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July 15, 2010
The California Sustainability Alliance is pleased to share with you an exciting opportunity for cleantech startups, IBM’s SmartCamp Silicon Valley.
The event, to be held on September 8th and 9th, will bring together entrepreneurs, investors, and experienced mentors who want to build a Smarter Planet. Focused on helping society become more instrumented, interconnected and intelligent, SmartCamp will provide five selected startups with world-class mentorship and a direct route to seed and venture capital. The winner will receive a three month mentorship with IBM and an invitation to the international SmartCamp finals in Ireland on November 15th. Applications are due before August 8th, at http://ibm.com/ie/smarterplanet/smartcamp.
The Alliance will be participating in the event, and we can’t wait to hear all of your great ideas! In the meantime, tell us – what kind of technologies would you like to see to make our planet smarter? What cleantech startups are you most excited about?
March 8, 2010
One of the leading contenders in change.org’s Ideas for Change in America competition is the notion of an energy performance label for homes that works like the miles-per-gallon sticker that comes with a new car. Called the Energy Performance Score (EPS), the concept heralds from the Pacific Northwest and is more than just an idea, having been developed and piloted by Earth Advantage in 2008, and then adopted on a voluntary basis for new homes in Oregon and Seattle.
The scorecard is similar to the UK’s Energy Performance Certificate, which has been mandatory for all buildings on construction, sale or rental, since 2008. Both of these labels go beyond the EnergyStar and ASHRAE EQ energy labels, which measure energy performance, but not CO2 emissions.
The EPS scorecard is completed following a home energy audit by a certified EPS auditor, who reports the home’s current score in terms of energy use and carbon emissions. The scorecard indicates where the home falls in relation to the state average and also how the home would score if all of the recommended upgrades were completed.
Earth Advantage report that there has been a lot of interest in the label from across the country:
This comprehensive initiative has attracted national interest. The City of Chicago, City of Houston, Clinton Climate Initiative, U.S. Department of Energy, New York State Energy Research and Development Authority, and the World Business Council for Sustainable Development are all assessing the final recommendations from the pilot report issued in August 2009.
We look forward to seeing versions of the EPS appearing elsewhere in the not-too-distant future.
February 2, 2010
The Securities and Exchange Commission (SEC) has for the first time released guidelines for public companies that define the extent of the disclosures they should make relating to the issue of climate change.
This is good news for investors, who rely on comprehensive and accurate information to make their investment decisions. Institutional investors, such as pension funds, have been active in lobbying the SEC to tighten the rules about what a company needs to report when it comes to the risks and opportunities relating to climate change.
Groups active in the disclosure debate include the Environmental Defense Fund and CERES. In June 2009, the Investor Network on Climate Risk petitioned the SEC to issue guidance outlining climate-related ‘material risks’ – such as new regulations, physical impacts, new economic and business opportunities and other climate-related trends – that companies should be disclosing to investors.
According to the SEC’s news release, the interpretative guidance highlights four areas as examples of where climate change may trigger disclosure requirements:
- Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.
- Impact of International Accords: A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.
- Indirect Consequences of Regulation or Business Trends: Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.
- Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business.
As the New York Times reports, the new guidelines were welcomed by pension funds and other large institutional money managers:
“We’re glad the S.E.C. is stepping up to the plate to protect investors,” said Anne Stausboll, chief executive of the California Public Employees Retirement System, the nation’s largest public pension fund and one of the parties that petitioned for the guidance. “Ensuring that investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is absolutely essential. Investors have a fundamental right to know which companies are well positioned for the future and which are not.”
In the commercial real estate world, the SEC ruling may provide the impetus for public real estate companies to take seriously the measurement and reporting of energy efficiency and other measures of the sustainability of their real estate holdings. Pension funds are likely to lead the way in pushing for such disclosures from real estate companies with which they undertake joint ventures, as well as from the REITs whose shares they own.
Is it only a matter of time before the issuance of a “Sustainability Report” is as commonplace for real estate companies as the annual financial report is today?
January 6, 2010
 ASHRAE's Building Energy Quotient label Washington DC is leading the way in many aspects of sustainability, and may be the first place in the nation where building energy performance labeling becomes mandatory. Starting this year, the owners of approximately 260 of the largest commercial buildings in the District will be required to record their performance data in the EPA’s Portfolio Manager website.
According to the Washington Post, the initiative has supporters and opponents:
Cliff Majersik, executive director at the Institute for Market Transformation, an environmentally focused, Washington-based nonprofit group, said the law should fix a long-standing problem.
It’s tenants, not landlords, who typically pay the energy costs for a rented corporate space, he said. “The people in the best position to improve the energy efficiency of buildings don’t pay the energy bills, and the people who pay the energy bills are unaware that they could be saving money,” he said.
The Apartment and Office Building Association of Metropolitan Washington and the Cato Institute opposed the bill, noting that it calls for the District to fund a third-party contractor to conduct sustainable energy programs for the city.
“It’s something else that will make it more expensive to live in Washington or run a business in Washington,” said Pat Michaels, a senior fellow on environmental studies at the Cato Institute, a libertarian think tank. “If left to its own, the market would produce these efficiencies better.” Read more…
December 18, 2009
The City of San Francisco is paving the way for owners of residential and commercial buildings to conduct green upgrades to their properties through an innovative financing program. The San Francisco Sustainable Financing Program (SF2) will provide owners with affordable financing for green retrofit projects, with the repayment obligations tied to the property rather than the owner. The loan repayments and interest will be added to the building’s property tax bill, and paid back over the loan period.
Energy-saving upgrades, such as solar installations and replacement heating systems, are often unattractive to owners because they require sizable upfront expense, whereas it takes many years for the benefits from these improvements to accrue in the form of lower energy bills. In a traditional financing arrangement, the owner who arranges the financing is responsible for future repayments, even if they were to sell the property during the life of the financing. The property tax assessment model takes this problem away and allows owners to invest in the sustainability of their property and enjoy the many benefits that are gained from a cleaner, more efficient and healthier building.
The San Francisco program is based on the PACE (Property Assessed Clean Energy) framework that was pioneered in Berkeley and has since been adopted by municipalities across the nation. Unlike some other property tax repayment models, which are solely for solar installations, the San Francisco program will also be used for energy efficiency and water conservation initiatives. Under the program terms, participants are required to conduct an energy audit and install energy efficiency upgrades before any renewable energy improvements are allowed.
Also, in contrast to many similar government-funded programs, the San Francisco initiative will be financed using up to $150 million of private capital, plus any available state and federal grants.
December 15, 2009
As one of the leading global real estate services firms, CB Richard Ellis (CBRE) made an early commitment to the promotion of sustainability in real estate, both in its work with clients and in its own operations. Reflecting this, the firm released corporate responsibility reports in 2007 and 2008 and declared its goal to be carbon neutral in operations by 2010.
CBRE’s December newsletter, “6 Degrees of Sustainability”, provides a good insight to the kind of activities that CBRE is initiating across the green building spectrum. These include:
Real estate professional service firms like CBRE have a key role to play in the promotion of green building practices, and we expect to see that role – and their influence – increasing as sustainability becomes mainstream in the commercial real estate industry.
November 20, 2009
According to a Pike Research report released this week, the market for energy management systems (EMS) in commercial buildings will grow rapidly to become a $6.3 billion industry by 2020. The reason behind this growth is the expected widespread adoption of demand response in commercial buildings. EMS systems are based on hi-tech building management software, which enables demand response by allowing building systems to adjust power usage to reflect grid conditions.
Reports of new product launches of smart grid and energy management tools and software by clean energy companies, such as Comverge and Sequentric, are now daily events. Many of these companies gathered this week at the 2009 Cleantech Open in San Francisco, where Redwood City company EcoFactor won the Cleantech Open award for its energy management system that can talk to home thermostats to reduce energy usage.
November 11, 2009
While most news articles concerning real estate these days are stories of distress and bankruptcy, there continues to be positive sentiment when the discussion turns to sustainability. So it was last week, with the release of the latest “Emerging Trends in Real Estate” forecast from the Urban Land Institute and PricewaterhouseCoopers LLP.
This annual survey of executives captures sentiment towards the different sectors and locations across the country, and is considered a barometer of the state of the real estate industry. At the moment that sentiment is universally poor, with the market expected to hit bottom in 2010 “suffering a surge of painful writedowns, defaults, and workouts.”
But there is a light at the end of the tunnel, and it is clearly shining upon smart growth and green buildings:
Next-generation projects will orient to infill, urbanizing suburbs, and transit-oriented development. Smaller housing units—close to mass transit, work, and 24-hour amenities—gain favor over large houses on big lots at the suburban edge. People will continue to seek greater convenience and want to reduce energy expenses. Shorter commutes and smaller heating bills make up for higher infill real estate costs. “You’ll be stupid not to build green.” Operating efficiencies and competitive advantage will be more than worth “the minimal extra cost.”
Meanwhile, the greening of existing buildings is clearly on hold: “the recession makes it less of a priority and nobody has extra money to spend retrofitting.”
However, the widely held view is that sustainability will be required by tenants going forward, and the difference between green and non-green space will be noticed in terms of lease-up, rents and value:
Investors realize that “a green story” helps lease space faster even if “tenants won’t pay more for it.” They expect that “when they go and sell a property in five or ten years they can fetch a bigger price” than comparable space without green features. Climate change issues aside, office tenants gravitate to buildings with heating and cooling systems that provide healthier air flows and help create better work environments, especially when they cram more employees into tighter quarters. “Tenants will demand these systems once they experience the difference.” Costs can be prohibitive for retooling and greening mechanical systems in older space and over time brown buildings risk obsolescence. At the very least, “owners can find savings and gain good PR by instituting recycling programs and entering performance contracts with lighting suppliers to share in energy reduction costs.”
October 2, 2009
The California Public Utilities Commission (CPUC) last week approved a $3.1 billion budget for energy efficiency programs for the years 2010-2012, a 40% increase over the previous program cycle. The funds will be directed through the state’s publicly owned utilities and are expected to create energy savings of almost 7,000 gigawatt hours, avoid 3 million tons of greenhouse gas emissions and create between 15,000 and 18,000 skilled green jobs.
The $3.1 billion budget includes hundreds of millions that will be available for commercial real estate owners who want to improve their sustainability and who have the smarts to take advantage of the subsidies and incentives that are available.
Never before have there been so many programs, subsidies and incentives available to building owners. Here are five steps to tap into state funds to transform your CRE business from a green laggard to a green leader:
1. Find out your energy efficiency score
The state has ambitious goals to make all new buildings Zero Net Energy by 2030 and achieve major energy reductions in existing buildings… Read more…
September 23, 2009
A new study by the University of California Energy Institute (UCEI) reveals that among the organizations that are most likely to lease space in green buildings are those whose industry sector is not the greenest.
“Why Do Companies Rent Green? Real Property and Corporate Social Responsibility” presents the findings of a study of 1,180 green office buildings and their 3,179 largest tenants. The study found that the industries with the greatest preference for leasing green space were firms with environmentally-sensitive operations, such as the Crude Petroleum & Gas industry, where more than 60% of space leased is in green buildings. The reason is that these types of organizations are accustomed to incorporating sustainability in strategic decisions, including real estate leasing decisions, because they put a higher value on the benefits of sustainability, possibly in terms of direct energy efficiency cost savings, but more likely the reputational benefits of being seen to take a sustainable course of action. Read more…
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