Lendlease’s Head of Sustainability Sara Neff on Developing, Implementing, and Driving Corporate Sustainability

Sara, when we last spoke, in the Fall of 2021, you were just starting your new role as Head of Sustainability at Lendlease Americas. Bring our readers up to speed on the development projects that you’re overseeing here in the Americas.

When we were talking in 2021, we had a project in Brooklyn called 1 Java that had just gotten geothermal approved. I'm happy to say that the geothermal is now fully drilled. The project is coming out of the ground and the drilling of all the boreholes is complete. We're very excited to be delivering that all-electric project soon.

Since then, we’ve had a great project in Los Angeles called Habitat. The changes that have been happening there are really exciting. In addition to more traditional sustainability features like solar and rainwater harvesting, as well as more efficient energy, water, and software systems, we're actually going to be putting a battery on the roof of that building, which, to my knowledge, is the first time anybody's tried putting stationary storage on the roof of a commercial office building.

The reason I'm excited is because the penetration of stationary storage in the non-residential and non-utility scale market is very low. One of the many reasons we can’t put them inside are the fire concerns, as well as ground planes being very constrained. So where else are they going to go? 

It turns out, the roof is a great option as batteries have continued to get lighter. The impact of the initial structural cost was $5,000 for a 50,000-pound battery. Our project has six batteries in three groups on top of two columns, so I'm very excited about that. 

In addition, we are working on a life science project in Boston which will have the first vertical solar in the Lendlease portfolio; that project is going for LEED Platinum. That project and Habitat are also pioneering all-electric construction equipment, which we prefer from an emissions standpoint and for the mental health of construction workers. 

We’ve delivered all the Chicago projects you and I were previously talking about and now we have our next Chicago project. That project is also exploring geothermal, and we hope to add waste-heat recovery for the first time. The project is currently conducting its soil conductivity testing, as not all soils are appropriate for geothermal. That exploratory work is still happening, so geothermal and waste-heat recovery may turn out to be geologically infeasible, but that's what's going on in development and investment management.

We are also working on around 1,200 new military homes at Fort Campbell and Fort Hood which we are very excited about and which will also be all-electric. The Department of Defense is also very much a partner on all-electric new construction, and all the new homes will be Energy Star certified, as well.

Share how Lendlease is continuing to push the boundaries, as a third- party builder. What is expected in terms of sustainable development practices?

We are showing that the things you didn't think were possible can be done. For example, the geothermal facility in Brooklyn didn't have any impact on returns when you take into account the grant we got from NYSERDA, the grant we got from Con Edison, and future fines from Local Law 97. We are leading and we like to be leading, but in a way that makes financial sense. 

As a third-party builder, we're doing what the client needs. For the Department of Defense, the most important thing is the safety and comfort of the residents. That's always going to come first, but they also want to focus on energy efficiency and we are aligned with the DoD on that.

We are chosen because we have a fantastic track record on safety and delivering projects, but we are also comfortable bringing opportunities for decarbonization to our clients, some of whom are very interested and some who aren’t.

When it comes to the water side of your projects, could you tell us about the technology you’re employing and the metrics that you’re assessing? 

I think of water in a couple of ways. One is water in terms of sea level rise and climate mitigation. For example, we have two projects that are directly on the water. 1 Java in Brooklyn, the geothermal project I was talking to you about, has done the coolest thing with materials and I can't wait to tell you about it. Then we have Clippership Wharf, which is right on the Boston Harbor. Both of those will be using a natural feature, which will look like a shoreline, engineered for wave dissipation so that, during a storm surge, the waves don't hit the project as high as they could. That’s in addition to dewatering equipment and aqua-walls to handle any potential flooding. 

In terms of water efficiency, we're focused on where we can drive down domestic water, as well as the electrification of the domestic hot water system because boilers use quite a bit of gas. That’s where the waste-heat recovery and heat pumps instead of boilers are coming in.

Elaborate on the building materials being used in Lendlease’s 1 Java project in Brooklyn.

So many exciting things are happening so quickly on materials. When I started at Lendlease, if you had told me you could get net-zero steel in six months, I would have thought you were crazy. But, it became available in 2021 and, while there’s still a bit of a premium, we're seeing that premium decrease rapidly. I am also excited to share with you what's happening with materials on 1 Java in Brooklyn. 

Typically, companies decarbonize concrete by replacing percentages of the highest emitting material within the concrete, which is called portland cement, with an alternative material. Normally, it uses byproducts of the steelmaking process called slag and fly ash. Those are great to use for decarbonizing concrete but, unfortunately, are in fixed supply in the world. To decarbonize more concrete, we're going to need alternative materials. 

With the project in Brooklyn, I was excited because it used recycled glass pozzolan. You take glass that would otherwise have gotten thrown away and grind it up in a specific way. Then, you replace 40% of the Portland cement with that mixture. It sounds expensive, but it’s not, and here’s why: the final mix with the pozzolan also has the added benefit of reducing the permeability of the concrete. That is what you would want anyways in a foundation and, actually, has enabled us to delete a very expensive additive called silica fume that otherwise would have to be added in order to decrease the permeability. By offsetting the cost of the silica fume, we were able to utilize pozzolan and dramatically reduce the embodied carbon emissions of that project. 

Now what's happening in materials -and you had them speak at VerdeXchange, which was very prescient of you- is we have the Department of Energy Loan Program Office and Industrial Grant program which provides money for the materials manufacturers. We currently think of loan program money as going to solar and wind, and that's great, but they also want to decarbonize materials. We, on the buyer side, are trying to connect those federal funds with promising manufacturers in the low-carbon materials sector. For example, pozzolan is great but I can't get it in California because it's not made here yet. Funding from the DOE Loan Program Office for a recycled glass pozzolan manufacturer would allow me to use pozzolan in California for my next project.

Then with steel, we’ve had companies that electrified all of their arc furnaces, so they're not using fuels anymore. If you put that manufacturing into Seattle, with an 80% renewable grid as it is, it's very low carbon steel. In some places we see them getting renewable power purchase agreements to cover the rest of the electricity costs and that's how you end up with net neutral steel, as long as you're using recycled scrap in it. 

It’s rapid change, yet frustratingly slow. A thought experiment is: if I had infinite money, could I create zero-carbon concrete right now? I think I could, if I was willing to ship things from around the country, but it's certainly not available to be purchased on the scale at which I need it.

Is Lendlease presently exploring opportunities to utilize prefab construction? 

We're looking at a couple of things. Firstly for our military housing, these things have to go through DoD approval, which is a complicated process, but we are looking at the speed of how fast a prefab project could go up. Also, since prefab is supposed to save on labor, we’re also looking at cost. 

Ultimately, the quality of the homes is most important, as well as understanding the safety and comfort of our residents. We’re trying to assess if a prefab will perform better than what the residents are getting and if they'll meet Energy Star requirements. Will it be more efficient? What is the embodied carbon of the unit? Logistical questions like those. We are in talks with a prefab supplier who seems to be checking those boxes, so we hope to be doing a pilot project soon.

When you’re drawn into project meetings with the Lendlease business and finance partners, is there a line re: the introduction of cutting edge sustainable opportunities that you don’t cross ? Are you allowed room to advocate “crazy” building ideas?

I will say that Lendlease chooses its joint-venture partners very carefully. Lendlease is currently JV’d with two foreign pension funds; one is an Australian superannuation fund, which is what Australians call pension funds, and Ivanhoe Cambridge, which is a Canadian pension fund. They want to work with us in party because we do so much with sustainability. All of our portfolios with them have to operate net-neutrally from day one and, on top of that, we also have to be neutral on all tenant emissions and the construction emissions associated with construction operations; the fuel and electricity. They only want to work with us as a builder because we can deliver on that and we want to work with them as a partner because that's what they want. That's pretty critically important. 

A lot of these “crazy ideas” aren't necessarily coming from me. It was somebody on the DevOps team who came up with geothermal before I even got started at Lendlease. I certainly have had crazy building ideas but what I love about Lendlease is that when I do have a crazy idea like, I want to put a battery on the roof, it's not, “No, that's a crazy idea, you're going to add a bajillion dollars to the structural costs,” instead it’s, “Alright Sara, go figure it out.” I appreciate Lendlease for letting me study these ideas and implementing them when they make sense.

Given you are Lendlease’s sustainability leader for the Americas -not yet the global company-  how much knowledge sharing, with regards to how to get to net-zero goals, is taking place within Lendlease globally?

We collaborate globally constantly. The exciting thing that Lendlease has done globally is we have published our scope three protocol. That came out of the global sustainability leadership team, which I'm a part of. We're the first real estate company that has said, here's what is in our scope three emissions and we'll get to absolute zero, no offsets, by 2040. 

We are super excited that we're doing that and the idea is now to share that knowledge. We want to host workshops where we show people how we decided what's in and what's out through a series of exercises. This is what we have globally and what I'm going to be bringing to America. 

Recently, the California legislature adopted and sent to the governor’s desk an emissions bill that will require large companies to do scope three emissions research and disclose their findings. At Climate Week NY, the governor announced his intention to sign this bill. Do you have a position on whether such disclosure by these companies is merited?

We do. The vast majority of our emissions, for LendlLease, are in our scope three. So, legislation that’s only focusing on scopes one and two is the tiniest layer of snow on the tip of the iceberg. We want to see more companies making progress on scope three. If this legislation encourages an understanding of scope three emissions so that companies can begin grappling with setting targets and then making progress towards those targets, then it is critically important. The data is not easy, but it's important to get it done.

Before concluding our interview… address and update readers on development & the healthy living movement, and the technologies and practices that support industry evolution.

The industry is moving towards rigorously measuring the social value created by these kinds of interventions for the first time. We have been globally coalescing around carbon as the environmental metric and there has not been a similar coalescing around a social metric. Now, social is coalescing around a dollar equivalent number. It's not parts-per-million of this or WalkScore, etc; it really comes down to the social value created by an intervention. For example, Lendlease has the goal of creating 250 million Australian dollars of social value by 2025. We’re also seeing the Center for Active Design doing a pilot measuring social value from certified projects and looking at particular interventions in terms of the social value that they've created. We're participating in that pilot.

Companies often say, “I can't do anything on health because I have no idea what it’s about,” and I think those days are ending as people become more strategic. We can be strategic around carbon. Do you buy an offset? Do you invest in solar? Do you invest in low-carbon concrete? You can do the math and make that decision. We're going to start seeing that around health, which I'm excited about. We're seeing sensors improve. I know that's not a great big headline but we're seeing that get better. 

Office landlords have bent themselves over backward to try to get tenants back into the office when they can. That involves health-related amenities like more outdoor spaces on the roof as well as on the ground plane, fitness equipment, etc. A multifamily project we delivered in Chicago had beautiful, beautiful amenities. I want to live there! They have rooms that are just there to be full of plants, maker-spaces, a roof garden where the tenants can pick veggies, a music room, and virtual golf. These are all just things within the asset, things that I hadn't seen any of maybe five years ago.

Sara, you’re a graduate of Stanford University. When you were there, the Doerr School of Sustainability did not exist. With a donation of a billion dollars, it does now. What do you hope that the school will offer its students that wasn’t available to you 25 years ago?

I hope that Stanford provides interconnectivity between disciplines in a way that fosters growth. I'll give an example: Yesterday, a bunch of people in my Lendlease office grappled with how the real estate industry can accelerate the decarbonization of materials. One person said, maybe the model we should be looking at is aviation and how airlines invest in sustainable aviation fuel futures. Then we all looked at each other and said, does anybody know anyone in aviation? We can talk to them and see how they did this but somebody has to know someone. I think all industries, out of necessity, end up a little bit siloed, but I hope those silos break down a little bit because there are great ideas coming from other industries that are hard for us to source. 

Conferences like VerdeXchange are very important for giving us the ability and access to talk with folks outside of our industries and also giving students the knowledge about how many different directions environmental careers can go in.

I'm hoping for more breadth of possibilities within the private sector. The fact that there are so many opportunities, that we're doing this in every industry, is really exciting. I hope to expand minds, make connections, and accelerate change.

Lastly, I’m hoping you’ve marked on your calendar the next VerdeXchange conference, scheduled for May 12th-15th, 2024. What would you most like to share re: sustainability?

I would like to talk about putting our money where our mouth is. We’ve talked about all this stuff, but what does it take to move the markets? From my understanding, what it takes is being willing to make some financial commitments around future technology as it becomes available. 

What the Department of Energy Loan Program Office folks have said loud and clear was that in order to get loans, companies need to have the demand on the other side. They need the airline companies to commit to purchasing sustainable aviation fuel when it becomes available. The people who are making low-carbon concrete need to know that there's a company on the other side willing to buy it. People who are making shipping logistics need to know that someone is working on electric trucks on the other side. So, what makes that easier? 

How do we talk and in what way do we need to talk for companies to feel comfortable to take on the debt and equity financing that they need to scale up? It's a scary amount of money that's needed. It's a lot to tell a startup that they are going to need to pay back a billion dollars of loans. So, how do we do that? Overall, I think that’s what I'm excited about. I could happily talk about scope three inventories, low-carbon materials, and stationary storage on rooftops but I think what I want everybody to do is set those scope three targets and then get going on the market transformation it’s going to take to get there.