City planners and developers can also create net zero communities supported by more efficient infrastructure.

For example, offices use most of their energy by day; residences are just the opposite. Thus, a single district heating or cooling plant that serves both commercial and residential buildings may not need to be much larger than a plant serving just one or the other. It is also sometimes possible to share energy — for example, using waste heat from data centres.

ON DECK Smart buildings and cities reflect today’s rapid technological and the entrepreneurial progress. Thus far, the focus has been on transportation and mobility, security and street lighting. Integrating smart buildings and smart city technology is the next frontier. Buildings constitute the basic fabric of a city.

The private and public sectors, including utilities, will need to cooperate to make this happen. The Global City Teams Challenge (GCTC) is an example of such a collaborative platform. Led by several U.S. government agencies, it p r o m o t e s a c t io n clu s t e r s w it h participation from the private sector, universities and municipal/regional governments.

To date, the focus has been on mobility, security, communications and public health. The real estate sector is next. zz Jiri Skopek is Managing Director, Sustainability, with JLL. For more information, see the website at www.jll.com/ sustainability.

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greenprogress

BEHIND-THE-METER

MOVES TO THE

FOREFRONT

Distributed Energy Resources Underpin Interactive Electricity Grid By tradition, ASHRAE presidents choose a theme for their term. For 2018-19, President Sheila Hayter has declared it: Building Our New Energy Future. ASHRAE's recently released primer on the potential that the smart electricity grid offers to the buildings sector shares that title. The following is an excerpt – Editor.

HISTORICALLY, the electrical grid was designed for centralized generation and one-way f low of electr icity.

Distributed energy resources (DERs) change that, placing generation assets on the distribution component of the grid and forcing bi-directional f low of electricity. DERs are very often, although not always, associated with buildings. It is important for buildings professionals to educate themselves and their clients about DERs because they represent critical technologies and strategies through which buildings evolve from passive consumers to active partners with the grid.

16 December 2018 | Canadian Property Management

DEFINING DERs DERs include other familiar terms, including: distributed energy systems; distributed generation; and distributed power. The tendency is to think of DERs as just physical assets (e.g., solar PV, wind, batteries), but DERs also include virtual assets, such as strategies to reduce or better manage loads. DERs include: Distributed generation: Made up of smaller electric generation units, from 3 kilowatts (kW) to 50 megawatts (MW). These smaller-scale (vs. large utilityscale) power sources are located across the electrical grid. They are usually, but not

always, “behind” the meter — meaning, on the customer side and close to the loads to which they provide power.

These power sources can be connected to the grid or stand alone, and the output from multiple units can be aggregated to meet regular electricity demand. Distributed generation challenges the centralized generation model of the existing grid and is a driving force in changing the model of the grid from one-way to bi-directional electricity flow.

Examples include: • Solar PV, including rooftop solar arrays, building integrated photovoltaics, on-site

greenprogress ground-mounted solar arrays and community solar; • Wind turbines, including utility-scale (larger than 100 kW), small wind (100 kW and smaller) and offshore wind; • Generators using diesel, oil, natural gas or a combination of fuels; • Co- and tri-generation; • Fuel cells; • Microturbines; and • Reciprocating engines.

Community solar: A business model for distributed renewable generation in which electricity is usually generated off-site (i.e., not on a building or building site) and provides power proportionally to the number of customers it serves. This is particularly beneficial to consumers who want solar PV but, for a variety of reasons, can’t put solar PV on a building or own it themselves.

Electric storage: Options include batteries, even those in electric vehicles. Electric storage can help balance the grid and make it more flexible.

It can be used when generation exceeds demand and the stored energy can be released to meet demand at another time (e.g. when intermittent renewable generation is not meeting demand).

Or, when a shor t-ter m pea k in demand occurs, storage can reduce t h e n e e d fo r s h o r t- t e r m p e a k generation, which is often the most expensive generation. Renewable generation and storage combined can also help protect consumers and utilities from f luctuations in fuel costs because the costs for installations of such combined renewable/storage projects are usually fixed.

Nanogrids & microgrids: Small (in relation to the overall grid) local electrical grids that use distributed generation and include sophisticated controls and battery storage. Their difference is one of scale. N a n o g r i d s are smaller than microgrids, often residential or single-building in scale.

They usually employ solar PV for generation, batteries for storage, and on-site grid components.

Microgrids are larger, campus or multi-building in scale, and employ a wider array and sometimes a combination of generation technologies (e.g. solar PV, wind, combined heat and power, generators) and storage. Their grid

components are usually not located on-site to a single building but often require their own dedicated space. They enable multiple buildings to share electricity and storage.

Na nog r ids a nd m icrog r ids a re connected to the larger electrical grid at a point of common coupling that maintains voltage at the same level as the main grid and aligns frequency unless there is a reason to disconnect (e.g. outage or need to control electricity flowing back onto the grid). A switch can separate the nanogrid or microgrid from the main grid automatically or manually, and the smaller grid then functions independently as an island — called “islanding”.

Nanogrids and microgrids offer advantages for both utilities and consumers. They can compensate for the intermittency of renewables at the source of generation. They can provide backup power if the grid goes down.

They may also be attractive to utilities and grid operators as a means of integrating increasing distributed generation. Offering services for customers on the nanogrid scale that include solar PV, energy management and battery storage is a revenuegenerating service that utilities in Europe and other parts of the world are beginning to offer.

DEMAND AND LOAD MANAGEMENT DERs include technologies and programs that help utilities to ensure reliable and secure delivery of electricity. Additionally, they are distributed across the grid. For example, energy efficiency and demandside management programs, demand response and energy management technologies are considered DERs. Third-party providers and third-party aggregators play an important role in DERs. Third-party providers offer an array of products and services to consumers or utilities. Aggregators offer products and services from multiple third-party providers. These products and services are distributed across the grid and include: • Distributed generation, sometimes coupled with storage; • Energy efficiency products and services; • Billing software and services; • Energy management services; and • Grid reliability products and services for utilities.

EVOLVING PERSPECTIVE In the future, the interaction between a building project and the grid will create many new opportunities and challenges.

These issues will arise very early in the project, possibly even influencing the choice of site. Building owners will need expert advice, including strong research about available options as well as an explanation of the pros and cons.

For example, researching DERs c o u l d l e a d t o m a ny i mp or t a nt discussions, including: Will the building have a nanogrid or be pa r t of a microgrid? Will there be on-site power generation? What about on-site battery storage and charging stations for EVs? Who is paying for all of this? Can a third-party provider or third-party aggregator provide and operate a solution for a fee or even profit sharing? What is the strategy to allow these operators necessary access to parts of the facility? Is additional building space required, and what costs could it add to the project?

Regardless of the choices concerning building interaction with the grid, the billing structure for electricity will most likely change radically. Most fee structures today are based on the amount of electricity delivered to the building (e.g $/kWh) and possibly a fee for the peak rate for the delivered electricity (e.g. $/kW peak for the billing period).

A new billing structure will have to reflect the cost of the infrastructure.

Most building owners will want to be connected to the larger grid for resiliency, the cost of which will likely take the form of a service rather than the cost of energy used.

Incentives (and possibly regulations) to make the building grid friendly will also likely increase. These new incentives will influence how the building is designed and constructed, as well as how the building is operated. To optimize the building and grid interactions, including those related to new billing structures and incentives, the grid will want to “see and know” more than ever about generation, distribution and loads related to the building, which leads to discussions about security and privacy. zz The complete text of Building Our New Energy Future, What Buildings Professionals Need to Know About Changes Coming to the Electricity Sector can be found at www.ashrae. org/about/leadership/ashrae-president.

Canadian Property Management | December 2018 17

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BUILDING THE GLOBAL REPUTATION OF FACILITY MANAGEMENT The need for quality facility management is pervasive with aspects that touch all our lives – both personal and professional and yet the biggest challenge the industry faces is a lack of recognition.

A good facility manager is unseen - working to ensure the facility is running at full efficiency but prepared for something to go wrong. From cyber-attacks to flooding, emergency preparedness is the hallmark of a successful facility manager, but the more integrated the facility manager’s role becomes in the strategic operation of an organization, the better the results.

This is where the Royal Institution of Chartered Surveyors (RICS) comes in. As a global professional body that sets standards, regulates and trains professionals working in the built environment from construction to property management, RICS is in the unique position to bring global perspectives to the industry.

“As a third party, RICS is able to bring associations and organizations together to build a global understanding of what FM is,” explains Steve Morris, Head of the FM Sector for RICS. “We want to show the benefit of bringing the FM sector into the boardroom for a seat at the table – highlighting the added productivity that could be gained as FM becomes a part of decisionmaking. This approach started a few

years ago with our collaboration agreement with IFMA and we are now starting to see the results of this collaboration success.”

Recognition is building for the need to have qualified property management to ensure real estate assets are protected and investments are sound. Adopting the common use of standards, training and terminology will build leadership in the FM sector as those holding investment portfolios welcome qualified professionals into the boardroom. Once in the boardroom, facility managers can ensure best practices are built into the design and management of assets at every level.

“FM touches every point of our lives and working activity in one form or other. It impacts how we go about our lives on a day-to-day basis with an aim to ensure there is as little disruption as possible. And while a big part of this is delivered by facility managers, it also involves many who have not yet realised they are delivering FM,” says Morris.

IFMA and RICS are collaborating on training, events and implementing a system of strategic thinking in the delivery of facility management, which is best disseminated from the

boardroom. In 2018, we released the Strategic FM Framework, professional guidance for all levels in facility management from novice to professional. It introduces a common approach for strategic leadership and outlines the role and scope of work.

Focus on facility management FM has arguably the longest list of competencies and scope of work within its responsibilities than any other industry. It is a profession that requires a holistic implementation with strategy, tactical management and operational delivery aspects.

Weakness in any of the crucial FM skills risks impacting the building system as a whole.

Good facility management requires a solid understanding of communications, finance, sustainability, business continuity and more. Morris explains, “FM can deliver best value when implemented as a core consideration from the concept design stage of any built environment project. It provides the best outcomes and return of investment when taking into consideration the full property lifecycle.”

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RICS is in the unique position to bring global perspectives to the industry.

A facility manager following the Strategic FM Framework manages a building as a working system that includes the physical aspects and human aspects of the facility. This guidance is for all FM skill levels, from those who are not currently in the FM industry but who either manage their own facilities, or for those who manage facilities for others to professional facility managers who deliver all FM services. It is a platform for all, it provides a common approach for all levels for strategic leadership and understanding of the role and the scope of work of facility management.

First and foremost, a facility manager is a project manager. Often the FM delivers a quality service, within budget and on time because facility managers have a diverse range of skills and work hard to live up to high expectations. Despite the quiet success of the facility manager, RICS is working with IFMA to bring these

skills into the spotlight for some welldeserved recognition.

As an established global professional body in its 150th year, RICS provides a reputable designation that brings recognition to qualified professionals who have demonstrated competency and leadership in their field. An RICS designation is known globally and professionals who have achieved an RICS status are sought after by international corporations Supporting and providing a platform for qualified facility managers comes with benefits that we will all gladly reap. Found out how you can elevate your career through RICS.

Interested on receiving RICS communication about FM news?

REGISTER at rics.org/join

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PRIMED FOR THE LOW-CARBON

VANGUARD GRESB Could Fill Information Gaps

By Barbara Carss REAL ESTATE AND infrastructure t o p a l i s t o f f ive s e c t o r s t h a t prominent Canadian analysts have tagged as the most obvious prospects to deliver returns on investment in re duci ng g re en house gas (GHG) emissions and improving resilience to climatic extremes. Even so, the re cent ly relea se d i nt er i m repor t f rom Ca na d a’s E xp er t Pa nel on 20 December 2018 | Canadian Property Management

Sustainable Finance (see story, page 28) suggests there is more untapped opportunity than coordinated action in a market grappling with emerging i m p e r a t ive s fo r cl i m a t e - r el a t e d financial disclosure and integrating E S G (e n v i r o n m e n t a l , s o c i a l , governance) measures.

“The Panel witnessed remarkable institutional commitment to progress;

impor ta nt p o cket s of g r ow t h i n sustainable finance; and widespread confidence in Canada’s opportunity to prosper in the global movement t owa r d cl e a n , cl i m a t e r e s i l i e n t e c o n om ic g r ow t h . Ye t , ove r a l l , Canada’s sustainable finance market is not growing in a manner that ref lects the dialogue,” the report states.

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“Increasingly, social and environmental responsibility is seen as not only positive branding, but also a moral and market imperative.”

T h e P a n el , wh ic h r e p o r t s t o Canada’s Ministers of Finance and Environment and Climate Change, is chaired by Tiff Macklem, Dean of Un iver sit y of Toronto’s Rot m a n School of Management and includes s en ior exe cut ive s f r om O nt a r io Teachers’ Pension Plan, Caisse de dépôt et placement du Québec and Roya l Ba n k o f C a n a d a . A f t e r widespread consultation with the f ina ncia l ser vices indust r y, t hey maintain that investors and their key advisors lack appropriate structured guidance, benchmark indices are not incorporating sufficient sustainability criteria and lenders fail to adequately focus on the long-term impact of climate change.

“The majority of investors remain confident that they can adjust their portfolios if or when climate impacts become more tangible, and are not mea n ingf ully adjusting thei r investment strategies today,” the interim report submits.

The Panel cites “transformative importance and economic potential” as reasons for categorizing real estate and infrastructure among the low-

carbon vanguard, but the two sectors are also making progress in filling in some of the informational gaps t h at t he i nt er i m r ep or t d e c r ie s.

GR ESB, the assessment and benchmarking program tracking the ESG per for ma nce of com mercial real estate and infrastr ucture portfolios worldwide, again extended its reach in 2018.

Beginning with just three European pension funds in 2009, this year’s real estate results reflect data collected from 903 participating entities that hold 79,000 assets in 64 countries, collectively valued at about USD $3.5 trillion. This includes dozens of the largest REITs, direct property holders and private equity firms globally.

“There is a huge amount of global activity. The real goal is having more and more common language,” Neil Pegram, GRESB Director for the Americas, told a gathering in Toronto earlier this fall, as he drew connections to initiatives like the Task Force on Climate-related Financial Disclosure (see story, page 23), UN Sustainable D evelopment G oa ls a nd va r ious national and sub-national ta rgets a n d p ol ic ie s fo r r e du c i ng GHG em issions, conser ving water a nd e n e r g y, a n d s a f e g u a r d i n g ecosystems. “We’re always looking from the perspective of the investor and how they need sustainability KPIs (key performance indicators) to work for them.”

PEER-TO-PEER BENCHMARKING GRESB participants report in seven va r iously weighted categor ies — management; policy and disclosure; r isk and oppor tunity assessment; environmental monitoring/ management; performance indicators,

including energy a nd water consumption and waste diversion; building cer tif ications; a nd stakeholder engagement — to provide a pict u re of t hei r st r at eg y-level e nv i r o n m e nt a l c om m it m e nt a n d oversight, implementation rigour and measurable outcomes. For investors and asset managers alike this offers a means to track ESG compliance and delineate linkages to other elements of portfolio performance.

Submissions are scored and then bench ma rked with in peer groups based on global regions, asset types and listed or private status. Participants that score at least 50 on the scale of 100 also earn a star rating, prorated to their quintile of performance within the total field. “ I n c r e a s i n g l y, s o c i a l a n d environmental responsibility is seen as not only positive branding, but also a moral and market imperative,” says Michael Brooks, Chief Executive Officer of the commercial real estate i ndust r y associat ion, R EA LPAC, wh ich pa r t ner s w it h GR E SB i n Canada. “GRESB is the key global tool to identify relative performance through peer-to-peer benchmarking, d r iving increased cor porate accountability, responsibility and morality.”

Six Canadian based organizations are among the current contingent of f i f t y- eig ht i nvestor memb er s, collectively representing more than USD $18 tr illion in institutional capital, that have access to GRESB’s comp r ehen sive r esu lt s d at aba se.

Speaking at the Toronto release of this year’s results, Dan Winters, GRESB Head of the Americas, affirmed that institutional investors “are the players at the highest level of our pyramid”, Canadian Property Management | December 2018 21

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“Globally, we are seeing more infrastructure and the need for more infrastructure. In some ways, it’s the sexy new asset class.” but expressed no surprise that private equity firms are also on board.

“For value-add funds, that’s exactly where the rubber meets the road,” he asserted. “In a tight time horizon, that’s really where sustainability pays off financially.”

In recognition of what’s commonly acknowledged to be an arduous reporting process, first-time participants are offered confidentiality for their initial results, keeping them off-limits to GRESB investor member scrutiny.

“There is a lot of work, particularly in the first year. The first year is a heavy lift,” noted Pegram, who brings pa r ticipa nts’ insight to h is role, having served as Morguard’s head of sustainability prior to joining GRESB earlier this year.

However, when called out of the audience to comment on her company’s recent experience as a newcomer, A nush k a G ra nt , Vice P resident , Sustainability and Asset Efficiency at R io Ca n, voice d no reg ret s. She pointed to inter na l a nd exter na l d r ivers that bolster the case for making the effort.

“Last year, we took advantage of the grace period. The struggle [to report] is real, but we are really happy with the progress we have made,” she said. “We have our senior leadership tea m st rongly suppor t i ng ou r sustainability program. It also helps that investors are asking more and more questions.”

BURGEONING INFRASTRUCTURE OPPORTUNITIES In light of such questions, the scope of GRESB analysis has been widening — via new topics within the real estate assessment and with the 2016 launch of a separate infrastructure a ss e ssm e nt . A lb e r t a I nve st m e nt Management Corporation and Ontario Teachers’ Pension Plan were among 22 December 2018 | Canadian Property Management

10 f o u n d i n g m e m b e r s o f t h e infrastructure benchmark, which, this year, draws on data from 75 funds reporting on 280 assets, collectively worth an estimated USD $500 billion.

“Globally, we a re seeing more i n f r a st r uct u r e a nd t he ne e d for more infrastructure. In some ways, it ’s t h e s ex y n ew a s s e t cl a s s ,” m u s e d R i c k Wa l t e r s , G R E S B Infrastructure Director.

In Canada, that coincides with the federal government’s commitment to invest $180 billion over a 12-year period.

That includes a $5 billion Disaster Mitigation and Adaptation Fund to be awarded via a competitive bid process, which is open to both public and private ventures valued at a minimum of $20 million. All bids will be vetted for alignment with ISO standard 14067 for greenhouse gas mitigation and ISO 31000 for risk management and climate change resilience.

“The condition our assets are going to have to endure over time a re changing,” Emily Partington, Project Director, Sustainability and Energy, with the engineering consulting firm WSP, advised the gathering. “What’s changed in the market is our ability to actually anticipate some of these trends, down to the asset level. We have the ability to know what the world is going to throw at us.”

Together, provincial and municipal gove r n m e nt s cu r r e nt ly ow n t h e overwhelming majority of existing i n f rast r uct u re assets i n Ca nad a.

However, t he con f luence of of tdocumented vast requirements for renewal and replacement, new funding and prospective investors that have heretofore been largely shut out of the market sets the scene for a shift. The Expert Panel on Sustainable Finance again stresses that better information is needed.

“Canada’s major public pension funds are among the top infrastructure investors in the world and have had a longstanding appetite for investment in domestic infrastructure. Because private infrastructure investment has not been widely pursued in Canada, these funds are largely invested offshore,” the interim report states. “Greater shared access to reliable, consistent, timely i n fo r m a t io n a n d m o r e m o d e r n assessment methodologies would both eliminate redundant effort and cost, and enhance risk comfort among i nvestor s, lender s, i nsu ra nce underwriters and developers.”

GRESB is a potential source of that in for mation, wh ich ma ny of t he targeted investors are already using for real estate. “It’s ter rific that GR E SB is now de a l i ng w it h infrastructure because these lines [between real estate and infrastructure] blur,” Brooks maintained.

“We have to think more about the resilience piece,” concurred Thomas M u e l l e r, P r e s i d e n t a n d C h i e f Executive Officer of the Canada Green Building Council. “There is going to be billions and billions and billions of dollars that communities are going to invest in resiliency — because they have to.”

EVOLVING ASSESSMENT Mea nwh i le, 13% of rea l est at e participants chose to report under a new volunt a r y resil ience component, designed to gain insight into their portfolios’ vulnerability to, and ability to endure, environmental upheaval. Over the course of the three-year pilot, program designers will further refine the questions and approach to interpreting collected data.

This mirrors the evolution of the health and well-being module, offered as a pilot from 2016 to 2018. Volunteer respondents, representing fully one third of the database this year, helped to shape the assessment for the future.

"When we started, we didn’t know how to a sk quest ions about it ,” recalled Chris Pyke, Research Officer with the U.S. Green Building Council, who has been leading both pilots.

“The best working of the health and wel l- b ei ng i n d ic a t o r s w i l l now graduate to the core program and the rest will hit the road.” zz

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INFORMING FINANCIAL STABILITY Climate-related Volatility Figures in Risk-Return Profiles

The Task Force on Climate-related Financial Disclosure (TCFD) — under the auspices of the global finance oversight body, the Financial Stability Board — promotes a four-part framework for companies to voluntarily assess and report how the risks of climate change and evolution to a low-carbon economy could affect their business operations and value. Investors, lenders, insurers and other financial industry stakeholders can now make consistent comparisons based on a common methodology for disclosing companies' governance, strategy, risk management, metrics and targets related to climate change. Thus far, five of Canada's largest banks and six of its largest pension funds have expressed support. The following is an excerpt from the TCFD status report released in September 2018 – Editor.

FOR MANY INVESTORS, climate change poses significant financial challenges and opportunities. The expected transition to a lower-carbon economy is estimated to require around $3.5 trillion, on average, in energy sector investments a year for the foreseeable future, generating new investment opportunities.

At the same time, the risk-return prof ile of companies exposed to climate-related risks may change significantly because of physical impacts of climate change, climate policy, or new technologies. In fact, one study estimated the value at risk to the total global stock of manageable assets because of climate change

ranges from $4.2 trillion to $43 trillion between now and the end of the century.

The study highlights that “much of the impact on future assets will come through weaker growth and lower asset returns across the board.” This suggests investors may not be able to avoid climate-related risks by moving out of Canadian Property Management | December 2018 23

greenfacilitation certain asset classes as a wide range of asset types could be affected.

Both investors and the companies in which they invest, therefore, should consider their longer-term strategies a nd most ef f icient a l locat ion of capital. Companies that invest in activities that a re susceptible to climate-related risks may be less resilient to the transition to a lowercarbon economy and their investors may experience lower returns.

Compounding the effect on longerterm returns is the risk that present valuations do not adequately factor in cl i mate -relate d r isk s be cause of insufficient information. As such, long-term investors need adequate information on how companies are preparing for a lower-carbon economy; and those companies that meet this n e e d m ay h ave a c o m p e t i t ive advantage over others.

DISCLOSURE MOMENTUM Momentum has continued to build since the Task Force on Climate-related Financial Disclosure (TCFD) released its framework in the spring of 2017.

Currently, more than 500 supporters — 457 c o m p a n i e s a n d 5 6 o t h e r o r g a n i z a t i o n s (e . g . , i n d u s t r y associations, governments) — represent a broad range of sectors with a combined market capitalization of more than USD $7.9 trillion. This includes nearly 290 financial firms, responsible for assets of nearly USD $100 trillion. Plus, the review identified another 104 companies that, in their financial filings or sustainability reports, stated they are already aligning their reporting with the TCFD or expressed intent to implement the recommendations.

Compa n ies implementing t he r e c om mend at ion s h a d a l i m it e d amount of time between the release of the Task Force’s 2017 report and the start of their internal processes to prepare their 2017 financial filings.

As a result, the Task Force focused on providing companies with a general indication of how many companies, in eig ht sp e c i f ic g r o up s , i n clud e d information in recent reports that address the core element of each of the Ta s k F o r c e’s 11 r e c o m m e n d e d disclosures.

While the Task Force found the majority of the companies reviewed repor t some climate-related information today, further work is needed for disclosures to contain more decision-useful, climate-related i n for m at ion. T he m ajor it y of compa n ies rev iewe d d isclose d information that is aligned with the

Compounding the effect on longer-term returns is the risk that present valuations do not adequately factor in climaterelated risks because of insufficient information.

24 December 2018 | Canadian Property Management

core element of at least one of the recommended disclosures in their financial filings, annual reports, or sustainability reports. In addition, the Task Force found several instances of d is closu r e s a d d r e ssi ng t he c or e element of each of the 11 recommended disclosures.

To reach a state where disclosures contain more complete, consistent, a nd c om p a r a ble cl i m a t e -r el a t e d information that is useful to market pa r t icipa nt s, cont i nue d fo cus is needed on improving data analytics a nd model i ng of cl i mate -relate d i s s u e s. I m p r ove d p r a c t ic e s a n d techniques should further improve the quality of climate-related financial disclosures and, ultimately, support more appropriate pricing of risks and allocation of capital in the global economy.

UNDERSTANDING IMPLICATIONS W h i le ma ny compa n ies d isclose climate-related infor mation, they often do not disclose the financial implications of climate change on the company. As part of the disclosure practices review, the Task Force found compa n ies more of t en d isclose d information on the costs of individual projects, investments with climaterelated implications, or measures of t h e c o m p a n y ’s i m p a c t o n t h e environment.

Users of disclosure have expressed t h e n e e d fo r m o r e qu a nt it a t ive information on the actual or potential

greenfacilitation climate-related financial impacts on a c ompa ny. Ma ny c ompa n ie s w it h material climate-related issues could improve their disclosures by describing t he act ua l or pot ent ia l f i na ncia l implications of climate change.

The description of the resilience of a c om p a ny’s st r a t eg y, t a k i ng i nt o consideration different climate-related scenarios, including a 2°C or lower scenario, is one of the Task Force’s key a rea s of fo cus. It 's a lso t he recom mended disclosure with the lowest percentage of disclosure overall.

Qualitative or quantitative disclosure on how a company’s strategies might address potential, climate-related risks and opportunities is a key step to better understanding the potential implications of climate change on the company. The Task Force recognizes the use of scena r ios in assessing cl i m a t e -r ela t e d i ssue s a nd t h ei r potential financial implications is relatively recent and practices will evolve over time, but believes such analysis is important for improving the disclosure of decision-useful, climaterelated financial information.

VARIANCES IN REPORTING Companies’ climate-related financial disclosures tend to vary by industry.

There was often a large difference between the group with the highest percentage of disclosures aligned with a recommended disclosure and the group with the lowest percentage.

For example, only a few companies in the Materials and Buildings group d isclose d i n for mat ion on t he integration of climate-related risk ma nagement processes i nto t hei r overall risk management. However, the m ajor it y of t he ba n k s d isclose d i n for m at ion a l ig ne d w it h r isk management. Energy group companies had the highest percentage of disclosure of any group.

In terms of regional differences, a higher percentage of companies in Europe disclosed information aligned with the 11 recommended disclosures compa re d to compa n ies i n ot her reg ions. A h ig her p erc ent age of companies in North America disclosed information on the board's oversight of cl i mate -related issues t ha n on management's role in assessing and managing such issues. The reverse is

t r ue for compa n ies in t he Asia Pa c i f ic r eg ion wh e r e a h ig h e r percentage of companies disclosed information on management's role in assessing and managing climaterelated issues than on the board's oversight of such issues.

OMISSIONS FROM FINANCIAL FILINGS Compa n ies of ten provided information aligned with the TCFD recommendations in multiple reports (e.g., financial filings, annual reports, integrated reports, and/or sustainability reports). Disclosure on climate-related metrics and targets was two to three times more likely to be found in a sustainability report than in a financial filing. When climate-related financial disclosures are spread across multiple reports or included in very lengthy reports, companies may wish to consider providing cross-references or mappings to assist users of disclosure in locating relevant information.

A company might disclose in one part of its report that climate-related risks

are integrated into its overall risk management, but describe the actual processes for identifying, assessing, a nd m a nag i ng r isk s i n a not her section without specifying that those processes address climate-related issues. In some cases, it was difficult to understand the significance of climate-related projects described in c o m p a n i e s’ r e p o r t s a n d t h e i r relevance to the companies’ overall strategies.

R e a s o n s fo r c l i m a t e - r e l a t e d projects could range from increasing the resilience of a company’s strategy to reducing costs to demonstrating go o d c o r p o r a t e c it i z e n sh ip. I f compa n ies do not desc r ib e t he reasons for their climate-related projects, it may be difficult for investors and others to determine the importance of such projects. zz More information about the Task Force on Climate-related Financial Disclosure can be found at www.fsb-tcfd.org.

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“What we offer is a leading marketplace for owners to prequalify manufacturers, contractors, and consultants RCACI for their is roofing projects matter where are in that Canada,” says operate Perue. “Our job is to building envelope comprised ofno a trusted equitythey partners own and roofing and make sure that marketplace is filled with experts their field who are aligned to RCACI's good at what they do,rigorous and they've been doing it for construction companies across the in country.

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Canada-Wide: National Presence with Local Expertise

RCACI's Network Nation-Wide “What weisoffer is a leading marketplace for owners to prequalify manufacturers, contractors, and

consultants for their roofing projects no matter where they are in Canada,” says Perue. “Our job is to

From Burnaby, BC, to Mount Pearl, Newfoundland, RCACI's roster of Alliance Shareholders are make sure that marketplace is filled with experts in their field who are aligned to RCACI's rigorous headquartered throughout Canada. Alone, they are individual experts in their market; but as equity standards andoffer business values.” roofing, waterproofing and building envelope services. partners of RCACI, they industry-leading

RCACI's is growing: Nation-Wide And that network, saysNetwork Perue, is still “We're always on the look out for new shareholders who want to grow with RCACI and add their experience and expertise to our team. We only take the best.”

From Burnaby, BC, to Mount Pearl, Newfoundland, RCACI's roster of Alliance Shareholders are headquartered throughout Canada. Alone, they are individual experts in their market; but as equity partners of RCACI, they offer industry-leading roofing, waterproofing and building envelope services.

Canada-Wide: National Presence with Local Expertise

And that network, says Perue, is still growing: “We're always on the look out for new shareholders who want to grow with RCACI and add their experience and expertise to our team. We only take the best.”

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approach to an evolving industry – and results to real estate asset man

ct to small, and no task too complex for RCACI's team. Combined, SPONSORED CONTENT rts provide a vast range of roofing services, including preventative experts in their field who are aligned to oating, waterproofing RCACI's rigorous standards and business solarvalues.” roofing, RCACI'S NETWORK or IS NATION-WIDE w construction From Burnaby, BC, to Mount Pearl, Newfoundland, RCACI's roster of Alliance Shareholders are headquartered throughout Canada. Alone, they are individual experts in their market; but as equity partners of RCACI, they offer industry-leading roofing, waterproofing and building envelope services.

And that network, says Perue, is still growing: “We're always on the look out for new shareholders who want to grow with RCACI and add their experience and expertise to our team. We only take the best.”

y client who calls with a of our members in their e.

THERE ARE EXPERTS FOR EVERY MARKET

There are Experts for Every Market

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RCACI is a Full-Service Property Management Partner

There's no job too large, no project to small, and no task too complex for RCAC the Alliance's consortium of experts provide a vast range of roofing services, inc maintenance, restoration and re-coating, waterproofing and tapered insulations, green and solar roofing, learning technology, canand alsonewthe Alliance's 24/7 emergency, snowRCACI removal, construction or National Emergency provide education expertise. to clients about the Leak Program, they're there when design-build

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IS A FULL-SERVICE PROPERTY ys ARCACI Call Away MANAGEMENT PARTNER

There's no job too large, no project to small, and no task too complex for RCACI's team. Combined, the Alliance's consortium of experts provide a vast range of roofing services, including preventative maintenance, restoration and re-coating, waterproofing and tapered insulations, green and solar roofing, emergency, snow removal, and new construction or design-build expertise.

“Our goal is to make sure that any client who calls with a problem can be connected to one of our members in their area who can tackle it,” says Perue.

RCACI KNOWS THE BUSINESS

Uniting the best in the business under one umbrella means RCACI is home to a growing body of industry research, best practices, lessons learned, and other key resources. By utilizing the latest in video

Canada (and counting), a RCACI and property stakeholders across the Alliance shareholder is always just a few country.

RCACI Knows the Business short hours away from the job. And with

Uniting the best in the business under one umbrella means RCACI is home to a industry research, best practices, lessons learned, and other key resources. By ut video learning technology, RCACI can also provide education to clients about th products and services.

With 32 locations in major cities across Canada (and With counting), a RCACI citie coun Alliance shareholder is Allia alwa always just a few short hour And hours away from the job.

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For a quote or estimate, call Shane Perue, National Accounts Director 1-888-781-1286 or 647-671-7738, or email sperue@rcaci.ca.

For a quote or estimate, call Shane Perue, National Accounts Director Visit rcaci.ca for more information about becoming a member.

RCACI is an innovative – and one Perue believes will bring greater credibility, accountability, Visit rcaci.ca for more information about becoming a member. nagers and property stakeholders across the country.

1-888-781-1286 or 647-671-7738, or email sperue@rcaci.ca.

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24 36

greenfacilitation

NUDGE FOR A

NEEDLE MOVER

Buildings Sector Tagged a Key Player in Low-Carbon Growth

By Tiff Macklem, Barbara Zvan, Andrew Chisholm and Kim Thomassin

Canada's Expert Panel on Sustainable Finance was appointed earlier this year with instructions to: consult with financial market participants; provide a status report on readiness to comply with climate-related financial disclosure frameworks; recommend how financial services could better facilitate the transition to a low-carbon economy; and identify gaps and opportunities for progress. The following excerpt from the Panel's interim report, released this fall, highlights commercial real estate's ranking as both a sector with a critical role to play and one where investment and financial tools are needed – Editor.

28 December 2018 | Canadian Property Management

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SEVERAL MARKETS and financial activities appear to demonstrate particular value and economic potential in transitioning key sectors of the Canadian economy to lower-carbon growth.

Some represent existing areas of progress that could benefit from a targeted nudge; others have yet to develop or achieve the necessary scale.

Given Canada’s relatively high-carbon profile, sectors with transformative importance need to secure financing and boost investment and innovation — underscoring the need for a robust sustainable finance market.

Canadian buildings represent 11% of domestic greenhouse gas (GHG) emissions and are more energy-intensive than those of other developed countries, including those with similar climates.

It is estimated that today’s buildings will represent 75% of the stock in 2030.

Therefore, while Canada's low-carbon pathway will require higher standards for new builds, retrofitting the existing building sector to reduce energy consumption and manage climate risk is a critical building block of the transition plan. Gains have been made, but full potential remains unrealized.

Based on commitments made under the Pan-Canadian Framework on Clean Growth and Climate Change, federal, provincial, and territorial governments have committed to jointly developing a model energy code for existing buildings, which is on track for publication by fiscal year 2022-23. This will follow with Net Zero Energy Ready codes for new buildings by 2030.

Building retrofitting is proving to be one of the most cost-effective measures in Canada’s clean energy strategy, with benefits to all stakeholders. Done well, these projects offer significantly reduced energy consumption and emissions (and t h e r efo r e lowe r c o s t s) wh i l e simultaneously enhancing property values and associated tax revenues, improving conditions for occupants, creating employment opportunities and sources of expertise within the real estate sector, all while producing attractive returns for lenders or investors.

The Atmospheric Fund (TAF) argues that an integrated, multi-measure retrofit can reduce energy use by 20 to 30% and generate a double-digit internal rate of return. The estimated scope of investment opportunity across Canada’s current building stock quoted to the Panel is between $250-300 billion. However, reaching economies of scale in building retrofit will require more concerted action and scaled investment in skills, technology and financing solutions.

Were Canad a to suc c essf u l ly develop expertise and a practical, cost-effective, replicable project model, it could become a marketable commodity. Organizations such as The Atmospheric Fund and the UK Carbon Trust are already demonstrating the

economic and operational viability of a commercialized model.

CHALLENGES While sector experts highly endorse the business case for building retrofits, consultations suggest some practical barriers to wider action and investment. A resonating theme was the need for increased awareness and distribution of k nowle dge. From a proje ct implementation perspective, the most commonly cited challenges were: • a generally inadequate understanding of the cost/benefit trade-off and life cycle of various retrofit options; • an overall perception that projects are too capital-intensive and, in some cases, present split incentives; • insufficient information and analytical tools to assess, prioritize, implement and audit upgrade measures; and • difficulty sourcing financing and expertise.

Over the years, the large owners of Class A buildings have leveraged their access to sophisticated resources and analytical capabilities to pursue opportunistic efficiency upgrades.

Many of these buildings have achieved high LEED certification, but that does not guarantee a reduction in GHG emissions, nor necessarily include considerations of resiliency. Until there is a more concrete market or policy imperative, these building owners have limited impetus to invest in further efficiency or resiliency measures over other capital priorities.

The greater majority of smaller real estate owners (Class B or C) are often less aware of the opportunity or are grappling with competing priorities.

They also generally lack access to the analytical tools or expertise to assess where to start, how to navigate a project successfully or what outcomes they can expect. Moreover, most property owners have already pledged the property as collateral for loans, making it difficult to secure additional debt to finance upfront retrofit costs.

Canadian Property Management | December 2018 29

greenfacilitation For investors, a one-off retrofit transaction process can be long, complex and relatively costly. Individual opportunities are often too small for large investors to justify and, conversely, beyond the administrative scope or budget of smaller or relatively inexperienced players.

As a result of all these factors, economically viable, low-risk retrofit projects are often not prioritized or able to source affordable financing on a stand-alone basis. In light of this, there was a strong message that project aggregation and securitization will be essential measures for crowding private capital into the retrofit market.

FINANCIAL INSTRUMENTS Commentators suggested that preferential insurance and mortgage rates for retrofitted real estate (such as green mortgages) could serve as an additional incentive, and could potentially be leveraged to create pooled, securitized products for retrofit. The call for a national investment plan was particularly prominent when it came to the retrofit market, along with a centralized platform for facilitation and public/private partnership.

There was a general view that, with an enhanced sustainability mandate from the federal government, an entity such as the Canada Mortgage and Housing Corporation (CMHC) or the Canadian Infrastructure Bank (CIB) could be well placed to play this role. It's suggested that this entity could: • promote a pipeline of scalable projects or strategically bundle smaller projects into vehicles to be matched with suitable investors; • provide a platform for collaboration and knowledge sharing between key stakeholders;

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30 December 2018 | Canadian Property Management

• serve as a centre of expertise and a trusted advisory partner on best-practice project selection, structuring and delivery; • collect and distribute centralized industry information; and • pioneer a diverse range of blended finance instruments to attract and mobilize institutional investment in retrofit projects.

This national body could facilitate these roles either directly or by assisting in the establishment and seeding of regional lending entities to provide more locally tailored insights and solutions, similar to the New York Green Bank model. Groups such as the Investor Confidence Project and The Atmospheric Fund have developed scalable models for deep-retrofit due diligence, project administration, private investment and performance measurement. It was suggested that these models could serve as a reference point in the development of a national approach.

POLICY DRIVERS & INVESTMENT TRIGGERS As a commitment under the Pan-Canadian Framework, Natural Resources Canada is in the process of developing a mandatory energy efficiency labelling and disclosure program for Canadian buildings in collaboration with the provinces and territories, along with a national data platform. The Panel heard wide support for this initiative and the benefit it would have in enhancing awareness, supporting more informed decision analysis, and providing the basis for innovation-driven research.

Some participants suggested that, as a further measure, the disclosure of energy efficiency and physical risk vulnerability could be required for the sale and lease of residential homes.

There is also support for the government’s role in piloting and modelling energy labelling and deep retrofit on the existing public building stock. In addition to federal buildings, this includes the much larger MUSH (municipalities, universities/ colleges, schools and hospitals) sector. This demonstration would advance expertise and test market scale for innovative technological solutions (such as smart meters and control systems), while simultaneously providing benchmark standardization of contracts, project approaches, finance structuring and performance expectations for the private sector and provincial/municipal governments.

Canada’s financial system has a critical role to play in the transition to a low-carbon economy by recalibrating investment flows and channelling financial expertise and focus toward more sustainable outcomes. The financial sector is highly capable of the task, and has reason to be vested in the long-term outcomes and the ample opportunity along the way.

With that said, observable measures and feedback suggest that Canada is approaching sustainable finance reactively, tentatively, and in only a loosely coordinated fashion. For Canada to capture the large market opportunities and influence the rules affecting the financial industry and key economic sectors over the long run, we need to move faster and more decisively. This will require focus on areas that will significantly move the needle both with respect to environmental impact and long-term economic opportunity, including a focus on fostering and leveraging innovation. zz Tiff Macklem, Barbara Zvan, Andrew Chisholm and Kim Thomassin were appointed to the Expert Panel on Sustainable Finance by the Government of Canada with a mandate to report to the Ministers of Finance and Environment and Climate Change. The complete text of their interim report can be found at www.canada.ca/en/environment-climate-change/ services/climate-change/expert-panel-sustainable-finance.html.

METER DESIGN & MANUFACTURING. METER DESIGN & MANUFACTURING. ENERGY ANALYTICS Real-time data collection allows you REPORTING. &ENERGY to monitor energy performance and ANALYTICS detect deficiencies.

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Managing Tenant Insurance with InsureTech Digital platforms giving property stakeholders the edge Liability can be a sticking point in tenant/ landlord relationships. It’s not uncommon for tenants to be uninsured (or under-insured) against property damage or personal injuries, and without any real means to force their hand, landlords can face legal challenges when (and if) disaster strikes.

The question is: Who pays the price when tenants are uninsured? In some cases, an incident could lead to landlords taking an instant loss. In others, an accident or event will trigger a tenant lawsuit which, while toothless, can drain landlords of their time, money, and reputation.

It’s a complex issue; insurance documents can add up, get misplaced or lost altogether, and the solutions to managing them have been patchwork at best. One has been to demand evidence of insurance at the time of move-in, but it’s all-too-easy for tenants to cancel it the month after. Another has been to seek program deals from insurance brokers, but these are also difficult to track and maintain.

As with many traditional challenges, there is a modern answer. More and more, property owners/managers are using InsureTech tools to track and monitor tenant insurance as well as ensure they’re doing their part to keep incidents from happening in the first place.

Embracing InsureTech: A Case Study Crawford Compliance Inc., a subsidiary of Crawford & Company (Canada) Inc. knows the challenges of managing a multi-

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Like many InsureTech solutions, Tenant Tracker is a real-time digital tool uses automation, data analytics, and intuitive systems to help landlords keep tabs of the ‘bigger picture’.” Already, says Gordon, the software as a service suite has helped clients save time and money while mitigating risk and assisting in restoring businesses to their pre-loss state.

this also hold everyone accountable and fully transparent for their part in keeping tenants safe and satisfied: “For example, Snow Tracker® dashboards allows for site logs to be received from multiple sources which helps to stop finger pointing between employees and contractors.”

Stopping claims in their tracks

InsureTech solutions like these are becoming more common in the real estate space. And, in combination with staff and tenant training, incentive programs, and other “human” initiatives, tools like Tenant Tracker and Snow Tracker® will play an increasingly important role in protecting everyone’s best interests.

Of course, preventing insurance claims from occurring in the first place is the safer play.

This is especially true as the volume of slip and fall claims continue to climb. Here again, InsureTech solutions are emerging to help landlords uphold their responsibilities to keep their properties safe. residential asset all too well. Leveraging its position as the largest insurance adjuster in the world, it created the Tracker Central Management Portal to help property stakeholders track, monitor, and mitigate the risks of the business. Within the system’s suite of tools is Tenant Tracker , a solution that provides landlords and property managers with a platform to collect and store proof of tenant insurance in real-time from the moment they sign a contract and through the duration of their stay.

“Before you can reduce risk, you must be able to measure it accurately,” says Eric Gordon, President of Crawford Compliance, adding, “Our software as a solution (SaaS) is designed to give landlords and property managers real-time views of all tenant insurance by tracking cancellations or insurance purchased through partner programs, and notifying them of all changes, including the expirations of insurance certificates from any source.”

Crawford Compliance’s Snow Tracker® program, for example, gives landlords and property managers the digital tools to verify that winter service providers (e.g., snow removal, salt applications) are being carried out as planned. It does so by collecting documentation on the full scope of work rendered, with real-time arrival and departure notifications, geo targeted real-time weather reports, site maps, time-stamped pictures, videos, and comment logs – all of which are stored in the cloud for instant access this helps validate and manage by exception that the hired work was done well and within the areas specified, and that all necessary precautions were taken to ensure the safety of tenants and other parties.

“This advanced level of tracking has other benefits,” notes Gordon. “By quantifying onsite labour hours and consumables between the property managers and the contractors, Snow Tracker® enables property managers to better manage their expenses.”

It helps, he adds, that technologies like

On track to better outcomes

Eric Gordon is President and CEO of Crawford Compliance Inc., a subsidiary of Crawford and Company (Canada) Inc., creators of the Tracker Central Management Portal, the award-winning software contractor/vendor management software solution. Learn more about the entire Tracker suite of solutions at www.crawfordcompliance.ca

NOD TO CURRENCY Bank of Canada Headquarters Get Energy-Saving Revamp

By Michelle Ervin

A 1970s' ADD-ON to Bank of Canada’s downtown Ottawa complex looks to be ahead of its time. When eminent Canadian architect Arthur Erickson book-ended a limestone building dating back to the 1930s with mirrored glass towers bridged by an atrium, it accommodated many of the features that are now de rigueur in the 21st century office: biophilic design, open concepts and outdoor views.

Despite this foreshadowing of current workplace trends, the central bank’s headquarters were in need of an update when they recently underwent a sweeping modernization — just as any facility would be after 50 years without significant intervention. The atrium, for all its 34 December 2018 | Canadian Property Management

greenery and water features, was underused; open concepts had been sacrificed to private offices; and window seats came with thermal comfort issues.

Not to mention, technology had transformed the workplace.

Beyond modernization, there were other issues that demanded attention, such as exhausted major equipment to replace and important new standards to meet.

“The requirements for a safe and efficient workplace have evolved considerably since [the 1970s], as have the security requirements for a G7 central bank,” Rebecca Spence, a media relations consultant with the Bank of Canada,

explained via email. “Renewing the head office was also an opportunity to make it more energy-efficient, cost-effective and environmentally sustainable.”

Inserting an invisible second skin into the mirrored glass towers was a core component of the energy-saving, heritagesensit ive i nt er vent ion at t he 835,000-square-foot Bank of Canada complex. The project, completed last year at a construction cost of $460 million, also saw the atrium revamped and open concepts reinstated to suppor t a collaborative workplace culture. Plus, a relocation of Canada’s Currency Museum reclaimed unused space and helped satisfy modern security requirements.

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The wide scope of the project brought together three Perkins+Will offices. Its Ottawa and Toronto teams combined forces on the renovation, while its Chicago team, whose portfolio included work for the Bank of America, took the lead on the interiors.

IMPROVING THERMAL COMFORT Thermal discomfort is one of the most common sources of complaints fielded by facility managers in office environments.

Prior to their modernization, the Bank of Canada’s headquarters were not immune f rom t h is. E mploye es wou ld simultaneously report that it was too hot or too cold, depending on their location on the floorplan.

Andrew Frontini, Pr incipal at Perkins+Will’s Toronto office, explained that the curtain walls of the mirrored glass towers were essentially acting like a magnet for heat in the sun and like a sieve for heat in the shade — an effect that was most pronounced during Ottawa’s cold winters.

“It [takes] a lot of energy to move heat and cooling around the floor, and because the floorplates had been subdivided over time, and because the advent of the digital workplace adds to much larger heat loads, the existing systems, which had been modified in a piecemeal way, were having a really hard time keeping up with occupant comfort,” he said.

Photos by doublespace photography

The impetus to introduce new systems without interfering with the original architecture produced a novel solution: the addition of a glass layer, inset oneand-a-half feet from the existing envelope.

Introducing a dropped ceiling might have addressed the capacity of the crowded duct raceways, but it would have altered t he look a nd fe el of t he space, characterized as it was by an exposed structure and concrete trees and slabs.

“Before that space heats up inside the workplace, the air in the buffer zone has been heated up and then been removed so it allowed us to lower the heating and cooling loads in the space proper," Frontini said. "That meant we could look at using a radiant panel, which was tucked up into the structural coffers of the tree columns where it’s very discrete.”

The radiant panels occupied roughly one-third of the 30-inch structural cell, which left room for high-efficiency lighting and sprinkler heads. In addition to reducing thermal comfort complaints, the dynamic buffer zone improved the energy efficiency of the complex.

SUPPORTING A COLLABORATIVE CULTURE The modernization also saw the open concepts of the original architecture revived in an effort to promote a collaborative work culture, which is seen as a tool for recruiting the best and brightest.

Heritage-sensitive modernizations at the Bank of Canada headquarters respect both the circa-1938 original building and Arthur Erikson's additional 1970s-era mirrored towers, while improving thermal comfort and paying attention to public spaces like the outdoor plaza.

Canadian Property Management | December 2018 35

Photo by doublespace photography

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ENERGY MASTER PLAN INSTRUCTS CANADA'S CAPITAL UNIVERSITY Carleton University expects to fire up a new co-generation plant at its Ottawa-based campus next spring as the post-secondary institution implements a second phase of its energy master plan.

Once installed, the new plant is expected to supply 40% of electricity consumed on the campus.

Darryl Boyce, Assistant Vice-President of Facilities Management and Planning, says the decision was made after evaluation found that the existing steam-heating system was not up to the task for anticipated needs of the projected campus build-out. In fact, boilers were old enough to have gone through the public school system and graduated from university at least twice.

“We needed a reliable source of energy to provide the heat for the campus,” said Boyce. “And, at the same time, we realized we would benefit from lower cost electricity from the same system if we put in a co-generation plant.”

The installation, a 4.6-megawatt turbine powered by natural gas, will be accompanied by a heat recovery boiler, which will take over steam production, boosting its efficiency by a projected seven to nine per cent.

All told, Carleton University expects to generate energy savings of 17% through the implementation of its updated energy master plan. It covers the years 2018 through 2021 with planned energy retrofits of seven buildings, including equipment optimization and lighting upgrades.

This will further results achieved between 2014 and 2017, and is aiming to reduce use by 2% per year on the growing campus. Boyce, who is slated to be the president of ASHRAE in 2019-20, endorses energy master plans and the key exercises they entail. Those are: establishing baseline building performance; identifying energy-saving, operationsimproving opportunities; and mapping out implementation.

In Carleton University’s case, the energy master plan plugs into the post-secondary institution’s broader campus master plan for development.

“You’re not looking out five years, you’re looking out 50 years down the road,” Boyce observed. “Our master plan deals with that, so it gives us a much more comprehensive look at the impact of the decisions we make about the built environment on our campus.”

36 December 2018 | Canadian Property Management

“We perform unique roles that are critical to safeguarding and promotion of Canada’s economic and financial welfare and we need top-level executives, frontier researchers, highly specialized and skilled professionals, cutting-edge knowledge and expertise, and innovators,” said Spence.

The institution’s roughly 1,700 employees were invited to provide input into the selection of ergonomic furniture and floor layouts. Most of the private offices, which previously had low-density occupancy, were replaced with a range of spaces outfitted with modular furniture and sit-to-stand desks and tailored to a variety of activities, including both collaborative and quiet work.

Conference and meeting rooms that had been scattered throughout the floors have been collected around the 12-storey winter garden atrium, located behind the circa-1930s building.

Designers envisioned this as a way to bring together employees working within the two towers who might not otherwise have cause to cross paths. The same strategy underpins new mainfloor locations for services such as a help desk and IT support.

Working with landscape architect DTAH, Perkins+Will refurbished the atrium, removing an expansive reflecting pool that had been causing maintenance headaches, adding seating and replacing and restoring plantings.

"While it’s [the atrium] no longer open to the public, it’s very much more open and very much more integrated into the life of the Bank and ultimately becomes a functional space that’s going to serve the Bank’s needs for the next 50 years,” Frontini maintained.

MELDING SECURITY AND HERITAGE Before the modernization occurred, visitors used the atrium to access Canada’s Currency Museum, which was previously located in the circa-1930s building.

“Modern-day security requirements are such that the general public will no longer have unrestricted access to our atrium,” Spence explained. “However, as part of the renewal, the Bank invested significantly in public spaces.”

Canada’s Currency Museum, now known as the Bank of Canada Museum, found its new home in the plaza in front of the complex. The challenge, said Frontini, was to create a stand-alone facility that wouldn’t overshadow or be overshadowed by the original architecture. A former shipping and receiving area located below grade provided a place to integrate the facility into the landscape.

“We thought, what if it appears to lift up at the corners, and then it creates an opening so that you can descend below the plaza, and light can be drawn in, and you can see down into the museum below from the street,” Frontini recalled.

The plaza redesign — another collaborative effort by Perkins+Will and DTAH — also introduced landscaping and sloped seating atop a trio of angular pavilions, one of which doubles as the roof of the museum.

These are among the few visible signs outside the complex of the sweeping modernization that has taken place inside, and that was intentional. Heritage was a compelling factor in the decision to renovate rather than relocate, which made it important to temper the modernization with preservation.

“The look and feel of the exterior have been carefully maintained, with the Bank making every effort to restore and preserve important external façades,” said Spence. “The result is that, from the exterior, the Bank facility looks virtually identical to 2013, when renovations began.” zz

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PROMOTING THE CONSERVATION CONVERSATION Untapped Savings Promise Flow-through Economic Benefits

By Peter Love THE MOST RECENT progress report on meeting g reen house gas (GHG) em ission reduction t a rgets conclude d t hat f u l ly 81% of Ca na d a’s m a n-m a de greenhouse gases come from the production and use of energy. Low-carbon supply and reduced demand should be complementar y elements of any emission-reduction strategy, but the great majority of public discussion has always been on the supply side.

Energy efficiency advocates stress its vast potential — typically, two-thirds of energy consumption is wasted — and associated advantages for employment, the economy and the environment. It is particularly noteworthy that many of the direct jobs linked to energy efficiency are at the local level — to design, build/manufacture, retail and install conservation products and/or provide skilled and professional

services. Logistically, energy-efficiency projects rely on local contractors to actually do the required constructions or installations.

A report commissioned by Natural Resources Canada (NRCan) modelled the micro-economic impact of a relatively aggressive energy-efficiency scenario and concluded that over 15 years: • gross domestic product (GDP) would increase by $582 billion • 305,000 jobs would be added to the workforce • provincial tax revenue would increase by $2.7 billion • GHG emissions would be cut by 92 megatonnes/year.

Although perhaps less pressing in Canada, given its energy resources, security of supply bolsters the case for energy efficiency in many parts of the world. This is a major issue Canadian Property Management | December 2018 37

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Most environmental issues like air pollution, garbage, water pollution, etc., are an assault on the senses.

They stink, they're ugly, can be felt and even tasted.

In contrast, energy efficiency is largely invisible. in European countries that rely heavily on Russian natural gas imports and in much of Southeast Asia. At a conference of energy policy experts in Europe in 2009, the potential for various energy-efficiency programs began to be measured in terms of “Russian gas pipeline equivalents.”

Energy efficiency can also be framed in terms of productivity. This links energy consumption to economic output — calculated by dividing economic output (e.g., GDP) by energy consumed — providing a measure of flowthrough economic benefits of reducing the input cost. For example, the U.S.-based Alliance to Save Energy uses the slogan, “Using Less; Doing More”, and calls for a doubling of energy productivity.

On the f lipside, there are challenges because energy efficiency often seems more conceptual than concrete.

Firstly, it's hard to see. Most environmental issues like air pollution, garbage, water pollution, etc., are an assault on the senses. They stink, they're ugly, can be felt and even tasted.

In contrast, energy efficiency, as well as most forms of energy and even climate change itself, is largely invisible.

Most energy-efficiency products are obscured within walls, in the furnace/mechanical room or in the controls.

It's also hard to measure, requiring protocols to compare the amount of energy that was actually used with the amount that would have been used without the intervention.

Plus, it's a commitment that never comes to an end.

Broad and active participation from all sectors of society — government (at all levels), private companies, public institutions, homeowners and tenants — is needed.

Generally, these efforts fall into four main categories, although two other supply-related initiatives are sometimes added to the definition of energy efficiency. They are: • Conservation Behaviour: using existing technology in ways that reduce energy consumption; • System Operations: ensuring that entire systems are maintained and operated in the most efficient manner; • New Technology: replacing older, less energy-efficient technologies with newer, more energy-efficient ones; • Demand Response: reducing energy demand at certain times of the day when the system is nearing its limits; • On-Site Generation: technically a generation approach, but many jurisdictions consider small (less than 10 kilowatts or kW) on-site electricity generation to be a demand-side measure; and • Fuel Substitution: when one fuel is substituted for another.

38 December 2018 | Canadian Property Management

FUNDING MECHANISMS Purchasing more energy-efficient alternatives or undertaking major energy-efficiency retrofits of buildings requires upfront funding. Even if this gets repaid by future savings, this money must come from somewhere. Some of the most common forms of financing entire projects include: Internal Funds

Individuals or organizations use their own funds to cover both small purchases and larger ones that have been approved in an annual budget.

Bank Loans

When individuals or organizations do not have sufficient internal funds for the purchase, they can negotiate a loan from their bank for the purchase.

Product/Service Financing

In this case, the product/service provider accepts payment over a specified period of time under agreed-upon financing terms.

On-Bill Financing

This is similar to the product/service financing, but is provided by the energy utility, often with the support and encouragement of government and/or the energy regulator.

Guaranteed Energy Service Performance Contracts

These types of contracts have been used for larger ($1 million to $50 million) building retrofits for more than 30 years. Under a guaranteed Energy Service Performance Contract (ESPC), an energy service company (ESCo) undertakes the upgrade and guarantees that the resulting energy savings will cover the costs for the upgrade. This transfers the technical and financial risk associated with such projects to the ESCo. Most of the projects using an ESPC are in institutional buildings (municipal and other levels of government buildings, universities/colleges, schools and hospitals).

Over the last 10 years, eight universities and colleges across Canada have undertaken such projects and a few more are underway.

Property Assessed Clean Energy (PACE) Loans

This is the newest form of project financing and is based on the successful Local Improvement Charge that Business

greencontext Improvement Areas can employ to fund communal assets (hanging planters, festive lights, etc.). In this case, the municipality provides the financing for an energyefficiency upgrade and payments are added onto the property tax bill over the period of the contract.

One of the biggest benefits to this loan is that responsibility for paying for an energy-efficiency upgrade is passed on to new owners if the property is sold. This overcomes the reluctance to invest in an energy-efficiency upgrade if the payback period is longer than the owner expects to own the property.

INCENTIVES There are four major ways that incentive funding can be made available to partially reduce the initial additional cost of an energy-efficiency product or building. It should be noted that these different methods are in no way exclusive, and it is likely that the most optimal form of funding would include the last three together as they each provide distinct benefits.

General Government Revenues

In this program, funding is provided out of general government revenues and can take the form of sales tax (e.g., PST/ HST rebates), income tax reductions or funding for any type of incentive program. History has shown that regions that relied on this form of funding were subject to wide fluctuations in funding, as programs were often terminated when governments faced funding challenges.

Ratepayer-Funded Programs

This is similar to incentives from general government revenue, but with the critical difference that funds are from ratepayers, not taxpayers. Again, history has shown that once energy regulators approve the ability to deduct funds from ratepayer bills for such programs, they are much more stable than those from general government revenue.

Ratepayer-based programs fund the majority of incentive progra ms in Nor th A mer ica. T hey a re sometimes referred to as System Benefit Funds that are used for System Benefit Programs. The programs they fund result in reduced requirements for electricity or natural gas and thus provide overall system benefits.

Carbon Pricing Programs

This is the newest form of funding for incentive programs. There are basically two types of carbon pricing programs: carbon tax or cap-and-trade Under the first, the price of carbon is set and the market determines the resulting quantity of carbon that is reduced. Under the second, the quantity of carbon is set and the market determines the resulting price. Under both, revenues raised can be used either to reduce other taxes (thus making the programs revenue-neutral) or to provide funds for various incentive programs.

In Canada, British Columbia has had a revenue-neutral carbon tax since 2008; Quebec has a cap-and-trade system that includes California; and Alberta has recently

JEVONS EFFECT Although not usually taken into account when energyef ficiency programs are evaluated, it should be noted that increases in ef ficiency have been found to result in increases in resource use. This ef fect was first discovered by William Jevons in 1865.

Now known as the Jevons Ef fect, it supposes that improvements in the ef ficiency of a resource from improved technology results in increased resource use due to an increased rate of consumption. Appropriate for the times, Jevons used coal as his example.

He observed that technical improvements to the ef ficiency in steam engines resulted in increased use of coal as the steam engines began to be used in other applications. This ef fect is also referred to as the rebound ef fect.

Subsequent research has identified the potential for both direct rebound ef fects as well as indirect ef fects.

Money saved by using less energy is spent on an energy-intensive activity that otherwise would not have been undertaken.

Recent studies estimate this ef fect to be in the range of 5 to 15% in developed countries. One counter argument is that, if the purchasers of the more energyef ficient technology bought it because they want to improve their environmental footprint, then they might be expected to invest the savings generated in additional energy-saving technologies and thus reduce even more energy.

expanded its initial carbon tax on large emitters to include all energy consumers. The programs they fund result in reduced GHG emissions.

Capacity Market

Some electricity markets in Canada have (Ontario) or are investigating (Alberta) the introduction of capacity markets to handle the system peak loads for a limited number of hours per year. Energy-efficiency resources have been permitted to bid into these markets in two U.S. jurisdictions. In New England’s wholesale electricity market, energy efficiency is currently contributing about 4% of the total capacity, double what it was contributing five years ago. By 2021, it is expected to provide about 8%. Payments for this capacity represent a way to fund energy efficiency, as these types of programs result in reduced costs to meet system peaks. zz Peter Love is an energy efficiency consultant, an adjunct professor in York University's Faculty of Environmental Studies and a member of the board of directors of Energy Efficiency Alberta. The preceding article is excerpted from his book, Fundamentals of Energy Efficiency, Policy, Programs and Best Practices. It can be found online at http://energyefficiencyfundamentals.org/textbook.

Canadian Property Management | December 2018 39

greenfacilitation

NEXT STEP IN CONTINUOUS IMPROVEMENT LEED v4.1 to Prioritize Performance Outcomes

By Mark Hutchinson HEIGHTENED FOCUS on energy and carbon emissions reductions has changed expectations and priorities for Canada’s green building industry.

The Canada Green Building Council (CaGBC) has responded by introducing its Zero Carbon Building Standard in 2017 and bringing new certification programs and tools to Canada through the launch of GBCI Canada earlier this year. LEED also continues to evolve to meet rising expectations.

LEED’s holistic view emphasizes providing hea lth ier indoor environments for occupants while re duci ng g re en house ga s (GHG) em issions, ma x i m izi ng energ y ef f ic ie n c y, r e d u c i ng wa s t e a n d powering innovation. Within this framework, continuous improvement is necessary so CaGBC has begun rolling out LEED v4.1, which is focused on streamlining, clarifying and strengthening requirements.

40 December 2018 | Canadian Property Management

Project teams will be able to use the updated rating systems as soon as they are released, and members of the green building council will officially approve the rating systems by way of a vote expected to occu r i n 2019.

Upgrades to the rating system are being released as drafts (beta updates) over the course of 2018, with the March 2018 rollout of LEED v4.1 O+M being the first of these.

EXISTING BUILDINGS In order to reduce environmental impacts and improve the health and wellness of occupants, the critical role of existing buildings must always be considered. T he operat ions of bu i ld i ngs mu st b e subst a nt ia l ly decarbonized by 2050 in order to avoid the worst impacts of climate change, particularly when considering that more than 50% of the projected 2050 building stock will be comprised

of buildings that already exist today.

LEED v4.1 O+M addresses this issue by focusing on assessing emissions from building operations as well as from transportation (commuting to and from the building). A project’s energy performance score is determined in part by its GHG emissions per capita and unit area, while its transportation score is determined by percapita emissions.

LEED v4.1 O+M’s updates focus on performance outcomes, and not on prescriptive measures to improve performance. Fully 90% of the points available in LEED v4.1 O+M are based on simple key performance outcomes such as energy and water use.

LEED v4.1 O+M also introduces annual recertification, facilitating its integration into annual performance objectives and budgets. This reduces the likelihood of gaps in data tracking due to changes in personnel, equipment or processes.

NEW BENCHMARKING PLATFORM The LEED v4.1 O+M rating system uses the Arc platform, which is an online tool for collecting, managing and benchmarking building data and improving sustainability performance. On the Arc platform, data is assessed in five categories: energy; water; waste; transpor tation; and human experience.

T he per for ma nce metr ics correspond to those that represent 90% of the points available in LEED v4.1 O+M. This way, building owners using Arc will be able to easily identify projects in their portfolio that are ready for LEED certification.

REASSESSING ENERGY PERFORMANCE It’s anticipated that LEED 4.1 for Building Design and Construction (BD+C) will include updates to how energy per for ma nce is assessed.

Standards and practices have evolved since LEED v4 was first balloted, and version 4.1 is an opportunity to ensure LEED continues to address the most pressing environmental issue of our time: climate change.

CaGBC is work ing with st a keholders, its Energy a nd Eng i ne er i ng Te ch n ica l Advisor y Group and the LEED Canada Steering Com m it t e e to ident i f y t he b est approach for tackling greenhouse gas (GHG) em issions f rom bu i ld i ng operations in the Canadian context. In recognition of the climate change imperative, a metric that assesses efforts to reduce GHG emissions is being considered.

This metric would encourage careful evaluation of energy efficiency measures, the selection of energy sources (particularly for heating and hot water), and onsite renewable energy generation options.

Equal weighting could be provided to overall building energy efficiency in

recognition of its particularly complicated and critical role.

Consideration is being given to a new, clear measure of energy performance based on assessing energy savings relative to a baseline with a fixed energy source for heating. Historically, cost savings have been used rather than energy savings, and the energy source has changed as a function of the energy source chosen in the proposed design.

GREENER FUTURE In 13 years, more than 3,800 projects have been certified LEED across Canada under the green building rating system. The cumulative impact of these projects is as follows: a reduction in GHG emissions of 2.49 million carbon dioxide equivalent (CO 2 e) tonnes, which is like taking 530,000 cars off the roads for a year; energy savings of 12.9 million eMWh, which is enough to power 435,000 homes in Canada for a full year; and water savings of more than 24 billion litres, equivalent to three hours of water coursing over Niagara Falls.

The work isn’t done. It’s clear a g reener f ut u re ca n not be forged without ensuring the sustainability of both new and existing buildings. The latest update to the LEED O+M rating system, and the upcoming changes to other LEED rating systems, will simplify and strea m line this endeavour and provide tools and technology to aid the process, paving the way for the industry to continue to d e m o n s t r a t e le a d e r s h ip a n d b e recognized for these achievements. zz Mark Hutchinson is the Vice President of green building programs at the Canada Green Building Council (CaGBC). For more information about LEED v4.1 O+M beta, see the website at cagbc.org/leedv4-1.

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Tips for effective B2B hashtag use, part two

By Steven Chester Each social media platform views hashtags through a different lens.

Effective hashtag use can boost your audience reach, but overdoing it in some cases can lead to a wasted marketing effort.

Twitter’s advice from its own blog states that “one or two relevant hashtags per tweet is the sweet spot.”

There’s no known penalty for overuse, but if you’re looking to be engaging, keep it natural.

Facebook is entirely different. There have been many studies of Facebook’s ever-changing algorithm over the years that have indicated the same thing: Any more than two hashtags actually decreases post engagement.

Instagram is the opposite. The more hashtags you use, the more reach you can achieve, but more than 10 hashtags in your text can lose the user. Quick tip: you can stuff a number of hashtags as the first comment on your post so that they’re not bunging up your text. Those hashtags still apply to your original post, and it will look much cleaner. Instagram caps posts at 30 total hashtags – add any more and your post will not upload.

LinkedIn is somewhat new to the hashtag game, though many users were still adding hashtags prior to them having any effectiveness on the platform. Try not to use more than three or four tags, and be sure that they’re professional in nature and relevant to your company, as this platform is built for a business audience.

Steven Chester is the Digital Media Director of MediaEdge Communications. With 17 years’ experience in cross-platform communications, Steven helps companies expand their reach through social media and other digital initiatives. To contact him directly, email gosocial@mediaedge.ca.

The 24th Annual Su rvey

of the Canadian Real Estate Industry’s Major Players & Portfolios

Who’s Who 2019

Here’s how to participate in the 24th annual Who’s Who in the Canadian Real Estate Industry survey.

Please take a moment to complete this questionnaire and fax it back to (416) 512-8344 by February 15, 2019.

Your participation ensures the accuracy and comprehensiveness of the list so don’t miss the opportunity.

- Barbara Carss, Editor Note:

1. This survey pertains to Canadian properties only. Please do not report any properties outside of the country.

2. If your ownership interest in any property is diluted, i.e. by a partnership, joint venture or other structure, please report only your net interest.

3. Please print your responses clearly.

4. Please provide all estimates of space managed and/or owned in square feet.

Manage Only

Own Only

Both Own and Manage

Total Sq. Ft.

1. Office Properties 2. Apartment Properties (square footage estimate per unit: 900)

3. Condominium Properties (square footage estimate per unit: 900)

4. Industrial Properties 5. Retail Properties 6. Other Properties (Government, Health Care, Hotel, Educational etc.)

Total following information will not be released in the printed listing. It is, however, essential that you include this information should we need to confirm the accuracy of the estimates you are providing.

Name: ____________________________________________________ Title: __________________________________________ Company: _________________________________________________Email: __________________________________________ Telephone: __________________________________________________Fax: __________________________________________ Please sign and date this form in the space provided to authorize this submission. ______________________________ Authorized Signature

________________________________ Date

If you have any questions, please contact Sean Foley at 416-512-8186 ext.225 or 1-866-216-0860 ext. 225 or by e-mail at seanf@mediaedge.ca 42 December 2018 | Canadian Property Management

Achieve your professional goals in Property or Facility Management today.

Register for our industry-leading designations.

Learn more at:

bomicanada.com/noexcuses

s e s u c x e o n i m o b # 44 December 2018 | Canadian Property Management