Sustainable Portolio Strategy

Developing a Green Building Strategy for Your Organization

Bob Lambe, Managing PartnerPRES Location StrategiesA Division of PRES Services

ABSTRACT: Everyone wants to have "green buildings" that are good for the environment, community, occupants, and owner. But most organizations have a wide range of existing building vintages, limited funding, and the effort to green-up their facilities can be daunting.

This presentation will outline how developing a “Portfolio Strategy” for your organization can help you to coordinate various sustainability efforts and focus on the areas of most value to your organization. Integrating sustainability with your normal capital planning and facilities management activities is the best way to ensure steady and progressive accomplishment of your sustainability objectives.

Sustainability Challenges

• Lots of Hype / Information Overloado Confusion and misaligned expectations based on various

standards (Energy Star, LEED, Green Globes, Executive orders 13423 and 13514)

o Some “Green marketing” is questionable.o Lots of changing terminology as vendors try to position their

products/services for advantage.• Technology is Changing

o Rapid rate of development makes it hard to keep up.o Short history for some technology makes it hard to validate claims. o Proficient skill sets not always available.

• Meanwhile Life Goes On…o Property managers need to continue day to day activities.o Organizations sometimes have conflicting priorities

(environmental, health, security, or other hot issue of the moment).o Lack of incremental funding.

Interest is high in “green buildings” and sustainability, but many organizations face challenges in making progress….

© PRES Services, LLC 2010 -

Use An Integrated Portfolio StrategyIntegrating green building and sustainability items as part of your overall “normal” property management activities is much easier if you have a portfolio strategy.

1. Develop the strategic direction required by your company –focus on the desired “end state” for the property portfolio with sustainability as clear part of the plan.

2. Outline the logical steps necessary to get from the current situation to the desired end state and address organization and cultural issues required to advance sustainability.

3. Be sure your day-to-day operations maintain the benefits obtained from your sustainability initiatives and green building projects.

4. Implement a spectrum of projects that advance the overall sustainability of the building portfolio one step at a time.


Develop Portfolio StrategyYour Portfolio Strategy will define what buildings are expected to be needed by your organization, where they should be located, and how green you want them.

• An integrated, sustainable, portfolio strategy starts with a location strategy to address where your facilities should be located, then identifies their functionality & size as well as the sustainable principles used to build and operate them.

• Three parts needed for Sustainable Portfolio strategy:o Develop strategic facilities portfolio plan with initial emphasis on

finding the optimal location; then on functionality and size.o Determine your overarching sustainability goal(s).o Assign a set of sustainability objectives for each property.

Portfolio Strategy - Rational, systematic approach to establishing the right facilities in the right locations at the right time and operating them appropriately.


Develop a Strategic Portfolio Plan• The strategic portfolio plan identifies

the facilities needed to support the organization’s business plan.

• Location is often an overlooked aspect of the strategic plan but is important for both cost and sustainability reasons.

o Balance of travel cost and facility cost is important, especially for field operations.

o Reduction of unnecessary travel is essential to reduce CO2 footprint of organization.

o Preliminary opportunity assessments determine if relocations have advantages.

• Goal is to sort properties into groups:o New sites requiredo Sites to keep for existing functiono Sites to keep for new functiono Sites “on bubble” (not sure)o Sites to close

• Allows investment focus on properties with most long-term strategic value.


Understand the Sustainability “Journey”• The best sustainability programs

recognize the need for phasing.• The higher the standards,

the higher the initial cost.• Sustainability is

multi-dimensional:o Energyo Watero Solid wasteo Air

• Obtain executive support for prioritized approach:

o By type of building.o By degree of benefit.o By other criteria as appropriate:

• New build• Renovation• Refit• Transition


Strategy Guides Sustainability Objectives• After confirming a portfolio strategy (location, size, functionality) ,

sustainability objectives can be assigned to each property:

• These objectives can be refined on a site-by-site basis with assessment/review of each building that evaluates specific conditions with respect to the long term strategic plan for thatproperty:

o Space type and functional utilization.o Condition of building and equipment.o Ability to apply sustainable principles and practices.

Location Strategy: Example Sustainable Objective:

Develop new Comply with desired standard for all new buildings.

Keep with major changes (expand, renovate…)

Bring towards desired standard with renovations and targeted projects.

Keep “as-is” and/orminor changes (refit)

Bring towards desired standard with targeted projects.

On “bubble” (unclear whether to keep or close)

Only make financially justified investments until keep/close determined.

Close or relocate Only make financially justified investments.


Create Tactical PlanThe tactical plan will identify specific actions that advance the identified portfolio strategy – can translate directly into budget items or staff assignments.

• Follow-up investigations on specific properties/issues:o Building assessments, renovation/consolidation planningo Waste stream audits, water/energy sub-metering

• Capital Improvement Plano Funding is always a concern (next slide)

• Establish a sustainable cultureo Adopt green O&M practiceso Education & promotional programs (staff, occupants, public)o Keep up to date on green industry developments

• Performance and measuremento Tracking progress & benchmarking


Strategy Helps Reduce Funding Needs• Few organizations have reserves for sustainability; a

“self-funded” program is often the practical necessity.o Start savings with very first actions then build on success.o Generate support from financial community to allocate accrued

savings to offset program costs in a special “reserve fund”.

• Build the fund with savings produced from a full range of property initiatives:

o Value extracted from surplus building assets and space reductions.

o Cost savings in FM operations (vs. established baseline).o Reductions in “emergency” spending.o Reinvested annual property depreciation.o Reductions in energy, water, and waste costs.o Energy procurement program that reduces risk of future

commodity increases.o Core business productivity gains.o Supplement as possible with rebates, tax credits and other

incentives.


O&M Savings/Sustainability MeasuresThe O&M measures will include all those “non-capital investment” activities that generate savings and provide or maintain sustainability benefits.

• Modify facility O&M processes to assure continuous performance of green buildings.o Operating facilities appropriately includes not just service level,

asset management, and cost efficiency, but also sustainability.o Make staff and contractors aware of sustainability objectives.o Include occupant education programs.

• Roll out green cleaning.• Implement conservation/recycling programs.• Launch no-cost/low-cost energy savings measures.

o Lighting, commissioning, controls.o Work up to continuous commissioning mindset.


Strategy Allows Systematic Savings• Reduce building-related travel

o Organizations with substantial field operations have significant travel costs that are often reduced with territory optimization.

o Organizations with multiple properties can effectively group building contracts to reduce maintenance travel.

• Prioritize site assessmentso Benchmark costs and usage to identify

buildings with highest opportunity.o Low cost building audits can identify

specific measures that reduce cost or improve sustainability.

o Systematically focus on sites that offer best return on effort.


Execute ProjectsIncorporate sustainability principles into all of your “normal” building projects to leverage investments already being made.

• The incremental cost to incorporate green building measures during building construction or renovation is far less than when done separately.o Set standards for new construction/leases.o Include relevant work in renovation projects.o Be proactive about capital repairs (next slide).

• Include targeted investments for sustainability projects in your capital plan:o Any project that is financially justified.o Projects with a significant impact on energy/water use.o Projects that set an example or test new technology.o On-site renewable energy and other progressive options.


Strategy Facilitates Proactive Projects• Some organizations spend a significant

funds on “emergency” repairs when equipment fails.

o Equipment failure typically occurs when the equipment is needed most, creating an emergency situation.

o Failures often disrupt business operations (cost and risk to core business).

o Need to get system restored quickly reduces time to evaluate options and adds cost.

• Plan ahead for failures/ replacements based upon equipment age/condition.

o Building and equipment lifecycles allow some predictability.

o Condition assessments improve predictability and identify specific issues.

o Proactive replacement planning should consider the planning horizon for each building and identify the appropriate technology/design that meets anticipated use of the building and sustainability objectives.


A Sustainable Strategy

Use “opportunity assessments” to identify quick starts

Gain executive support for “self-funding” approach

Commissioning review of targeted buildings

Execute no-cost & low -cost projects

Develop on-site energy strategy

Integrated capital improvement plan

Perform ongoing benchmarking

Implement targeted projects

Develop long range property strategy

Perform building assessments

Start green cleaning Apply standards on all new buildings and major renovations.

Example Getting Started Activities

Example Activities to Continue the Program

Example of More Advanced Activities

Apply the 4-step approach in cycles of increasing detail/sophistication to keep building on success.


• Strategic Portfolio Planning

• Location Analysis• Opportunity

Assessments

• Tactical Property Planning

• Energy Procurement

• Building Assessments

• Building Commissioning

• Facility Benchmarking

• Territory optimization

• Energy Management

• Proactive HVAC Replacement Plans

• Turnkey Energy Projects

Bob Lambe, Managing PartnerPRES Location [email protected] Cell

PRES Energywww.PRES-Services.com

PRES Location Strategieswww.PRES-Location.com

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Sustainable Portolio Strategy

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