Amid the drive to improve energy efficiency in buildings, commercial real estate companies have shown a strong commitment to advancing building performance and reducing greenhouse gas emissions.
In 2009, leading CRE companies signed onto the Urban Land Institute Greenprint and made a commitment to cut energy use 50 percent by 2030. Maryland has ranked as one of the 10 top states for LEED certified construction for more than a decade and the state’s building sector reduced its GHG emissions 18 percent between 2006 and 2017.
Individually, REITs and
some other companies have adopted Environmental Social Governance (ESG)
practices to monitor and benchmark their sustainability. Now, annual ESG
reports are providing insights into which initiatives deliver efficiency gains,
serve tenants well and make financial sense.
Consider the findings
about lighting improvements in reports from COPT and Prologis.
COPT’s 2018 Sustainability
Report notes that the company follows a “culture of risk mitigation and service
to our stakeholders,” and consequently pursues resource-consumption initiatives
that generate both environmental benefits and significant savings.
“In 2017, we found a large
opportunity to reduce our energy consumption by updating the lighting in our
parking lots,” the report states. “COPT invested in replacement of more than
520 high-pressure sodium lights with alternative, energy-efficient LED bulbs.
This initiative across more than 20 buildings decreased our annual energy use
by more than 430,000 kilowatt-hours.”
Prologis reported a similar
initiative in its logistics centers.
“Lighting is a primary
source of electricity consumption in distribution centers,” the company’s 2018
ESG Impact report states. “Installing LEDs can reduce electricity consumption
and associated costs by more than 35 percent compared to traditional warehouse
lighting, yielding rapid investment payback.”
By the end of 2018,
Prologis had converted 27 percent of its portfolio to LED lighting. The upgrades
were aided by its LightSmart program, which requires tenants to cover only
nominal costs of installation while Prologis covers the upfront costs of
acquiring the new fixtures.