1 / 18

ERES 2013

ERES 2013. A FRAMEWORK FOR SUSTAINABLE REAL ESTATE DECISION-MAKING AND ASSESSMENT. Pernille Christensen, PhD Planning, Design & the Built Environment Clemson University Senior Lecturer, Property Economics & Property Development School of the Built Environment

cathy
Download Presentation

ERES 2013

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ERES 2013 A FRAMEWORK FOR SUSTAINABLE REAL ESTATE DECISION-MAKING AND ASSESSMENT Pernille Christensen, PhD Planning, Design & the Built Environment Clemson University Senior Lecturer, Property Economics & Property Development School of the Built Environment University of Technology, Sydney “The environment is everything that isn’t me.” - Albert Einstein Empire State Building, NYC “If we knew what we were doing, it wouldn’t be research” -- Albert Einstein

  2. Overview • Literature Review & Methods Overview • Summary of Delphi Results – 10 Lessons Learned • Framework for Sustainable Real Estate Decision-Making

  3. Ecological Footprint On The Planet WWF, 2010 USA ~3.8 Australia ~ 3.2 UK ~ 2.3 World ~ 1.3 China ~ 1.0

  4. Impact Of Buildings On The Planet • Buildings contribute an estimated: 40% of total carbon emissions 13% of water consumption (IPCC, 2007)

  5. Literature Review Overview Sustainable Real Estate Real Estate Investment, Development and Management Decision Making & Implementation Sustainability Assessment Evolution of ‘Sustainable Development’ Responsible Property Investment Sustainability Concept Sustainable Development Policy Assessment Systems & Costs Criteria and Indicators Building the Business Case Impacts of Real Estate Decision-Making Classical Economists: Malthus (1798), Mill (1848), Jevons (1865), Marx (1875) Pivo and McNamara (2005) IPCC-4 (2007) BREEAM, 1990 EnergyStar, 1999 LEED, 2000 Green Star, 2003 UN Conference on the Human Environment (1972) Miller, Spivey and Florance (2008) Hak, Molden & Dahl (2007) Mintzberg (1983 Elkington (1998) Triple-Bottom Line Levine (2007) Lutzkendorf and Lorenz (2005) Levy and DeFrancisco(2008) Eichholtz, Kok and Quigley (2009, 2010) Cocoyoc Declaration (1974 ) UNEP-SBCI (2009) Crawley and Aho (1999) Simons, Slob, Holswilder & Tukker (2001) Lowe and Ponce (2009) Rapson, Schiers, Roberts & Keeping (2007) Early Environmental Movement – Olmstead, Muir, Pinchot Pivo, G. and Fisher, J.D. (2010) World Conservation Strategy (1980) Matthiessan and Morris (2007) USGBC (2010) UNEP-FI (2005) Pivo (2008, 2009) Pivo (2007, 2008) Wiley and Benefield (2010) BRE (2010) Matthiessan and Morris (2009) 20thcentury Environmentalism: Leopold (1949), Carson (1962), Boulding (1966), Mishan (1967), Ehrlich (1968) World Commission on Environment and Development (1987) Krosinkshy and Robins (2008) Ellison and Brown (2010) IPF (2009) BRE Global (2011) Fuerst and McAllister (2011) Reed, Bilos, Wilkinson & Schulte (2009) Muldavin (2010) Pivo (2008) Dermisi(2009) UN Earth Summit (1992) Newell, MacFarlane and Kok(2011) Sayce, Sunderberg and Clements (2010) CDP (2012) Social Investment Forum (2010) Singh, Murty, Gupta and Dikshit (2009) Limits to Growth (Club of Rome) & Blueprint for Survival (1972) McCarty, Jordan and Probst (2011) Kyoto Protocol (1992) Pivo and Fisher (2010) Cajias, Geiger and Bienert(2011) GRICRES (2011) InBuilt (2010) GRESB (2012) * Not all literature was included in this diagram; works included have played pivotal role either in the research or asseminal works.

  6. Building the Business Case - Responsible Investment • Corporate Social Responsibility (CSR) • Resources, community relations, internal processes • CSR stakeholders – primary demand driver(Pivo, 2007, 2008; Pivo & McNamara, 2005, Rapsonetal, 2007) • Estimated $3.07 trillion under management in Sustainable & Responsible Investing(SRI) funds in US: (Social Investment Forum (SIF), 2011) • Increase of more than 380% since 1995; 13% between 2007-2010 • Broader investment universe increased 260%; 1% between 2007-2010 • Approximately 12.2% of $25.2 trillion in total assets • 65% of SRI mutual funds outperformed non-SRI benchmarks in 2009

  7. Building the Business Case - Sustainability and Value Eichholtz, P., Kok, N., and Quigley, J. 2010. Doing Well by Doing Good? Green Office Buildings. • Regression analysis of 10,000 buildings. • 2004-2007 CoStar data. • ‘Green ratings’ command: • 3% higher rental rates (per sq.ft.) • 6%+ premiums in effective rents (per sq.ft.) • 16% higher sales price (per sq.ft.) • EnergyStar - variation in premium directly tied to performance.

  8. Building the Business Case - Sustainability and Value Eichholtz, P., Kok, N., and Quigley, J. 2010. Doing Well by Doing Good? Green Office Buildings. • Benefits from investment in sustainable buildings can be obtained in several ways: • Direct and tangential financial benefits from energy savings • Higher employee productivity from improved indoor air quality • Improved corporate image • Buildings have longer economic lives as a result of tenant preferences = Lower risk premiums & higher valuations

  9. The Sustainability Challenge – Implications for Commercial Real Estate Classificationof Real Estate: ‘A’, ‘B’, ‘C’ – No ‘S’ or ‘G’ Class Lack of consistency among tools and measures. Stakeholders creating own criteria & indicators for decision-making. Two impacts of variation in sustainability assessment systems on the commercial real estate market (Ellison and Brown, 2010). Limits opportunity to compare properties – limiting competition Difficult for organizations to decide on sustainability approach How to make decisions related to sustainability in CRE? 3

  10. Research Questions • To identify the different ways that real estate industry stakeholders understand the concepts of ‘sustainability’ and ‘sustainable real estate’. • To gain an understanding of the how these concepts are integrated into the strategic decision-making and planning process. • What are the criteria used to make decisions about ‘sustainable real estate’ by each of the different stakeholder groups? • What are the indicators used to assess ‘sustainability’ by each of the different stakeholder groups? • How/why do these criteria and indicators inform the decision-making process differently depending on the role of the stakeholder in the real estate process? • What are the barriers to making sustainable real estate criteria and indicators more transparent and more easily comparable?

  11. Outline of Research Process • Personal & Conference Experiences • Literature Overview • Development of Research Questions • Literature Review & Content Analysis • Development of Research Design • Pilot Study Interviewsn=5 • Refinement of Scope & Research Questions • Delphi: Round 1 Interviews n=14 • Phenomenographic Analysis • Triangulation:Word Frequency Analysis • Delphi: Round 2 Follow-up • Member Checking & Vetting of Information • Development of Framework for Sustainable Real Estate Decision-Making & Assessment • Create Delphi Report • FUTURE RESEARCH: Industry Survey to Validate Results(Funded by Land Economics Fndn) 11 • Interpretation of Analysis • Quantitative Analysis of e-Questionnaire • Delphi: Round 3e-Questionnaire • (Pilot Study for Industry Survey)

  12. Expert Panel Participants - Qualifications

  13. Results from Expert Interviews • 92% of the time, sustainability concerns are integrated at least ‘frequently’ by expert panelists. • Sustainability in CRE is a bi-coastal activity. • Decision-making process & criteria/indicators: • Similar for Public and Private Investors. • Corporate Users overlap with both Investor groups and Tenants. • Developers primarily relying on LEED/EnergyStar checklists. • Similar words used – but sometimes with different meanings. • Transparency is important, but we’re not there yet. Free the data! • Convergence is emerging.

  14. Delphi Study - 10 Lessons Learned • 5 ways of understanding ‘sustainability’ & 4 ways of understanding ‘sustainable real estate development’. • Industry leaders are serious about integrating sustainability concerns. • Top drivers are common across stakeholder groups. • Key Performance Indicators (KPIs) emphasize environmental performance. • Industry Leaders advocated for simplicity of criteria and measures. • Common criteria less important to industry leaders than expected. • Divergence in use of criteria and indicators for decision-making. • Top criteria are common across stakeholder groups – and divergence in ratings are consistent with immediate business focus. • Focus on Sustainability Reporting Guidelines • Primary barrier to sustainable real estate & transparency = BROKERS! 14

  15. Framework for Sustainable Real-Estate Decision-Making Modified from Simons, Slob, Holswilder and Tukker, 2001

  16. Framework for Sustainable Real-Estate Implementation Modified from Simons, Slob, Holswilder and Tukker, 2001

  17. Future Research Opportunities • Addressing Limitations - Industry e-survey to increase transferability • Pilot (complete) • Counselors of Real Estate (CRE) – US stakeholders • Lambda Alpha International (LAI) – US stakeholders • Funded by the Land Economics Foundation (LEF) • Comparative & Replication Studies in Other Global Markets • Carbon Neutral Cities (Copenhagen/Melbourne/Portland/Seattle/Sydney) • Comparison Study: United States and Australia/UK • Replication in Developing Countries: India/China

  18. Thank you!! Any questions? Contact Information: Pernille Christensen Pernille.Christensen@uts.edu.au +61 2 9514 8928 RMIT, Melbourne, Australia

More Related