CBRE Sets Carbon Neutrality Goals for its Real Estate Portfolio

How did the report on risk and sustainability by CB Richard Ellis' (CBRE) global task force impact the company's real estate operations?

When we looked at the negative impact of greenhouse gas emissions on planetary health, we found that roughly 39 percent of emissions come from commercial buildings. As the world's largest real estate services firm, CB Richard Ellis directly manages more than 1.9 billion square feet of property and corporate facilities globally. We realized that we were sitting on a lot of carbon and could help with reduction of that carbon.

We talked a lot about that at the committee and came to the conclusion that it's not really that difficult for us to start to implement better practices and make these types of reductions as the largest real estate services provider. We really have a responsibility. As part of our corporate social responsibility initiative we took on the initiative to understand what it meant to our business, the risk to our business, and how to translate it into a business opportunity.

Elaborate on CBRE's green initiatives, more specifically, the target for a 10 percent reduction in energy use throughout your entire portfolio.

First, we have a policy that says we will be carbon neutral by 2010 as a corporation. In our first corporate social responsibility report, which is due out shortly, we have a summary of all the components of what we've done on the environmental side and what we've done in measuring our footprint. We are currently completing the measurement of our operational footprint, including the identification of emission sources and selection of the entities and facilities to be included in the inventory. Simultaneously, we are conducting research and site visits to determine the best approach to implement energy efficiency measures within our facilities. We have over 400 offices all over the world and over 30,000 employees, and we are doing a lot of work today in making the assessment of our own business operations.

On the service side, we are working to make carbon emission reductions in the property portfolio we manage. Last year, we made the commitment to register any building over 100,000 square feet in our American portfolio-we manage roughly 700 million square feet of commercial office space in the United States-with the EPA Energy Star program and seek EPA Energy Star Certification for the building. We did that for over 150 properties. Just a few weeks ago, we were awarded the "Energy Star Partner of the Year" by the EPA.

In 2008, we've made the commitment that we're going to register any building that's under 100,000 square feet, so that's another big opportunity for us. We'll also continue to seek certification of those buildings above 100,000 square feet.

To give you an example, in our asset services group, we've made a commitment to reduce all the energy usage in all of our managed properties by 10 percent in 2008. Average current energy cost is about $2.50 per square foot; a 10 percent reduction could save property owners and tenants more than $30 million on an office portfolio of 125 million square feet.

If we have 800 million square feet, you can imagine the kind of money that could be saved. However, moving beyond the 10 percent becomes difficult. Sometimes it can be difficult to get an owner to invest in something if only the tenant is going to benefit from-and vice versa. We're working through some policies and joint initiatives that will hopefully find the shared benefit of making an investment in order to increase that 10 percent number.

We could be carbon neutral today-we could measure our footprint and buy offsets for every piece of carbon we emit right now. But that really doesn't accomplish anything other than some quick PR.

We are taking the measurements and figuring out how to install energy efficient technology, better efficiencies and planning, and a variety of other things within our spaces to help us make actual reductions. Even using this model, one that pushes you toward actual energy efficiency and carbon reduction, ultimately you will have to buy some offsets because we're not going to turn off the lights.

But this model is a business model that can be shared, after learning how to do it for ourselves, to our occupiers on the facilities management side. We manage hundreds of millions of square feet of facilities; Bank of America is one of our largest clients, as well as Washington Mutual. They are very interested in these initiatives.

We've done some things internally to get started. Every time we relocate, we build with energy efficient lighting, sensors, high efficiency heating and cooling, low water usage, and Energy Star appliances. That's a mandate. We are building out our major offices aiming for LEED certification. We have built a LEED-certified office in Washington, D.C. We've submitted 42 points, which puts us on track to receive gold.

Other things are our very robust recycling programs, phasing out inefficient office equipment to Energy Star office equipment, doing double-sided printing, using recycled paper, changing our purchasing practices and our vendors to be environmentally friendly, making sure we have programs in place to turn off lights and office equipment when not in use, and organizing carpool programs and alternative transportation.

We've cut out a lot of the parking we provide to staff. We give them Metro cards, but we're not going to pay for our employees' parking anymore, unless they carpool.

Changing our paper products to those with a high post-consumer content and an FSC certification has lessened our annual environmental impact by almost 1,700 trees, over 575,000 gallons of wastewater, over 86,000 pounds of solid waste, and almost 110 pounds of greenhouse gas emissions.

Last month's VerdeXchange News interview with the executive director of the Climate Registry, Diane Wittenberg, discussed reporting protocols. What reporting protocol is CBRE using and how widely used is it?

The protocols we are using are broadly accepted. We've actually engaged an outside consultant to do our independent Phase 2 protocol. We're working with the consultant to measure our footprint, help to define the protocol and potential for internal abatement, and set corresponding emissions targets. We have, and could use, proprietary software to calculate greenhouse gas emissions for our property owners. But for transparency's sake, we want to make sure that we have an independent third party looking at this.

Elaborate on CB Richard Ellis working partnerships with environmental partners, such as NRDC and the U.S. Green Building Council.

NRDC is helping us to understand cap-and-trade legislation-the Climate Protection Act. We are also doing some independent research projects with them, and we collaborate with them to try to understand how the potential of this legislation will affect real estate from the environmental perspective. When we came out with our sustainability policy, we also discussed and reviewed it with them. We wanted to make sure it was robust enough to be supported by the environmental community. There is now an odd marriage of Fortune companies and the top environmental organizations, collaborating to create a new green economy.

Our work with the U.S. Green Building Council (USGBC), is more obviously in sync with what we provide in our business offerings. Education is the primary component that they help us with. We supply data to them to help them develop research as we "green" properties. We use the LEED rating system a lot, so we have a very strong collaboration with them in understanding that system. We are currently involved with a LEED portfolio management program where we are working to register a minimum of 100 of our managed properties in the LEED For Existing Buildings program.

Are there global examples of how CB Richard Ellis' clients are going green?

CBRE's global task force was made up of 16 individuals from all across the world. Outside the United States, they have far more experience and understanding of climate change, especially in the U.K. and Europe, because Eurpose signed the Kyoto protocols. Frankly, they're years ahead of us on many of the initiatives that we're starting to come to grips with now, especially a cap-and-trade program and how to really get emissions down.

In the U.K., LEED's equivalent is BREEAM. It deals with green building aspects. We've worked with some groups there to create what is called the Environmental Performance Code, which is more focused on the energy and assessment side. It's actually a protocol that some of our clients are interested in bringing to U.S. properties. It's applicable to U.S. properties and to all building property types. We're very focused on ISO 14001 in the U.K. and in Europe. Our London office has been ISO-14001 certified.

In Australia, they are dealing with a huge water issue. We were one of the first partners with Earth Hour, which started last year in Sydney, so we're very active in that. We participated in Earth Hour again this year in a variety of our facilities around the country. There is lot of knowledge and learning from Australia, which recently signed Kyoto under its new prime minister. They are now working hand in hand with the London to bring things up to speed quickly for compliance.

Our London office is spearheading the verification of our footprint and the carbon neutral assessment and reduction strategies. It's a global effort that on that piece, and we have leaders in each country that are organizing the assessment.

China is developing fast and moving quickly. The good news is that most of the buildings that are going up are fairly energy efficient. In the U.S., we're dealing with all of these older buildings, so it's a very different issue. The issue in China is power consumption and the type of power they're creating. They can only meet the demand with things like coal. Energy efficiency within buildings is really critical. We have our West Coast asset services working with them to help drive performance and standards. They're also getting up to speed on LEED. As United States corporations go abroad, especially to the Asian Pacific where there's not really a standard in place, they want to take LEED with them. We have some developers that have talked to us about doing some spec development in Singapore and other markets to entice a corporate client that might have a greenhouse gas emissions initiative.

How has the real estate industry's concept of sustainability evolved over the last ten years?

We only began this initiative a year ago, and it was a huge "Aha! Look at what's happening!" Brokerage in the real estate industry has been sitting by the sidelines, watching what's been going on. The tipping point for the real estate industry in general was 2006; that's when they opened the gates to the opportunity of building green and renovating and retrofitting and doing all these green initiatives.

In 2000, the LEED for New Construction came out. In 2004, LEED for Existing Buildings came out. The product was intended to provide ongoing compliance for the LEED for New Construction buildings. It was never intended to apply to 60-year-old buildings.

Also, in 2004, the LEED for Commercial Interiors came out, which gave the tenants an opportunity to begin to go out into the market, find a building that had some baseline compliance with the standards, and then build a green interior. With that, tenant awareness and market awareness were created about green opportunity. That was a big initiative and a big learning moment for corporate America, because they started to think about this a little bit more.

In 2006 a second product came out called LEED for Core and Shell, which was the committee I sat on, which essentially added the product for the speculative developer. You could marry the developer and the tenant and create a LEED project. All of a sudden, it provided a new opportunity to just develop the building and not necessarily the interior.

At the same time, An Inconvenient Truth came out. The IPCC reports came out. The universal consensus on the negative impacts of greenhouse gas emissions came together, and here you had this vehicle-LEED-that allowed you to put something in place to deal with the biggest carbon emitter: buildings. There was a boom in 2006. Awareness was incredible in 2007, when we started our policy.

Moving forward, this issue is viral. It's everywhere within our business and our service lines. It comes back to the notion that you have to look at sustainability, you have to look at the risk to your businesses of not acting on it, and you have to integrate it into your service offering to create a new green opportunity. We're watching very carefully what's happening with the climate bill. It's very important to us in the building industry to see if any kind of incentive programs come into play that create trading opportunities for buildings and landlords to invest in their buildings to create reductions.

We are sitting on and managing tons of carbon for our clients, and we want to be able to manage it in a very profitable way for them. That's a market we're watching carefully, because it could become a new type of service offering for us.