Don Anderson lauds the LEED and Energy Star programs as key drivers of the green building movement. But Anderson, chief sustainability officer and operating partner at the Blackstone Group, would like to see LEED and Energy Star capitalize on the mounds of data generated about building efficiency.
LEED and Energy Star have helped form “an amazing foundation” for tracking, benchmarking and certifying the efficiency of buildings, Anderson said during a Dec. 9 webinar sponsored by the U.S. Green Building Council. He doesn’t believe those two programs should be “scrapped and replaced.” The council’s LEED program rates green buildings around the world, while the federal government’s Energy Star program certifies U.S. buildings that meet energy efficiency standards.
However, Anderson said he would welcome an evolution of LEED and Energy Star—perhaps even a new certification system to supplement them—that would enable building operators across the country to collect, share and analyze granular data about building performance. The bedrock source of that granular data would be properties’ utility bills, he said.
“Can we get better data in the right place so that we can make better decisions faster?” Anderson wondered.
This effort would help identify building “leaders and laggards” based on various performance measures and would lead to construction and operation of even greener buildings. Commercial real estate represented 12 percent of the country’s energy consumption in 2019, according to the U.S. Energy Information Administration.
“It doesn’t have to be prescriptive, but it does have to be educational and motivational,” Anderson said of the proposed effort. “At the same time, because of the size of the existing building stock, we have to evolve and continue to build awareness around benchmarking comparative performance in a way that’s easy for the vast majority of buildings.”
Anderson’s proclamation could help move the needle in this regard, since New York City-based Blackstone controls a global real estate portfolio valued at $341 billion. That makes it the world’s biggest landlord. Blackstone subsidiary EQ Office, based in Chicago, manages tens of millions of sq. ft. of LEED- and Energy Star-certified office buildings across the country.
Building efficiency has come into sharper focus during the coronavirus pandemic, with offices, hotels, restaurants and other places of business in the U.S. shutting down to reduce the spread of the virus, according to Anderson. For instance, building operators are now more closely tracking data about the flow of fresh air in their spaces, he noted. He doesn’t see that trend reversing once the pandemic ends.
“When you build that type of awareness and when an operator gets addicted to data, they usually don’t go back to the way they were before,” Anderson said.
Another factor in boosting the efficiency of buildings: investor demand. Anderson said Blackstone’s investors have increasingly insisted that the investment giant reduce its carbon footprint.
In response, Blackstone promised in September to reduce carbon emissions by 15 percent on new investments in its portfolio, including real estate assets. The initiative will kick off in 2021 for investments where Blackstone controls use of energy.
“Once our investors start asking for this, they won’t stop,” Anderson said. “And we’re in the business of making sure that they’re happy, so this is one of the reasons why we made this commitment, and it’s a big commitment.”
According to Anderson, decreasing the carbon footprint is good for Blackstone’s real estate holdings, because it boosts asset values, occupants’ safety and tenants’ comfort. But in the U.S., that means adhering to national guidelines along with a patchwork of regional and local regulations. He is undaunted by the regulatory challenges, though.
“Now, with these local and regional regulations, it’s literally mandatory that we use what we know to make change happen,” he said. “For me, it’s been fun to watch the shift from the very first voluntary [efficiency] programs, which really started in the late ’80s, to now having over a dozen regulatory hurdles that we have to understand and take seriously.”
The 2021 outlook from commercial real estate services provider Avison Young suggests building owners and occupants take carbon emissions and climate change seriously.
“The COVID-19 pandemic may have knocked climate change out of the headlines in 2020, but it has highlighted the need for companies to focus more explicitly on risk management,” Avison Young researchers note.
