1. Air Quality Measurement and CO2 Level Management

The building’s air quality can have a substantial impact on productivity. Environmental Health Perspectives reports that cognitive scores improved by up to 101 percent when workers went from a conventional building environment with high VOC concentrations to one with better indoor environmental quality.

IoT devices measure the air quality and CO2 level management through a variety of interconnected sensors. Since these devices can connect to the rest of a building automation system, they proactively address any problems. The ventilation system can therefore maintain an environment that keeps everyone healthy and productive. The push for green buildings and sustainable practices receives a boost in light of the cognitive scores found in the research study, with many organizations looking for ways to optimize indoor air quality for maximum productivity.

The health issues associated with air pollution represent another significant cost for companies. Worker absences cost approximately $226 billion in the United States, with even more indirect expenses associated with employees who come to work sick. IoT air quality and CO2 level management can help reduce this figure.

2. Facility Management and Predictive Maintenance

Facility managers have many challenges to overcome with building maintenance. Preventative approaches can go a long way toward staying ahead of problems, but they are not foolproof. In practice, critical systems may be overlooked and unexpected failures can happen with little warning. Finding time to fix the issues without disrupting operations is a challenge for many facility managers and building engineers.

Preventative vs. Predictive

Preventative maintenance relies on assumptions. The promised lifespan of a component and the anecdotal knowledge of a repair technician will go into the schedule, but there is no way to account for variations that throw off the timing. Technicians could conduct replacements on equipment that is actually good for several more years, or else fail to change out parts before they hit critical failures. Either way, the process ends up being an expensive prospect for the facility manager.

Predictive maintenance, on the other hand, uses IoT sensors and other hardware “things” to make data-driven reports on the state of the building. Maintenance is performed when it is truly required, whether well before or after the typical schedule. The unexpected issues that crop up with preventative maintenance are often overcome through predictive maintenance. This happens when smart devices pick up tell-tale signs of failure before critical systems reach catastrophic levels. Disruptions to the building’s operations are minimal, with the predictive program only performing what’s necessary to keep everything running optimally.

Applications

The exact application of the IoT sensors for this process varies greatly based on the systems measured in a facility, but there are a few general categories they can fall into. Thermal imaging gives facility managers the ability to look for equipment that’s outside of the expected operational temperature range. The environment may be contributing to issues that accelerate the wear and tear, or it may have a malfunction elsewhere. Vibration sensors look for any deviance in patterns that could indicate normal operations. Slight changes that would be undetectable by other means show up with the help of IoT sensors. Ultra-sonic noises are another hard-to-register sign that something may be amiss in the building systems. For example, HVAC vents and lines could have cracks or holes. Gases escaping into the air may go unnoticed, but IoT can pinpoint the locations for maintenance technicians.

3. Measurement and Verification

IoT technology has completely transformed measurement and verification. Facility managers can now put sensors almost anywhere throughout the building, thereby tracking information they would never have access to previously. Data collection and analysis goes beyond a broad look at the facility as a whole. IoT empowers managers to drill down further, with granular information that reveals exactly what goes on with all of the interconnected systems.

Another way that IoT provides a substantial benefit to M&V is due to the speed of reporting. Real-time insights allow building managers to react quickly to emerging situations, or else enable them to quickly see the results of optimization. They also have the opportunity to integrate the IoT devices to monitor building systems from a single panel. The all-inclusive view adds context to the data, since the manager can see how it relates to the facility as a whole, or with particular parts. Connections with other solutions can streamline common tasks. This includes scheduling routine maintenance or trying several optimization experiments to determine the best settings for the facility.

These IoT trends have a far-reaching impact on facility management. Managers have the opportunity to create healthier environments, gain more knowledge about the system and stay ahead of any critical problems. These empowering technologies go a long way toward helping managers improve the building operations and do their jobs better.

Want to learn more about working with smart buildings? Download our latest e-book, “How to Combat Building Automation Obsolescence.”

Benchmarking is the process of measuring the performance of a building so it can be compared over time to similar buildings – and itself. In the US, cities such as Chicago, Philadelphia, Boston, San Francisco, Washington DC and Seattle – as well as New York – have passed benchmarking ordinances that require all office buildings larger than 50,000 square feet to share their energy use information so the public can compare performance. With the ultimate goal of reducing energy use, the immediate objective of benchmarking is to make building managers more aware of energy use and unleash market forces to drive energy efficiency investments and energy saving behavior.

And it appears to be working. According to Hsu’s research, benchmarking is driving down energy use in two ways. First, building managers are looking more closely at their utility bills. Just the act of gathering energy information to complete the benchmarking requirements may make building managers more aware of their energy use and lead to using less. Second, knowing that potential tenants and buyers will see their building’s performance, building managers may be motivated to reduce their energy use.

The USGBC local community in New York City, Urban Green Council, has played an important role in the success of the city’s benchmarking efforts, partnering with the Mayor’s Office of Sustainability every step of the way. “We now see our role as sharing what we’ve learned about implementing benchmarking with other USGBC communities just starting down this road,” said Urban Green Director of Policy Laurie Kerr.

USGBC communities in other cities are supporting benchmarking in innovative ways. “Benchmarking in Chicago wouldn’t be where it is today without Katie (Kaluzny, Associate Director of USGBC Illinois),” explained Amy Jewel, Senior City Advisor with the Energy Project Manager, who works to advise and support Chicago’s energy efficiency efforts and sits in the Chicago Mayor’s Office. “I can’t sing her praises enough.”

Looking ahead, several cities including Orlando, Los Angeles, and Denver, are poised to begin implementing new benchmarking ordinances, while other cities are expected to consider benchmarking proposals in the future. USGBC communities are supporting successful benchmarking by helping with 1) Advocacy, 2) Compliance and Data Quality, and 3) Beyond Benchmarking next steps.

Advocacy

Local USGBC communities have played an important role as advocates for benchmarking policies in cities. In Chicago, USGBC Illinois worked closely with the city to help design the benchmarking ordinance. Chicago passed its ordinance in 2013, after Austin (2008), DC (2008), New York (2009), Seattle (2010), San Francisco (2011), Philadelphia (2012), and Minneapolis (2013). Learning from the cities that had gone before, Chicago knew it was important to gather accurate information from buildings. “We knew if the energy data we were collecting wasn’t accurate, it wouldn’t be useful in driving energy reduction,” said Jewel. “Data quality and data verification were critically important for the city.” As a result, Chicago is one of only two jurisdictions in the U.S. that require data verification as part of their benchmarking ordinance.[1]

In addition to assisting with the data verification portion of the benchmarking ordinance, USGBC members and partners in the Chicago area signed on to a letter to Chicago City Council members not only voicing their full support for the ordinance but offering pro bono assistance with data verification. City council members were concerned the data verification process would be too cumbersome or expensive for building owners, so USGBC Illinois’ commitment to helping buildings through the process was key.

“We knew energy benchmarking would engage our members in the process, so we were happy to help,” explained Kaluzny. Through the pro-bono program, USGBC Illinois has helped over 80 properties complete their benchmarking and verification requirements. Most of the properties that seek help are nonprofit organizations, houses of worship, community centers, affordable housing, or other buildings in need.

The Delaware Valley Green Building Council (DVGBC) played a similar role in Philadelphia. The DVGBC put together the Coalition for an Energy Efficient Philadelphia and took the leadership role in coordinating the call for benchmarking, which was passed by City Council in 2012. In 2014 in Kansas City, USGBC Central Plains acted as the point of contact for the coalition of groups supporting benchmarking there.

In general, USGBC local chapters have a strong relationship with the local building community and help engage stakeholders and communicate the value of benchmarking.

Compliance

In many cities, the USGBC local community is involved in helping building managers comply with the benchmarking ordinance. Even prior to compliance assistance, an initial implementation challenge for benchmarking cities is finding the correct information for each building in the city. Cities have used creative approaches to finding the correct mailing address and building manager name.   For example, in Chicago, USGBC Illinois volunteers are helping with the process. They go beyond the typical Google desk search and actually hop on Divvy Bikes – the local bikeshare program – to visit and research buildings and look for contact information for building owners and managers. “We call them ‘building sleuths,’” said Kaluzny.

A major partner in supporting benchmarking compliance in New York City, Urban Green reached out to its vast network of building professionals and solicited volunteers to serve as a pro bono speakers’ bureau after the ordinance passed in 2009. Over the next 12 months, Urban Green sponsored more than 50 presentations for building owners to spread the word about benchmarking. They also provided a downloadable compliance checklist for buildings owners. “It was viewed by thousands,” said Sean Brennan, Research Manager for Urban Green.

Washington DC and Chicago have offered “Benchmarking Jams” or “Data Jams”, USGBC-led training sessions for building managers who are filling out Portfolio Manager for the first time. Cities use the EPA’s ENERGY STAR Portfolio Manager tool to collect their benchmarking data.

In Chicago, USGBC Illinois recruited more than 40 of its members to serve as volunteer benchmarking coaches. At one Data Jam, the asset managers for all the Chicago Housing Authority properties worked one-on-one with volunteers to organize their utility data, set up Portfolio Manager, and identify next steps in the submission process. “It not only helped the CHA with their benchmarking efforts,” explained Kaluzny, “It also provided a mentoring situation for our young professionals who were paired with more experienced professionals to work with a CHA managers. It was a win-win.”

In Kansas City, USGBC Central Plains volunteers are helping building managers collect more accurate data for their benchmarking submissions by doing pro bono walk-through audits of buildings. “They help building managers count computers and figure out lighting types,” explained Jennifer Gunby, the City Energy Project Manager for Kansas City.

Beyond Benchmarking

Benchmarking is a starting point for energy policy. As Gunby explained, “Beyond Benchmarking is the next step.” Cities are starting to analyze their benchmarking data and take action. Some cities, namely Philadelphia, Seattle, and Chicago, for example, send personalized scorecards to building owners to let them know how they are doing compared to their peers and suggest actions. Other cities, New York and Boston, as well as Philly, Chicago, and Seattle, have created interactive online maps that show comparative building performance.

In other cities, the local USGBC communities have created energy vendor databases that provide current lists of energy services providers for building owners who are ready to go the next step. USGBC affiliates in Chicago, Kansas City, and Philadelphia are using their own websites to host lists of energy services providers in the area so a building owner who just received a benchmarking report or scorecard find the best vendor to meet his needs. “The challenge is to keep the vendor data current and accurate,” said Kansas City’s Grunby. “We’d like to be able to vet the vendors and include user feedback and reviews.”

Urban Green in New York, built the interactive map the city uses to publicize the performance of its buildings. Since 2016, Urban Green also leads the writing and publishing of the city’s annual benchmarking report. “Our goal is to make the benchmarking information easy to find and easy to understand,” explained Kerr. Her organization is hoping to create a template for data analysis and reporting – as well as mapping – that other USGBC local communities can use as they begin to support benchmarking. “There are huge opportunities for economies of scale,” noted Kerr.

As Hsu’s research in New York proves, benchmarking has the potential to make huge strides towards energy efficiency in cities. USGBC local communities can play an important role in making it happen.

[1] The other jurisdiction is Montgomery County, Maryland. Chicago requires that a person with a City-recognized credential (such as a licensed architect or engineer) must verify the accuracy of the benchmarking data the first time a property owner or manager submits a report, and then every third year afterwards.

In 2017, USGBC is setting our expectations to zero—zero net energy. According to a report released last quarter by the New Buildings Institute (NBI), there are currently 332 buildings that have been either verified as or are on their way to achieving zero net energy (ZNE). That’s a 74 percent increase since the last count, a little over a year before—very good news from the building industry, which has an outsized opportunity to take bold action on climate through green buildings that save energy, water and money.

Up from 33 projects in 2014, 53 projects have now been verified by NBI as having achieved ZNE for at least one full year. NBI verifies the performance data, ensuring that the total consumption of energy, from all sources, has been fully balanced by onsite renewable energy generation on an annual basis.

USGBC is excited to complement NBI’s pioneering work to support and recognize buildings achieving net zero energy, with ongoing net zero carbon tracking tools built into our new venture, Arc. Arc provides building owners and operators with a new platform to track net zero carbon emissions associated with energy and transportation, along with an array of performance data representing LEED’s full-spectrum focus on building sustainability. We’ve committed to developing a designation for net zero carbon in energy use to recognize these leading buildings with performance verified through Arc.

As a complement to LEED and other green building rating systems, standards, protocols and guidelines, Arc is a performance measurement platform that enables incremental improvements and can put a project on track for LEED or other rating system certification.

More than 60 percent of the 2016 ZNE verified buildings have also earned LEED certification. Of course, LEED certification adds an extra badge of honor to these projects (with many benefits), but it also ensures that the laser focus on energy performance does not take away from substantial opportunities to either slash other impacts or contribute to solutions to human and environmental health concerns.

A 2014 study by the University of California at Berkeley further emphasized the climate benefits of LEED-certified buildings beyond their operating energy performance. The study found that, “on average, the certified green commercial buildings cut greenhouse gas (GHG) emissions from water consumption by 50 percent, reduced solid waste management-related GHG emissions by 48 percent and lowered transportation-related GHG emissions by 5 percent, when compared to their traditional California counterparts.” LEED also challenges projects to look at procurement decisions for building materials and ongoing consumables, which can save energy, water and carbon in extraction, manufacture and transport.

So, if we’re to expect a lot more zero in 2017, where will we see the most action? The NBI report shows ZNE buildings activity in 39 states and in several Canadian provinces, too. The undisputed ZNE leader is California. State policy nearly 10 years ago set goals for all new residential construction to be ZNE by 2020 and for all new commercial construction to achieve the same by 2030. L.A. County and USGBC Los Angeles is working on a net zero water ordinance.

In August, 2016, NBI and California state agencies announced a milestone: there were more than 100 commercial buildings in California that were either ZNE verified (17) or working toward that target (91). For more on what’s next in California’s ZNE buildings landscape, see the spring/summer 2016 California ZNE Watchlist.

Looking ahead, the NBI report sheds light on some very encouraging news. ZNE buildings are no longer just demonstration projects or market outliers built by government initiative. “Today’s list includes a wide range of mainstream building types and ownership that reflect a more universal trend of ZNE adoption,” according to the NBI release.

Who knows—maybe our Project Haiti will be among the next set of recognized buildings? Currently under construction, the LEED Platinum-seeking orphanage in Port-au-Prince is designed to achieve net zero energy and net zero water to enhance its resiliency for occupants. With your help, we can keep up this progress in 2017, adding more zeros to the next list of zero net energy buildings.

Myth 1: Too Expensive

This particular misconception comes from the fact that you need very specific materials when building the passive house for it to be effective. Windows, doors, and insulation do cost more than some conventional alternatives. However, passive houses can save you thousands of dollars a year in energy costs, essentially paying for themselves in a very short period of time. So, when you consider the total cost of the house, you need to look at it long term and compare the total costs after a year, after five years, and after 10 years – you’ll soon see that the passive house not only catches up to, but exceeds the savings of a conventional home.

Myth 2: Too Hard to Build

For someone that has never worked with a passive house design before, yes, there is a fairly steep learning curve. However, for those that specialize in passive house design, building one is a little like a puzzle, where you need to work out all of the different areas in a way that they fit together. So yes, for a conventional builder the concept of a passive house may be a little daunting at first, but for those that want to learn or who have been working in this model for some time, a passive house is not that much more difficult to construct than a conventional home.

A passive house under construction [Image courtesy of Kebony].

This misconception may come about because some passive homes built in Europe make great use of things like insulated concrete block as the main material. The result can be a home that lacks some of the detail and design that people have come to expect from homes. There is no one way to build a passive house, however; the design possibilities are endless as long as you are adhering to the principles of the design. For example, you can use any type of exterior cladding you want, provided that the envelope of the home is completely airtight and insulated, and that the walls are of sufficient thickness to help hold onto heat and prevent air transfer. There are some parts of the passive house design that can’t be changed, such as positioning of windows in a way that will capture the best solar gain, but ultimately, what the house looks like is up to you.

Myth 4: Too Stuffy

Passive houses need to be air tight, eliminating the thermal bridges that can be found so frequently in traditional homes. Gaps beneath doors, poor insulation, or air transfer through windows are all eliminated in the passive house design. Combined with the thicker walls, some people fear that the interior of the passive house will therefore become stuffy or stale in a very short period of time.

At the core of every passive house, however, is a ventilation system designed to deal with just this issue. Cool, fresh air from the outdoors is brought inside, while the stale air is pushed out. The warm air leaving the home helps to warm the cooler outdoor air as it comes in, which helps to maintain the temperature indoors, even while providing the interior with fresh air. At no time does the air ever get stuffy or difficult to breathe.

Myth 5: The Walls Are Too Thick

The walls of a passive home are at a minimum of 6-inches thick, and in some places, may go to as much as 12-inches thick to accommodate additional insulation. Some people fear that these thicker walls are going to take up too much interior space, decreasing valuable square footage.

And while it is true that the walls do have to be a certain thickness depending on the area you are building the house in, this is offset by how usable the rest of the interior becomes. For example, during the winter months, you may stay away from areas with a lot of windows in a traditional home; in a passive home, you can sit beside a window all year long without any drafts or cool spots. This means that you can use more of your home comfortably all year long, well making up for the loss of a few square feet.

Consider the Passive House

In many areas, passive house-like building requirements are being recommended and even mandated to help keep energy costs down. These homes are much more comfortable and versatile than most people may realize when first encountering them. Consider the passive house design for the next home you build to make the most of everything it has to offer.

Establishing a Common Definition of Net Zero Energy

One of the struggles defining the push toward net-zero energy is settling on a common definition of precisely what a net-zero building is. On its face, it’s a simple concept: buildings generate at least as much energy as they consume. However, in terms of pure environmental benefit, that may not be the best way to calculate site energy. Source energy net zero buildings, on the other hand, factor in the energy consumed by site power generation, as well. That encourages site owners to opt for renewable sources, like wind and solar energy.

Since there is currently no official site certification process for ZNEs, businesses need to assign their own net zero classification and designation policies internally. Typically, it’s easier to fold energy efficiency features and renewable technology into new sites, rather than retrofit existing buildings, and that’s certainly the way that nationally-recognized standards like LEED are currently angled. So if a new site is in your future, work with architects and contractors that hold green building credentials, like the LEED AP Building Design + Construction certification. Board members, site managers, and other stakeholders also need to decide where renewable energy offsets will originate—off-site from utility-scale solar farms and facilities, or through on-site generation. If the consensus is for on-site renewable energy, it opens up a range of incentives and building programs that sites can use to offset the cost of solar energy.

Taking Advantage of Existing Incentives

Balancing site demand versus energy generation of course requires professional know-how, as well as specialized building design. But perhaps the biggest inhibitor to net-zero building is not the technology so much as the associated cost. A high-level finish net-zero building starts at around $200 per square foot—not exactly what you’d call cheap.

Federal, state, and utility-offered incentives for businesses are certainly the wisest way to offset these costs, but their perpetuity isn’t guaranteed. The national Business Energy Investment Tax Credit, for instance, drops off after 2019—and even so, its future isn’t a sure bet. While businesses should take the planning phase of site development seriously, the instability of the political climate for renewables makes securing these incentives as soon as possible a top priority.

Budgeting for Improving Technology

Thirty-four years is a long time to the technology sector. While the majority of the technologies that make net-zero building possible have been around for a while, efficiencies are evolving at a rapid pace now, thanks mainly to the growing popularity of solar power. Green building shouldn’t be approached as a “one-and-one” technique. As part of a company’s energy roadmap, businesses should budget for site improvements and upgrades that occur as technology adapts and as inefficiencies are refined—and investing in those technologies could potentially alter site energy calculations as well.

For instance, there’s plenty of evidence to support the eventual adoption of electric vehicles as the standard for future commuters. So sites may potentially need to install EV charging stations in parking lots, which raises a question about how site-specific net zero energy calculations should be performed. Furthermore, there’s a good chance that solar storage will be where renewables head next, and if solar batteries were to become very robust and efficient in the next decade or two, the net zero standard could itself grow entirely moot. That fact alone argues for specific—but flexible—standards for green site energy portfolios. The world of energy for commercial buildings is evolving more quickly than ever, and businesses need to be adaptable enough to keep up.

Distribution of scores on the GRESB Health & Well-being Module

This week, a white paper from the Green Health Partnership, an initiative of the University Virginia School of Medicine and the U.S. Green Building Council with funding from the Robert Wood Johnson Foundation, provides a deeper look at data gathered by the Module. A couple of new insights have emerged:

1. The type of leadership for health seems to impact the type of health promotion efforts that real estate entities pursue.

Most real estate companies and funds (60%) indicated that human resources professionals lead the entity’s health promotion efforts while a smaller portion of participants (32%) indicated that their sustainability leader was serving a dual role inclusive of health promotion. Participants with leaders from human resources were more likely to prioritize internal and programmatic health promotion efforts in comparison to participants with leaders focused on sustainability, who were more likely to prioritize external and design oriented health promotion efforts. As one example, 70% of entities for whom the senior sustainability leader is an HR professional implement internal programmatic health strategies, while only 50% implement internal design and operations strategies. Bridging conversations between HR and sustainability professionals may provide an opportunity to increase the impact of health promotion efforts.

Breakdown of health leadership type among responding entities.

2. The GRESB Health & Well-being Module attracted participants with varying levels of sustainability performance.

Real estate companies and funds that chose to participate in the Health & Well-being Module had, on average, higher scores on the GRESB Assessment as compared to those funds that did not participate (67.6 to 58). However, health module participants demonstrated a wide range of performance on the GRESB Assessment. While the greatest proportion of health module participants (40%) were in the top quartile of GRESB performance, a full 36% of scores fell in the bottom 2 quartiles. Interestingly, module participants had a similar level of prior participation in GRESB as compared to GRESB Assessment participants. In each case, half (50%) of respondents had participated in the core assessment for 3 or fewer years, with the other half (50%) having participated for 4 or more years. This supports the assertion that health presents an emerging and valuable market, and that interest is not limited to longstanding market leaders.

Percent of responding entities choosing to participate in the health module by years of participation in GRESB.

3. Drivers for health considerations within the real estate sector extend beyond the reduction of financial risk associated with healthcare costs.

Data from the Module shows that almost all companies face financial risks from health and well-being; however, risks are not spread evenly across the industry. Unsurprisingly, funds in the United States report the highest level of exposure to financial risk where the employer bears a significant financial burden related to employee health insurance. However, the data show that exposure to healthcare costs is not necessarily associated with action to promote health and well-being. In fact, European and Australian firms reported much lower exposure to cost, but are still taking action to promote health and well-being both internally and externally. On the whole, nearly 90% of entities not exposed to financial risk are still taking action to promote the health and well-being of their employees, with 60% of these entities also taking action to promote the health and well-being of their tenants and customers. This suggests that these real estate companies and funds see value in health considerations that extends beyond traditional cost reduction strategies.

Aside from the more detailed conclusions explored in this new white paper, the greatest discovery of the GRESB Health & Well-being Module is that real estate companies and funds are increasingly engaging in efforts to promote health and well-being, both for their own and employees and for their tenants and customers. Almost as many real estate companies and funds chose to participate in the Module as participated in the inaugural GRESB Assessment in 2009 (174 vs. 198 entities). Over the past 6 years, participation in the GRESB Assessment has more than tripled with 759 entities participating this year. If health and well-being considerations follow a similar growth pattern as sustainability, the next 5 years present a tremendous opportunity for promoting public health through real estate practice.

Access the white paper in its entirety here: http://www.usgbc.org/resources/state-health-considerations-commercial-real-estate-sector-initial-look-results-gresb-healt

In addition to being a technology writer, I happen to be a fitness instructor, certified by the American Council on Exercise since 2000. I keep up with the latest fitness research out of necessity to maintain my certification, but also because it interests me. The fact that a sedentary lifestyle, like smoking, is profoundly damaging to our health is becoming well known. But can smart buildings help?

Apparently some think so.

Smart Building Steering People to Healthier Choices
George Washington University’s Milken Institute School of Public Health is designed to “steer people to make healthier everyday choices.” The $75 million LEED Platinum-certified academic building features a beautiful, centrally located stairway to encourage physical exercise over taking the elevator. “The seven story atrium fills the building with natural light and creates a sense of spaciousness without exceeding the allowed building area.”

Additionally, the architects excluded vending machines and coffee bars “in favor of kitchens to promote cooking and healthy eating.”

Have Kitchen, Will Cook?
The above description immediately reminded me of the new Intel Israel campus, which some thought would “nag” inhabitants towards health. Describing the new GW University building, author Lucy Wang wrote, “The architects engineered public health into the building,” further strengthening the association.

Providing opportunities for exercise for those who are interested is a great thing. But I confess to being perplexed at the belief that availability of kitchens will preclude inhabitants eating take out. I have a wonderfully equipped kitchen here in my home and I certainly don’t use it to exclusively cook all of my meals.

Gates Foundation Gives UW $210M toward Improving World Health
The Gates Foundation has given the University of Washington $210M, its largest donation ever to build a home for a new initiative to improve global health. “The new building will house many of the players in the UW’s Population Health Initiative.”

UW President Ana Mari Cauce said, “Big data allows us to diagnose the health of communities, not just individuals.” This, “incredibly audacious initiative” will include a wide variety of university departments, with innovative strategies such as studying businesses’ success distributing refrigerated beverages, as a potential model for vaccine distribution. The new building will be between 265,000 and 290,000 square feet, and is expected to facilitate the cooperation of the various departments.

Stairwells: From Seclusion to Prominence
“Health is also influenced by urban planning and architecture,” said Thaisa Way, a professor of landscape architecture, executive director of Urban@UW and a member of the initiative’s executive council. ‘For example, most multistory buildings put elevators in a prominent place and hide the stairs.’”

Stair Prompt from Center for Active Design

I could not agree more. Many times I’ve sought a staircase, only to never find it. Or worse, I find it and it doesn’t lead to the lobby. I exit the enclosed, often dirty, smelly, stairwell only to exit the building entirely on another side and end up lost!

So, does it Work?
“The data has been pretty thin about how green buildings improve health, personal performance and productivity – that is until now. This is important because while inspiration will spark the green building movement, it’s the data that will sustain it.” John Mandyck is a journalist after my own heart.

He lists a Harvard study in which employees in green-certified buildings showed 26% higher cognitive function scores. While promising, endless skeptic that I am, I had to see if rigorous studies had been conducted on the fitness impacts of buildings. I found the below studies, which are encouraging.

• Better access to stairs in office buildings – and prompts reminding people to use them – might encourage workers to get more exercise. The study also offers the first real evidence that having natural light in stairwells is important. Employees were about three times more likely to use stairs in buildings with stair prompts.
• To encourage stair use, motivational posters and directions were first posted, and changed weekly. Three months later, the second phase included sprucing up the stairwells with stickers on stair risers. Stair-climbing then increased by almost 19%. Although employees slowly returned to their pre-study ways.

Real estate issuers play a sizable role in the green bond market. With roughly 20% market share, real estate commands a significant amount of green bond issuance. Defining attributes and targeted outcomes of a green property bond require a consistent framework, that is comprised of key performance indicators sought by investors seeking both risk reduction and superior environmental outcomes.

The Green Bond Principles, developed in 2014 and administered by the International Capital Markets Association, were re-released in June 2016 with clarifications and updated market guidance along with added definitions for ‘social bonds’. The broad-based Principles provide the necessary concepts required to properly define a green bond as applied to all economic sectors. The global nature of the Green Bond Principals brings limitations when applied to industry sectors like real estate, resulting in a need for specific guidance that allows capital market participants to properly characterize real estate based performance indicators, costs and benefits, and impacts over time.

In concert with the Principles, GRESB updated the Green Bond Guidelines for the Real Estate Sector which recognize the real estate industry’s environmental and social impact, and provide specific guidance on 1) how to identify green project eligibility, 2) implement and manage investment proceeds, and 3) communicate potential and actual green bond outcomes to stakeholders. The guidelines span the full range of construction and real estate investment activities and are intended for use across multiple bond types:

• Green Use of Proceeds Bond
• Green Use of Proceeds Revenue Bond
• Green Project Bond
• Green Securitized Bond

The 2016 version of the GRESB Guidelines provides a list of aspects, certification schemes and key performance indicators (KPIs) that issuers can incorporate into their bond offering and reporting. To achieve and maintain capital market credibility, issuers should utilize environmental and/or social metrics in the project evaluation and monitoring stages. The update incorporates active feedback from the GRESB Green Bond Working Group, drawing from the expertise and recommendations of leading institutional investors, listed property companies, green bond underwriters, and institutional investors with direct experience in the development and growth of the green bond market.

An oft-heard observation of Green Bond Working Group members is how bond investors typically seek alignment between an offering’s overall sustainability goals and the underlying green bond framework used to identify eligible projects and report outcomes over time. The updated Real Estate Sector Guidelines incorporate this feedback and offer opportunities for issuers to identify track record and achievements communicated during the roadshow prior to issuance, report post-investment ESG performance, and connect outcomes to long-term sustainability goals. Transparency on track record and KPIs allows investors flexibility to provide latitude to entities lacking an ESG track record but otherwise financing credible forward-looking projects with strong sustainability objectives – second party opinions are helpful to this process.

Several green property bond investors indicated that green bond reporting should contain specific environmental impact levels, especially in cases when reduction in energy or CO2 emissions is part of the green bond offering objectives. As more institutional investors analyze the overall climate impact of their investment portfolios, bond issuers will be keen to hone in on these KPIs during bond formulation and ongoing reporting.

The legal argument hinges on the concept of environmental rights, which are legal provisions guaranteeing individuals a certain level of environmental quality.[1]  The idea of environmental rights is not new; it emerged in 1972 with the signing of the Stockholm Declaration, an international agreement which reads: “[b]oth aspects of man’s environment, the natural and the man-made, are essential to his well-being and to the enjoyment of basic human rights—even the right to life itself.” Since their inception, environmental rights have been formally adopted in the constitutions of at least 75 countries and they appear in a number of international declarations and regional human rights treaties.[2]  Yet, for the most part, environmental rights have been primarily used in cases where human rights have been threatened by harms present in the natural environment. Drawing on cases, constitutions, and laws from around the world, however, this new article argues that environmental rights should apply to both the natural and built environments.

The article stipulates that human rights to the environment, health, housing, and water and sanitation are all affected by indoor environmental quality (IEQ). A review of domestic cases, international law, and scientific evidence demonstrates that IEQ is crucial to the protection of human rights within the built environment. For example, poor indoor air quality has been shown to negatively affect human health.[3]  Therefore, one cannot enjoy the inalienable human rights to which all are entitled in places where IEQ is compromised.

A practical solution to preventing exposure to poor IEQ lies in green buildings. Green buildings are specifically designed to optimize IEQ and perform better than conventional buildings in this area. LEED in particular places significant emphasis on IEQ, with credits and mandatory prerequisites devised to address one or more attributes of IEQ: indoor air quality, temperature, humidity, ventilation, lighting, acoustics, and ergonomic design/safety. Thus, LEED buildings are designed to directly and positively impact the environment, health, housing, and water and sanitation through measures created with the explicit purpose of enhancing IEQ.

By extending the purview of environmental rights from the outside to the indoors, the article provides a compelling legal basis for arguing that IEQ is essential to safeguarding human rights. In addition, because of its deliberate focus on maximizing IEQ, it suggests that green building can be an important tool that governments and the private sector use to protect human rights around the world. Establishing this connection on legal grounds also lends additional support to the USGBC’s move to incorporate social equity credits into LEED. But more opportunities to address the social dimension of sustainability in the built environment loom on the horizon.

Future research should examine how specific IEQ interventions contribute directly to improvements in health, especially among vulnerable communities. Policymakers should identify ways to provide low-income residents with quality green housing options. Thus, this article contributes to a growing body of evidence demonstrating not only that green buildings can help improve human rights performance in spaces where most people spend most of their time, but also that green buildings offer a concrete means of obtaining environmental justice.

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[1] Gellers, Joshua C. 2015. Explaining the Emergence of Constitutional Environmental Rights: A Global Quantitative Analysis. Journal of Human Rights and the Environment. 6(1): 75.

[2] May, James R., & Daly, Erin. 2015. Global Environmental Constitutionalism. Cambridge University Press.

[3] Singh, Amanjeet, and others. 2010. Effects of Green Buildings on Employee Health and Productivity. American Journal of Public Health. 100(1665): e1.

The Module includes ten new indicators addressing leadership, policy, needs assessment, implementation action, and performance monitoring related to health and well-being. Information from the assessment helps investors identify companies and funds that are taking systematic action to promote health and well-being. The information also provides companies and funds with measures to gauge their relative strengths and weaknesses in this rapidly emerging area of work.

In its first year, 174 entities – 23% of all entities participating in the GRESB Real Estate Assessment – participated in the voluntary Module. Their responses have been aggregated to provide a valuable industry snapshot in the form of our new infographic (download).

Here, I’ll highlight five findings from these initial results:

(1) Many companies promote health and well-being in their own operations; only a fraction are actively promoting health and well-being through their products and services

We learned that all participating companies and funds were beginning to manage health and well-being internally, to some degree. However, a relatively small sub-set of companies and funds are taking action to promote health and well-being externally through their real estate and services. We identified 62 leaders taking action in both domains. Interestingly, no companies or funds report taking external action without taking action internally. In other words, promoting health and well-being in internal operations seems to be a necessary precursor to offering this to customers.

(2) Health and well-being most often brings in new leadership; sometimes new responsibilities for ESG leaders

We see many sustainability professionals taking on health and well-being as an additional responsibility. Consequently, my personal expectation was that the majority of participants would indicate that the same individual in their organization is responsible for sustainability and health and well-being. I was surprised by the results. The data show that there are a significant number of such dual role professionals (32%); however, 60% of companies report that a different individual is in charge, most often from human resources. This makes sense with respect to internal operations; however, it is a double-edged sword. Human resource leaders may be in a good position to drive internal change, but they may have limited expertise and mandate to act externally. This creates a situation where no single leader has the expertise and mandate to promote health both internally and through products and services.

(3) Many firms have internal health and well-being policies; only a fraction of companies have policies to promote health and well-being through their products and services

Most, but not all, participants report having a formal policy to promote the health and well-being of the people operating their business. That’s good. However, such policies are not yet universal even in this self-selected sample. The data also show that policies regarding health promotion for customers lags behind. Barely half of participants have formal policies. Ultimately, policies matter because they are leading indicators that, ideally, express the direction and intent of management. The absence of policy does not necessarily mean the absence of action. However, the absence of policy is a warning sign that action may not be institutionalized or directed toward specific outcomes. The lack of organizational structure and accountability creates the risk of committing random acts of health promotion – well-intended actions without the coordination needed to make large-scale change.

(4) Many companies are acting to promote health; only a fraction are measuring performance

Companies and funds described a wide-variety of specific implementation actions intended to promote health and well-being. Internally, the most common actions included medical care, the provision of social interaction spaces, and access to recreational opportunities. Externally, the most common actions included attention to indoor air quality, toxic exposures, and thermal comfort. These make sense, but they beg follow up questions. For example, given the attention to material supply chains over the last several years, it is somewhat surprising that nearly half of firms do not report taking action to reduce toxic exposures. From a societal perspective, it is also interesting to see the gap between medical care and mental health care. For North American audiences, it may also be interesting to note the relatively low frequency of smoke free policies for property companies and funds in other regions. This serves as a reminder that even one of the most fundamental green building “prerequisites” (tobacco smoke control) is not yet ubiquitous among property companies and funds.

(5) Almost all companies face financial risks from health and well-being; however, risks are not spread evenly across the industry

We face some fundamental questions about the drivers of action to promote health and well-being. One elemental issue is the degree to which firms are acting to address financial risks or liabilities associated with health and well-being. This concern is often acute in the United States where private companies bear significant and rising costs for employee health insurance. We are often told that socialized medical systems elsewhere in the world isolate firms from these concerns.

We asked a simple question in the module to explore this issue: Is the company exposed to health and well-being related costs?  North American firms report the greatest exposure; however, Asian firms also reported high levels. European and Australian firms reported much lower exposure, but a significant number of companies reported some exposure. This is a richer and complex story that warrants more investigation.

These initial observations are only the start of our efforts to understand how companies and funds are acting to promote health and well-being. GRESB is working with colleagues including Delos, the Green Health Partnership at the University of Virginia and the U.S. Green Building Council to dig deeper and understand more about industry strengths and weaknesses. We want to use this information to provide investors and participants with more visibility on this important issue and, ultimately, provide differentiation and recognition for high performing companies and funds.

You can also connect with me or some of the other folks involved, including Kelly Worden (USGBC), Whitney Austin Grey (Delos), Matthew Trowbridge (Univesity of Virginia), and Roxana Isaiu (GRESB).  You can also learn more by asking one of the Health & Well-being Module participants. You can find a list on the back of the infographic.