The more we study real estate sustainability and resilience, the more we’re convinced that investing in sustainability upgrades over time can ultimately save money at your leased locations. Across a portfolio of locations, these savings add up.
A sustainable and resilient leased location - in active use for restaurant, retail, auto care, personal care, warehousing, or other commercial services – is a space that optimizes the use of resources such as energy, water, and consumable materials today and also maintains conditions favorable to ongoing use of resources and conduct of business into the future.
Like all real estate, leased spaces are vulnerable to physical damage due to extreme weather; utilities cost increases either due to rate changes or increased usage in response to, for example, hot and dry weather; electrical grid reliability; national, state and local laws and regulations regarding building standards and operations; and availability of adequate insurance. How do we maximize the resilience of commercially leased spaces to changes in these factors?
We’re considering not only location-specific, cost-reducing measures, but also emerging regulatory and financial requirements, such as regional environmental and building standards and sustainability-related reporting that may be requested by lenders and investors for access to capital at favorable pricing.
Plus, thousands of government-provided financial incentives for a range of environmental sustainability upgrades are available, helpfully listed by NC State University’s Clean Energy Technology Center in this database (US only).
At Property Works, in collaboration with sustainability experts, we’re “in development” of a realistic roadmap to sustainability for commercially leased spaces as well as simple software tools for tracking sustainability data at the leased-asset level. The three foundations of the roadmap are introduced below, and will be explored further in future posts and communication with clients.
1. Know Better. Understanding your location’s business-as-usual baseline is the first step toward making improvements. Tracking energy, water, waste, and other location-specific data and looking at past trends will provide essential information on where, when, and how your location is using these resources and money. There are many tools out there, from public to proprietary, and consultants that collect data directly from utilities and provide businesses with a personalized dashboard and benchmarking against similar businesses. You may well already have relevant information in your files, ripe for review. For no-cost help initiating tracking or expanding your current process, check out the U.S Department of Energy’s free Energy Star Portfolio Manager.
2. Plan Better. Once you have started your data collection and analysis journey and “know better,” you can use this information to set goals and targets for reducing resource consumption and costs that align with business targets. Watch for future posts here about identifying climate risks and resilience challenges specific to your business and geography and prioritizing them based on return on investment (“ROI”) and impact.
3. Implement Better. Once you have your data and are working on a plan, consider how your business can contribute innovation and leadership to your sector. Climate resilience leads to brand resilience and business resilience. When your location stands out as a community value-add rather than a drain on resources, you become a cornerstone for local and industry-wide resilience and your business strengthens the cycle of responding to disruptions, recovering quickly, and improving preparation for the next time around.
With so many possible avenues to take, the journey to sustainability may feel overwhelming. As with any road you are on, just run the mile you’re in - one step at a time. And for every step you take, make at least a short note of what action you took and when. Your sustainability reporting will write itself. (Property Works is building solutions for managing sustainability records, so feel free to reach out.)
Looking for a few low-overhead sustainability steps to take? Start here.
1) Check your utility providers’ website(s) for financial incentives and educational materials. Some providers are offering rebates and utility-management tools that can help reduce use and costs. What’s more, these providers likely have staff who will assist you in considering what options make sense for your leased space and whether the products can save you money.
● Pacific Gas & Electric
● Southern Company
● Midwest Energy
Tenant impact: Maximize electricity and natural gas efficiency in your space to lower costs.
Sustainability impact: Reduce greenhouse gas emissions generated in providing energy to the leased space. Reduce pressure on the electrical grid, resulting in increased grid resilience.
2) Easy fixes to stop wasting water (and money).
● Check for water leaks by (i) walking around the physical property and (ii) analyzing water usage in your bills for sudden increases in usage. If you identify leaks, it’s likely to be a money-saver to fix them. Need help reviewing water bills for trends? Property Works can assist.
● Test toilets for leaks, as water loss here can really add up and the tracer dye test won’t take much time. We found some examples of non-toxic, biodegradable toilet leak tracer dye here and here, and others are likely available on the market.
● Coordinate with your plumbing service to upgrade and/or clean the aerators in your location’s faucets. Yes, another small item that can lead to big cost savings. Check out this post on commercial faucet aerators for details. Tip: if the flow rate is more than 1.5 gallons per minute (gpm) per the rating on the aerator, it’s probably beneficial to replace it with a lower-flow option.
○ Lower water bills.
○Readiness to operate in reduced-water conditions, as water is a limited resource and combinations of regulatory and actual availability limits are likely to impact future water usage during your lease term.
Sustainability impact: Minimize waste of an essential natural resource.
3) “Start stopping” wasting electricity (and money).
● Phase in LED bulbs at your leased locations. Light-emitting diode, or “LED”, bulbs are available in a broad range of sizes and styles, use 90% less energy to operate than incandescent bulbs, and last 15 times longer. Details here at EnergyStar.gov and U.S. Green Chamber of Commerce, along with some rebate offers. Don’t forget to check with your utility provider for LED equipment rebates, also. Georgia Power’s rebate page is linked here, as an example. Big picture? According to EnergyStar, “By 2027, widespread use of LEDs could reduce [U.S.] electricity use equal to the annual electrical output of 44 large electric power plants, and lead to total savings of more than $30 billion.”
● See if your energy provider(s) offers commercial/business energy efficiency audits. Even if you’re not ready to sign on for an audit, you can get a sense of what’s available.
○ Lower electric bills.
○More information about what next steps on the sustainability road are practical and profitable.
Sustainability impact: Less energy consumed = lower greenhouse gas emissions and less stress on the electrical grid.
Do you have a scheduled remodel coming up? That could be a great time to schedule an energy efficiency audit and integrate the suggested sustainable building features. And consider opening up the lines of communication with your landlord or franchise brand about building sustainability. Perhaps they have an interest in the benefits of a better-performing building and some tenant improvement allowance or other incentive could be worked out. Sustainability is an opportunity to earn recognition for improving building performance, streamline operations for all buildings in a portfolio, and strengthen marketing with positive brand recognition.
We’ll be posting more on leased location sustainability, resilience and reporting, so watch this space. Send questions, comments and topics you’d like to see covered to Caroline.
Would a short conversation about sensible next steps to sustainability for your locations be helpful? Contact Kelly.
Kelly O’Day Weisinger is the Director of Corporate Sustainability at the Environmental Defense Fund, specializing for over ten years in practical, impactful and just solutions to real-world sustainability challenges affecting businesses. Caroline Magee, a VP at Property Works, focuses on ESG and sustainability considerations across industry sectors, including real estate, financial services and energy.
Links are provided for information only and not for purposes of endorsement. Any opinions expressed are those of the individual authors and do not purport to reflect the opinions and views of Property Works or the Environmental Defense Fund.