Sustainable Retail Development: New Success Strategies

Sustainable Retail Development

Jerry Yudelson

Sustainable RetailDevelopment

New Success Strategies

123

ISBN 978-90-481-2781-8 e-ISBN 978-90-481-2782-5DOI 10.1007/978-90-481-2782-5Springer Dordrecht Heidelberg London New York

Library of Congress Control Number: 2009929302

Copyright © 2009 by the International Council of Shopping CentersNo part of this work may be reproduced, stored in a retrieval system, or transmitted in any form or byany means, electronic, mechanical, photocopying, microfilming, recording or otherwise, without writtenpermission from the Publisher, with the exception of any material supplied specifically for the purposeof being entered and executed on a computer system, for exclusive use by the purchaser of the work.

Printed on acid-free paper

Springer is part of Springer Science+Business Media (www.springer.com)

Foreword

For good reason, sustainability is a word on everyone’s lips these days. Sustain-ability means meeting the needs of the present without compromising the abilityof future generations to meet their own needs.1 As such, it is an issue that will notgo away, and it has consequences for every area of human endeavor, including thedesign, construction and operation of shopping centers and retail stores. We nowknow that human activities of all kinds have had a negative impact on this fragileyet remarkable planet that we call home—an impact that could challenge or evenimperil the well-being of future generations. Sustainability is therefore not an issuethat any of us involved in the shopping center and retail industries can afford toignore, even during difficult business conditions.

The International Council of Shopping Centers (ICSC) has responded to thischallenge through a variety of green initiatives and by adding green components tomany of our regular meetings and conferences. Our objective is to build awarenessof the importance of sustainability among our 70,000 members and to help them tocreate and implement their own sustainability programs. Some highlights of ICSC’sgreen efforts include the Sustainable Energy and Environmental Design (SEED)initiative to survey and support green construction practices; ICSC RetailGreen, aconference and trade exposition focusing solely on sustainability; various Centre-Build conferences on the challenge of sustainability; the Green Zone and GreenPavilion, showcasing product and service providers committed to the environment,at RECon, ICSC’s global retail real estate convention in Las Vegas; and publicationof The RetailGreen Agenda. Additionally, the ICSC Environmental Sub-Committee,the European Sustainability Working Group and other committees perform sterlingservice in identifying how green policies and practices impact the shopping centerindustry.

Another very important step in helping our members on their journey to a moresustainable future was the September 2007 appointment of Jerry Yudelson, a highlyregarded expert in the field of green buildings and marketing, as Research Scholar

1Definition coined by the United Nations Brundtland Commission. See Report of the World Com-mission on Environment and Development (The Brundtland Commission), Our Common Future(London: Oxford University Press, 1987). Definition is also available at http://habitat.igc.org/open-gates/ocf-02.htm#I, retrieved February 11, 2009.

v

vi Foreword

for Retail Real Estate Sustainability. As part of this research scholarship, Jerry haswritten Sustainable Retail Development, a comprehensive and practical guide for allthose involved in conceptualizing and executing an agenda for developing and oper-ating sustainable shopping centers and retail stores. Jerry has provided a wealth ofdetail about the sustainability programs and current best practices of those shoppingcenter developers and retailers worldwide that are today’s leaders in green retailbuildings. Even more importantly, Sustainable Retail Development also provides aten-point program that any company in these industries—big or small—can follow.This is a book for all professionals involved in retail real estate design, constructionand operations, as well as investors in the industry.

As you will see as you turn the pages, Jerry has thrown down the gauntlet and ischallenging the retail real estate and retail industries to do more to tread lightly onthis fair Earth by increasing their commitment to developing and operating greenshopping centers and retail stores. I encourage you to take up this challenge. Ibelieve that Jerry’s book provides you with an invaluable reference that will helpyou to succeed in designing, constructing and operating high-performance, sustain-able shopping centers and stores.

Michael P. KerchevalPresident and ChiefExecutive Officer

International Council of Shopping Centers

Preface

Throughout the early part of this decade, as interest in green buildings began togrow dramatically in the United States, Canada, Australia, the United Kingdom andother countries, especially in public buildings and commercial offices, on universitycampuses and the nonprofit sector, I wondered when the retail sector would catch onto the trend toward sustainable design and development. After all, the retail sector isclosest to the consumer, and the consumer in these countries has been environmen-tally conscious for a long time.

The International Council of Shopping Centers (ICSC) gave me a two-yearappointment in 2007 as its Research Scholar for Real Estate Sustainability. In addi-tion to preparing research reports and speaking at ICSC events, I benefited fromintroductions to many of the leaders in this very large and important industry. Afterall, in 2007 retail development was the second-largest commercial building sectorin the U.S., behind only office construction.

In the U.S., the leading green building and green development rating system isLEED, the Leadership in Energy and Environmental Design program introduced in2000 by the U.S. Green Building Council. In the U.K., the BREEAM system (Build-ing Research Establishment Environmental Assessment Method) has been certify-ing buildings since the mid-1990s. By the end of 2008, the number of non-residentialbuildings certified by both systems totaled more than 3,000, yet the number of retailbuildings certified was less than 100 and most of those had come from the “vol-ume certification” of a handful of retailers, including one bank and one grocerychain. There were also a few shopping centers certified by the end of 2008, mostlydeveloper-controlled smaller buildings (“in-line shops”) housing multiple retailers.

Why has the retail sector been relatively slow to adopt sustainability measuresand to embrace the worldwide movement toward green buildings and sustainabledevelopment? There are several reasons. First, there is the split in incentives betweendevelopers and retailers. In many enclosed shopping centers with a central powersupply, the developer pays most of the up-front capital costs, while operating costsavings accrue primarily to the tenants. To date, developers have not been able torecover these investments through higher rents. The same situation prevails in open-air or “lifestyle” centers, where the individual large retailer is responsible for mostof the design and construction activity.

vii

viii Preface

There is a third actor in this drama, the consumer. While people have been will-ing to pay more for “green” products and there are a number of retailers withsuch offerings, there is little empirical evidence that “green” shopping centers or“green” retailers will attract greater numbers of shoppers. Without some evidencefor increased consumer demand, there is little direct incentive for developers andretailers to invest extra money in green measures.

Yet, sustainable retail development is happening all over the world. What’s goingon? That is precisely what this book seeks to answer. What are the business reasonsfor retailers and developers going green? What are the difficulties? Which com-panies are showing the way? What are they learning as they pursue sustainabilityinitiatives?

What’s the upshot? What can you learn from some of the early experiments withgreen design and corporate sustainability? One takeaway lesson is that the retail sec-tor has been late responding to developments in green building design and sustain-able development. There is a worldwide tidal wave of concern about global warmingand other ecological issues that retailers ignore at the peril of their long-term busi-ness interests.

In the near future, it is likely that governments worldwide will be pushing every-one in commercial building development and operations to lower the environmentalimpact of their projects, beginning with reductions in direct and indirect carbondioxide generation. In this sense, the future will be dramatically different from thepresent—especially with respect to carbon emissions. Starting with zero-net carbonemissions as the goal will radically change retail building design and construction,as well as product and technology selection, and that is one key lesson to learn fromthis book.

Throughout this book, you’ll see interviews with various leaders in retail sus-tainability and profiles of successful projects. This group of people and projectswas chosen to be representative, not exhaustive, and to cover a wide range of greendevelopment and sustainability initiatives. I have tried to avoid being too “U.S.—centric” in my approach and examples, recognizing that my experience has beenmostly in the U.S. and Canada. I can only ask for the reader’s tender mercy in thisregard. Instead, I hope you will focus instead on the broader message of this book—sustainability matters—and that you will be encouraged to duplicate and extend themany good examples profiled in this book.

My goal is to get you started down the path toward sustainable retail develop-ment, by helping you learn from those leading the way and by introducing a ten-point framework that any company can adopt to dramatically reorient its businesstoward long-term sustainability. At the global level, we’re all in this together. Whynot get good at it? I truly hope that this book will help you in that endeavor.

Tucson, Arizona Jerry YudelsonJune 2009

Acknowledgments

I want to acknowledge all of the architects, engineers, planners and developers whomet with me and who provided information for this book. I’m especially thankfulto Michael Kercheval, President and CEO of ICSC, for writing the Foreword and toMichael Niemira, Director of Research for ICSC, for sponsoring this work. Thanksalso to Angela Jameson of ICSC for her multifaceted assistance with this book.Thanks are due to Ermine Amies, Managing Director of the ICSC Europe officein the U.K. and operations in India, for assisting with the research effort and forinviting me to speak to the inaugural CentreBuild Europe conference in London in2008.

Thanks to Arco Rehorst of the Netherlands’ Multi Development for arranging aguided tour of Multi’s BREEAM-certified shopping center in Duisburg, Germany(with the company’s CEO for Germany, Alex Funke), to Alexander Otto of ECE forsponsoring my presentation to the ULI Germany in 2008 and to the many develop-ers and retailers in the U.K., Germany, the Netherlands, Portugal and Austria whoshared an hour or more of their precious time, along with expertise and insights,in providing interviews and responding to email surveys. Those design and devel-opment professionals in the U.S., Australia, Canada, Japan, Europe and the MiddleEast who agreed to be interviewed for this book also deserve special thanks.

A special thanks to Thomas Saunders of the U.K.’s BRE Trust for keeping meup to date on the progress of the BREEAM program. I owe a special recogni-tion to Jaimie Galayda, research director at Yudelson Associates, who prepared theAppendix comparing various international green building rating systems and alsoprovided research and writing for some of the case studies. Thanks to Cyrus Khosh-Chasm for additional case study research. I would also like to thank the reviewersof the manuscript: Filipa Fernandes, Thomas Saunders and Amber d’Este-Hoare ofBRE, Joyce Kelly, Erik Ring, Lauren Yarmuth, and Justin Doak. Thanks also toICSC for permission to use material that previously appeared in Research Review.

Many thanks also to Gretel Hakanson, my editorial associate and chief inter-viewer. This is our seventh green building book together in the past three years,and her contribution grows with each project. Thanks also to my wife, Jessica, forputting up with all my globetrotting to put this book together.

ix

x Acknowledgments

Thanks to Heidi Ziegler-Voll of Creative Tornado for providing illustrations forthis book and to Professor Ulf Meyer for providing a critical review of the draftmanuscript.

I owe a final thanks to the many people who participated in interviews, providedexpert guidance, helped with arranging project visits and provided photos and ren-derings for this book, as well as those who served as reviewers and critics. Thoughthis work is sponsored by the ICSC, the opinions in this book are mine alone, butwithout the help of many thoughtful and sharing colleagues, I wouldn’t have knownwhere to start and, more importantly, how to finish this book.

Contents

List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii

List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxi

Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii

1 Sustainability Matters . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Multi Development . . . . . . . . . . . . . . . . . . . . . . . . 4

1.1.1 Multi’s Sustainability Principles . . . . . . . . . . . . 41.1.2 Turning Principles into Development Activity . . . . . 51.1.3 Getting the Company on Board . . . . . . . . . . . . . 61.1.4 Getting the Customers on Board . . . . . . . . . . . . 7

1.2 Sonae Sierra . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.2.1 Sustainability . . . . . . . . . . . . . . . . . . . . . . 81.2.2 Implementation Issues . . . . . . . . . . . . . . . . . 11

1.3 Marks and Spencer . . . . . . . . . . . . . . . . . . . . . . . . 121.3.1 Beyond Environmentalism . . . . . . . . . . . . . . . 131.3.2 2008 Plan A Update . . . . . . . . . . . . . . . . . . . 13

1.4 Regency Centers . . . . . . . . . . . . . . . . . . . . . . . . . 141.4.1 Branding . . . . . . . . . . . . . . . . . . . . . . . . . 151.4.2 Training . . . . . . . . . . . . . . . . . . . . . . . . . 151.4.3 Capital Allocation . . . . . . . . . . . . . . . . . . . . 161.4.4 Developing a Sustainability Program . . . . . . . . . . 161.4.5 Taking a Larger Perspective . . . . . . . . . . . . . . . 171.4.6 Progress . . . . . . . . . . . . . . . . . . . . . . . . . 17

1.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

2 Green Buildings Around the World . . . . . . . . . . . . . . . . . . 212.1 Why Retail Should Go Green . . . . . . . . . . . . . . . . . . 222.2 North American Case Studies . . . . . . . . . . . . . . . . . . 23

2.2.1 Developer Case Studies . . . . . . . . . . . . . . . . . 232.2.2 Retailer Case Studies . . . . . . . . . . . . . . . . . . 27

2.3 United Kingdom (U.K.) . . . . . . . . . . . . . . . . . . . . . 292.3.1 Cabot Circus . . . . . . . . . . . . . . . . . . . . . . . 29

xi

xii Contents

2.4 Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322.5 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332.6 Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342.7 Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352.8 Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362.9 China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

2.9.1 LeSong Mall . . . . . . . . . . . . . . . . . . . . . . . 372.9.2 Central Walk . . . . . . . . . . . . . . . . . . . . . . 38


3 What Is a Green Building? . . . . . . . . . . . . . . . . . . . . . . . 413.1 Green Buildings Since 2000 . . . . . . . . . . . . . . . . . . . 413.2 High-Performance Building Characteristics . . . . . . . . . . . 433.3 Green Building Practices . . . . . . . . . . . . . . . . . . . . . 453.4 The LEED Rating Systems . . . . . . . . . . . . . . . . . . . . 46

3.4.1 LEED for New Construction . . . . . . . . . . . . . . 493.4.2 LEED for Core and Shell Buildings . . . . . . . . . . 503.4.3 LEED for Commercial Interiors . . . . . . . . . . . . 513.4.4 LEED for Existing Buildings: Operations and

Maintenance . . . . . . . . . . . . . . . . . . . . . . . 513.4.5 LEED for Neighborhood Development . . . . . . . . . 52

3.5 Typical Green Building Measures . . . . . . . . . . . . . . . . 533.6 To LEED or to Lead? . . . . . . . . . . . . . . . . . . . . . . . 55

3.6.1 Building Commissioning . . . . . . . . . . . . . . . . 553.6.2 Low-Toxicity Finishes . . . . . . . . . . . . . . . . . 56

3.7 LEED for Retail . . . . . . . . . . . . . . . . . . . . . . . . . 573.8 The Future of High-Performance Buildings in the U.S. . . . . . 583.9 Non-U.S. Green Building Rating Systems . . . . . . . . . . . . 59

3.9.1 BREEAM . . . . . . . . . . . . . . . . . . . . . . . . 603.10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

4 The Business Case for Green Retail . . . . . . . . . . . . . . . . . . 674.1 Who Benefits and Who Pays? . . . . . . . . . . . . . . . . . . 674.2 The Developer’s Perspective . . . . . . . . . . . . . . . . . . . 68

4.2.1 The Entitlement Process . . . . . . . . . . . . . . . . 704.2.2 Cost Offsets . . . . . . . . . . . . . . . . . . . . . . . 704.2.3 Tax and Other Incentives in the U.S. . . . . . . . . . . 714.2.4 Renewable Energy Incentives in the U.S. . . . . . . . . 71

4.3 Branding and Marketing . . . . . . . . . . . . . . . . . . . . . 714.4 Case Study—First Capital Realty, Toronto, Canada . . . . . . . 72

4.4.1 Business Case Factors . . . . . . . . . . . . . . . . . . 724.4.2 Financial and Nonfinancial Incentives . . . . . . . . . 724.4.3 Challenges . . . . . . . . . . . . . . . . . . . . . . . . 73

Contents xiii

4.5 The Retailer’s Perspective . . . . . . . . . . . . . . . . . . . . 734.5.1 Reputation Capital . . . . . . . . . . . . . . . . . . . 744.5.2 CFOs Going Green . . . . . . . . . . . . . . . . . . . 74

4.6 Six Key Areas of Focus for Green Retailing . . . . . . . . . . . 754.7 Consumer Demand . . . . . . . . . . . . . . . . . . . . . . . . 754.8 Challenges for Greening the Retail Sector . . . . . . . . . . . . 76

4.8.1 Tenant Guidelines . . . . . . . . . . . . . . . . . . . . 76References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

5 Costs of Greening Buildings and Developments . . . . . . . . . . . 795.1 Barriers to Green Building Growth . . . . . . . . . . . . . . . . 805.2 Hard and Soft Cost Elements . . . . . . . . . . . . . . . . . . . 815.3 Cost Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

5.3.1 Design Team Capabilities . . . . . . . . . . . . . . . . 835.3.2 Design Process and Scope . . . . . . . . . . . . . . . 83

5.4 The Cost of Learning to Be Green . . . . . . . . . . . . . . . . 845.5 Cost of a Developer’s Sustainability Initiative . . . . . . . . . . 855.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

6 Solar Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 876.1 The Solar Power Movement . . . . . . . . . . . . . . . . . . . 876.2 Solar Technology . . . . . . . . . . . . . . . . . . . . . . . . . 906.3 The Current Market . . . . . . . . . . . . . . . . . . . . . . . . 906.4 Economics of PV Solar Power . . . . . . . . . . . . . . . . . . 926.5 Financial Benefits of PV Solar Power . . . . . . . . . . . . . . 936.6 Noneconomic Benefits of Solar Power . . . . . . . . . . . . . . 956.7 The Solar Services Model . . . . . . . . . . . . . . . . . . . . 956.8 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

7 Greening Shopping Centers . . . . . . . . . . . . . . . . . . . . . . 997.1 European Green Building Programs . . . . . . . . . . . . . . . 99

7.1.1 SES SPAR European Shopping Centers, Austria . . . . 997.1.2 Forum Duisburg, Germany . . . . . . . . . . . . . . . 1017.1.3 ECE, Germany . . . . . . . . . . . . . . . . . . . . . 1027.1.4 PRUPIM, U.K. . . . . . . . . . . . . . . . . . . . . . 1037.1.5 Redevco, U.K. . . . . . . . . . . . . . . . . . . . . . . 105

7.2 North America . . . . . . . . . . . . . . . . . . . . . . . . . . 1067.2.1 Uptown Monterey Shopping Center, Monterey,

California . . . . . . . . . . . . . . . . . . . . . . . . 1077.2.2 Green Circle Shopping Center, Springfield,

Missouri . . . . . . . . . . . . . . . . . . . . . . . . . 1077.2.3 Station Park Green, San Mateo, California . . . . . . . 1077.2.4 Northgate Mall Redevelopment, San Rafael,

California . . . . . . . . . . . . . . . . . . . . . . . . 108

xiv Contents

7.2.5 Tanger Outlet Center at the Arches, Deer Park,New York . . . . . . . . . . . . . . . . . . . . . . . . 110


8 Greening Retail Buildings . . . . . . . . . . . . . . . . . . . . . . . 1138.1 Wal-Mart Case Study . . . . . . . . . . . . . . . . . . . . . . . 1138.2 LEED Certification for New and Renovated Retail Buildings . . 116

8.2.1 Sustainable Site Features . . . . . . . . . . . . . . . . 1168.2.2 Water Efficiency . . . . . . . . . . . . . . . . . . . . . 1178.2.3 Energy Efficiency . . . . . . . . . . . . . . . . . . . . 1178.2.4 Materials and Resource Conservation . . . . . . . . . . 1198.2.5 Indoor Environmental Quality . . . . . . . . . . . . . 1198.2.6 Daylighting and Retail Sales . . . . . . . . . . . . . . 1208.2.7 LEED Project Results . . . . . . . . . . . . . . . . . . 121

8.3 Case Study—Target, McKinley Park, Chicago . . . . . . . . . . 1228.4 Case Study—Kohl’s . . . . . . . . . . . . . . . . . . . . . . . 1228.5 Case Study—SUBWAY . . . . . . . . . . . . . . . . . . . . . 1238.6 Case Study—ASDA . . . . . . . . . . . . . . . . . . . . . . . 1248.7 Case Study—The John Lewis Partnership . . . . . . . . . . . . 1248.8 Case Study—Tesco . . . . . . . . . . . . . . . . . . . . . . . . 125

8.8.1 Sustainability Initiatives . . . . . . . . . . . . . . . . . 1268.8.2 Cutting Carbon Dioxide Emissions . . . . . . . . . . . 126


9 Greening Retail Interiors . . . . . . . . . . . . . . . . . . . . . . . 1299.1 LEED for Commercial Interiors . . . . . . . . . . . . . . . . . 129

9.1.1 Sustainable Site Features . . . . . . . . . . . . . . . . 1299.1.2 Water Efficiency . . . . . . . . . . . . . . . . . . . . . 1309.1.3 Energy Efficiency . . . . . . . . . . . . . . . . . . . . 1309.1.4 Materials and Resource Conservation . . . . . . . . . . 1319.1.5 Indoor Environmental Quality . . . . . . . . . . . . . 132

9.2 Wachovia Bank . . . . . . . . . . . . . . . . . . . . . . . . . . 1339.3 Grocery Store Remodel . . . . . . . . . . . . . . . . . . . . . . 1349.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

10 Operating Green Retail Spaces . . . . . . . . . . . . . . . . . . . . 13710.1 Sustainable Site Management . . . . . . . . . . . . . . . . . . 137

10.1.1 Exterior and Site Maintenance . . . . . . . . . . . . . 13810.1.2 Reducing Single-Occupant Auto Use . . . . . . . . . . 13810.1.3 Open Space . . . . . . . . . . . . . . . . . . . . . . . 14010.1.4 Stormwater Management . . . . . . . . . . . . . . . . 14010.1.5 Urban Heat Island Effect . . . . . . . . . . . . . . . . 14010.1.6 Light Pollution Reduction . . . . . . . . . . . . . . . . 141

Contents xv

10.2 Water Conservation . . . . . . . . . . . . . . . . . . . . . . . . 14210.2.1 Indoor Water Conservation . . . . . . . . . . . . . . . 14210.2.2 Water Metering . . . . . . . . . . . . . . . . . . . . . 14210.2.3 Water-Efficient Landscaping . . . . . . . . . . . . . . 14210.2.4 Cooling Tower Water Conservation . . . . . . . . . . . 143

10.3 Energy Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . 14310.3.1 Reducing Energy Consumption . . . . . . . . . . . . . 14410.3.2 Building Commissioning . . . . . . . . . . . . . . . . 14510.3.3 Renewable Energy Systems . . . . . . . . . . . . . . . 14510.3.4 Emission Reduction Reporting . . . . . . . . . . . . . 145

10.4 Materials and Resources Conservation . . . . . . . . . . . . . . 14610.4.1 Sustainable Purchasing . . . . . . . . . . . . . . . . . 14610.4.2 Purchasing Consumables . . . . . . . . . . . . . . . . 14610.4.3 Purchasing Durable Goods and Facility Alterations . . 14710.4.4 Low-Mercury Lamps . . . . . . . . . . . . . . . . . . 14710.4.5 Responsible Waste Disposal . . . . . . . . . . . . . . 14710.4.6 The Waste Stream Audit . . . . . . . . . . . . . . . . 14810.4.7 Ongoing Consumables . . . . . . . . . . . . . . . . . 14810.4.8 Durable Goods Recycling . . . . . . . . . . . . . . . . 14810.4.9 Waste Disposal from Tenant Improvements and

Store Remodels . . . . . . . . . . . . . . . . . . . . . 14810.5 Indoor Environment . . . . . . . . . . . . . . . . . . . . . . . 149

10.5.1 Green Cleaning . . . . . . . . . . . . . . . . . . . . . 14910.5.2 Maintaining Air Quality During Construction . . . . . 15010.5.3 Occupant Comfort . . . . . . . . . . . . . . . . . . . . 150

10.6 Case Study—Stop & Shop . . . . . . . . . . . . . . . . . . . . 15010.6.1 The Business Case for Ahold/Stop & Shop . . . . . . . 15210.6.2 What Did Stop & Shop Do for LEED-EB Certification? 152


11 Marketing Sustainable Retail Development . . . . . . . . . . . . . 15711.1 Four Key Marketing Steps for Sustainable Retail . . . . . . . . 158

11.1.1 Differentiation . . . . . . . . . . . . . . . . . . . . . . 15811.1.2 Become a Low-cost Provider of Green

Developments and Green Retail Stores . . . . . . . . . 15911.1.3 Focused Differentiation . . . . . . . . . . . . . . . . . 16011.1.4 Name It and Claim It . . . . . . . . . . . . . . . . . . 161

11.2 Build a Brand Image . . . . . . . . . . . . . . . . . . . . . . . 16111.2.1 Green Power . . . . . . . . . . . . . . . . . . . . . . . 163

11.3 Sustainability Marketing as an Evolving Strategy . . . . . . . . 164References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

12 Sustainable Retail Organizations . . . . . . . . . . . . . . . . . . . 16712.1 CEO Leadership . . . . . . . . . . . . . . . . . . . . . . . . . 16712.2 Communications . . . . . . . . . . . . . . . . . . . . . . . . . 167

xvi Contents

12.3 Education and Training . . . . . . . . . . . . . . . . . . . . . . 16912.4 Knowledge Management . . . . . . . . . . . . . . . . . . . . . 17012.5 Corporate Operations . . . . . . . . . . . . . . . . . . . . . . . 17112.6 Case Study—SES Spar European Shopping Centers . . . . . . 17212.7 The Sustainability Report . . . . . . . . . . . . . . . . . . . . 17312.8 The Long-Term Benefit . . . . . . . . . . . . . . . . . . . . . . 17412.9 Creating a Sustainability Program . . . . . . . . . . . . . . . . 17412.10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

13 The Ten-Point Program for Retail Sustainability . . . . . . . . . . 17913.1 Looking to the Future . . . . . . . . . . . . . . . . . . . . . . . 185References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

Appendix A: Green Building Rating Systems Around the World . . . . 189A.1 Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189A.2 Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191A.3 France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191A.4 Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192A.5 Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192A.6 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193A.7 United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . 195A.8 United States . . . . . . . . . . . . . . . . . . . . . . . . . . . 196

Author Biography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

About the ICSC Research Scholar Program . . . . . . . . . . . . . . . . 208

About SEED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208

About the International Council of Shopping Centers . . . . . . . . . . 209

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211

List of Figures

1.1 The U.S. retail sector accounts for 20% of the country’s totalsite energy use by commercial buildings . . . . . . . . . . . . . . . 3

1.2 The triple bottom line concept blends economic, social andecological criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.3 Forum Duisburg is the first BREEAM Very Good ratedcenter on the European continent . . . . . . . . . . . . . . . . . . . 5

1.4 Sonae Sierra’s corporate sustainability program is based onan ISO 14001 Environmental Management System . . . . . . . . . 8

1.5 The Rio Sul shopping center is one of Sonae Sierra’sshowcase environmental projects . . . . . . . . . . . . . . . . . . . 10

1.6 Marks & Spencer’s Galashiels store is one of the chain’smany green buildings . . . . . . . . . . . . . . . . . . . . . . . . . 14

2.1 Forest City’s Northfield Stapleton development was the first“lifestyle” center to be LEED-Silver certified in the U.S. . . . . . . 24

2.2 Abercorn Common in Savannah, Georgia, was the firstLEED-certified center in the U.S. . . . . . . . . . . . . . . . . . . . 25

2.3 Morningside Crossing, Toronto’s first LEED-compliantshopping center, is one of 30 projects for which thedeveloper, First Capital Realty, plans to pursue LEEDcertification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

2.4 Cabot Circus in Bristol, U.K., is a green retail project fromHammerson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

2.5 The £350 million Highcross shopping center in Leicester,U.K., is a significant contribution to a city revitalizationproject and is rated Very Good by the BREEAM rating system . . . 31

2.6 AEON shopping center in Laketown, Japan, received highmarks from that country’s CASBEE rating system . . . . . . . . . . 33

2.7 Orion Springfield is Australia’s first Green Star ratedshopping center . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

2.8 The 30,000-m2 green roof on Metro Development’s Meydancenter in Istanbul, Turkey, not only offers a space to lingerbut also helps control the building’s internal climate . . . . . . . . . 36

xvii

xviii List of Figures

2.9 City Square Mall in Singapore was the first suchdevelopment to be awarded the government’s platinum Green Mark . 37

2.10 Central Walk shopping mall, opened in 2007 in Shenzhen, China . . 393.1 The growth of new LEED registered projects in the U.S. has

consistently grown at more than 50% per annum . . . . . . . . . . 423.2 LEED for New Construction and Major Renovations

distributes its points across six different environmentalattributes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

3.3 An example of a “LEED Scorecard” showing pointsgarnered by this LEED Gold-rated Office Depot project . . . . . . . 48

3.4 LEED for Core and Shell can be used for shell retail spaces . . . . 513.5 LEED for Commercial Interiors rating system can be used

for store remodels . . . . . . . . . . . . . . . . . . . . . . . . . . . 523.6 LEED-EBOM allows developers and retailers to benchmark

performance against established criteria . . . . . . . . . . . . . . . 533.7 Improving indoor air quality leads to major reductions in

health symptoms, improving overall employee productivity . . . . . 563.8 The new BREEAM for Retail system will allow a closer

match of green building criteria to specific retailer designand construction practices . . . . . . . . . . . . . . . . . . . . . . 62

3.9 BREEAM for Retail Interiors provides retailers with greendesign criteria for individual store remodels and newconstruction inside of malls and shell retail spaces . . . . . . . . . 63

4.1 The benefits of green retail spaces encompass five majorareas of interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

6.1 Wal-Mart was a pioneer in using extensive rooftop area forsolar power generation, as shown by this project in California . . . . 88

6.2 This Office Depot store in Austin, Texas, uses solar power tooffset a portion of store electricity needs . . . . . . . . . . . . . . . 91

7.1 EUROPARK in Salzburg, Austria, is an award-winninggreen retail development from SES . . . . . . . . . . . . . . . . . . 100

7.2 The ATRIO Center in Villach, Austria, connects that countrywith nearly Slovenia and Italy . . . . . . . . . . . . . . . . . . . . . 101

7.3 ECE shopping centers receive a total of about 155 millionkWh per year of hydroelectric power. Ernst-August-Galeriein Hanover is one of 48 ECE shopping centers participatingin the company’s green energy initiative . . . . . . . . . . . . . . . 102

7.4 Redevco plans to assess its retail developments in Europeaccording to green building rating standards; 40 PrincessStreet in Edinburgh was the first Redevco building to receiveBREEAM certification . . . . . . . . . . . . . . . . . . . . . . . . 106

7.5 The 23,000-ft2 Green Circle Shopping Center in Springfield,Missouri, is the first shopping center in the U.S. pursuing aPlatinum-level LEED certification. . . . . . . . . . . . . . . . . . . 108

List of Figures xix

7.6 The Tanger Outlet Center at the Arches on New York’s LongIsland transformed a former industrial site into a 800,000-ft2

open-air mall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1108.1 Energy use in retail stores varies dramatically by end-use

and type of activity, as shown by the annual energy use index (EUI) . 1158.2 Falabella’s center in Chile aims to become the first

LEED-certified shopping center in South America . . . . . . . . . . 1178.3 Chipotle Mexican Grill shows that even small quick service

restaurants can achieve LEED certification . . . . . . . . . . . . . . 1188.4 A variety of studies over the past decade strongly suggest

that using skylights to increase daylighting in stores canincrease retail sales significantly . . . . . . . . . . . . . . . . . . . 120

9.1 Marks & Spencer’s Bournemouth store is one of the chain’smany green building projects . . . . . . . . . . . . . . . . . . . . . 130

9.2 Office Depot uses skylights as well as signage to tellcustomers about their green commitment . . . . . . . . . . . . . . . 132

9.3 Wachovia Bank was the first to receive “volumecertification” under the U.S. Green Building Council’sLEED for Commercial Interiors program . . . . . . . . . . . . . . . 134

10.1 The Alexa center in Berlin, Germany, is another of SonaeSierra’s green projects . . . . . . . . . . . . . . . . . . . . . . . . . 139

10.2 Best Buy, Dick’s Sporting Goods and PetSmart are tenants inthe $400 million, 100,000-ft2 Stafford Park shopping centerin New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

10.3 Stop & Shop is the first U.S. grocery chain to use theLEED-EB program to benchmark performance at more than50 stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

12.1 Corporate sustainability programs typically contain all ofthese five elements . . . . . . . . . . . . . . . . . . . . . . . . . . 168

12.2 Woolworths made a major commitment to green constructionand operations in South Africa with their Midranddistribution center . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

13.1 The benefits of adopting sustainable retail solutions aremultifaceted and long-lasting . . . . . . . . . . . . . . . . . . . . . 180

13.2 Freccia Rossa is a green shopping center in Brescia, Italy . . . . . . 18113.3 Communicating your sustainability progress is an essential

part of every successful program . . . . . . . . . . . . . . . . . . . 184A.1 Australia’s Green Star program is a credible rating system

used also in New Zealand and South Africa . . . . . . . . . . . . . 190

List of Tables

3.1 Growth of All LEED Project Registrations, 2004–2008 . . . . . . . 423.2 LEED-NC Certifications by Attainment Level, December 2008 . . . 433.3 LEED-NC 2009 System Categories of Concern . . . . . . . . . . . 463.4 The Major LEED Rating Systems for Commercial Buildings,

December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493.5 Use of LEED Credits in Gold and Platinum Projects . . . . . . . . 543.6 BREEAM Certifications, Non-domestic Buildings, 2004–2008 . . . 603.7 2008 BREEAM Rating Categories and Weightings . . . . . . . . . 614.1 Potential Business Benefits of Green Retail Centers and

Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684.2 Who Benefits? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695.1 Hard Costs for Greening Retail Projects (U.S. Experience) . . . . . 815.2 Soft Costs for Greening Building Projects (U.S., 2008

Estimates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825.3 Green Building Initiatives—An Example of Estimated Costs

($ millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 856.1 Basic Economics of PV Systems . . . . . . . . . . . . . . . . . . . 926.2 Average Cost in Cents/kWh over 20 Years for Solar Power

Panels Production (kWh/kw-Peak/Year) . . . . . . . . . . . . . . . 926.3 Financial Benefits to PV System Owners . . . . . . . . . . . . . . 946.4 Noneconomic or Intangible PV System Benefits . . . . . . . . . . . 946.5 Considerations in Purchasing Solar Power from Investment

Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968.1 LEED-NC Points Achieved for Several Retail Stores . . . . . . . . 12111.1 Top Ten Purchasers of Green Power in the U.S., 2008 . . . . . . . . 16412.1 Corporate Departments Engaged in Sustainability Task Force . . . . 17512.2 Key Functional Areas for Sustainability Planning . . . . . . . . . . 176A.1 Australian Green Star Rating Levels . . . . . . . . . . . . . . . . . 190A.2 French HQE Targets . . . . . . . . . . . . . . . . . . . . . . . . . 192A.3 HK-BEAM Performance Categories and Available Points . . . . . . 193A.4 HK-BEAM Rating Levels . . . . . . . . . . . . . . . . . . . . . . 194A.5 BEE Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194A.6 CASBEE Grades . . . . . . . . . . . . . . . . . . . . . . . . . . . 195

xxi

xxii List of Tables

A.7 BREEAM 2008 Sections and Weights . . . . . . . . . . . . . . . . 195A.8 BREEAM Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . 196A.9 Credit Categories and Points for LEED for Retail: New

Construction 2009 Rating System . . . . . . . . . . . . . . . . . . 198A.10 Comparison of Credit Categories and Points Across LEED

Rating Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

Abbreviations

AIA American Institute of ArchitectsASHRAE American Society of Heating, Refrigerating and Air-Conditioning

EngineersAuSSI Australian SAM Sustainability IndexBAS Building Automation SystemBCA Building and Construction Authority (Singapore)BIM Building Information ModelingBIPV Building-Integrated PhotovoltaicsBRE Building Research Establishment (U.K.)BREEAM Building Research Establishment Environmental Assessment

Method (U.K.)CaGBC Canada Green Building CouncilCAM Common Area MaintenanceCASBEE Comprehensive Assessment System for Building Environmental

Efficiency (Japan)CBI Commercial Building Initiative, U.S. Department of EnergyCDI City Developments Limited (Singapore)CDLI Climate Disclosure Leadership Index (Carbon Disclosure Project,

U.K.)CFL Compact Fluorescent LightCFCs ChlorofluorocarbonsCRS Center for Resource Solutions (U.S.)CSO Chief Sustainability OfficerCSR Corporate Social ResponsibilityDGNB Deutsche Gesellschaft für Nachhaltiges Bauen (German Sustain-

able Building Council)DOE U.S. Department of EnergyEMS Environmental Management System, see also ISO 14001EPCs Energy Performance Certificates (European Union)EPBD Energy Performance of Buildings Directive (European Union)EPI Environmental Performance IndicatorEPP Environmentally Preferable PurchasingESCO Energy Service Company

xxiii

xxiv Abbreviations

ESRD Environmental Standards for Retail Development (Sonae Sierra)ETS Environmental Tobacco SmokeFSC Forest Stewardship Councilft2 Square Foot/FeetGBCA Green Building Council of AustraliaGRI Global Reporting InitiativeGSBC German Sustainable Building Certificate, see also DGNBHa HectareHCFCs HydrochlorofluorocarbonsHK-BEAM Hong Kong Building Environmental Assessment MethodHQE Haute Qualité Environnementale (French Green Building Rating

System)HVAC Heating Ventilation and Air ConditioningIAQ Indoor Air QualityICSC International Council of Shopping CentersIEQ Indoor Environmental QualityISO International Standards Organization, also ISO 14001JaGBC Japan Green Building CouncilJSBC Japan Sustainable Building ConsortiumkW KilowattkWh Kilowatt-HourkWp Kilowatt (Peak) rated output, used only for photovoltaics (PV)LCC Life-Cycle CostingLED Light-Emitting DiodeLEED R© Leadership in Energy and Environmental Design R©LEED-CI LEED for Commercial InteriorsLEED-CS LEED for Core and ShellLEED-EBOM LEED for Existing Buildings – Operations and MaintenanceLEED-NC LEED for New ConstructionLOHAS Lifestyles of Health and Sustainabilitylm-h Lumen-hours (used only in calculation of mercury concentration

in lamps)m2 Square Meter(s)/Metre(s)m3 Cubic Meter(s)/Metre(s)MACRS Modified Accelerated Cost Recovery System (U.S.)M&S Marks & SpencerNPV Net Present ValuePg Picograms, or “one millionth-millionth” of a gramPR Public RelationsPV PhotovoltaicRECs Renewable Energy Certificates (U.S.)RMB Renminbi (Chinese currency)ROI Return on InvestmentSRI Solar Reflectance Index

Abbreviations xxv

StEP Solving the E-Waste Problem (United Nations)TOD Transit-Oriented DevelopmentUSGBC U.S. Green Building CouncilVOC Volatile Organic Compound

Chapter 1Sustainability Matters

Sustainability, like quality, doesn’t cost; it pays. In all mybusiness experience, I have never seen a more powerfuldifferentiator in the marketplace [1].

—Ray Anderson, Founder and Chairman of Interface, Inc.,2007 sales: $1.1 billion

What is sustainability and why does it matter to the retailer and developer? We’veheard about corporate social responsibility (CSR) for years. How does this differfrom the current discussion about sustainability? One way to think about it is this:Sustainability refers to being responsive to the entire web of living systems inside ofwhich we live and work, whereas CSR primarily pays attention to social obligations(government regulations, worker well-being and consumer demands).

One definition of CSR describes it as comprising “two elements: acting as a goodcorporate citizen, attuned to the evolving social concerns of stakeholders, and miti-gating existing or anticipated adverse effects from business activities” [2]. For manybusiness leaders, CSR has become a primary way to secure a long-run competitiveadvantage.

The classic definition of sustainability comes from the U.N.’s Brundtland Com-mission report of 1987: “Sustainable development is development that meets theneeds of the present without compromising the ability of future generations to meettheir own needs” [3]. This definition clearly speaks to the long-term, overridingissue of sustainability: we should be living off of income and not stored capital. Inother words, our society should be striving to live off of renewable resources andnot one-time resources.

What’s driving the current push toward corporate sustainability? There are anumber of factors. Many companies are responding to customer (demand) pull,supplier push, European regulations (like the Registry of Hazardous Substances,or RoHS) and their own internal stakeholders in creating sustainability offices andhiring or appointing “chief sustainability officers.” There is also a strategic desire to“get ahead of any future legislation” that might regulate such things as carbon emis-sions. Creating sustainability offices is also the best way to formalize and centralizedisparate efforts in various business units and locations [4].

One magazine survey indicated that 25% of Fortune 500 companies expected toappoint chief sustainability officers in 2008 [4]. One pundit, Marc Epstein, reported

1J. Yudelson, Sustainable Retail Development, DOI 10.1007/978-90-481-2782-5_1,Copyright C© 2009 by the International Council of Shopping Centers

2 1 Sustainability Matters

that “Companies are currently looking to get past the regulatory and complianceaspect of this. The companies that get it are beginning to look at the growth that cancome about as a result of sustainability.”

In spite of the current economic recession, one leading sustainability consultant,Gil Friend of Natural Logic, cites several reasons why U.S. companies continue toshow strong interest in sustainability [5].

• Reduce energy costs for ongoing operations.• Mitigate risk of future regulation of carbon emissions.• Take advantage of opportunities that will arise due to the Obama administration’s

commitment to green issues.• Well-designed sustainability initiatives often have a really attractive return on

investment.

The downturn is prompting many businesses and their customers to reevaluatetheir value propositions and priorities. This reassessment goes hand in hand withincreasing eco-efficiency and creating long-term value through sustainable jobs andrenewable energy sources [5].

One important and perhaps overriding issue in sustainability relates to the build-up of human-produced carbon dioxide in the Earth’s atmosphere. The FourthAssessment Report of the U.N.’s Intergovernmental Panel on Climate Change,issued in 2007, put the probability of human-induced global warming at 90%, upfrom 67% in the previous Third Report, issued in 2001 [6, 7]. Reducing carbondioxide emissions in the building sector is critical to our ability to combat globalwarming. Energy-efficient design and operations of buildings, along with on-siterenewable energy production, represent one important response to the challenge topeople all over the world to reduce our collective ecological footprint.1 Green build-ings are an important component in the effort to bring carbon dioxide emissions backto 1990 levels, as required by the Kyoto Protocol, so that we can begin to stabilizecarbon dioxide concentrations in the atmosphere at levels no more than 20% abovetoday’s. Recent studies by the international consulting firm McKinsey indicate thatbuildings can provide up to 25% of the required carbon emission reductions, requir-ing costs that can be easily recovered over the life of the building [8, 9].

Retail matters in global warming emissions. Figure 1.1 shows that retail storesand centers account for 20% of site carbon emissions in the U.S., a considerableamount by anyone’s reckoning.

To combat global warming, and for other reasons discussed in this book, environ-mental sustainability is firmly on the global corporate agenda, and is beginning tomake a stronger impression in the retail real estate development industry. There aremany paths that shopping center developers and owners can take as they create andexecute a sustainability program internally and externally. This chapter presents fourrepresentative sustainability programs in depth, two undertaken by large shopping

1See www.footprintnetwork.org for a fuller explanation of the term ecological footprint.

1 Sustainability Matters 3

Fig. 1.1 The U.S. retail sector accounts for 20% of the country’s total site energy use by commer-cial buildings. Source: Govt Chart: www.nrel.gov/docs/fy08osti/41956.pdf

center developers based in continental Europe, one by a large U.K.-based retailerand one by a U.S.-based developer. Their varied approaches may give guidance toothers launching a sustainability program.

Each corporate sustainability program involves considerations of the triple bot-tom line, concern for economy, environment and ethics (the “three Es”) or people,planet and profit (the “three Ps”), shown in Fig. 1.2. The triple bottom line is agood conceptual way to present the topic of corporate social responsibility within

Fig. 1.2 The triple bottomline concept blends economic,social and ecological criteria


the larger context of development issues. In this view, each company should pursueactivities that create economic benefit, while simultaneously improving (or at leastnot adversely impacting) the natural environment and providing significant benefitsfor society. In our research for this book, we found that the European developers aremore open in their consideration of the people or ethics aspect of the Triple BottomLine, viewing business as having an important social mission in their countries, aswell as a profit-making one.

1.1 Multi Development

Multi Corporation B.V. is headquartered in Gouda, the Netherlands, and is active in23 countries throughout Europe, extending from the United Kingdom to Turkey[10]. In 2007, Multi was named European Retail Developer of the Year at theMAPIC conference in Cannes [11].

CEO Glenn Aaronson is a firm believer in changing the world via the “2% solu-tion,” making things 2% better every year, instead of trying to make huge leaps allat once. He believes that any corporation can handle 2% change, such as 2% highercosts for green buildings and 2% per year improvement in results. In the space of 10years, he notes, “you’re then 20% better, and it’s virtually painless.” In his view, thesolution to the challenge of achieving sustainability is “getting better” all the time,the well-known approach of continuous improvement. The issue of course is how toaudit the changes to make sure that the 2% change is happening each year, withoutbacksliding.

1.1.1 Multi’s Sustainability Principles

Aaronson has led the charge at Multi toward incorporating sustainability into everyaspect of the company’s operations. The first shopping center to use the company’ssustainability principles was built in Duisburg, Germany, and opened in the fall of2008 (shown in Fig. 1.3). The project received a Very Good rating from the U.K.’sBREEAM system (see Chapter 3 for a fuller discussion of BREEAM).

Multi has formalized its sustainability commitment into five key principles,known as the “5Es for a Sustainable Future” program:

1. Everlasting Design—design should aim at creating flexible and timeless urbanspaces that will hold their value far into the future;

2. Ecological Footprint—each project should optimize the use of land and reducethe consumption of resources, by both constructing new buildings more effec-tively and managing existing buildings more efficiently;

3. Equal Benefits—each project should provide benefits to the local community,through a variety of giveback programs;

1.1 Multi Development 5

Fig. 1.3 Forum Duisburg is the first BREEAM Very Good rated center on the European continent

4. Economic Vitality—each project should aim to create healthy business environ-ments to ensure financial sustainability;

5. Education for All—each project should raise public awareness of the changesrequired to preserve our planet.

Multi’s five principles are its own customized version of the traditional triple bot-tom line such as the 3 Ps—people, planet and profit—or the “3 Es”—environment,economy and ethics. The five principles also contain operational criteria thatreflect Aaronson’s belief that if a company holds strong beliefs internally—in this case about sustainability—it is also important to express these valuesexternally.

1.1.2 Turning Principles into Development Activity

With the right focus on customer, shopper, employee and community benefits,appropriate to time and place, it is relatively straightforward to craft a set of operat-ing guidelines for future development and to begin filling in the outline with specificgreen features.

A statement of core values such as the 5 Es begins to suggest synergies to thedesign team. For example, a focus on light and daylighting immediately integrateswith energy efficiency considerations. Studies of daylighting in retail show gains insales of about 5% but also energy savings of about 10% of initial investment per


year.2 Appropriate transport connections begin to reduce the carbon footprint of thedevelopment by encouraging more public transit and pedestrian access.

Aaronson strongly supports the use of BREEAM, the U.K. green building assess-ment and certification standard for shopping centers in the European Union.3 Aaron-son believes that BREEAM is more flexible than other systems such as LEED, that itcan be customized to fit many different development situations and that it is focusedappropriately on the social dimension of development, in addition to obvious con-siderations such as water and energy use.

One interesting approach adopted by Multi is to use each shopping center as aforum for education about sustainability by creating an educational focus in eachcenter. In the case of the Forum Duisburg project, there is a social program thattrains disadvantaged citizens in construction and center operations, in coopera-tion with the local municipality. Consisting of 59,000 m2 of gross leasable area(GLA), the project cost about C170 million and includes a district heating plantusing combined heat and power systems, a green roof and insulation well abovestandard [12].

1.1.3 Getting the Company on Board

Multi has gone through a progression of steps to reach its current level of commit-ment to sustainable development activities. This sequence may prove to be typicalfor many retail developers.

Under Arco Rehorst’s leadership, a Sustainability Committee was created in2006, followed in 2007 by a strong CEO commitment to move forward with thecommittee’s recommendations. Rehorst and the committee started with a long listof possible topics, some 63 in all, narrowing them down to the top 12 to create afocus for future work. From these points of focus came a calendar with a specificfocus for each month.

In 2008, the firm began regular videoconferencing with its 20 country managers,to bring them up to speed on the commitment and the program. The companyis already a big fan of ISO 14001, the international environmental managementstandard. The goal is to improve sustainability achievements with each succeed-ing project, and to this end, management believes that it is important to set aspi-ration levels at the outset of a project and then score performance against theselevels.

Each new investment proposal submitted to management now becomes an“investment plus sustainability” proposal in that it details the sustainability achieve-

2See 2003 studies by the Heschong Mahone Group, sponsored by California’s Pacific Gas& Electric Company, available at http://www.h-m-g.com/downloads/Daylighting/A-5_Daylgt_Retail_2.3.7.pdf, accessed June 13, 2008.3This position was adopted in 2008 by the ICSC for all European projects.

1.2 Sonae Sierra 7

ments that it targets. Each new development will carry tenant guidelines, for exam-ple, to set green cleaning standards. The purpose of this approach is to transforminvestment decisions over time, by encouraging development executives to changewhat they consider to be appropriate considerations. In this case, sustainability hasto be considered when money is being allocated, or the project is likely to fall bythe wayside.

1.1.4 Getting the Customers on Board

Every retail developer such as Multi has two sets of customers: directly, the retailtenants, and, indirectly, the customers it hopes to attract to the shops. There is alsoa third, very important constituency, namely the investors in the project. Becausesustainability measures often involve higher initial costs, certainly at the beginningof the journey, the developer’s dilemma is either how to persuade the retail tenantsto pay higher rents (in exchange for continuing savings in energy costs) or to per-suade the project’s investors to accept slightly lower returns. This is an importantproblem, one unlikely to disappear in the next three to five years, even as the worldbegins moving toward sustainable development and tenants may begin to desire thereputational benefits of locating in green centers. Whether they will be willing topay higher rents for these benefits is still open to question. (Chapter 5 deals directlywith the issues of cost.)

The issue of potentially lower returns is also likely to be temporary for two rea-sons: first, the centers with lower energy, water and waste management costs willbe able to demonstrate those reductions in shared operating costs as time goes for-ward (and therefore have the potential for rent growth); second, developers withgreen experience are likely to obtain other benefits, such as attracting investmentcapital and recruiting and keeping key employees (a major emerging issue in mostadvanced economies at this time).

1.2 Sonae Sierra

An innovator in the shopping center business, Sonae Sierra offers an integratedapproach to owning, developing and managing shopping centers. Sierra centersintegrate leisure with retail and other services, with a focus on green issues.Based in Portugal, the company currently operates fifty centers, with twenty-eight under development in Portugal, Spain, Italy, Germany, Romania, Greeceand Brazil. For fiscal year 2007, the company reported net operating revenue ofC639 million, with net profit of C300 million and net asset value of C1,713million [13].


1.2.1 Sustainability

Sonae Sierra’s CEO, Álvaro Portela, created a corporate responsibility policy in thepast decade [14], based on the firm “belief that no economic activity can take placein a vacuum” [15]. The company was a founding member in 1995 of the WorldBusiness Council for Sustainable Development, one of the leading organizations inthe field. The ultimate goal is for the business to be “sustainable, in the very long-term meaning of the word.”

Sonae Sierra uses an Environmental Management System (EMS) certified underthe ISO 14001 standard (see Fig. 1.4). The company’s Environment Manager over-sees the application of the EMS to company operations. The key to ISO 14001 isits focus on continuous improvement. Sonae Sierra ensures sustainable buildings byfocusing on environmental responsibility in the design, construction and operationphases. Portela believes that the corporate responsibility policy is essential to their

Fig. 1.4 Sonae Sierra’s corporate sustainability program is based on an ISO 14001 EnvironmentalManagement System. Courtesy of Sonae Sierra

1.2 Sonae Sierra 9

brand, but “like all brand attributes, you have to deliver what you promise to yourstakeholders to be taken seriously.” Hence the importance of each year’s corporateresponsibility action plan and the EMS system for monitoring performance.

A centralized, online database gathers data for Sonae Sierra’s water use, wasteand climate issues. This information generates reports that, for example, call fortighter water use, set annual targets for waste recycling and provide directions forimproving Building Management Systems (BMS). Sonae Sierra’s environmentalfocus covers four major areas.

1. Climate ChangeThe company’s stated short-term goal is to reduce greenhouse gas emissionsby 10%.

Sonae Sierra uses its Environmental Standards for Retail Development(ESRD) —an internal internet specification tool—to come up with the best envi-ronmental practices in the planning and design of new shopping centers. The toolconsiders 190 standards that cover issues such as energy, water, waste, transport,health and well-being, site sustainability and materials. The standards are basedon Sonae Sierra’s experience, best practices and certification schemes such asLEED and BREEAM. The standards determine the use of technologies suchas solar, ventilation, efficient boilers, air-conditioning units, advanced lightingand combined heat and power in design. The company is committed to achiev-ing a high rating under the EU’s Energy Performance of Buildings Directive,which issues grades of A to G, from best to worst in terms of annual energyuse per square foot/meter of operating area [16]. Furthermore, the company ispart of a three-year project (ending 2009) called the World Business Council forSustainable Development’s Energy Efficiency in Buildings (EEB) Project whichdelineates the changes necessary to have all buildings become zero net energyconsumers.

ESRD have led to transport impact studies at the design stage. These studiesresult in green travel plans, local transport partnerships and encouraging greateruse of public transport, walking and cycling. Furthermore, the company encour-ages efficient vehicle use through traffic-calming measures, priority lanes, dedi-cated parking bays for car-poolers, refueling stations and points for alternative-fuelled vehicles [17].

In 2004, Sonae Sierra conducted a study to understand the greenhouse emis-sions of its core activities. In partnership with a Portuguese environmental con-sulting firm, Sonae Sierra initiated the pilot phase of the project to estimate emis-sions. This phase was conducted in Portugal in its corporate offices and in theCentro Colombo and Rio Sul shopping centers, shown in Fig. 1.5. In the secondphase in 2005, Sonae Sierra applied the Greenhouse Gas Protocol guidelines asa measurement tool to all its offices and centers.

2. WaterThe company’s goal is to maintain water consumption at or below four liters(one gallon) per visit per year, a target it claims to have achieved in 2007. ESRDstandards require water-efficient designs—such as equipment specifications and


Fig. 1.5 The Rio Sulshopping center is one ofSonae Sierra’s showcaseenvironmental projects.Courtesy of Sonae Sierra

water recycling—and wastewater treatment—such as oil and hydrocarbon sep-arators. Some of the water efficient features are rainwater harvesting and graywater recycling, water-efficient sanitary equipment (such as spray taps and low-flush toilets), efficient irrigation systems and the use of non-water-intensivenative or adapted plant species. Furthermore, to prevent pollution from rainwaterrunoff, filter drains and porous pavements are used.

3. WasteThe company’s stated goal is to achieve a minimum 50% recycling rate and amaximum 30% landfill disposal rate. Sonae Sierra conducts site-specific wastemanagement strategy studies to determine the required space for waste separa-tion and recycling. The company calls for construction companies to providereports of their waste management. Furthermore, it encourages tenants to man-age waste responsibly, even though it has little control over tenant activities.

4. Land UseSonae Sierra’s goal is to use previously developed land for new shopping cen-ters and to protect biodiversity where possible in developing new sites. Wheresites have been previously contaminated, the company takes remedial actionaccording to the Canadian Environmental Quality Guidelines or the Dutch

1.2 Sonae Sierra 11

Standards for Soil Quality. ESRD standards specify planting indigenous plantspecies in landscaped areas and favoring the use of hedgerows and greenbarriers.

1.2.2 Implementation Issues

Introducing a major change toward sustainability at the corporate level is not with-out its challenges. According to Portela, “the main challenge was the company’scultural evolution that we had to create in order to place the corporate responsibil-ity management issues at the core of our strategy and mission. All the company,from board-level to the rest of the staff, has to understand and believe that this [pol-icy] is crucial for the growth of the company and it should impact the way we alldo business.” This challenge implies the need for a massive and continuing salesjob inside the company, as people are continually brought into the organization andthose inside the company need constant reminders about the mission.

Portela also points out one of the major areas of concern for all developers,saying, “another big issue is how to balance short-term [additional] costs againstlong-term externalities, since both the environmental and economic benefits areonly visible during the operation phase. Only a company [like ours] that holds ontoassets, and actively manages them, is able to recoup additional capital costs throughreduced running costs.”

As for the future two to three years, there is still the challenge “to keep oursuppliers and tenants inspired to replicate our own sustainability efforts, and to con-tinuously find innovative and more sustainable ways of developing and managingshopping centers.”

Examples of Sonae Sierra’s Approach to Sustainability

El Rosal, Ponferrada, Spain. Built to reflect local character, this shoppingcenter achieved ISO 14001 certification for the construction phase. One ofthe center’s environmental features is a solar roof with 600 photovoltaic (PV)panels on a 1,500-m2 area that cost C620,300. This results in energy pro-duction of 132,447 kWh per year with annual savings of C58,300. At currentelectricity prices, the company expects to recover the initial system cost afterjust nine years for equipment with a 25-year life. On average, emissions arereduced by 48 metric tons of carbon dioxide per year and over 25 years by1,200 metric tons of carbon dioxide.

Centro Colombo, Portugal. In this development, Sierra introduced theGreen Travel Plan project. It analyzes the transport infrastructure and imple-ments measures to encourage and improve the accessibility of the shopping


center by public transport, bicycle and foot. Furthermore, in customer surveys,Sierra asks what form of transport its customers use in visiting the centers sothat it can monitor indirect greenhouse emissions.

Parque D. Pedro, Campinas, Brazil. Water is treated at the center’s treat-ment plant and reused in bathrooms and for irrigation. In 2007, 48% of watersupplied was from reclaimed sources. The reuse and irrigation system costC83,115, while savings in the first year were C100,000. The center was oneof the first buildings in Brazil to receive ISO 14001 certification.

Arrabida Shopping Center, Portugal. This center uses a composting systemthat allows garden managers to use organic waste in the center’s green areas.

Zubiarte, Spain. The Bilbao city council and the Zubiarte managementteam introduced a bicycle loan scheme. People can borrow and return bicyclesfor free by registering on the internet.

Centro Vasco da Gama, Portugal. This project utilizes subterranean waterfrom a nonpotable water supply. The investment for the system consists of apumping station and treatment equipment. Monthly water consumption hasbeen reduced by 530 m3 (142,000 U.S. gal), corresponding to 11% of totalwater consumption. According to the company, the initial system investmentwill be recovered during the first year, with total cost savings equivalent toC11,900 in the following years.

Luz del Tajo, Toledo, Spain. An EMS monitors areas such as energy saving,transportation, water treatment, contamination, resource use, selection and useof materials, ecology, and health. A building management system controlsenergy savings, a pre-treatment system separating residues of fat and hydro-carbons, timers in the public taps and the use of filters in kitchen extractionsystems.

1.3 Marks and Spencer

The prominent U.K. retailer Marks & Spencer (M&S) embarked in 2007 on a seriesof wide-ranging sustainability initiatives, widely known as “Plan A,” because asChairman Sir Stuart Rose said at the time, “there is no Plan B” when it comes toenvironmental responsibility. Plan A is a five-year, £200-million, 100-point plan formoving the company forward as a leader in corporate sustainability.

The plan means that by 2012 M&S aims to accomplish 100 goals relating to fiveprimary areas of concern:

• become carbon-neutral;• send no waste to the landfill;• extend sustainable sourcing;• set new standards in ethical trading;• help customers and employees live a healthier lifestyle.

1.3 Marks and Spencer 13

When announcing the plan in January 2007, M&S Chairman Stuart Rosesaid [18]:

Every business and individual needs to do their bit to tackle the enormous challenges ofclimate change and waste. While M&S will continue to sell great quality, stylish and inno-vative products, our customers, employees and shareholders now expect us to take boldsteps and do business differently and responsibly. We believe a responsible business can bea profitable business. We are calling this “Plan A” because there is no “plan B.”

M&S will change beyond recognition the way it operates over the next five years. Wewill become carbon neutral, only using offsetting as a last resort; we will ensure that noneof our clothing or packaging needs to be thrown away; much of our polyester clothing willbe made from recycled plastic bottles instead of oil and every year we will sell over 20million garments made from Fairtrade cotton.

1.3.1 Beyond Environmentalism

M&S’s shift toward greening its operations is a business decision as well as beingRose’s personal philosophy: “No one had announced a big initiative up until then,and we wanted to be the first. . .[w]e were the first out of the pack. I’m not crowing,but it’s important. I’m not going to deny, if you get it right, it does give you acompetitive advantage.”

1.3.2 2008 Plan A Update

Although the financial benefit is still unclear, Plan A has had some definite businessbenefits for M&S. For example:

• Marketing Week magazine named it as the greenest brand (March 2008).• Over 20% of electricity consumed by the business comes from renewable

sources; saving 55,000 tons annually of CO2 produced by stores and offices.• The company opened three eco-stores in the U.K.—Bournemouth, Galashiels

and Pollok. The stores were built or remodelled to help the company learnabout sustainable construction and many of the lessons are included in a Sus-tainable Construction manual and have been rolled out across the M&S chain.The Bournemouth store has reduced its energy use by 18% and was refitted toinclude displacement ventilation and CO2-based refrigeration, for example. Sim-ilar initiatives were included in the stores in Pollok and Galashiels. The Pollokstore achieved the highest fitout assessment score that the BRE has issued to date.(The Galashiels store is shown in Fig. 1.6.)

• First eco-factory, in Sri Lanka, in partnership with supplier MAS, the eco-factory“is designed to minimize environmental impact.” Green energy is used to powerthe factory with solar supplementation of around 10%. The factory will use about40% less energy than an equivalent factory in that place. Rainwater collection andlow flow fixtures also reduce normal water use by approximately 50%.


• Teardrop-shaped eco-trucks with better aerodynamics emit 20% less carbondioxide.

• Carrier bag charging introduced—customers are now encouraged to use a bag forlife, and carrier bag use has been reduced by 80%.

• Food packaging weight decreased, with a large amount of it now recyclable orcompostable.

It is important to note that Plan A is an evolving plan and adjustments are madewith each lesson learned. For example, because of the threat of loss of habitatthrough converting agricultural land to biomass crops for ethanol production, M&Sput an indefinite hold on the use of biofuels.

Fig. 1.6 Marks & Spencer’s Galashiels store is one of the chain’s many green buildings.Courtesy of the project architect, 3DReid for Marks & Spencer

1.4 Regency Centers

Based in the U.S., Regency Centers owns, operates and develops grocery-anchoredand community shopping centers. At year end 2008, the company owned 440 retailproperties, including those held in co-investment partnerships. Including tenant-owned square footage, the portfolio encompassed 58.4 million ft2 located in topmarkets throughout the U.S., representing an investment at completion of $3.0 bil-lion [19]. The author interviewed Mary Lou Fiala, vice chairman/chief operatingofficer (COO), and also moderated a presentation by two key players on the Regency

1.4 Regency Centers 15

sustainability team at the 2008 ICSC ReCON conference, Scott Wilson, vice presi-dent construction, and Mark Peternell, vice president sustainability.4

In November 2007, Regency’s CEO and chairman Martin E. “Hap” Stein, Jr.announced the company’s sustainability program, including a commitment to movetoward basic LEED certification of 60% of all new developments beginning in 2010.According to a recent interview with Stein [20]. The company is pursuing LEEDcertification at six centers, including the 700,000- ft2 Deer Springs Town Center inLas Vegas, under construction.

COO Fiala and CEO Stein emphasize that sustainability has become one of thecore values at Regency and is integral to its brand of “quality shopping centers.”While respectful of the economic effects of each decision to go green, key exec-utives at the company are committed to sustainability. Regency realizes that it isbig enough to make a difference, and it intends to do so with sustainable construc-tion and operations programs. While many of the company’s anchor tenants havenot embraced LEED, the majority of them are aggressively pursuing energy effi-ciency strategies. A larger issue for greening shopping centers remains the splitincentives between landlord and tenant, a subject discussed in more depth later inthis book.

1.4.1 Branding

As part of its sustainability initiative, Regency adopted a trademarked program thatit calls “greengenuityTM”—green ingenuity—as a way to demonstrate quality andinnovation, as well as leadership in the field of sustainability and green building. Thegreengenuity program encompasses new developments, existing centers and corpo-rate operations. The company expects that tenants with strong LEED certificationprograms for their own buildings may in the future also want to locate in centers thatsupport that mission. In addition, the company expects that creating and implement-ing a sustainability program will help it with investors who want green real estate intheir portfolios.

1.4.2 Training

According to Fiala, Regency is currently training key personnel in green buildingpractices and the LEED certification system, including all construction team mem-bers. There is also a condensed training program for all of the company’s invest-ment team members, focusing on the business case for green development. A key

4Full disclosure: the author served as a consultant to Regency’s in-house task force for about sixmonths in 2007.


part of the training is to place good information in people’s hands and to take awaythe fear factor that going green will significantly harm a project’s expected returns.Training and providing good cost information are critical to changing behavior. Fialasays [21],

Training is an extremely important part of implementing a successful sustainability pro-gram. As such, this has been an integral part of our initiative since its inception over thepast 12 months. We hosted day-and-a-half green building training seminars for our owninternal construction teams, as well as some of our top A&E consultants and general con-tractors. In total, this effort reached over 180 professionals. In addition, we had training forour investment teams that focused more on the business case for sustainability and how toincorporate the cost analysis and yield impact into their initial review of potential develop-ment projects.

Training will continue to be an important part of our platform in 2009. It takes the com-mitment and dedication of the entire company to be successful. Additional focus will begiven to educating retailers to address the issue of competing incentives.

1.4.3 Capital Allocation

Similar to Multi Development, Regency requires that all new investment proposalssubmitted to the Capital Allocation Committee provide an assessment of the LEEDcertification potential of all or part of the center, as part of its due diligence pro-cess. Naturally, some projects are not amenable to LEED certification. However,Regency expects that requiring all investment decisions to at least consider the sus-tainability issue will drive its green program forward and also teach its investmentofficers how to deal with the costs and expected returns of green development. COOFiala says,

Based on the internal analysis performed by our task force, we estimate the cost premiumfor a LEED certified project to be approximately 2%. These premiums increase with thehigher levels of certification (Silver, Gold, and Platinum). However, there is such a broadspectrum of sustainability strategies that it is really difficult to make a blanket statement thatit costs “X” to be green. Each investment decision needs to consider any on-going benefits,in addition to first costs, and ultimately make a decision based on a project’s overall returnon investment (ROI).

1.4.4 Developing a Sustainability Program

Regency began its sustainability initiative with an in-house task force. The groupspent nine months looking at three key areas: cost and scope of green construction,as well as operations; LEED and public relations/marketing; and tenant and siteassessment issues. One task force undertook detailed cost assessments for LEEDcertification of specific centers already in the development pipeline.

1.4 Regency Centers 17

1.4.5 Taking a Larger Perspective

The business case for green development is discussed at some length in Chapter 4.Regency’s COO Fiala states it in this way:

LEED, or other third party green building certifications, are a testament to a building’squality, and tenants will seek out shopping centers that have these certifications becausethey are energy efficient, have better indoor air quality, and have shown evidence of higherworker productivity and increased retail sales. As the demand for green buildings increases,our projects will become even more desirable.

As a result of this increased demand, green shopping centers should have lower vacancyrates and quicker absorption. Furthermore, because these projects have lower operatingexpenses, a tenant’s total cost of occupancy will be less, making our shopping centers morecompetitive. In the end, these trends will result in higher valuations.

In addition to these direct economic benefits, there are a number of indirect benefits thatmake the business case for green real estate compelling. Our commitment to sustainabilityhas been well received by many of our government partners, and we believe this will beadvantageous during the entitlement process for new centers. Similarly, the communities inwhich we develop and operate shopping centers place a high value on environmental stew-ardship, and we believe this shared value will result in more customer loyalty, translatinginto more foot traffic and higher retail sales.

1.4.6 Progress

Regency Centers hired a corporate sustainability vice president, Mark Peternell,in 2008. Since that time, in spite of the difficult economic environment for centerdevelopments, the program has moved ahead with a number of projects. In Decem-ber 2008, Regency announced a major commitment to water conservation in thewestern U.S [19].

Regency’s outdoor water conservation initiative will take thirty-six existing shop-ping centers and install high-efficiency “smart” irrigation controllers aimed at reduc-ing each facility’s outdoor water consumption, expecting to save 42 million gallonsof water each year, saving costs both to the company and to its tenants through lowercommon-area charges. Smart irrigation controllers adjust to changing weather con-ditions and to reduce over watering, using local weather information to adjust waterquantities, timing and duration. Based on results from this pilot study, Regencyexpects to continue rolling out smart irrigation controllers across its portfolio.

In 2008, Regency chose to partner with the U.S. Department of Energy’s (DOE)Net Zero Energy Commercial Building Initiative (CBI) as a National Account andwas chosen among 21 companies in retail, finance and commercial real estateto team with DOE Laboratories to speed market adoption of current energy-saving technologies that will produce buildings with significant, measurable energysavings [20].


1.5 Summary

The four examples in this chapter illustrate a wide-ranging approach to corporatesustainability in the retail sector. Chapter 12 draws some detailed lessons for othercompanies’ programs that we can glean from these and other examples. Being aleader in retail sustainability, whether as a store operator or as a retail developer,requires a major and ongoing commitment to sustainable design, construction, oper-ations and management, and management focus on a host of important initiatives.Without a strong commitment, most companies tend to revert to status quo ante.

Leaders don’t wait for all the data to come in, to prove that a sustainability strat-egy provides the best direction. Leaders act on incomplete data, backed by soundprinciples, due diligence and extensive business experience. Throughout this book,there are many examples of interesting and profitable approaches to sustainableretail development, all coming from well-known companies in various segmentsof the retail industry and in countries large and small around the world. The nextchapter highlights some of these projects.

References

1. Sustainability matters. p. 188. Retrieved December 21, 2008, from http://www.gsa.gov/gsa/cm_attachments/GSA_DOCUMENT/oaspublications_R2-mQC1_0Z5RDZ-i34K-pR.pdf.

2. Porter, Michael E., and Kramer, Mark R. (2006, December) Strategy and society: The linkbetween competitive advantage and corporate social responsibility. Harvard Business Review.Retrieved on June 21, 2009, from harvardbusinessonline.hsbp.harvard.edu/.../Porter_Dec_2006.pdf.

3. Report of the world commission on environment and development (1987, December 11).Retrieved on February 8, 2009, from http://www.un.org/documents/ga/res/42/ares42-187.htm.

4. Executive chief sustainability officer appointments on the rise. (2007). ERS Global Newsletter,Fall.

5. Frankel, Carl. (2009, January 23). No downturn for corporate sustainability initiatives.Retrieved on January 23, 2009, from http://featured.matternetwork.com/2009/1/no-downturn-corporate-sustainability-initiatives_8068.cfm.

6. Fourth assessment report of the Intergovernmental Panel on Climate Change. pp. 39, 72.(2007). Retrieved on February 9, 2009, http://www.ipcc.ch/ipccreports/ar4-syr.htm, accessedFebruary 9, 2009.

7. Summary of New IPCC Findings on Climate Change. (2007, February 12). Retrievedon February 9, 2009, from http://www.uoregon.edu/˜climlead/publicationspress/IPCC%20Summary%202.12.pdf.

8. Curbing global energy demand growth (2007, May). Retrieved on February 9, 2009, fromhttp://www.mckinsey.com/mgi/publications/Curbing_Global_Energy/index.asp.

9. The case for investing in energy productivity (2008, February). Retrieved on February 9, 2009,from http://www.mckinsey.com/mgi/publications/Investing_Energy_Productivity/.

10. This section is based on interviews with three key executives in April 2008 at the company’sheadquarters: Glenn H. Aaronson, CEO, Multi Corporation B.V.; Arco Rehorst, TechnicalDirector for Multi Asset Management; and Arno G. N. Ruigrok, Adjunct Director of MultiVastgoed B.V.

11. Multiple awards for Multi Development at MAPIC in Cannes. Retrieved on June 3,2008, from http://www.multi-development.com/web/nederland.nsf/wwwVwContent/l2multipleawardsformultidevelopmentatmapicincannes.htm.

References 19

12. Forum Duisburg company web site. Retrieved on June 3, 2008, fromwww.forumduisburg.de/Aktuelles.php.

13. Sonae Sierra company web site. Retrieved on July 20, 2008, from http://www.sonaesierra.com/Web/en-GB/home/default.aspx.

14. General sources for this section are presentations by Elsa Monterio. Retrieved on July20, 2008, from youtube.com/watch?v=pVRgKWmgYgU&feature=related (Part 1) andyoutube.com/watch?v=5C9VNoanVfg (Part 2).

15. All quotes from an email interview with CEO Álvaro Portela, August 7, 2008.16. European Commission web site. Retrieved on July 20, 2008, from http://ec.europa.

eu/energy/demand/legislation/buildings_en.htm.17. Presentation by Elsa Monteiro, Head of Institutional Relations, Environment and Communi-

cation, Sonae Sierra, at ICSC Centrebuild Europe, London, June 20, 2008.18. Marks & Spencer: Plan A web site. Retrieved on December 21, 2008, from http://plana.

marksandspencer.com/index.php?action=PublicAboutPressDetailDisplay&press_id=2.19. Field, Catherine. (2008, December 22). Regency Centers goes even greener. Chain

Store Age. Retrieved on December 28, 2008, from http://www.chainstoreage.com/WebExclusives.aspx?storyId=89093.

20. Shearin, Randall. (2008, May). Regency gaining ground. Shopping Center Business,May 2008. Retrieved on June 4, 2008, from http://www.regencycenters.com/uploads/Regency%20Gaining%20Ground%20with%20Green%20Initiative.pdf.

21. Interview with Mary Lou Fiala January 2009.

Chapter 2Green Buildings Around the World

The preceding chapter discussed sustainability programs of some well-knownplayers in the retail real estate and retail industries. This chapter focuses more nar-rowly on green buildings and provides a survey of retail green building develop-ments around the world. While most of the focus is on projects in North Americaand Western Europe, where sustainable design has had a larger impact, there arealso instructive examples from the Middle East, South America, Asia, Australiaand Africa. The overall lesson is that green building is a worldwide phenomenonembraced by many retailers.

Green buildings are growing by leaps and bounds. A green building is one that iscertified in the U.S. by the U.S. Green Building Council’s LEED system, in the U.K.by the BREEAM system, in Australia and New Zealand by the Green Star systemand in various other countries by their own third-party systems. Considering anyreasonable metric, the rapid growth in the green building sector since 2005 has beenremarkable. BREEAM was introduced in the mid-1990s and LEED was introducedin 2000, originally to cover just new construction projects and major renovations.LEED and BREEAM have since been expanded to cover Core and Shell Build-ings, new or remodeled Commercial Interiors and the environmental performanceof Existing Buildings. BREEAM and Green Star have similar categories to LEEDfor certification, which are examined in more detail in the next chapter.

Green rating systems typically cover seven major categories of environmentalconcern, each of which can apply to the retail store and shopping center sectordevelopment.1

• Sustainable site development• Water conservation, both indoors and outdoors• Energy conservation and renewable energy use• Materials and resource conservation• Indoor environmental quality

1The entire LEED system is available for download and use from the U.S. Green Building Council,http://www.usgbc.org/leed. BREEAM can be accessed at www.breeam.org and Green Star can befound at http://www.gbca.org.au/green-star/rating-tools/.


22 2 Green Buildings Around the World

• Transport energy use• Emissions from site operations

In the LEED, BREEAM and Green Star systems and in the green building move-ment in general, the retail sector has certainly been a laggard, as this sector hasfaced different challenges and obstacles from the public, nonprofit, and commercialoffice sectors, which we’ll discuss throughout this book. As of December 2008,approximately 200 retail projects had registered their intent to certify under theLEED-NC or LEED for Core and Shell (LEED-CS) rating system, compared withnearly 15,000 total projects [1]. Green Star and BREEAM just certified their firstgreen projects in 2008. However, the premise of this book is that there are greatopportunities for the retail sector to embrace sustainable design, development andoperations, for sound business reasons.

2.1 Why Retail Should Go Green

The entire world appears to be going green, albeit at different rates and with dif-ferent approaches. In the commercial office sector, for example, there is a growingappreciation for the business case benefits of green buildings. Many of these benefitsapply to the retail sector in one way or another. A fuller discussion of driving forcesinfluencing the business case for green retail buildings and developments is pro-vided in a later chapter. These economic and noneconomic, tangible and intangiblebenefits include some or all of the following:

• Reduced energy costs• Increased use of utility and tax incentives for energy conservation• Increased building value, through higher net operating income (NOI)• Improved productivity and reduced health impacts of building operations• Improved sales and lease-up (letting) of properties• Growing evidence of increased sales from daylighting, averaging 5%2

• Marketing benefits• Public relations benefits• Recruitment and retention of key people• Greater funding availability from institutional sources• Increased interest by investors (for both public and private companies) in a com-

pany’s long-term sustainability programs• Corporate social responsibility exemplified in green buildings, especially with

concern over global warming and carbon emissions mounting each year

Not all benefits apply in all cases, but this list is indicative of what green retailstores and retail center developers should consider when weighing the costs and

2See studies by Heschong Mahone Group for Pacific Gas & Electric, www.h-m-g.com.

2.2 North American Case Studies 23

benefits of greening their operations. In this chapter, we will also explore tenantand consumer demand, local government incentives and mandates and increasingenergy costs as driving factors. Chapter 4 presents the business case for green retailin more depth.

2.2 North American Case Studies

For this book, the author assessed a number of case studies of LEED-certified andother green retail projects. In small retail operations, an early green adopter in theU.S. was PNC Bank, with more than fifty retail branches certified or registeredfor LEED certification.3 The giant retailer Wal-Mart completed two “experimen-tal” stores in Colorado and Texas (not LEED-certified, however) and committedin 2005 to more than $500 million in energy conservation upgrades. Owing to itsmammoth size, Wal-Mart is a special case discussed in Chapter 8. From other devel-opers, by 2007, two shopping centers were certified at LEED Silver, and the firstLEED Gold shopping center was well under way. The first LEED-certified retailproject, going back to 2004, was a Giant Eagle supermarket in Ohio. A large gro-cery chain, Stop & Shop, based in the northeastern U.S., has certified more than fiftystores under the LEED for Existing Buildings program, something we’ll profile inmore depth in Chapter 10. These are just a few examples of early adopters amongretailers. A more detailed treatment of retail store initiatives will be found later inthe book.

2.2.1 Developer Case Studies

2.2.1.1 Northfield Stapleton

Forest City’s Northfield development in Denver at Stapleton Field (the former Den-ver airport site) received the first LEED for Core and Shell Silver certificationfor a “main street” or “town center” retail development. The Stapleton residentialdevelopment has received smart growth awards from the Urban Land Institute andthe National Association of Homebuilders. The master plan for the entire projectrequired “sustainable development,” a condition that applied also to the retail seg-ment. The LEED certification process involved about sixteen small buildings atthe core of this large (1.2 million ft2) development, which opened for business in2006. This open-air project features extensive signage about the green features ofthe project (created from salvaged signage from the former airport runways), high-efficiency plumbing fixtures in public restrooms, low-toxicity paints and carpets, areflective roof, high-efficiency irrigation and a small solar power system (not visible

3U.S. and Canadian case studies were based largely on interviews conducted during 2007 and 2008,by Gretel Hakanson, Yudelson Associates, and Sonja Persram, Sustainable Alternatives Consult-ing, Toronto.


Fig. 2.1 Forest City’s Northfield Stapleton development was the first “lifestyle” center to beLEED-Silver certified in the U.S. Photography by Steve Crecelius, Wonder Works

from the street level). There are also tenant guidelines that stress both education andincentives for tenants; those who comply get to display a sticker on their windowthat says, “Sustainability Program Participant” (Fig. 2.1).

2.2.1.2 Abercorn Common

Developed by Melaver, Inc., a privately held developer, the 169,000-ft2 AbercornCommon in Savannah (shown in Fig. 2.2), Georgia, also received a LEED-CS Silvercertification in 2006. Abercorn Common boasts the nation’s first certified quick-service restaurant in a LEED-certified building, along with a host of green featuresin the other parts of the center. The project was the first retail LEED for Core andShell certified project in the country, achieving the Silver level of performance [2].According to the developer, the second phase of the project, the 16,000-ft2 Shops600, was certified at the LEED Silver level and built without any discernible costincrease. At Shops 600, the leasable retail space includes solar water heaters and agreen roof. Harvested rainwater provides 5.5 million gal a year of irrigation water,the project’s entire consumption. In this warm climate, a highly insulated buildingenvelope and a reflective white roof reduce electricity consumption by more than30%. Porous pavement in the parking lots reduces stormwater runoff by 30%, andwater-efficient plumbing units reduce projected water use by 50%, compared withnational code requirements [3].

Green development was an extension of the owner’s vision. A few years agothe company decided that all subsequent development projects would be LEED-certified. This directive arose out of the company’s core values. In 2002, the


Fig. 2.2 Abercorn Common in Savannah, Georgia, was the first LEED-certified center in the U.S.Attic Fire Photography.

executive team met with leading sustainability expert Paul Hawken4 and devel-oper John Knott, who recommended that the company retain its ownership of itsbuildings, and to insert its values into the development process. At that time, LEEDwas rising in prominence, and the company was planning the Abercorn Commonproject. During 2002, Melaver’s planning of an office project was fairly far along(the Whitaker building) when it was halted for four months to allow staff to learnabout LEED sufficiently to enable achieving the LEED goals. The knowledge baseand goals were then also applied to Abercorn Common, which required a littlereworking of the initial planning.

2.2.1.3 First Capital Realty

First Capital Realty Inc. is the one of largest owner, operator and developers ofretail shopping centers in Canada. Primarily sited within major metropolitan neigh-borhoods and anchored by supermarkets, the firm’s Canadian centers comprise161 properties totaling about 18.9 million ft2 of gross leasable area, of which$132.8 million in properties is under development [4]. The company is undertak-ing an ambitious greening program whereby one-third of all properties will beLEED-certified with the Canada Green Building Council within three to four years,

4Hawken’s two 1990s books, The Ecology of Commerce and Natural Capitalism (with A. andH. Lovins), are still considered must reading for business executives desiring to understand how toapply sustainability thinking to their enterprises.


and the remaining (existing) buildings will be “as green as possible” over ten tofifteen years.5

2.2.1.3.1 Visionary Leadership

This green building program was initiated in 2006 by president Dori Segal, whoengaged corporate executives with his vision for the company’s shopping centerproperty holdings to be sustainable going forward—not just from an environmentalperspective, but for economic reasons.

In 2007, twenty-seven green LEED-NC projects were in progress, and 27 morewere at the planning stage. The LEED-certified requirement will relate to all newconstruction—whether on greenfield sites or on existing properties. As indicated,for existing properties, greening will evolve more slowly, such that, for example,HVAC/re-roofing/landscape upgrades will take place as the existing componentsapproach the end of their useful lives.

2.2.1.3.2 Morningside Crossing

Opened in September 2008, the development of Toronto’s Morningside Crossing(Fig. 2.3) testifies to First Capital’s commitment to corporate responsibility and sus-tainability [5]. As the first large project to benefit from the firm’s May 2006 dec-laration that all of its new buildings would be green, this property had additionalchallenges, including a previous legacy of opposition from city hall and residents.For First Capital Realty, the sustainable approach to the redevelopment of this prop-erty was unique and appropriate.

The plans and detailed design work were mostly complete for MorningsideCrossing when the company made the commitment to pursue LEED certification forits new developments. As a large and complicated project that involved the demoli-tion of a three-story mall and the promise of uninterrupted service to several existingtenants, the conversion to LEED standards and principles for all the new buildingsfurther challenged project managers and tenants. Significant changes were intro-duced to drawings, and new commitments were written into leases to reflect envi-ronmentally inspired objectives. Examples include the provision of white reflectiveroofs; 95% of the concrete from the old mall and parking structure was diverted fromlandfill and reused on-site; rainwater is now collected on rooftops and redirected forlandscape irrigation; and new green technologies ensure greater water and energyefficiency throughout the development. The objective of LEED certification becamea central theme that permeated all business decisions for this project and all thoseto follow. This desire to pursue products and practices that reduce the ecological

5The Canada LEED certification is essentially equivalent to the U.S. Green Building Council’sLEED program requirements, with some adaptation for Canadian conditions.


Fig. 2.3 Morningside Crossing, Toronto’s first LEED-compliant shopping center, is one of 30projects for which the developer, First Capital Realty, plans to pursue LEED certification.Photo: © Greg Schmidt 2008

footprint has instilled a new corporate mantra for the people who work for and withFirst Capital Realty.

First Capital Realty has clearly demonstrated that the principles of sustainabledevelopment can be integral to a successful business strategy. While the decision toconstruct green buildings presented some early internal challenges, the company’scommitment helped guide this development from the unwanted status that precededits arrival to that of a friend and celebrated addition to the community a couple ofyears later. First Capital’s outreach efforts were extensive and involved local res-idents and stakeholders from the very onset of this project. The initial plans werealtered in response to direct meetings with city officials and other stakeholders. Thisincluded the input of about 600 local residents at an open house staged by First Cap-ital staff and senior management to introduce the company and the proposed project.

2.2.2 Retailer Case Studies

2.2.2.1 Giant Eagle Supermarket

The first LEED-certified retail project was an 80,000-ft2 Giant Eagle supermar-ket in the Brunswick Town Center shopping plaza in northeastern Ohio in 2004.When building the Brunswick supermarket, Giant Eagle implemented a range of


environmentally friendly features that are fairly typical of the measures available tolarge retail stores:

• The consumption of 30% less energy than comparable supermarkets, with morethan 50% of the location’s electrical energy supplied through off-site-purchasedwind power.

• More than 50 skylights integrated with electrical lighting sensors, which auto-matically adjust the amount of electric light supplied depending on the light gen-erated by the skylight.

• A fiber-optic lighting system for wine coolers that reduces heat generation.• Natural filtration of parking lot stormwater into the adjacent constructed wetland.• Water-conserving equipment that will save more than 100,000 gal per year.• A construction waste recycling program that diverts 62% of waste from landfills.• All wood used in the building was sustainably harvested certified by the Forest

Stewardship Council.• Drought-resistant plants and trees that require no irrigation other than natural

rainfall, saving about 400,000 gal of water each year.• A green housekeeping program that uses environmentally responsible cleaning

products.• A white reflective roof and increased insulation to allow the building to cool and

heat easier [6].

2.2.2.2 Home Depot of Canada

Home Depot of Canada Inc. has 155 stores in Canada and has been working todevelop an array of ecological choices for home renovations. The North Hill projectin Calgary, Alberta, was the company’s first LEED-certified project [7]. Two yearsago, when Home Depot of Canada was planning a fifth store in Calgary, the cityrequired that any development within the location preferred by the company—thedowntown core—be LEED-certified, and (in the specific instance) utilize an existingbuilding site. Given the desirability of the site, the agreement was struck, and thefirst LEED-certified Home Depot store was developed.

The site was a small, old hotel, which was demolished, with much of this oldbuilding reused in the new structure. The size of the site meant underground parkingwas required. For a variety of green and non-green factors, including the way it wasdemolished, the requirements for reuse and a labor shortage prompting skyrocketinglabor rates (caused by rapid growth in northern Alberta oil sands development), thecost increment for this development was 25%.

Lower energy operations and maintenance costs have been noted at the store:energy costs for lighting are 40–50% less than at other stores. Additionally, therehave been some water savings due to the installation of water-free urinals and low-flush toilets, as well as timed equipment for plant watering at the garden centers.

Many of these higher building standards (such as energy-efficient lighting, tem-perature sensors allowing energy shedding by regulating lighting with external

2.3 United Kingdom (U.K.) 29

temperatures, central energy management of all stores in Canada and LED signs atboth entrances and exits) have been implemented as specifications for all new con-struction, and some have also been applied in the existing building stock. However,the company is not yet committed to bringing all its buildings to LEED standards,or even to the energy efficiency standards of LEED certification level projects.

The driving force for greening future Home Depots in Canada is the businesscase. If a store is being developed on a greenfield site, it would be more likely tobe built to LEED standards. And where a region requires that developments complywith LEED standards, and the expected sales volumes balance out the anticipatedcost increases, Home Depot of Canada’s business case requirements may be met. InBowmanville, a town near Toronto, low land costs allowed development standardstargeting a LEED-certified level. While there is a great deal of pride over the LEED-certified North Hill store, the company did not seek market differentiation on thatbasis. Home Depot of Canada believes there have been reputation benefits from theproject, but these are difficult to measure.

2.3 United Kingdom (U.K.)

Paul Edwards is head of sustainability at Hammerson, a major European real estateinvestment trust. He says:

At Hammerson, we find BREEAM useful. We produce our own internal document called aSustainable Implementation Plan (SIP) with BREEAM plugged into the overarching doc-ument. The SIP covers a lot more than just environmental issues, with social issues suchas jobs, skills and training included, it is also always evolving as the project develops.For us, BREEAM is just an element of our overall program. I think one of the benefits ofBREEAM is that it enables you to label a building as green. It has industry recognition andso tenants, agents and other stakeholders are starting to understand its meaning and that itprovides some comfort as to the environmental credentials of the building. BREEAM haslimits though and does not cover all environmental aspects [8].

2.3.1 Cabot Circus

The first BREEAM Excellent retail project in the U.K. is the Cabot Circus project inBristol (shown in Fig. 2.4). Cabot Circus provides nearly 1 million ft2 (93,000-m2)of new retail space within a 1.5 million ft2 (139,353 m2) mixed-use master planoccupying a 36-acre site. It is a leading example of a comprehensively mixed-usescheme with nine different uses: retail, catering, leisure, offices, market housing,affordable housing, student housing, hotel, and car parking. The project representsa £500 million investment by The Bristol Alliance—a partnership between LandSecurities and Hammerson, two U.K. Real Estate Investment Trusts. In addition,other entities provided a further £100 million of development within the masterplan [9].


Fig. 2.4 Cabot Circus in Bristol, U.K., is a green retail project from Hammerson. Photo:© Bristol Alliance

The scheme is the first retail project of its kind to achieve the highest BREEAMrating of Excellent. Key environmental achievements include:

• Eighty-five percent of waste was recycled during construction including storefitout waste

• Seventy percent of construction workers lived within 25 miles• “Considerate contractors” average score of 33 (out of 40)• Lighting energy use reduction through intelligent lighting controls• Sustainable tenant fitout guidance and assessment document• Rainwater harvesting system• Roof gardens within residential areas.

2.3.1.1 Sustainability Guidelines

The developer provided environmental guidance for all tenants through a number ofinitiatives, including a store fitout guide, retailer and on-site management trainingand an education and green issues awareness program. Lighting to streets uses highefficacy LED lighting where appropriate. Motion detectors control back-of-housearea lighting to significantly reduce energy use. Car park lighting energy usagecosts are reduced 50% through the use of intelligent controls and high-efficiencylamps. An enhanced level of control allows three-stage switching of lighting toall levels, linked to daylight sensors to ensure that lighting is not on during day-light hours. Perimeter lighting is also controlled independently of lighting furtherinto each floor. The architectural design of the scheme took advantage of natural

2.3 United Kingdom (U.K.) 31

Fig. 2.5 The £350 million Highcross shopping center in Leicester, U.K., is a significant contribu-tion to a city revitalization project and is rated Very Good by the BREEAM rating system. Photo:© Hammerson

ventilation to reduce the energy demands associated with heating and cooling vialarge air handling systems, saving around 5 million kWh annually.

Building materials with low environmental impact were used throughout theproject. Sustainably harvested timber and mineral wool insulation, along with recy-clable materials such as zinc and copper, were used in preference to less recyclablematerials. Materials such as natural stone, brick, steel, glass and landscaping werepredominantly U.K.-sourced where possible. During construction, the project recy-cled 90% of steel waste, and 80% of timber waste was chipped and recycled. Bydesign, some 40% of concrete came from recycled sources.

Low-water-use fixtures were installed in residential units, landlord and publicareas. The rainwater harvesting system captures rainwater from the street canopiesfor reuse in flushing toilets and irrigation throughout the project.

Another Hammerson project is Highcross, shown in Fig. 2.5. Of this project andHammerson’s overall approach, Edwards says,

When I joined Hammerson in 2007, we basically drew a line in the sand on all of ourprojects in construction and asked: What is the current sustainability status on all of theseprojects? We called it a sustainability profile. We did this for Cabot Circus and Highcross.We found that they would have achieved a BREEAM Very Good. We reviewed all of theaspects of Very Good and then all of the aspects of how to get to Excellent [the next level],including how much it would cost. It was basically a case of focusing the teams’ minds asmuch as anything. That initial investigation came back saying it was going to cost us £2million at Cabot Circus and £2.6 million at Highcross. Following a detailed and thoroughreview with the design team and main contractor, we found it was just simple things that


were missed or points hadn’t been claimed and the cost at Cabot Circus was reduced to justunder £300,000. We invested in modeling the stores and reorganized the way we actuallyapproached BREEAM. Highcross is an extension to an existing asset and so it posed muchmore difficult questions, and the cost turned out to be prohibitive at that particular time inthe project.

So at Cabot Circus it turned out not to be a huge cost to take it to Excellent and theBristol Alliance agreed that the investment was worth it. The main things we’ve done areincorporate high efficiency lighting, daylighting, natural ventilation, high efficiency boil-ers, rainwater collection and use of sustainable materials. We also completed an exercisewith WRAP—Waste Recycling Action Program, a government program. Through that, wefound we could change minor things that created a better, more sustainable project, suchas increasing the recycled content of blockwork. In summary, it is much easier to achieve ahigher rating at a lower cost if you start early. BREEAM does not solve sustainable devel-opment, its merely acts as a directional tool.

2.4 Austria

In Central Europe, SES SPAR European Shopping Centers (SES) operates a num-ber of shopping centers with a strong focus on sustainability. In 2008, ICSC recog-nized two of its centers in Austria with ReSOURCE awards: Q19 EinkaufsquartierDöbling in Vienna and ATRIO in Villach, which also received a commendation inthe medium-size award category [10, 11].

SES received the award for its efforts to ensure the efficient use of energy, wastedisposal and use of locally sourced materials, and also for the strong social- andcommunity-oriented strategies to ensure the integration of the centers within thesocial and economic infrastructure of existing towns. For example, ATRIO caters tothree distinct cultures, Austria, Italy and Slovenia, providing a real heart to the cross-border community and living up to its motto “Sensa Confini”—without borders. Theprogram of the center adopts the motto of the three countries’ cross-border Olympicbid. The traditional Roman idea of the atrium is reborn in both the name of thecenter and the central plaza idea. The architectural concept arranges the mall andthe Interspar hypermarket around this glazed central plaza (50 × 60 m), creating anew urban square for the city of Villach.

ATRIO saves energy with a concept that transforms most of its foundation intogeothermal “energy piles” making use of geothermal energy assisted by a districtheating system from a local power plant. External LED lighting meets all currentEuropean regulations. Recycling is aggressive, and the center was subjected to astringent environmental impact assessment before building permission was granted.

At the Q19 shopping center in Vienna (Wien-Döbling), translucent Teflon R©roofs are illuminated to create a space that appears to open to the sky and savesenergy. Q19 utilizes energy-efficient cooling systems, benefiting from less use ofelectricity, with higher electrical rates designed during periods of peak demand toreduce daytime usage. Water and energy consumption are monitored constantly.LED lighting of the facade is used to create strong architectural effects. Withlandscaped, planted roofing and green public green areas, biodiversity and com-munity comfort make Q19 an example of environmental, social and economicsustainability.

2.5 Japan 33

2.5 Japan

AEON is a large Japanese retailer that has approached sustainability and retail devel-opment in a very systematic way [12]. To understand its approach to green buildingsrequires an appreciation of the high-level principles and goals it has adopted forcorporate sustainability generally. In 2004 and 2005, AEON released an “Agendafor Prevention of Global Warming” and a “Midterm Plan for Prevention of GlobalWarming.” Its new developments since then have incorporated the company’s phi-losophy and action agenda.

As a retailer, AEON developed three principles to inform its sustainable agenda:first, prevent global warming through improvements in logistics; second, preventglobal warming through building and operating the stores; and third, prevent globalwarming through acting with customers.

In March 2008, the company released the “AEON Declaration for Prevention ofGlobal Warming.” In this declaration, AEON set a goal for carbon dioxide emissionreduction of 30% by 2012, compared to 2006 emissions levels. This goal representsa reduction in carbon dioxide emissions of 1,850,000 metric tons. To implement thedeclaration, the company set numeric targets for installing photovoltaic panels on300 stores and planting 11 million trees worldwide.

To further implement the declaration, AEON developed an “Eco-Store” conceptto study effective environmental measures for its stores. Based on the studies, AEONopened the first eco-store, AEON Chikusa Shopping Center in Nagoya city, in May2005. The company has since opened eight eco-stores in Japan; for example, inthe shopping centers AEON Kashiwa in Kashiwa city, Chiba prefecture; AEONDainichi in Moriguchi city in Osakaj; AEON Kagoshima in Kagoshima city; Max-valu Taki; AEON Laketown (shown in Fig. 2.6) and AEON Hiezu.

Fig. 2.6 AEON shopping center in Laketown, Japan, received high marks from that country’sCASBEE rating system. Courtesy of AEON Retail Ltd.


These stores introduced eco-friendly measures such as utilizing solar energy,planting trees, installing advanced HVAC systems and using recycled materials.Through self-assessment, these stores got “A” ratings from Japan’s CASBEE6

system. CASBEE further certified an even higher “S” ranking for AEON Lake-town Shopping Center, which reduced carbon dioxide by more than 20%, com-pared with a typical center. This shopping center won additional awards, includingan Ecobuild Award, Lighting Dissemination Award and Environmental EquipmentDesign Award in 2006 and an Assessment Case Study award from the World Sus-tainable Building Conference in 2005.

2.6 Australia

Green Star is the Australian green building rating system. In the summer of 2008,the Green Building Council of Australia introduced a new version of Green Star forretail centers. The first three certified projects under this new standard came fromthe pilot system used to test the applicability of the rating criteria.

The Mirvac Group’s Orion Springfield Shopping Center in southeast Queens-land, near Ipswich (shown in Fig. 2.7), was rated at 6 Star Green Star (World Leader)in 2008 [13]. The Center houses about 110 shops in 35,000-m2 of space, with a MainStreet, Town Square, and connecting malls. Mirvac’s strong commitment to sustain-ability is found in its broad participation in national and global sustainability pro-grams, including the 2006 and 2007 Climate Disclosure Leadership Index (CDLI)and a listing on the U.K.’s “FTSE4Good” Global Index [14]. The Australian SAM

Fig. 2.7 Orion Springfield is Australia’s first Green Star rated shopping center.Photography courtesy of Christopher Frederick Jones

6CASBEE is the Japanese equivalent of LEED and BREEAM.

2.7 Turkey 35

Sustainability Index (AuSSI) recognizes Mirvac as one of the top sustainability-driven companies within the entire Australian economy [15].

The cost of the Orion Springfield project is estimated at A$130 million, with anadditional A$2.5 million (about 2%) spent on green building initiatives, which thecompany predicts will offer a payback period of six years. According to Mirvac,this shopping center is already saving money operationally compared to other cen-ters in its portfolio and is future-proofed to meet tenant and consumer demand forsustainable buildings over the coming decade [16].

The Chadstone Shopping Center in Melbourne, Victoria, was rated at 5 StarGreen Star (Australian Excellence), also in the Green Star pilot program, while theWestfield Doncaster Shopping Center, an A$600 million redevelopment in Mel-bourne, was rated at 4 Star Green Star (Best Practice).

The 120,000-m2 (1.29-million-ft2) Doncaster Center implemented some uniqueinitiatives, including two 50,000-l (13,200-gal) rainwater harvesting tanks to pro-vide water for general cleaning and irrigation purposes, solar hot water panels, lightfixtures with energy-saver lamps and sophisticated building management systemsthat monitor and minimize energy use [17].

2.7 Turkey

The Germany-based Metro Group Asset Management company opened its center inMeydan in 2007. The parent Metro Group is one of the largest international retailingcompanies. In 2007 the Group reached sales of around C64 billion. The companyhas about 290,000 employees and operates over 2,100 stores in 32 countries [18].Metro Group has had a sustainability program in place since 2002, with the goal ofidentifying the relevant social and ecological challenges facing the company, withresulting practical actions and objectives to maximize opportunities and/or minimizerisks for the company [19]. Metro Group is particularly focused on using renewableenergy systems, including solar and geothermal.

Metro Group Asset Management realized high-level green building standardswith its Meydan Shopping Square (shown in Fig. 2.8), which opened in Istanbul inOctober 2007. A sustainable energy concept is the main characteristic of the Shop-ping Square. One of Europe’s largest geothermal plants is located beneath the center;in summer the plant cools the center and in winter, it heats it. The geothermal planthelps to save 1.3 million kWh of primary energy per year as well as 350 tons ofcarbon dioxide. The Meydan Shopping Square has about 30,000 m2 (323,000 ft2)of green roof space. This project has already received several international awardssince it opened, including the Prime Property Award 2008 at the Expo Real confer-ence in Munich, which recognizes properties that combine sustainable managementwith social requirements, and the Award for Excellence of the Urban Land Institute(ULI) Europe.

Following the opening of the Meydan Shopping Square, Metro planned to openanother shopping center in Istanbul, Merter, which will open in mid-2009 and fea-ture a sustainable climate control concept: a solar chilling system built on the roof of


Fig. 2.8 The 30,000-m2 green roof on Metro Development’s Meydan center in Istanbul, Turkey,not only offers a space to linger but also helps control the building’s internal climate. Photo© Mr. Murat Pulat

the center. Solar chilling technology is new: Parabolic troughs form a field of collec-tors and capture the energy from the rays of the sun. The resulting high-temperaturewater can be utilized in winter in the heating system of the building. In summer thesteam from the hot water is transformed into cool air in an absorption refrigerationsystem and thus used for climate control.

2.8 Singapore

The Singapore Building and Construction Authority (BCA) awarded the CitySquare Mall in Singapore, a project of City Developments Limited (CDL), the Plat-inum Green Mark in 2007. This is the first time that the government awarded thistop-tier Green Mark certification to a private developer for a commercial building[20]. The BCA Platinum Green Mark is awarded to exemplary green projects thatdemonstrate 30% energy and water savings, as well as environmentally sustainablebuilding practices and innovative green features. Shown in Fig. 2.9, the 700,000-ft2

mall is projected to reduce its energy usage by approximately 39% compared to stan-dard designs. This savings results in an estimated emission reduction of over 5,700metric tons of carbon dioxide per year. CDL invested approximately 5% of the totalconstruction cost into the development of the center’s numerous green innovations.

The City Square Mall’s design features include many Singaporean firsts. It isthe first shopping mall project to be integrated with an urban park. It is the firstcommercial project to boast a pneumatic waste collection system for an odor-free

2.9 China 37

Fig. 2.9 City Square Mall in Singapore was the first such development to be awarded the govern-ment’s platinum Green Mark. Artist’s impression courtesy of City Developments Limited

and pest-free environment, built with separate chutes to encourage recycling of foodand dry waste. It is also the first shopping mall to have motion sensors fitted into thebasement parking garage to control the lighting level for vehicles.

2.9 China

An interesting example of an early LEED-certified shopping center in China isthe LeSong Mall in the northeastern city of Harbin [21]. The LeSong Mall is afour-story, 642,000-ft2 (60,000-m2) building with a retail capacity of 135 shops,including supermarkets and retail stores. Developed by Hadian Real Estate Com-pany, LeSong Mall achieved LEED Silver certification in 2005 under the LEED-CSpilot program.

2.9.1 LeSong Mall

LeSong Mall was designed to reduce energy consumption by 29% compared tothe prevailing LEED baseline standard. The building also saves water through useof water-efficient plumbing fixtures. Low-VOC (low off-gassing) paints and low-emitting carpeting were used to improve indoor air quality. Construction wastematerials were recycled or reused, with over 75% of construction waste divertedfrom the waste stream. The project also used locally sourced materials for morethan 20% of value of all construction materials.


2.9.1.1 Energy Efficiency Measures

Energy efficiency measures include high-efficiency lighting, daylighting controls,additional insulation above code, high-efficiency glazing, demand-control ventila-tion and chillers with heat recovery for domestic hot water production.

The lighting power density was reduced by 20%, from the original design of25 W per m2 to 20 W per m2 (from 2.32 to 1.86 W per ft2). Lighting controlsare used to automatically dim or turn off lighting in daylight spaces. Daylightingcontrols act to reduce the overall building peak electrical load in two ways: first bydirect reduction of lighting energy use, and second by reducing the cooling loaddemand resulting from the waste heat of electric lighting. Daylighting controls wereused within 15 feet of perimeter window areas, and in the open mall area under thebarrel-vault skylight.

Ventilation for the building is achieved through a demand-controlled ventilationcontrol scheme employing carbon dioxide sensors to monitor and control ventila-tion. This approach effectively matches ventilation to actual occupancy of the build-ing, thereby reducing heating and cooling costs.

Use of more efficient lighting, along with an improved thermal envelope, allowedfor a “downsizing” of installed chiller capacity by nearly 17% over the baselinebuilding, saving a capital cost of RMB 649,440 (US$93,000).7

2.9.2 Central Walk

Another interesting Chinese project, designed by the U.S. firm Callison Archi-tecture, is the Central Walk project in Shenzhen, encompassing 135,000 m2

(1.5 million ft2) of high-end retail, dining and outdoor public space, shown inFig. 2.10. Central Walk attempts to balance environmental responsibility andresource efficiency with commercial viability. To achieve this, several factors,including access to public transportation and green space, optimized energy perfor-mance and a green roof, were incorporated to make Central Walk a significant greenmall in China. The building’s recessed design allows the roof garden to seamlesslyconnect with the street-level garden walkways and activities.

Integrated landscaping and cascading gardens throughout the project foster phys-ical and visual connections to nature. At 26,000 m2 (276,000 ft2), the roof gardenreduces the heat island effect while restoring open space and natural habitat. Thesubterranean design and daylighting optimize energy performance. Roof skylightsprovide daylight to lower levels to reduce dependence on artificial lighting duringthe day. The vertical design stacks the rooftop public park on top of a four-storyretail center with underground parking, while the center’s direct connection to thecity’s new subway line and bus system, along with walkways and footbridges, pro-motes a pedestrian-friendly environment [22].

7Conversion rate of approximately 7 RMB = $1 US.

References 39

Fig. 2.10 Central Walk shopping mall, opened in 2007 in Shenzhen, China.Courtesy of Callison/Chris Eden

2.10 Summary

In terms of greening the retail sector, there’s little doubt that the retail landscapeworldwide will look much different by 2012. In spite of the poor economic climatefor retail development and retail in general prevailing in 2008 and 2009, one can stillexpect that the number of large retailers and developers announcing green buildinginitiatives will accelerate in 2009 and reach a crescendo in the 2010 to 2015 period.The number of shopping center developers building certified green retail centers willincrease, so there will be hundreds of new projects registered each year and dozenscertified. The engagement of center developers with the public sector, in terms ofentitlement (political approval) benefits and green project requirements, will feedthis trend.

References

1. USGBC project registration statistics, available at http://www.usgbc.org/leed. These numbersare updated monthly.

2. Melaver project receives 2nd LEED certification. (2007, February 22). SavannahMorning News. Retrieved on March 31, 2007, from http://www.abercorncommon.com/index.php?option=com_content&task=view&id=20.

3. Shops 600 at Abercorn Common receive LEED Silver certification. (2007, February 25).Retrieved on March 31, 2007, from www.prleap.com/pr/67257.

4. First Capital Realty Annual Report. (2006). Retrieved on December 28, 2008, fromhttp://www.firstcapitalrealty.ca/Files/Annual Report/fin_e_28.pdf


5. Information supplied by First Capital Realty.6. Giant Eagle becomes first LEED certified supermarket. (2004, December, 27) Retrieved on

December 28, 2008, from http://www.greenbiz.com/news/news_third.cfm?NewsID=27528.7. Interview with Nick Cowling, Senior Manager, Communications and External Affairs, Home

Depot of Canada Inc., June 2007.8. Interview with Paul Edwards, November 2008.9. Cabot Circus media information provided by Hammerson PLC.

10. ICSC ReSource Award goes to Sonae Sierra. (26 April 2007). ICSC Press Release.11. SES Spar European Shopping Centers web site. Retrieved on 28 December 2008, from

http://www.ses-european.com/ATRIO.3f2bc4f96c.s33.24.1.html.12. Interview responses from Jyunji Kinoshita and Kitase Tadashi, Group Environmental and

Social Contribution Department, AEON, December 2008.13. Orion Springfield web site. Retrieved on December 28, 2008, from http://www.

orionspringfield.com.au/sustainability, accessed December 28, 2008.14. FTSE4Good Global Index. Retrieved March 16, 2009, from http://www.ftse.com/Indices/

FTSE4Good_Index_Series/index.jsp.15. Mirvac web site. Retrieved on December 28, 2008, from http://www.mirvac.com/

sustainability-overview.16. Green Building Council Australia. (2008). p. 32. The Dollars and Sense of Green Buildings.17. Westfield Doncaster the passion for fashion. (16 October 2008). Retrieved on Decem-

ber 28, 2008, from http://whatswhat.com.au/fashion/news-and-celebrity/alicias-blog/2008/10/16_Westfield_Doncaster_Redevelopment_Unveiled.html.

18. Interview with Arco Rehorst, Metro Group, November 2008.19. Metro Group web site. Retrieved on December 28, 2008, from http://www.metrogroup.de/

sustainability.20. Information provided by City Developments Ltd., December 2008.21. Information supplied by Abhishek Lal and Jason Hainline, EMSI, www.emsi-green.com.22. Personal communication, Callison Architecture, January 2009.

Chapter 3What Is a Green Building?

Following a worldwide survey of the green building movement, this chapter takes acloser look at green building design and certification systems, the core of any strat-egy for greening retail buildings and developments. Since 2000, the green buildingmovement has become increasingly influential in the public and institutional sectorand in private-sector office buildings. However, it is just beginning to be noticed inthe retail sector, as retailers and developers start to engage in major sustainabilityinitiatives. Greening the retail sector is an important component of the overall greenbuilding movement; in the U.S., for example, more than 20,000 retail buildings arebuilt annually, and they comprise the second-largest commercial building sector,after office buildings.

3.1 Green Buildings Since 2000

Green buildings and sustainable design have been major movements in the design,development and construction industry since about 2000, with an accelerating inter-est since 2006. Figure 3.1 shows the growth of green buildings in the U.S., in termsof cumulative LEED project registrations and certifications, both increasing 75% in2007 alone, and more than 80% in 2008, versus the prior year.

In this respect, the acceptance and practice of green building design, after grow-ing steadily from 2000 to 2005, in fact began accelerating from 2006 to 2008(equating green commercial buildings in the U.S. with LEED-certified buildings).A similar situation holds true, with less dramatic growth, for the U.K.’s BREEAMsystem, as shown in Table 3.6.

However, a large majority of such projects are still at a basic level of greendesign, as shown by the number of LEED Certified and Silver projects as a percent-age of the total. By the end of 2008, total LEED for New Construction and MajorRenovations (LEED-NC) project certifications (U.S. projects only) numbered 1,420(including the four major systems—LEED for New Construction and Major Reno-vations, LEED for Core and Shell, LEED for Commercial Interiors, and LEED forExisting Buildings: Operations and Maintenance), total certifications were 2,213.Table 3.1 shows the growth of each of these programs since 2004, through the end


42 3 What Is a Green Building?

Fig. 3.1 The growth of new LEED registered projects in the U.S. has consistently grown at morethan 50% per annum

of 2008, shown by the number of new projects registering their interest in pursuingeventual certification.

Table 3.2 shows that the relative percentage of high-performance LEED-NC cer-tifications (Gold and Platinum) represent about 35% of the total, with Platinum rep-resenting some 113 U.S. projects, or 5% of the total. Looking at these numbers, it iseasy to want to focus on Gold and Platinum projects. However, most retail projectsare still at the more basic LEED Silver and Certified levels.

Table 3.1 Growth of All LEED Project Registrations, 2004–2008 [1]

LEED system 2008 2007 2006 2005 2004

LEED-NC 9,555a 5,800 3,895 2,758 1,792LEED-CS 2,147 1,147 325 142 62LEED-CI 1,757 852 462 233 106LEED-EB 2,063 769 244 151 88

Total 15,522 8,568 4,926 3,284 2,048

a Numbers are cumulative, beginning in 2004.

3.2 High-Performance Building Characteristics 43

Table 3.2 LEED-NC Certifications by Attainment Level, December 2008a

Level Number of certified projects Percentage of total certifications

Certified 664 31.2%Silver 711 33.5Gold 635 30.0Platinum 113 5.3

Total 2,123 100.0

a Numbers are cumulative, beginning in 2004.

3.2 High-Performance Building Characteristics

What do the terms “green building” and “high-performance building” actuallymean? A green building is one that considers and then reduces its impact on theenvironment and human health. A green building uses considerably less energyand water than a conventional building and has fewer site impacts and gener-ally higher levels of indoor air quality. It also accounts for some measure ofthe life-cycle impact of choices between various types of building materials, fur-niture and furnishings. Green building benefits result from better site develop-ment practices; design and construction choices; and the cumulative effects ofoperation, maintenance, removal and possible reuse of building materials andsystems.

In the U.S. and Canada, a green building is generally considered to be one cer-tified by the LEED green building rating system of the USGBC or Canada GreenBuilding Council (CaGBC).1 For our purposes, we will use “high-performance”buildings to designate those that achieve a certification from the U.S. or CanadianLEED systems, or from the U.K.’s BREEAM system, or from the Australian GreenStar.2 This is not entirely a fair choice, because there are some excellent green build-ings that have not sought certification; however, increasingly, one must ask that ahigh-performance building achieve a reputable third-party certification, since other-wise there would be no standards at all for the definition.

This said, the retail industry has criticized LEED for certain requirements that itfeels are not realistic for the retail store or development. For example, retail storestend to use more lighting than the office buildings that are still the core applicationfor the LEED rating system. In response, the USGBC has worked with the retailindustry in the U.S. to develop a specific LEED for Retail standard (for individualstores) that will become an official certification program in August 2009, following a

1This is the author’s viewpoint and not necessarily that of the ICSC or its members.2The U.S. ENERGY STAR labeling system deals only with the relative energy performance of abuilding compared with others of similar use, while in contrast, LEED and BREEAM are absolute,objective standards. It is an important label, but falls short of being a green building certification.The same holds true for the European Union’s energy use labels under the Energy Performance inBuildings Directive, scheduled for full implementation in 2010.


two-year “pilot program” or “beta test.” The primary “missing link” still is a ratingsystem for overall shopping centers; USGBC and the industry are working on anequitable rating system for such centers, but this is unlikely to be in place before2010.

The essence of LEED and BREEAM is a point-based rating system that allowsvastly different green building practices to be compared, using one resulting aggre-gate score. This provides an owner, tenant or developer with the ability to label awide variety of buildings and to rate very dissimilar approaches to sustainable con-struction and operations with one composite score. Some people may argue withthe relative importance of various categories of environmental concern, but both ofthese rating systems have stood the test of time through continuous improvementand openness to intelligent modification and innovation. Because they are point-based, LEED and BREEAM also appeal to the competitive spirit in the retail psy-che, which values winning very highly and often associates getting “more points”with beating the competition.

Interestingly, LEED and BREEAM are seen around the world as good examplesof rating systems that are practical to use, but which still signal achievements in sus-tainable construction and operations far above the norm for most buildings.3 Overthe years, LEED and BREEAM have continually adjusted their credit requirementsto stay at the leading edge of green building design. In 2009, for example, LEEDcredits were revised, reflecting a rigorous “life-cycle assessment” approach, givingeach credit equal weight for equal environmental benefit. This new system givesowners, along with design and construction teams, far more flexibility in pickingwhich credits to pursue in a given geographic region or for meeting client prefer-ences that might, for example, value energy savings or water savings much morethan the current system.

In September 2006, the U.S. General Services Administration reported to theU.S. Congress that it would use only the LEED system for assessing the govern-ment’s own projects [2]. The U.S. Army adopted LEED in 2008, to replace its ownhomegrown “Spirit” rating systems. Therefore, in the commercial and institutionalarena, if a project is not rated and certified by an independent third party, such asLEED or BREEAM, it can’t really be called a green building, since there’s no otherstandard definition. Companies are of course free to come up with their own pro-grams, but these still have to meet the test of general public and media acceptance,something that the USGBC and the LEED system have accomplished over the pastten years.

If someone states they are “following LEED or BREEAM” but not applying forcertification of the final building, one should wonder if the final construction willreally achieve the expected results, especially if there is no detailed documentation

3For example, a similar approach is being pursued by the German Green Building Council,Deutsche Gesellschaft für nachhaltiges Bauen, which formed in 2007, www.dgnb.de. The Ger-mans began to issue their certificate of sustainable building excellence, “Deutsches GütesiegelNachhaltiges Bauen,” early in 2009. See Appendix A.

3.3 Green Building Practices 45

and independent third-party review of results. If they say they are doing “sustain-able design,” you have a right to ask, “Against what standard are you measuringyour design, and how are you going to prove what you did?” Most retail buildingsdon’t yet measure up to any accepted standard of a green building. However, thatsituation is undergoing rapid change for the better, as more retailers and developersare engaging in store and project certification using accepted green building certifi-cation programs.

3.3 Green Building Practices

A green building uses design and construction practices that significantly reduceor eliminate the negative impact of buildings on the environment and occupants.In the LEED and BREEAM systems, these practices include building location,water and energy use, environmentally preferable purchasing and waste manage-ment activities, improved indoor environmental quality and a “continuous improve-ment” approach to green building innovations. Though owned by the USGBC andBRE, respectively, the LEED and BREEAM rating systems are publicly availabledocuments; they have been kept current and improved over time. The new LEED2009 system, effective April 27, 2009, has greater flexibility for building teams toconsider regional issues, a strong focus on life-cycle assessment and a better wayto handle alternative approaches to designing “low-carbon” buildings. In this way ithas moved closer to the BREEAM system.

Table 3.3 shows the six major categories in the LEED-NC 2009 (for new con-struction and major renovations) rating system for commercial and institutionalbuildings and mid-rise and high-rise residential towers above four stories. At firstthought, many people think of a green building as one that primarily uses less energyand possibly uses recycled-content materials. Looking at the entire LEED rating sys-tem, one can see that the categories of concern are much broader and more compre-hensive than just saving energy. Most practitioners in the design, development andconstruction industry in the United States and Canada have embraced this systemover all other competing standards and definitions. One piece of evidence for thisviewpoint is the more than 77,000 industry professionals who have already becomeLEED Accredited Professionals by national exam [3].

From the standpoint of commercial buildings, the LEED rating system is heav-ily weighted toward saving energy. However, it’s virtually impossible to get LEEDSilver or Gold ratings without paying close attention to the sustainable sites crite-ria, water conservation measures, providing higher levels of indoor environmentalquality and engaging in choices that conserve materials and resources. In this senseLEED Silver and Gold projects are fairly balanced across all five main groups ofenvironmental attributes (see Table 8.1). In certified retail projects the main dif-ference between Gold and Silver is a higher level of energy savings in the Goldproject.


Table 3.3 LEED-NC 2009 System Categories of Concern

Category Total points Issues evaluated by the LEED-NC 2009 system

1. Sustainable sites 26 Avoiding sensitive sites; promoting urban infill;locating to facilitate use of public transportation;reducing site impacts of construction; creatingopen space; enhanced stormwater management;lowering the urban heat island effect andcontrolling light pollution

2. Water efficiency 10 Encouraging water conservation in landscapeirrigation and building fixtures; promotingwastewater reuse from on-site sewage treatment

3. Energy efficiency 35 Energy conservation; using renewable energysystems; building commissioning; reduced use ofozone-depleting chemicals in HVAC systems;energy monitoring and green power use

4. Materials/resources 14 Use of existing buildings; facilitating constructionwaste recycling; use of salvaged materials,recycled-content materials, regionally producedmaterials, agricultural-based materials andcertified wood products

5. Indoor environment 15 Improved ventilation and indoor air quality; use ofnontoxic finishes and furniture; greenhousekeeping; daylighting and views to theoutdoors; thermal comfort and individual controlof lighting and HVAC systems

6. Innovation 10 Exemplary performance in exceeding LEEDstandards; use of innovative approaches to greendesign and operations; four points for addressingregional issues

3.4 The LEED Rating Systems

LEED rates all buildings across five major categories of concern, using key environ-mental attributes in each category. LEED collects and incorporates a wide varietyof best practices across many disciplines including architecture, engineering, inte-rior design, landscape architecture and construction. It is a mixture of performancestandards (for example, save 20% of the energy use of a typical building) and pre-scriptive standards (for example, use paints with less than 50 g per l of volatileorganic compounds), but leans more toward the performance approach. In otherwords, LEED believes that best practices are better shown by measuring results(outcomes) not by prescribing efforts alone (inputs).

Until 2009, each LEED rating system had a different number of total points,so that scores could only be compared within each system; however, the methodfor rewarding achievement is identical, so that a LEED Gold project for New Con-struction represents in some way the same level of achievement (and degree of dif-ficulty) as a LEED Gold project for Commercial Interiors (tenant improvements).

3.4 The LEED Rating Systems 47

Fig. 3.2 LEED for NewConstruction and MajorRenovations distributes itspoints across six differentenvironmental attributes

Figure 3.2 shows how the LEED-NC rating system splits points into the five majorcategories of concern.

LEED version 2.2 project attainment levels are rewarded as follows4:

Certified >40% of the 64 core points in the systemSilver >50% of the core pointsGold >60% of the core pointsPlatinum >80% of the core points

The LEED rating system is a form of an eco-label that describes the environ-mental attributes of the project, similar to the nutrition labels on food. Prior to theadvent of LEED, there was no labeling of buildings other than for their energy use,as found in the federal government’s ENERGY STAR R© program. While useful inpresenting a building’s energy use compared with all other buildings of the sametype in a given region, ENERGY STAR gives an incomplete picture of a building’soverall environmental impact. The LEED scorecard shows a project’s achievementin each credit category and allows you to quickly assess the sustainable strategiesused by the building team (Fig. 3.3)

The irony here is that a $20 million building that is not LEED-certified has lesslabeling than a $2 box of animal crackers, in terms of its “nutritional” benefits

4LEED 2009 will award certificate levels based on the same percentages of the 100 “core” pointsin the new system.


Fig. 3.3 An example of a “LEED Scorecard” showing points garnered by this LEED Gold-ratedOffice Depot project. Redrawn with permission from Office Depot

(energy use, water use, waste generation, etc.) and its basic ingredients (materialsand systems).

Owners of commercial buildings have far less knowledge of what is in the build-ing they just built or bought than one might think, because the construction processis messy: there are usually thousands of design decisions made, along with manyproduct and materials substitutions and changes during construction, and there isseldom money left over to document what really went into the building, so that theconstruction documents often give an incomplete or even inaccurate picture of whatis actually in the building and how all of the building systems are supposed to worktogether. (The case may be slightly different for retail prototypes, but even so, thereare a lot of changes to accommodate site conditions and local codes.)

To understand a building’s ingredients and its expected performance (includingoperating costs for energy and water), an eco-label such as LEED, BREEAM orGreen Star is especially valuable both to building owners and to occupants whomay naturally be more concerned about how healthy the building is rather than howmuch water it saves. Figure 3.3 shows the LEED scorecard for an Office Depotcertified project.


Complicating this rather straightforward percentage method (for determining lev-els of LEED certification) is the addition of a sixth category with up to 10 “bonus”points for “innovation and design process.” In addition to securing a certain num-ber of points, each rating system has “prerequisites” that each project must meet,no matter what level of attainment it achieves. For example, a LEED 2009-certifiedbuilding must reduce energy use to at least 10% below that of a comparable buildingthat just meets the American Society of Heating, Refrigerating and Air ConditioningEngineers (ASHRAE) 90.1-2007 standard for building energy performance.5

Table 3.4 shows the four major systems that account for the vast majority ofLEED registered and certified projects as of December 2008 (not including theLEED for Homes and LEED for Neighborhood Development pilot programs).From this table, you can see that the LEED-CS system is the second most pop-ular, followed by LEED-EB (now LEED for Existing Buildings Operations andMaintenance).

To best understand LEED, think of it as a self-assessed, third-party-verified rat-ing system. (In that sense, it is like the U.S. income tax system: you decide whatyou owe, and a third party—the Internal Revenue Service—decides if you are cor-rect!) In the case of a LEED certification, a project team estimates the particularcredits for which a project qualifies and submits its documentation to the USGBC,which assigns the review to an independent third party; there is a one-step appealprocess for situations in which the project proponent disagrees with the reviewers’decisions.

Table 3.4 The Major LEED Rating Systems for Commercial Buildings, December 2008

Rating systemPercentage of totalregistrations [4]

Percentage of totalcertifications

LEED for New Construction (LEED-NC) 61.6 67.1LEED for Core and Shell (LEED-CS) 13.8 6.0LEED for Commercial Interiors (LEED-CI) 11.3 18.8LEED for Existing Buildings (LEED-EB) 13.3 8.1

3.4.1 LEED for New Construction

The most widely known and used LEED system is LEED-NC, which is useful for allnew buildings (except core and shell developments), major renovations and housingof four stories and above. Table 3.3 captures the essence of the LEED-NC ratingsystem’s major categories of concern. Through the end of 2008, about 62% of LEEDprojects were registered and 67% were certified using the LEED-NC assessment

5ASHRAE 90.1-2007 is the accepted U.S. and Canadian standard for measuring expected buildingenergy performance against a standard or “building code-compliant” similar building designed andconstructed without additional energy-efficiency measures.


method. LEED-NC has frequently been used as the assessment system for retailstand-alone buildings, along with the pilot version of LEED-NC for Retail.

A LEED-NC rating is typically awarded after a building is completed and occu-pied, since it requires a final checkout process known as “building commissioning”before the award can be made. Under the current LEED version 2.2, certain cred-its known as “design phase” credits can be assessed at the end of design and priorto construction completion, but no final certification is made until all credits arereviewed after substantial completion of the project.

3.4.2 LEED for Core and Shell Buildings

LEED for Core and Shell is a system employed typically by speculative develop-ers who control less than 50% of a building’s tenant improvements at the time ofconstruction. They may build out 40% of the space for a lead tenant, for example,and then rent the rest of the building to several tenants who will take much smallerspaces. LEED-CS is a popular system for developers building retail shell spaces, andit works well as long as the developer also provides the HVAC system and requirescertain green building measures as part of the tenant’s lease.

LEED-CS allows a developer to precertify a design at a certain level of attain-ment, then use the LEED rating to attract tenants and, in some cases, financing.LEED-CS also allows a “design phase” review if precertification is not requested.Once the building is finished, the developer submits documentation to secure a finalLEED rating. Figure 3.4 shows how the LEED credits in the five main categoriesare distributed in the LEED-CS system. Except for having eight fewer total points(including two fewer points for energy efficiency), the distribution of credits is quitesimilar to LEED-NC.6

The benefit of the LEED-CS system for a retail center developer is that marketingcannot wait until a building is finished. By allowing a precertification, using a sys-tem very similar to LEED-NC, the LEED-CS rating assists the developer in secur-ing tenants and thereby encourages more green buildings. Not only that, LEED-CSawards a point for creating tenant guidelines that encourage each tenant to use theLEED-CI system to build out their interior spaces. If that happens, the result is sim-ilar to a LEED for New Construction building, and everyone is happy!

In the commercial office sector, there is growing evidence that a LEED-CS cer-tification helps developers to lease space faster and attract better tenants. Thereis also evidence that ENERGY STAR-labeled buildings attract higher rents andresult in higher resale values [5, 6]. To date, there are no similar studies forthe retail sector, as it is at a much earlier stage of market penetration for greenbuildings.

6See the presentation of LEED 2009 in Appendix 2, in which all of the four major rating systemsnow have the same number of points.


Fig. 3.4 LEED for Core andShell can be used for shellretail spaces

3.4.3 LEED for Commercial Interiors

LEED-CI is designed mainly for situations in which the base building systems arenot changed and in which a tenant only takes up space in a much larger retail shellbuilding. In this circumstance, the ability to affect total energy and water use, orsuch issues as open space, landscaping or stormwater management, is either muchsmaller or nonexistent. Thus, other green building measures are incorporated intothe evaluation system. These measures include choices that retail tenants can makeabout lighting design, energy-using equipment, lighting control systems, subme-tering, furniture and furnishings, paints, carpet and composite wood products andlength of tenancy. (Chapter 9 focuses on retail commercial interiors, showing howany store remodel or store in an existing retail building can adopt green construc-tion and operating principles.) Figure 3.5 shows the distribution of credits in theLEED-CI 2009 rating system.

3.4.4 LEED for Existing Buildings: Operations and Maintenance

LEED-EBOM was originally proposed and designed to be a method for assuringongoing accountability of LEED-NC buildings over time. It has become insteada stand-alone rating system for building owners who want to benchmark their


Fig. 3.5 LEED forCommercial Interiors ratingsystem can be used for storeremodels

operations against a nationally recognized standard. LEED-EBOM addresses manyissues not dealt with in new construction, including upgrades, operations andmaintenance practices, environmentally preferable purchasing policies, waste man-agement programs, green housekeeping, continuous monitoring of energy use,retrofitting water fixtures to cut use, relamping and a host of other measures thatreduce the environmental footprint of a store or development. All of these issues areimportant for retailers and center operators, and Chapter 10 devotes considerableattention to them.

By late 2008, of the first 110 LEED-EB project certifications, 14 projects hadreceived LEED-EB Platinum ratings, and the system appeared to be gaining momen-tum, as new LEED-EB project registrations in 2008 increased by 268%. Figure 3.6shows the distribution of credits in the LEED-EBOM 2009 rating system.

3.4.5 LEED for Neighborhood Development

Sometime in 2009, the USGBC will adopt LEED-ND as a rating system, followinga two-year pilot program with nearly 240 participating projects in 39 states and6 countries. LEED for Neighborhood Development is a rating system that inte-grates the principles of smart growth, new urbanism and green building into thefirst national standard for neighborhood design. It is being developed by USGBCin partnership with the Congress for the New Urbanism (CNU) and the NaturalResources Defense Council (NRDC). LEED-ND is the urban, mixed-use standardthat moves away from certifying individual buildings to certifying large multiple-usedevelopments. It’s beyond the scope of this book to consider LEED-ND, since it’s

3.5 Typical Green Building Measures 53

Fig. 3.6 LEED-EBOMallows developers andretailers to benchmarkperformance againstestablished criteria

still in the pilot phase, but it may be of some interest to retail developers who domixed-use projects that might include housing, offices, public buildings and otherproject types [7].

3.5 Typical Green Building Measures

While there is no such thing as a “typical” green building, there are specificdesign and construction measures that are used in many high-performance buildings.Understanding these measures will help designers work with green builders, build-ing owners, developers, facility managers, government officials, business clients,nonprofit executives or just interested stakeholders in a green building program.

Based on the author’s analysis of the first 1,015 LEED-NC certified projects, thefollowing technical measures are those that one might associate with a typical greenbuilding project:

• Solar photovoltaic systems (44% of Platinum projects had at least 12.5% of totalenergy use supplied by PV systems, versus only 8% of Gold projects).

• Site restoration (used in 88% of Platinum projects and 61% of Gold projects, butonly 56% of Silver projects).

• Carbon dioxide monitors (used in 96% of Platinum projects, 69% of Goldprojects and 59% of Silver projects).

• Green or LEED-compliant roofs (used in 84% of Platinum projects and 66% ofGold projects, versus 63% in LEED Silver projects) [8].


• Use of certified wood products (in 48% of Platinum projects and 42% of Goldprojects, versus about 19% in all LEED-Silver certified projects) [8].

• Rapidly renewable materials such as cork and bamboo flooring (used in 28% ofPlatinum projects versus used in less than 5% of other projects).

• Daylighting design (used in 84% of Platinum projects, 51% of Gold projects andonly 41% of Silver projects).

Many of these systems and approaches aren’t common because they have feweropportunities (for example, hard-to-restore sites in dense urban areas), experiencesupply-chain difficulties or require greater initial cost. The primary reason, ofcourse, for the lack of use of any green building measure is the higher initial cost,followed by the relative inexperience of design teams working with various systemsand products.

To illustrate the use of these measures, Table 3.5 presents an analysis of 25LEED-NC Platinum and 105 LEED-NC Gold projects.7 There are more Platinumand Gold projects, of course, but the detailed project data from them is not readilyavailable.

Table 3.5 Use of LEED Credits in Gold and Platinum Projects

LEED credit category

Percentage of Platinumprojects awarded thiscredit (n = 25)

Percentage of Goldprojects awarded thiscredit (n = 105)

1. Site restoration 88 612. Stormwater control 96 613. Urban heat island effect (green

roof or ENERGY STAR roof)84 66

4. Light pollution reduction 76 445. Renewable electricity

(12.5%/15% of total)44 8

6. Measurement and verification 64 427. Purchased green power 84 558. Recycled content materials @ 20% 84 909. Bio-based materials 28 810. Certified wood @ 50% 48 4211. Carbon dioxide monitors 96 6912. High-efficiency ventilation @ 30% 68 3613. Improved air quality at

occupancy84 59

14. Under-floor air systems forinterior thermal comfort

60 37

15. Daylighting 84 5116. Views to outdoors 88 68

7Research by Beth M. Duckles, a Ph.D. candidate at the University of Arizona, for YudelsonAssociates, based on the USGBC web site, published data through the end of March 2008,http://www.usgbc.org.

3.6 To LEED or to Lead? 55

3.6 To LEED or to Lead?

One reason that LEED has displaced ENERGY STAR as the preferred certificationsystem for larger projects in the U.S. (although both may be used by developers andbuilding owners) is that LEED focuses on a broader range of issues than just energyefficiency. These measures often can lead to reducing operating costs and improvedoccupant health, productivity and comfort. However, at this time in the U.S., LEEDand ENERGY STAR both have marketplace acceptance as brand names that indicatea high level of energy and/or environmental performance against measurable andwell-defined criteria.

Both LEED and other building evaluation systems encourage an “inte-grated design” process, in which the building designers (mechanical, electrical,civil/structural and lighting engineers) are brought into the design process with thearchitectural and interiors team at an early stage, often during programming andconceptual design. Integrated design explores, for example, building orientation,massing and materials choices as critical issues affecting energy use and indoorair quality, and attempts to influence these decisions before the basic architecturaldesign is fully developed.

3.6.1 Building Commissioning

LEED also requires all certified buildings to be “commissioned,” through the useof performance testing and verification for all key energy-using and water-usingsystems. Typically, commissioning involves creating a plan for all systems to betested, performing functional testing while the mechanical and controls contractorsare still on the job, and providing the owner with a written report on the performanceof all key systems and components.

Green building commissioning involves third-party peer reviews during designto see if the design intent has actually been realized in the detailed constructiondocuments. Finally, most commissioning programs also involve operator trainingand documentation of that training for future operators. Getting the future store andcenter maintenance staff involved is also a critical component of effective commis-sioning practice [9].

Commissioning is analogous to the sea trials a ship undergoes before it is handedover to the eventual owners. No ship would be put into use without such trials,which may expose flaws in design or construction. In the same way, no buildingshould begin operations without a full “shakedown cruise” of all systems that useenergy and affect comfort, health and productivity.

Often the documentation provided by the commissioning process can be helpfullater on in troubleshooting problems with building operations. When likened to seatrials, it seems amazing that any building would be built today without a full com-missioning process, so it’s a good thing, absolutely essential for a high-performancebuilding, that LEED requires it for all projects.


3.6.2 Low-Toxicity Finishes

High-performance buildings achieve higher levels of indoor air quality through acareful choice of less toxic (low-VOC or no-VOC) paints, sealants, adhesives, car-pets and coatings for the base building and tenant improvements, often in conjunc-tion with building systems that provide higher levels of filtration and carbon dioxidemonitors to regulate ventilation according to occupancy. With so many buildingoccupants today having breathing problems and chemical sensitivities, it just makesgood business sense to provide a healthy building. Documentation of these mea-sures can often help provide extra backup when fighting claims of sick buildingsyndrome. This benefit of risk management is an often overlooked aspect of greenbuilding guidelines, but can be useful to demonstrate to prospective tenants or occu-pants the often invisible measures taken by building designers and contractors toprovide a safe and healthy indoor environment. Figure 3.7 suggests the potentialreduction in health symptoms from better indoor air quality measures, especially innew buildings.

Healthy buildings incorporate daylighting and views to the outdoors not only foroccupant comfort, health and productivity gains, but also to reduce energy costs.There is a growing body of evidence strongly suggesting that daylighting, opera-ble windows and views to the outdoors can increase productivity from 5 to 15%

Fig. 3.7 Improving indoor air quality leads to major reductions in health symptoms, improvingoverall employee productivity. Center for Building Performance Diagnostics, Carnegie MellonUniversity. eBIDSTM: Building Investment Decision Support Tool

3.7 LEED for Retail 57

and reduce illness, absenteeism and employee turnover for many companies [10].Throw in higher levels of building controls that allow for such things as carbondioxide monitoring and demand-controlled ventilation adjustments, for example,and one has an effective program addressing the people problem that can be sold toprospective tenants and other stakeholders.

For retail stores, these savings alone are often enough to justify the extra costsof such projects. Considering that a large percentage of the non-product operatingcosts of retailers relate to employee salaries and benefits, it just makes good businesssense to pay attention to productivity, comfort and health in building design andoperations.

3.7 LEED for Retail

Recognizing the importance of greening the retail sector, the USGBC inauguratedits LEED for Retail program, designed to test out changes to the LEED-NC andLEED-CI rating systems that would work better in retail, without compromising therigor or integrity of the LEED system. About eighty projects signed up to participatein the LEED for Retail pilot program, where the resulting goal is to produce twoLEED Retail ratings systems: LEED for Retail Commercial Interiors (intended foruse by retail tenants) and LEED for Retail New Construction (for freestanding retailprojects). At the time of this book, the LEED for Retail rating systems were being“harmonized” with the LEED 2009 scheme and prepared for USGBC member ballotin anticipation of a market launch as formal rating systems sometime in the summerof 2009.

Justin Doak, now a principal of Ecoxera, LLC, a retail sustainability consultancy,was the project manager of the LEED for Retail program at USGBC. He describessome of the challenges of applying LEED to the retail sector [11]:

Essentially the LEED for Retail rating systems recognize the unique nature of the retailenvironment and address the different types of spaces that retailers need for their distinctiveproject lines. By capturing the feedback of our pilot projects, we were able to develop aLEED program that would push the market forward, but at the same time not be too rigorousand discourage market adoption.

When you go into an apparel supply store versus a quick service restaurant versus asupermarket, you’ll see a huge difference in the way that the stores are designed to accom-modate their product lines. A grocery store requires a substantial amount of refrigerationbecause of perishable goods, floral departments and frozen products. An apparel storerequires high-intensity lighting to showcase the clothing lines whereas restaurants withtheir commercial kitchens have both large regulated and unregulated energy demands. Thechallenge was that the existing LEED rating systems simply did not address these uniquesettings adequately and they also failed to provide the baselines need to calculate perfor-mance. Also in retail, there are more customers than there are employees, which providesfor different calculations and strategies from commercial office buildings.

Issues such as energy use, lighting intensity, daylighting and ventilation ratesare certainly critical issues for retailers, but perhaps even more critical is the brandexperience retailers are trying to create. Does designing green really help or hinder


that experience? Doak believes that the movement toward green buildings createsan opportunity to engage the retail consumer at a new level of meaning.

The opportunity is that more and more U.S. adults are showing some type of green motiva-tion. The average consumer knows that running water continuously in the back of a store isnot a good thing. Trash that’s co-mingled with recyclables is not a good thing. Those ineffi-cient and wasteful practices translate not only into poor environmental impact, but also intohigher costs that are ultimately passed on to the customer. People are cognizant of energyand waste; they care about environmental prosperity—it’s just part of the culture now, anaddition to humanity’s ethos. So whenever a customer goes into a store and sees bad prac-tices happening, then it translates into a negative experience and pings against brand loyalty.The opportunity now is that retail brands have a chance to build a new level of loyalty withcustomers who have eco-values. Patagonia, Timberland, REI and L.L. Bean, for example,have done it for years—that’s why they were some of the first adopters of LEED—the align-ment was a natural fit. Environmental initiatives are a core competency for these brands andare a big reason why they’ve maintained such a loyal following.

As the customer base grows, we’ll see more and more retailers making sustainability aprimary endeavour for their company—and not just on the sales floor, but throughout theirentire portfolio—all the way down to the products they sell.

The challenge (and the barrier) is how retailers are going to implement green practicessuccessfully into their portfolio. Brand experience is a delicate tool and fine art in retail.How can a retailer now incorporate and communicate green practices effectively into itsbrand experience and efficiently across their multiple sites, including the warehouse andsupply chain? That’s tough. It requires an overhaul; a new way of looking at the way itoperates and grows its business. Retailers will regroup, test and implement new processesthroughout their operations.

The biggest challenge will be getting decision makers within our retail brands to under-stand how a sustainability program works inside the traditional expectations of the retailbusiness model. Just like the development of any new prototype, be it a product or building,an investment is going to have to be made to evaluate where the cost saving opportunities arefor the longer term. You have to spend money to make money, but not necessarily for everyproject down the road—it’s always the learning curve that requires the real investment.

Retailers have practiced efficiencies for years. Without it, the P&L doesn’t look good.What retailers have to realize is that when we talk about green, we are talking about efficien-cies and practices that make smart business sense, not investments into green appendages.It’s about saving energy, saving water, reducing waste, reusing whatever you can and pro-viding your employees and customers with a healthy place to work and shop. What doesthis mean? That innovation yields cost-saving opportunities. There are countless examplesemerging in small pockets all over the retail industry, the challenge will be full-scale imple-mentation. Once that happens—the aggregate savings will be astounding and drive sustain-ability into the retail industry faster than any other sector.

3.8 The Future of High-Performance Buildings in the U.S.

The U.S. Environmental Protection Agency’s ENERGY STAR program, the mostwell-known to American consumers, is likely to be used to promote energy-efficientand zero-net-energy, or carbon-neutral, commercial and retail buildings. By 2010,buildings will likely be designed to cut energy use 50% or more below 2005levels through integrated design and innovative technological approaches [12].Zero-net-energy buildings are already coming online in the U.S. and the U.K. in

3.9 Non-U.S. Green Building Rating Systems 59

2009, essentially providing all site electric power needs with renewable power,either generated on-site with solar power or purchased from remote wind projects,for example. In Central Europe, the focus tends to be on considering “primary”energy demand, which includes the energy wasted in producing and distributing theelectricity consumed by buildings. There are many definitions of “zero net energy”floating around, so the retailer and developer should try to stay informed about thislarger discussion in the years ahead [13].

With the growing awareness of the carbon dioxide/global warming problem andthe contribution of buildings and urban settlement patterns to this situation, archi-tects and others in the design and construction industry have begun to propose pos-itive actions. One sign of this is the position statement adopted by the AmericanInstitute of Architects (AIA) in December 2005, calling for a minimum 50% reduc-tion in building energy consumption by 2010, compared with 2003 averages [14].In its statement, the AIA supported “the development and use of rating systems andstandards that promote the design and construction” of more resource-efficient com-munities. This position statement echoes the requirements of the “Architecture 2030Challenge,” which seeks to reduce building energy use by 50% by 2010 and 90%by 2030.8

Many cities have subscribed to climate change initiatives and will begin torequire green buildings from commercial projects, especially large developmentswith major infrastructure impacts. For example, by the fall of 2008, more than 900mayors representing cities in all 50 states and Washington, D.C. signed on to theU.S. Conference of Mayors’ climate change initiative [15]. Mayors who sign onto the agreement make a commitment to reduce greenhouse gas emissions in theirown cities and communities to a level 7% below 1990 levels by 2012 through aseries of actions including increasing energy efficiency, reducing vehicle miles trav-eled, maintaining healthy urban forests, reducing sprawl and promoting use of clean,renewable energy resources.

In 2008, three of the four largest cities in California, Los Angeles, San Jose andSan Francisco, passed ordinances requiring private-sector projects above 50,000 ft2

to achieve LEED certification. Developers would be well advised to keep a closewatch on more local governments starting to mandate LEED certification for largecommercial projects, which will certainly affect most retail projects in the comingyears.

3.9 Non-U.S. Green Building Rating Systems

Three non-U.S. rating systems have substantial support in their respective markets:the Japanese CASBEE system, the British BREEAM and the Australian Green Star[16]. Appendix A fully explains the CASBEE and Green Star systems. In this sec-tion, we’ll focus on BREEAM, because it is the largest and oldest system in use

8See www.architecture2030.org for regular updates on this challenge.


outside North America and one likely to be of greater interest to both retailersand center developers outside the U.S., particularly in the European Union. Themain standard used in the U.K., BREEAM is supported by the nonprofit Build-ing Research Establishment (BRE) and has the longest track record of any ratingsystem.

3.9.1 BREEAM

Through the end of 2008, BREEAM had certified 2,049 nonresidential (commercialand institutional) buildings since 2000, a total nearly as great as the LEED system,but in a country one-fifth the size of the U.S. Table 3.6 shows the BREEAM totalsfor both registered and certified projects through the end of 2008 [17].

BREEAM rates buildings according to nine major categories, with a singlescore at the end, similar to the LEED system, with the 2008 weightings shown inTable 3.7. At 27% of the total, energy and transport in new buildings are givenweightings similar to the LEED-NC version 2.2 system, but less than that in LEED2009, which weights energy and transportation impacts almost 40%.

Along with specific green building measures and weightings, the percentagescores then translate into green points that yield the following rating categories [18].

1. Pass (≥30)2. Good (≥45)3. Very Good (≥55)4. Excellent (≥70)5. Outstanding (≥85)

More than 600 buildings have been rated Excellent by BREEAM. BREEAMcan be used to rate all types of buildings, with individual rating systems availablefor commercial buildings including offices and retail. One critique of BREEAM,similar to that levied against the USGBC’s LEED system, is that:

There is no measurement of how the building performs once occupied. It is believed therehas been little or no measurement of carbon emissions from the 628 buildings to have beendesignated Excellent so far. Total emissions are strongly influenced by tenant behavior, from

Table 3.6 BREEAM Certifications, Non-domestic Buildings, 2004–2008 [17]

Year Registered projects Certified projects

2004 449 1452005 550 1922006 1,353 2492007 2,006 3712008 5,861 728

Total (2000–2008) 10,705 2,049


Table 3.7 2008 BREEAM Rating Categories and Weightings

Rating categoryWeighting—New buildsand major refurbishments Interior fitout only

1. Building management 12 132. Health and well-being 15 173. Energy 19 214. Transport 8 95. Water 6 76. Materials and waste 12.5 147. Waste 7.5 88. Land use and ecology 10 N/A9. Pollution 10 11

Total 100 100

the type of fit-out, the number of people in the building and the hours the building is in useeach day, to the amount of electrical equipment installed and the occupier’s understandingof how to run the heating and cooling efficiently [19].

In 2008, BREEAM introduced a new and higher rating of Outstanding, todenote the few projects now exceeding the Excellent rating level. Also, in 2008BREEAM made major changes to the system, including introducing new environ-mental weightings, mandatory credits and a two-stage certification process, designstage and post-construction. Benchmarks were set for carbon dioxide emissions toalign BREEAM with the new Energy Performance Certificates that must be issuedfor all buildings to comply with the E.U. Energy Performance in Buildings Direc-tive. Finally, BREEAM introduced a Core and Shell rating system for offices andshell retail spaces, similar to one that has been part of the LEED system since 2004.

BREEAM is admirably flexible and creates a “bespoke” (or customized) ratingsystem for unusual building types, such as recreation, laboratories, hotels and vari-ous higher education structures. In the U.S., LEED has taken the opposite approachby making most of the diverse building types fit into a straitjacket designed origi-nally for office buildings, although this is changing, with rating systems specificallyfor schools and retail buildings introduced in 2008 and 2009, respectively.

In 2008, BREEAM Retail was introduced as a rating tool that can assess newbuild or major refurbishment, post construction, tenant fitout, existing (occupied)buildings, management and operation [20]. According to BRE staff, BREEAMRetail was developed with a number of partners representing a significant portion ofthe retail sector. The two-year development process was sponsored by a number ofkey players in the retail —Marks & Spencer, Tesco, Sainsbury’s Property Servicesand many more.9 In addition, a number of key BREEAM assessor organizations

9BREEAM Retail development sponsors included British Land Company, Chartwell Land Devel-opment, Chelsfield, Grosvenor, Hammerson UK Property, Land Securities, Lend Lease GlobalInvestment, Marks & Spencer, Sainsbury’s Property Services and Tesco. The British Retail Con-sortium also advised during the project’s development.


Fig. 3.8 The new BREEAMfor Retail system will allow acloser match of greenbuilding criteria to specificretailer design andconstruction practices

were partners in the development of the BREEAM Retail scheme [21]. Figures 3.8and 3.9 show the BREEAM Retail point distributions.

BREEAM Retail can assess the following types of retail developments [22].

• General display and sale of goods: for example, shopping centers, home improve-ment stores, showrooms and all general retail outlets.

• Food retail: for example, supermarkets, general stores with a food retail sectionand shops that sell food for consumption off the premises.

• Customer service retail: For example, bank, post office, dry cleaners, travelagency, etc.

Currently BREEAM Retail cannot assess restaurants that do not form part ofa wider development. Retail does present challenges to the BREEAM system.BREEAM has successfully overcome many obstacles to develop a methodologysuited to assessing the variety of retail environments that exist, particularly sincethese have very different purposes than office buildings.

The issue of daylighting provides an example of how BREEAM requirementscan be tailored to the retail environment in individual shopping centers. Daylightingaims to ensure that building users have sufficient access to daylight.

In the majority of BREEAM certifications, BRE requires that at least 80% offloor area in each occupied space is adequately daylit to a daylight factor of 2%.BREEAM received feedback from retailers that this target was going to be unachiev-able and so there was a risk that no one would address the daylighting issue for retailbuildings and therefore make no attempt to ensure that building users have sufficient


Fig. 3.9 BREEAM for RetailInteriors provides retailerswith green design criteria forindividual store remodels andnew construction inside ofmalls and shell retail spaces

access to daylight. To resolve this, BREEAM tailored the requirements of this issuein retail buildings so that at least 35% by floor area of the sales and common spaceshave daylight factors of at least 2%. While this still presented a difficult target forretailers to meet, it was no longer unachievable and the design teams could try toincorporate this requirement into a building’s design [21].

There were 43 certified retail projects as of November 2008, according to BREstaff, with nearly 1,300 retail buildings registered for eventual certification (cur-rent economic conditions may deter or delay finishing these projects, of course).Retail assessments are currently under way in seven countries outside the U.K.:Germany, Turkey, Sweden, France, Spain, Austria and Iceland. In 2008, ICSCadopted BREEAM as a standard for rating shopping centers throughout Europe,stating at the time [23],

After extensive research and comparisons the ICSC Sustainability Working Group, chairedby ICSC European Chair and COO of Redevco Europe, Jaap Gillis, with representativesfrom other companies such as Sonae Sierra, Multi Development, ING Real Estate andImmochan, launched in 2007 an initiative to develop a pan-European BREEAM frame-work, in order to establish a common level playing field across the continent.

After taking its recommendations to the European Union, which welcomed the self-regulation the retail real estate industry wished to pursue, ICSC is now working withBREEAM to adjust its environmental criteria so it is suitable for adoption by countriesacross Europe. Using BREEAM, a number of ICSC member-developers aim to imple-ment pilot projects across Europe in 2008. BREEAM could become the blueprint for apan-European green standard from 2009.


3.10 Summary

All in all, BREEAM is a worthy competitor to LEED in the U.S. and likely to be adominant system in many countries. It illustrates green building rating systems thatactually work because it’s in tune with the marketplace realities, without giving upa sense of higher purpose.

Green building rating schemes have come of age. While there is still some awk-wardness in applying office building design and construction criteria to the retailenvironment, there is much agreement in the industry that retail stores and shop-ping centers need to be upgraded to meet criteria for green building and high-performance interiors. By 2012, most developers and retailers with strong commit-ments to corporate social responsibility will most likely find a green building ratingand certification scheme that can fit their projects.

References

1. USGBC unpublished data furnished to the author.2. Report to Congress. General Services Administration. (2006, September). Retrieved on March

6, 2007, from http://www.usgbc.org/ShowFile.aspx?DocumentID=1916.3. U.S. Green Building Council web site. Retrieved February 2009, from http://www.

usgbc.org/leed.4. Data for LEED registrations and certifications are from the USGBC, furnished to the author,

end of November 2008.5. Miller, Norman. Does green pay off? Retrieved January 4, 2009, from http://www.sandiego.

edu/business/documents/EconofGreenMArch52008.pdf - 2008-04-18.6. Burr, Andrew. CoStar study finds ENERGY STAR, LEED buildings outperform peers.

(2008, March 26). Retrieved January 4, 2009, from http://www.costar.com/News/Article.aspx?id=D968F1E0DCF73712B03A099E0E99C679.

7. U.S. Green Building Council web site. Retrieved February 16, 2009, fromhttp://www.usgbc.org/DisplayPage.aspx?CMSPageID=148.

8. Yudelson, Jerry. (2006) Marketing Green Building Services: Strategies for Success New York:Architectural Press. p. 129.

9. Paul Schwer, PAE Consulting Engineers, May 2008, “Personal communication.”10. See, for example, studies by the Heschong Mahone Group for Pacific Gas & Electric Company

and the California Energy Commission, available at http://www.h-m-g.com, retrieved January5, 2009.

11. Interview with Justin Doak, USGBC, November 2008.12. For example, the U.S. Department of Energy began a Commercial Buildings Initiative and

a “Net Zero Commercial Building” program in 2008, http://www.energy.gov/ energyeffi-ciency/6454.htm.

13. Yudelson, Jerry. (2009) Green Building Trends: Europe. Washington, D.C.: Island Press (inpress).

14. American Institute of Architects press release. Retrieved December 19, 2008, fromhttp://www.aiaarchitect.net/site/news/06/august/sustainability.html.

15. City of Seattle, Mayor’s Office web site. Retrieved April 26, 2007, from http://www.seattle.gov/mayor/climate/PDF/USCM_Faq_1-18-07.pdf.

16. USGBC website. Retrieved January 4, 2009, from http://www.usgbc.org/ShowFile.aspx?DocumentID=1916.

17. Information supplied by Building Research Establishment to the author, January 5, 2009.

References 65

18. BREEAM web site. Retrieved on January 5, 2009, from http://www.breeam. org/manualpage.jsp?id=28.

19. Jansen, Mark. (2008, August 8). BREEAM’s green credentials are not what theyseem. Retrieved August 29, 2008, from http://www.propertyweek.com/story. asp?sectioncode=274&storycode=3119943&c=1. BREEAM In-Use, introduced in 2008, intendsto challenge this critique by offering retailers a way to continually update their certification,after a building has been occupied for a year or two.

20. BREEAM web site. Retrieved January 5, 2009, from http://www.breeam.org/ page_1col.jsp?id=54.

21. Email interview with BRE staff, November 2008.22. BREEAM web site. Retrieved January 5, 2009, from http://www.breeam.org/page.jsp?id=19.23. Gillis, Jaap. (2008, February 15) Property EU. Retrieved January 5, 2009, from

http://www.propertyeu.info/services/expert-views/read/default.asp?id=40

Chapter 4The Business Case for Green Retail

If green buildings are happening in most segments of the commercial real estatesector, as demonstrated in Chapter 2, it is reasonable to suppose that they will alsoarrive in the retail segment in the next few years. What would be the benefits to aretail real estate developer to have a larger “green profile?” This chapter sets outthe business case for green retail buildings and provides examples of some of themonetary and other benefits that early adopters are gaining. Table 4.1 outlines someof the potential benefits and who would receive them, while Fig. 4.1 shows thesebenefits graphically.

Many of these benefits accrue unequally to various parties. For example, a devel-oper incurs many of the costs of energy efficiency and water efficiency investments,but the tenant secures the benefits, at least initially, through lower common areacharges. At this time, the developer is typically unable to secure higher commercialrents from tenants, since the potential future energy and water savings are not rec-ognized in most lease negotiations. This makes a developer reluctant to incur theseexpenses, since the net result is a higher capital cost and a lower potential returnto offer investors. This situation forces a developer to look at a broader picture ofcosts and benefits. For example, in the commercial office sector in the U.S., LEED-certified and ENERGY STAR–labeled buildings have been shown predictably tohave greater rents (up to 30%), higher occupancy rates (2% to almost 4%) andgreater resale value (up to 30%), more than compensating for the 2% or so highercapital cost [1].

4.1 Who Benefits and Who Pays?

The irony in green retail is that it is mostly the developer who pays for such itemsas extra insulation and better glazing, more efficient lighting and higher-efficiencyHVAC units, as well as stormwater management, construction waste managementrecycling, LEED certification and the like, and it is the tenant who benefits, throughthe center’s green advertising and promotional efforts and through lower commonarea maintenance (CAM) expenses. While the developer recovers some of thesebenefits through its non-billable CAM charges (typically 20% or a little more), the


68 4 The Business Case for Green Retail

Table 4.1 Potential Business Benefits of Green Retail Centers and Stores

1. Utility cost savings for energy and water, typically 30–50%, along with reduced carbonfootprint from energy savings

2. Maintenance cost reductions from commissioning, operator training and other measures toassure proper systems integration and ongoing performance monitoring

3. Increased long-term building and center value from higher rents, increased net operatingincome (NOI) and improved public relations

4. Tax benefits for specific green building investments such as energy conservation and solarpower, and local development incentives

5. More competitive real estate holdings for private-sector owners over the long run,including higher resale value

6. Productivity improvements for long-term building owners, typically 3–5%7. Health benefits, including reduced absenteeism, typically 5% or more.8. Risk management, including faster lease-up and sales for private developers, and less risk

of employee exposure to irritating or toxic chemicals in building materials, furnitureand furnishings

9. Marketing benefits, especially for developers, large corporations and consumer productscompanies

10. Public relations benefits, especially for developers and public agencies11. Recruitment and retention of key employees and higher morale12. Increased availability of both debt and equity funding for developers, as both banks and

investors such as pension funds make green building projects a priority13. Third-party financing of solar power systems14. Political and entitlement benefits of providing sustainable retail stores and shopping centers15. Demonstration of commitment to sustainability and environmental stewardship; shared

values with key stakeholders

tenants enjoy the balance. Over the long run, lower operating costs for energy, waterand waste disposal should be reflected in higher rents; at the beginning it’s typicallynot possible to get rent increases. Restructuring a standard lease to share some of thesavings is possible, but is not commonly done. However, one growing movement isfor retailers to pay a “gross lease” that would include energy costs. In this situation,developer and tenant interests would be more closely aligned. Table 4.2 shows howbenefits might be split between various parties.

Table 4.2 shows that the benefits have to be considered as a whole and comparedwith costs, for each of the parties to a retail transaction. There is no clear-cut answerto the question of “does sustainability pay?” However, there is a clear answer tothe obverse: Without a major sustainability program, everything else being equal, aretailer or a developer is likely to surrender a major source of competitive advan-tage. The more significant question is: Which form of sustainability program offersthe greatest benefit to the retail developer and to the retail store operator? To thisquestion, we provide a number of answers in Chapters 12 and 13.

4.2 The Developer’s Perspective

Clearly, developers and retailers have common interests—to persuade as many con-sumers to shop the center as often as possible—however, they also have divergentinterests, as the developer functions primarily as a landlord, developing the property,

4.2 The Developer’s Perspective 69

Fig. 4.1 The benefits of green retail spaces encompass five major areas of interest.Courtesy of Palladeo

Table 4.2 Who Benefits?

Owner type EnergyProductivityand health

Marketingand PR Recruitment Financing

Retail store, stand alone:does the retailerbenefit?

Yes No Yes No N/A

Retail store, interior: doesthe retailer benefit?

Smallsavings

Yes Yes Maybe N/A

Shopping center: does thedeveloper benefit?

Smallsavings

No Yes Yes Maybe

maintaining it and collecting rents. At some point, the developer will likely sell theproperty. The developer aims to collect enough rent to meet investors’ expectedreturn on investment and to keep the center as fully tenanted as possible for as longas possible.

The retailer’s goal is to meet or exceed sales targets by satisfying consumerdemand for products and services, while paying as little rent as possible. The retailertypically pays directly for utilities, as well as indirectly for other operating expensesthrough CAM charges, which it would like to keep as low as possible. Becausemany consumers care about energy use and environmental impact, both developerand retailer have common interests around green certifications.


4.2.1 The Entitlement Process

Getting land use and building permits to build new centers and often to renovateolder centers, as well as to construct mixed-use projects, will continue to be a strug-gle. In many parts of the U.S., cities and counties are beginning to offer preferentialtreatment to development applications that promise to achieve LEED certification.This treatment can take the form of “top of the pile” priority processing (Chicagoand San Francisco are two cities that offer this benefit) and density bonuses or reduc-tions in certain other requirements. As of the end of 2008, more than twenty jurisdic-tions in the U.S. offered some type of development incentive for green buildings [2].

Many more cities and counties will begin to offer priority processing for commit-ments to build to green certification standards, if for no other reason than that it ispolitically attractive to do so and costs the jurisdiction nothing. In some cases, devel-opers may even have to post bonds to back up their commitment. Cities will figureout that they have to grant land use (planning) and building permits long before thedeveloper has gained LEED certification, and they will need some reassurance thatthe developer will follow through on its commitment.

There are also upcoming mandates for the private sector, since more than 900U.S. mayors have committed their cities to the U.S. Conference of Mayors ClimateChange Initiative, committing them to reduce carbon dioxide emissions below 1990levels by 2012. As cities begin to grapple with the reality of this commitment, therewill be a strong temptation to start forcing the private sector to do its part.

Developers would be wise to start getting green building experience now, beforemore of these requirements come into force. As of early 2009, more than twentycities around the U.S. (including large cities such as Boston, San Francisco, LosAngeles, San Jose, Dallas and Washington, D.C.) had ordinances requiring LEEDcertification for larger commercial developments. As most cities are run by politi-cians who value such issues as green building, reducing energy use and promot-ing more environmentally sensitive land use, developers can expect to face suchdemands.

4.2.2 Cost Offsets

There are opportunities for reducing initial development costs by reconfiguringshopping center layout to recover and reuse rainwater from rooftops for toilet flush-ing and cooling tower makeup water, and to recover and treat stormwater from park-ing lots for irrigation and street and sidewalk washing. Recovered stormwater canalso be infiltrated (where soils are appropriate for that purpose) and/or used in land-scape ponds, drainage swales or even constructed wetlands (for greenfield sites).The goal of all these green measures is to avoid having to send stormwater to a stormsewer and thereby to avoid a lot of impact or development charges. Civil engineersneed to be instructed to look at a cost/benefit analysis of such measures before pro-ceeding with the usual storm sewer hookups. Not all jurisdictions will go along withreducing fees, but it is a useful item to have on the table during negotiations.

4.3 Branding and Marketing 71

4.2.3 Tax and Other Incentives in the U.S.

At the time of this book, the state of Nevada provided 35% property tax abatementsfor 10 years to projects that achieve a LEED Silver rating. If the average prop-erty tax is 1% of value, then the abatement would be worth up to 3.5% of projectcosts. Oregon and New York both have large state tax credits for green buildingsthat achieve at least LEED Silver certification. In Oregon, the incentive is based onsquare footage (project area), so that an efficient developer can see a very beneficialreturn. Other states offer similar incentives, so it pays to stay informed at the end ofeach legislative session about new incentives for green building.

4.2.4 Renewable Energy Incentives in the U.S.

More than twenty states and many electric utilities offer some form of incentivefor solar power systems [3]. In addition, the 2005 Energy Policy Act (as amended in2006, 2007 and 2008 by various laws) offers a 30% federal tax credit for solar energysystems placed in service through the end of 2016. Taken together with local utilityincentives for solar power, state tax credits and sales tax abatements and acceleratedfederal depreciation, there is a strong ROI case to be made for putting solar poweron every shopping center roof. In April 2007, Kohl’s became the first major retailerto do this, committing to convert more than 75% of its California locations to solarpower (see the discussion in Chapter 6) [4].

The benefit of using solar power incentives is simple: Many solar systems can bevisible from street level and most of the public does not need a lot of education torecognize them. As a result, a developer or retailer can get a lot of public relationsbenefit and save money on energy costs. Since 2006, there have been a number ofpartnerships created to use the state and federal tax and utility incentives for solarpower systems, so that it is possible in about seventeen states with such inducementsto get the solar system financed by a third party at no initial cost to the developer orretailer, as discussed in Chapter 6.

4.3 Branding and Marketing

Green buildings and solar power offer a developer the rare opportunity to do wellby doing good. As part of a thoughtful branding and marketing strategy, green andsustainable are beneficial, but they have to be real. The media are pretty well trainedby now, or soon will be, to recognize “greenwashing” by the retail sector, so it is bestto have a strong corporate commitment to the full extent of sustainable strategiesbefore announcing specific elements. In addition to media scrutiny, greenwashingis an unethical practice that will surely cause consternation and dismay among acompany’s employees. For a more extensive discussion of the marketing aspects ofsustainable retail development, see Chapter 11.


Another benefit from green buildings is their positive impact on recruiting. Oneshould also think of the benefits in terms of hiring and retaining good employees.In today’s talent-short world, finding and keeping good people may be a primarybenefit realized by greening the retail center and retail store.1

4.4 Case Study—First Capital Realty, Toronto, Canada

4.4.1 Business Case Factors

Let’s take another look at First Capital Realty in Canada, where the first driver islocation: the company chooses properties surrounded by dense residential commu-nities. The second driver is concern for the tenants. The company anticipates that ademand shift will occur among larger retailers, and that some tenants, especiallyfinancial institutions, will consider LEED-CI in their future commercial fitouts.Hence, First Capital plans to be ahead of this market and to stay there. Currently,however, the general experience of First Capital, as with most developers, is thattenants are happy to have the green measures but are unwilling to pay for them.

First Capital understands that paybacks will not be in the short term, but willbe achieved in the medium and longer term. Although a good deal of effort isnow put into educating tenants, the company anticipates that in the future tenantswill increasingly demand green leased space, and so the company expects to real-ize future economic benefits from differentiating itself from the rest of the mar-ket in this area. Also, First Capital Realty regards this strategy as part of beinga good corporate citizen. While the company anticipates that greener buildingswill eventually generate higher rents, it also expects that it will only be able toreliably quantify cost savings for future tenants in this or other properties afterone to three years of operation. First Capital anticipates that it will benefit fromrent growth only in the medium term—three to five years after a building is fullytenanted.

4.4.2 Financial and Nonfinancial Incentives

Permitting and awarding additional building capacity are significant factors impact-ing costs differentially across the nation: in British Columbia, municipalities areso familiar with, and supportive of, greening that permits are fast-tracked (saving a

1Many of the corporate audiences addressed by the author emphatically agree with this idea.Despite the current global recession, there is a considerable shortage of people in the 30–40 year-old age category in most of the world’s advanced economies. Without good people, how are yougoing to grow your business and/or profit in the future?

4.5 The Retailer’s Perspective 73

great deal of time and money), or the municipality may offer another pad to buildon as a developer incentive, given a project’s green goals. Further east, however—from Alberta through Central and Eastern Canada—while municipal policies wereintended to encourage building greening, their staffs were unfamiliar with the mea-sures, and in fact the building permitting process was slowed down. First Capitalhad to spend time with municipal staff in these regions in order to bring them onboard.

4.4.3 Challenges

There have been three major challenges experienced to date:Tenant education: Much time is spent in educating the tenants regarding poten-

tial implications of their space changes arising from the greening. Delays also areincurred due to the leasing department’s education gaps.

Municipal staff limitations: As indicated, while municipalities have the politicalwill to green buildings, at the moment, east of British Columbia, municipal staffsare not sufficiently knowledgeable to effectively support green building permitting.

Managing costs: Cost challenges were significant at the beginning. The antici-pated cost increment for greening was 5–7%; however, for some green componentsthe cost increase was as high as 15–20%. One green project, the Morningside Cross-ing property, was an existing shopping center with parking. A major portion of thecenter was vacated and demolished, with an occupied portion still standing whilethe new center was built.

This particular property presented some challenges. First, deals with tenants weredone prior to the decision to add green features, which required additional timeto educate tenants as to the benefits of the greener building. Second, leases weretriple net, with tenants responsible for energy costs; however, some anchor tenantshave “clawbacks” and caps on costs, limiting what they are prepared to pay thedeveloper to reduce those costs. Third, the decision to go green took place afterconsulting and design drawings were done, requiring many changes to the contractthat added considerably to the expenses. Costly green components have includedhigher efficiency rooftop units and low-e, triple-paned, argon-filled windows (with30% higher costs than conventional windows).

4.5 The Retailer’s Perspective

As seen in earlier chapters, a number of retail chains are increasingly commit-ting to ambitious sustainability goals, including tracking and reducing their car-bon footprints, greening the supply chain and operating green stores. What mightbe some of the less obvious reasons for doing this? The first that comes to mindis building or burnishing the company’s own reputation as a forward-lookingcorporation.


4.5.1 Reputation Capital

Joseph Feldman is managing director and a retail stock analyst at Telsey AdvisoryGroup.2 He says [5]:

The green movement has definitely started to take hold within retail. It’s no longer just a fad,it’s a trend that’s here to stay. It may be tough to justify the expense in the current market interms of the recessionary environment. That being said, a lot of retailers are starting to playwith it. When a company like Wal-Mart is putting some significant effort behind the greenmovement, I think that says a lot. . .

Obviously, using less energy is good for the environment but using less energy is alsogood for Wal-Mart. I think it’s both a company savings and a global savings. A big part ofthe green initiative from retailers goes beyond the profitability aspect. A lot of it is repu-tation capital. More and more consumers are concerned with green—being healthy, eatingorganics, breathing clean air, and consuming less energy. If Wal-Mart is in the forefront ofthat, it makes sense to me that others will follow its lead.

Look at Whole Foods. In reality, the entire concept is based on the green movement. It’sthe poster child for the green movement. It’s all about organic and natural products. Theconcept has built its brand and reputation on healthy, green living, and has gained loyalcustomers in the process.

4.5.2 CFOs Going Green

This point was emphasized in a 2007 survey by a major consulting firm. In this sur-vey, two-thirds of chief financial officers at leading U.S. retailers say their companyis actively involved with green or environmentally friendly practices, and 44% ofthose indicate they have increased their investments in these practices during thepast two years [6]. Among the top 100 largest retailers, 83% are involved in greenpractices, and a majority of those (62%) have increased their green investments since2005.

Among those retailers involved with green practices, 34% are pursuing internalactivities (environmentally modifying operations and buildings) exclusively, while9% are focused solely on external practices (selling green products). Of the retail-ers surveyed, 57% are pursuing a combination of both external and internal greenpractices.

When asked to identify the greatest motivator for their company to pursue envi-ronmentally friendly practices, two-thirds of the CFOs cited the company’s corpo-rate image (54% cited “image among consumers” and 13% cited “image amongshareholders”). Surprisingly, a tax break or tax incentive was the greatest greenmotivator among only 15% of the CFOs, followed by 10% who cited city/state orzoning regulations.

2Telsey Advisory Group is the leading independent equity research and consulting firm focused onthe consumer sector. www.telseygroup.com.

4.7 Consumer Demand 75

4.6 Six Key Areas of Focus for Green Retailing

These points were reinforced by a 2008 review of the sustainability programs of100 U.S. retailers by another consulting and research firm, which found that greenretailers had six key focus areas [7].

• Green sourcing/procurement (59%)• Waste management (54%)• Eco-friendly mandates in packaging (49%)• Redesign the retail supply chain (41%)• Eco-friendly “end-of-life” programs, such as product takeback (41%)• Redesign store facilities and infrastructure (35%)

According to the study’s authors:

The top actions on the green retail agenda align with the strategic decision to take a holis-tic approach to all aspects of brand management and total cost of operations. For 59% ofretail respondents, implementing a responsible and green-oriented sourcing and procure-ment plan is a crucial element of success. The focus on the very beginning of the retailsupply chain complements the strategy of adopting eco-friendly standards for waste man-agement (54%) and product end-of-life, recycle and reuse programs (41%). This end-to-endapproach underscores an intensive vision of the retail value chain and indicates that retail-ers are becoming more involved in the entire life cycle of their products and operationalactivities, according to the report.

The study concluded that the six top actions of green retail initiatives demonstratethat practically no aspect of the retail enterprise will go untouched by the sustain-ability agenda. Even more importantly, the study demonstrated that the best-in-classretailers achieve not only dramatic cost savings (20% decrease in energy costs) espe-cially when compared to industry laggards (39% increase in energy costs), but alsodramatically improved customer loyalty. This ought to be reason enough for allretailers to dramatically accelerate their green building and retrofitting programs.

4.7 Consumer Demand

One can foresee that as more large retailers (such as Home Depot, Office Depot,Tesco, Marks & Spencer and others) begin to build green stores, consumers willcome to expect that the entire shopping center will have green and sustainable fea-tures. If one does and another does not, is it possible that consumers will prefer toshop at one and not another? What is clear from a number of studies of the LOHASconsumer (representing Lifestyles of Health and Sustainability) is that a certain coregroup of such consumers prizes “authenticity” in their lives and selectively patron-izes retailers who demonstrate those values. One meaning of authenticity might sim-ply be, we do what we say; for a retailer to sell green products, authenticity requiresa very strong sustainability program. What is not clear at this time is how much


typical consumers are going to change their shopping habits to patronize centersthat have such tenants.

From the retailer’s perspective, anything that helps attract consumers to a givencenter, any successful point of differentiation, is a good thing. More traffic shouldmean more sales, everything else being equal. We can foresee centers offering theirown “green seals,” much as Forest City Stapleton did at Denver’s Northfield center,to cooperating retailers who meet LEED guidelines for store fitout.

We also expect to see larger retailers and anchor tenants such as Kohl’s, BestBuy, Office Depot, Marks & Spencer and similar enterprises aim at the green con-sumer with certifications of upcoming stores. What many are of course discoveringis that the green certification is a result and not a cause of good store design, as theyfind operating costs coming down and employee satisfaction rising. The advent ofskylights throughout the large retail store environment, pioneered by Wal-Mart, is agood example of doing well by doing good. Not only do sales increase, as shownby research, but cost recovery happens within five to ten years, depending on localprices for electricity. There is also some evidence that there is less eyestrain onretail clerks working under skylights than under artificial lights, leading to greaterjob satisfaction and longer job tenure.

4.8 Challenges for Greening the Retail Sector

The first and foremost challenge to greening the retail sector is cost, a subject thatis tackled in the next chapter. Other challenges include the capabilities of the designand construction teams to provide green features on conventional budgets, the dis-parity between which parties incur costs for green features and which parties get thebenefits, and writing green tenant guidelines.

4.8.1 Tenant Guidelines

Some developers certify to the LEED for New Construction, BREEAM or the newLEED or BREEAM for Retail standards, while others creating only shell retailspace prefer to use the LEED for Core and Shell rating system, with its precerti-fication benefit. In either case, having gone to the effort to green the retail center,a developer often wants to write tenant guidelines that will ask or require tenantsto use sustainable design and construction measures in their own spaces. In theLEED rating system, a strong set of tenant guidelines also qualifies for one creditpoint toward certification of a center. These guidelines could cover such items asusing low-toxicity paints, adhesives, sealants and carpets in tenant buildout, usingmore efficient lighting systems and a wide variety of measures that are coveredin the LEED for Commercial Interiors (Retail) rating system. If the guidelines arenot required, then developers need to engage in a strong tenant education program,starting with the lease negotiations. This may provoke discomfort among the leasing

References 77

brokers or letting agents working for both developer and tenant; therefore, a clearset of guidelines, with attention to how they’re written and promoted, is a key partof the process.

There is a strong business case for green retail stores and green shopping centerdevelopment, but it is not just in terms of the typical return on investment, whereinone tries to recover extra initial costs through utility savings on energy and water.The real business case comes from corporate social responsibility initiatives, supple-mented by real but intangible benefits in terms of development approvals, marketing,public relations and stakeholder engagement.

References

1. Burr, Andrew. (2009). CoStar study finds ENERGY STAR, LEED buildings outperformpeers. (2008, March 26). Retrieved January 4, 2009, from http://www.costar.com/News/Article.aspx?id=D968F1E0DCF73712B03A099E0E99C679. This study was updated through the sec-ond quarter of 2009, with similar results to the earlier data. Personal communication, AndrewBurr, July 2009.

2. Yudelson, Jerry. (2007). Green building incentives that work: A look at how local gov-ernments are incentivising green development. Retrieved on February 15, 2009, fromhttp://www.naiop.org/foundation/ greenincentives.pdf. accessed February 15, 2009.

3. The best source for these incentives is the Database of State Incentives for Renewables andEfficiency, maintained by the North Carolina Solar Center, http://www.dsireusa.org.

4. Hajewski, Doris. (2007, April 26). Kohl′s to go solar in California. Journal Sentinel. Retrievedon June 14, 2007, from http://www.jsonline.com/business/29452254.html.

5. Interview with Joseph Feldman, November 2008.6. U.S. retailers embrace “green” practices according to BDO Seidman, LLP survey

of CFOs. (2007, October 1). http://www.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20071001005301&newsLang=en.

7. Getting from green to gold: Retail success factors and outcomes. (2008, August 18). Retrievedon August 18, 2008 from http://www.environmentalleader.com/2008/08/18/green-retailers-six-key-focus-areas.

Chapter 5Costs of Greening Buildings and Developments

The key issue in building green retail centers and stores is extra cost versus addedbenefit. Design and construction teams who work in retail have become good atcost-cutting and cost management. To ask them to add cost for green features goesagainst the grain. Nevertheless, it is necessary, certainly at the beginning, to add costto achieve green building certification.

The testimony is fairly solid from many developers and retailers that a LEEDcertification is initially going to add about 2% to the capital cost of a shopping centerand perhaps a similar amount to a retail store. From the experience with many LEEDproject studies, the cost for basic certification should decrease to nearly zero oncethe basic lessons of green design and green building have been mastered.

In one sense, cost is the only issue, since benefits are apparent. It is a truism that“costs are real and present-tense, but benefits are speculative and future-tense.” Thismeans that a developer makes an investment in green building features and certifi-cation by paying more in initial costs, but with the hope of getting some significantreturn over time. This is not an unreasonable thing to do, but right now it is anexercise in leadership in the industry to commit to a strong green building program.One developer told the author in 2007 that the cost impact was about “5 to 15 basispoints” (hundredths of a percent, nominally) in the rate of return, certainly a subjectfor concern but not a deal breaker.

There’s no doubt that achieving a LEED or BREEAM certification for a retaildevelopment is initially going to cost more, and it is not clear that a developer canrecoup these extra costs in higher rents or faster lease-up of the retail spaces, atleast not right now. It is possible that the developer may realize some marketing andpublic relations benefits, but that is speculative in many cases. Perhaps the greatestbenefit may lie in a faster entitlement process and perhaps some reduced develop-ment fees—for example, a lower storm sewer connection fee, if the developmentkeeps all rainwater on-site, either for recharge, landscaping or beneficial reuse inthe buildings. There is also a not-insignificant benefit in achieving or maintaininga leadership position in this fast-changing green retail landscape—many of a com-pany’s employee-associates care intensely about this issue.

In one case, a Lowe’s store in south Austin, Texas, completed in 2005, reportedlybenefited from its commitment to building a LEED Silver building by receiving allof its permits in three months instead of the expected fifteen months. The resulting


80 5 Costs of Greening Buildings and Developments

early opening yielded enough profits in 12 months to pay for the entire building![1] While this story is an unusual example, it does illustrate the sometimes hiddenbenefits that may offset higher costs.

5.1 Barriers to Green Building Growth

Barriers to the widespread adoption of green building techniques, technologies andsystems are related to real-life experience and to a lingering perception in the build-ing industry that green buildings add extra costs.

Senior executives representing architectural and engineering firms, consultants,developers, building owners, corporate owner-occupants and educational institu-tions have positive attitudes about the benefits and costs of green construction,according to the 2005 Green Building Market Barometer, a survey conducted byTurner Construction Company, the largest commercial builder in the U.S. [2]. Forexample, at that time, 57% of the 665 executives surveyed said their companieswere involved with green buildings; 83% said their green building workload hadincreased since 2002; and 87% said they expected green building activity to con-tinue. However, despite an overwhelming sense that green buildings provided con-siderable benefits, these same executives thought that green buildings cost 13–18%more than standard buildings!

In a 2007 survey by Building Design & Construction, 41% of construction indus-try participants surveyed said that green buildings added 10% or more to cost ofbuildings, even while the clear evidence then was that cost increases were less than10%! [3] This just shows that all building decisions are fundamentally economicones and that the added costs of high-performance retail buildings and develop-ments will continue to be an issue until project teams figure out how to design suchprojects consistently without any cost increases.

An updated Market Barometer survey performed by Turner Construction in 2008involving 754 respondents reported the following as presenting an extremely or verysignificant obstacle to green construction: the costs of LEED documentation (61%),higher construction costs (61%), the length of the payback period (57%) and thedifficulty of quantifying the benefits of green building (43%) [4].

Although 54% of executives noted that the cost of LEED documentation is an“extremely” or “very significant” obstacle to green construction, 83% of executivessaid they would be “extremely” or “very likely” to seek LEED certification if theywere planning to build within the next three years.

For those seeking LEED certification, 40% expected to pursue Silver, 26% wouldseek the Certified level, 24% would pursue Gold and 10% Platinum. Among execu-tives who think the first cost of green buildings to be higher, roughly three-quartersbelieved green buildings can pay back their higher initial costs, with this figurerising to 84% among those who would seek a Gold or Platinum certification. Themedian estimated payback period cited by executives for sustainable features wasseven years.

5.2 Hard and Soft Cost Elements 81

5.2 Hard and Soft Cost Elements

It is easy to make the distinction between hard costs and soft costs—those for con-struction and those for design and certification services. (In reality, all costs arehard for the company that has to write the check!) Nonetheless, the hard costs ofgreen, based on experience in other commercial projects, are shown in Table 5.1.These cost premiums are only indicative. As with automobile fuel efficiency claims,“your mileage may vary.” According to research, larger LEED Platinum projectswere completed in 2007 and 2008 for less than a 2% construction cost premium(compared with a conventional building), but these results typically come first toexperienced developers or large institutions with sophisticated project managementteams [5].

It is important to point out that most developers have found that these cost pre-miums come down over time, as they gain more experience with green projects.These costs do NOT include the costs of including solar technologies, but mightinclude such things as innovative stormwater management, water conservation mea-sures, energy efficiency investments, green materials, construction waste recyclingand other sustainability features.

In addition to hard costs, there is a range of soft costs, such as requests for addi-tional architectural and engineering fees, holding “eco-charrettes”1 for consideringgreen alternatives and the LEED system documentation and certification activities.Table 5.2 shows some of these cost premiums. Note that the two most expensiveelements are things you probably want to do anyway, such as modeling the energyuse characteristics of your building(s) and commissioning the HVAC equipment tomake sure that it’s working according to design intent.

David Green is an architect and principal at Altoon + Porter in Los Angeles,California. His experience says that the soft costs can be quite large, at least for thefirst few projects a developer undertakes [6].

We have only one project where the cost of green, or specifically LEED-CS certification wasevaluated, The Collection at RiverPark, a 600,000-ft2 retail entertainment center in Oxnard,California. In this case the “LEED Premium” was calculated to be $761,500, or less than1% of the $80 million total construction budget. The bulk of this additional cost ($643,000)is in “soft” or administrative costs paid to USGBC and the consultant team, whereas only

Table 5.1 Hard Costs forGreening Retail Projects(U.S. Experience)

LEED certification level Construction cost premium

Certified (Basic level) 0–2%Silver 1–3%Gold 3–5%Platinum Above 5%

1An eco-charrette is an intensive design exercise focused typically around issues specified by aparticular green building rating system.


Table 5.2 Soft Costs for Greening Building Projects (U.S., 2008 Estimates)

Cost category Estimated cost

Design services 0–10% extra (depending on experience with green)Building energy modeling or prescriptive

design analysis$15,000–$30,000

Building commissioning $0.40–$0.70 per ft2, $20,000 minimumLEED consultant/certification effort $25,000 to $50,000 (varies by project size)LEED certification fees $0.035 per ft2, with certain minimum and maximum

fees

$118,500 has been identified as increased cost to the construction, or only 0.015% of thetotal construction cost.

Hard costs can be a different story, according to Green:

Most of our pre-design explorations show that achieving the minimum level of certificationunder LEED-NC or LEED-CS can be cost neutral to even cost-reductive compared to stan-dard design and construction methods. Whether projects have been third-party certified ornot, we have incorporated many of the green building and green site development strategiesinto our projects, which were completed on their original construction budgets. So, therewere no identified premiums.

Third-party certification does have direct and indirect costs to the project and the designteam, as the example described above demonstrates. The direct cost paid to USGBC wasonly about $20,000 of the soft cost total. Even considering the total of hard and soft costs,the figure of $761,500 is only 0.38% of the total $200 million development costs of thisparticular project.

Modeling energy use is an essential element for any building project, particularlyfor retailers. How will developers know what the carbon footprint should be withoutsome estimate of expected energy use? How will they know they are meeting expec-tations without a predictive model of anticipated energy use? How will constructionteams be able to meet the European Union’s building labeling requirements of theEnergy Performance in Buildings Directive without a model of expected energy use?Finally, how will they be able to design a less energy-intensive building without abaseline against which to measure design improvements?

Commissioning is a high-payoff activity for most projects, but is often not donein the retail sector; its main goal is to make sure that all energy-using equipment isworking according to design intent. It is amazing but true that equipment tends toget installed without anyone fully checking to make sure it is delivering designedperformance. That is the benefit provided by building commissioning.

For smaller retail projects, the costs of green building certification can definitelybe a perceived barrier, unless a company has a specific plan for realizing some of thebenefits of green project recognition. For volume builders, including both retailerswith small buildings such as bank branches and companies such as Home Depot,Lowe’s and Wal-Mart with very large stores, the USGBC developed a “portfolio”program that will allow a company to certify the basic green elements of its pro-totype or typical store, with documentation needed only for specific “site credits”

5.3 Cost Drivers 83

for each individual location. The portfolio program aims to drive down the cost ofgreen project certification to levels that a retailer can more easily handle.

5.3 Cost Drivers

Costs are real and immediate, but what drives costs? What are the key controllableparameters on which retail real estate executives can focus, to keep the costs ofgoing green under control? Key drivers of design costs include the following:

• Design team experience with green/high-performance projects• Level of green building certification desired• Team structure• Design process and scope• Green certification required documentation• Additional design fees

These two issues are discussed below in more detail, so that the retailer anddeveloper will understand how to address them in the future.

5.3.1 Design Team Capabilities

While there are more than 14,000 LEED projects under way in the U.S., fewer than2,200 were certified at the end of 2008. Part of this is owing to the time lag betweenproject registration (typically early in schematic design) and the completion and cer-tification of a project (which can take two to three years after the start of design). Asa result of this gap between interest and certification, most design (and construction)teams engaged heavily with retail work have not yet completed a LEED project.

As a result, many design teams are asking for premiums for adding the LEEDcomponent to their scope of services, and they are not always very comfortable withwhat it takes to make a project green. In addition, their ability to deliver green fea-tures on conventional budgets is suspect, and unnecessary cost increases on earlyprojects may result. In this situation, a retail developer would be wise to insist thatthe architect add an experienced green consultant to the project team, to guide theentire team through the design, product and system specification and LEED certifi-cation process.

5.3.2 Design Process and Scope

Fundamentally, it is critical to bring the entire design and construction team togetherfor enough early-stage meetings to arrive at a unified scope and series of measuresto achieve green results [5]. However, one can expect that a serious commitment to


integrated design will add to design costs, because of additional meetings, designcharrettes and further studies and analyses during the design period. A typical all-day meeting is going to cost $20,000 if it involves many consultants, each billing$1,200 to $2,000 for the day. The least costly approach is to get everyone togetherjust once, but not to leave the meeting until most key design decisions or direc-tions are made. This approach is especially important when consultants are broughtin from out of town or even out of country. In some cases, multi-day charrettesare useful; it is also possible that shorter meetings can work, in cases where thedeveloper’s team is really well informed about LEED and already experienced indelivering high-performance projects. However, some leading experts in integrateddesign maintain that integrated design requires a series of facilitated charrettes, untilall reasonable options and opportunities are fully explored.

It is also important to do most of the key thinking at the initial meeting and touse energy models in particular to get better and earlier design decisions. Some ofthe new developments in Building Information Modeling (BIM) promise to allowenergy outcomes to be modeled for alternative design approaches very early inschematic design. At the U.S. Green Building Council’s 2007 Greenbuild confer-ence, one leading BIM vendor showed a promising approach that would eventuallyallow modeling of approximate energy outcomes even from rough sketches [7].

5.4 The Cost of Learning to Be Green

One early adopter of green practices was developer Melaver, Inc., of Savannah,Georgia. In a study of the company’s costs for adopting LEED practices, Melaverconsidered both soft and hard costs. First of all, the cost of training twenty-sevenstaff members (including a calculation of the staff time involved, bonuses paid forpassing the LEED AP exam, etc.) was about $50,000, or about $2,000 each. How-ever, the more significant cost was $1.5 million of extra costs and deferred rents(from longer time to market) for the first four retail projects [8]. The CFO wrote,“As a values-centric company, Melaver, Inc., is comfortable paying a 50 basis pointpremium for being a green developer” [8].

Lessons learned included the following:

1. Set green objectives as early in the project as possible.2. Stick to those objectives throughout the project; this is harder than it sounds, as

anyone experienced in design and construction will attest.3. Make sure all members of the development team are strongly in alignment with

these objectives and are not just paying lip service to them.4. Use an experienced LEED (green building) consultant, at least for the first few

projects.5. Do your learning on smaller projects, if you can, before tackling the “project of

a lifetime.”6. Stay on top of the construction process, to ensure that green objectives are being

met by the team in the field.

5.5 Cost of a Developer’s Sustainability Initiative 85

7. Only do as much green in the first few projects as your organization can handle.(For example, it may be too much to expect the leasing team to get “green leases”from all tenants.)

8. Expect mistakes and put enough money into the budget to cover them.

Having said all this, the company still concludes that short-term and longer-termtangible and intangible cost reductions and value creation provide overriding bene-fits to the green strategy. Even after a net investment estimated at $5 million, most ofwhich comes from employees’ time, CEO Martin Melaver considers the return oninvestment to be positive. As he wrote, “Investments in a green bottom line can (andshould) be amortized over the long term, comprising part of a company’s overallinstitutional expertise—an expertise that simply becomes more refined (and prof-itable) over time.” [8]

5.5 Cost of a Developer’s Sustainability Initiative

Sometimes it is helpful to take a more comprehensive look at what a major com-mitment to sustainability might look like. Table 5.3 shows an example program thataims to LEED-certify $100 million in new projects in year one, followed by $200million in year two and $300 million in year three, and bring a similar amount ofexisting buildings up to LEED standards, for a hypothetical development company.Improving the sustainability profile of corporate operations might cost nearly $1million over a three-year period (of course there is likely to be some financial returnas well from this activity). Some of the cost elements might be surprising, such as amajor cost of corporate communications and donations to environmental nonprofits,but a developer needs to consider the full financial consequences of this commit-ment, especially since the benefits might be slower in coming than imagined. Thetotal program cost is 2.75% of all development costs.

Table 5.3 Green Building Initiatives—An Example of Estimated Costs ($ millions)

Program element 2009 2010 2011 Total

LEED-certify new centersa $2.00 $4.00 $6.00 $12.00LEED-certify existing centersb $0.75 $0.75 $0.75 $2.25Corporate communicationsc $0.30 $0.30 $0.30 $0.90Corporate sustainability operationsd $0.35 $0.35 $0.35 $1.05Charitable contributions (to green groups) $0.10 $0.10 $0.10 $0.30Total $3.50 $5.50 $7.50 $16.50

aBased on $100 million projects in 2009 at 2% cost increase, $200 million of new projects in 2010and $300 million of new projects in 2011.bThree centers per year, $250,000 per center, for 2009, 2010 and 2011.cEstimated $25,000 per month.dAssumes one CSO and one sustainability manager, total budget of $300,000 per year, plus educa-tion and training expenses of at least $50,000 per year.


5.6 Summary

Green development and green retail buildings are not free, in the sense that they mayrequire higher initial costs, certainly until an organization learns the ropes. However,there are considerable data and experience in greening other building types. As dis-cussed here and in the following chapters, many retailers and some developers havebegun to accumulate the experience with sustainable design, construction and oper-ations that will allow them to keep incremental cost increases within reasonablebounds in the future.

References

1. Personal communication, S. Richard Fedrizzi, CEO, U.S. Green Building Council, February2007.

2. 2005 survey of green building plus green building K-12 and higher education. Retrieved onMarch 6, 2007, from http://www.turnerconstruction.com/greensurvey05.pdf.

3. Green buildings research white paper: Where building owners, end users, and AEC pro-fessionals stand on sustainability and green building (2007, November). Building Design& Construction. Retrieved on December 23, 2008, from http://www.loginandlearn.com/media/whitepapers.php.

4. Credit market condition not likely to affect plans to build green buildings, say 75%of commercial real estate executives surveyed by Turner Construction Company. (2008,November 18). Retrieved on December 23, 2008 from http://www.turnerconstruction.com/corporate/content.asp?d=6504.

5. Yudelson, Jerry. (2008). Green Building through Integrated Design. (New York: McGraw-Hill).6. Interview with David Green, November 2008.7. Plenary presentation by Phil Bernstein, Autodesk, at the USGBC’s Greenbuild conference,

Chicago, November 2007.8. Melaver, Martin, et al. (2008). The Green Building Bottom Line, p. 113. (New York:

McGraw-Hill).

Chapter 6Solar Power

More retailers are getting aboard the solar power train. With the advent ofthird-party financing partnerships, putting solar power on the roof allows a retailerto buy renewable electricity without incurring the upfront capital costs. This chapterexplores what some retailers are doing today and presents the current economics ofsolar power [1].

This chapter is particularly focused on the U.S., but the information can be usefulfor international situations. For example, in Germany, the government kick-startedthe solar power industry in 2004 by mandating “feed-in tariffs” that required electricutilities to buy solar-generated electricity at about three times the going rate forconventional energy (more than $0.50 per kWh of electricity), on a twenty-yearpurchase contract [2].

6.1 The Solar Power Movement

A powerful change in energy usage among retailers is shining through with each newcompany announcement. Collectively, solar power implementation is getting signif-icant traction throughout the retail sector, although the number of stores today withthose systems is relatively small as the industry experiments with the technology.

In late 2007, Wal-Mart announced a solar power pilot project in California andHawaii to outfit twenty-two facilities with solar energy systems, with a projectedoutput of 20 million kWh per year [3]. The company signed ten-year agreementswith three companies: SunEdison LLC, BP Solar and SunPower Corporation. Wal-Mart will maintain ownership of the Renewable Energy Credits (RECs) that thesolar systems produce. According to Charles Zimmerman, Wal-Mart’s vice presi-dent, prototype and new format development, once it has evaluated the results of thepilot projects, the company may move forward with additional solar power systemsfor other stores [4]. In late 2008, Wal-Mart announced the installation of its fifteenthsystem at a store in Hanford, California, a 554-kW array, estimated to provide about15% of the store’s annual electricity consumption [5]. Figure 6.1 shows a Wal-Martstore in Southern California with an extensive rooftop solar array.


88 6 Solar Power

Fig. 6.1 Wal-Mart was a pioneer in using extensive rooftop area for solar power generation, asshown by this project in California. Courtesy of Wal-Mart Stores, Inc.

In January 2009, Wal-Mart Mexico announced plans to install a 174-kW solarsystem on top of its Bodega Aurrera Aguascalientes store, which at this time is thelargest solar array in Latin America. “This is the first large-scale project to generateenergy using photovoltaic panels, not only for Wal-Mart Mexico, but for Wal-MartInternational. This puts Mexico at the head of the energy field. The project reinforcesour commitment to obtain all the energy the company requires from renewablesources by 2025,” said Raul Arguelles, senior vice president for corporate affairsand people division at Wal-Mart Mexico [6].

In 2008, Safeway Stores installed solar systems on its Placerville, California [7]store and two of its Pavilions stores in California [8]. The grocer has plans to “solar-ize” twenty-three stores, mainly in California, with systems averaging about 300 kWeach. Collectively, these systems are expected to produce 7.5 million kWh per year[9]. According to Joe Pettus, senior vice president of Safeway, “Safeway, one ofCalifornia’s largest renewable energy purchasers, has embarked upon a major solarinitiative with Solar Power Partners to augment our comprehensive Greenhouse GasReduction Initiative. There are many items that must come together to make solareconomics work, with no two projects being exactly the same” [10].

As of September 2008, Kohl’s department stores installed sixty solar systems onstores in California, New Jersey, Wisconsin and Connecticut, with another twentyin various stages of construction. At the end of 2008, it appeared that Kohl’s was thelargest U.S. retail host of solar power [11]. Kohl’s program is expected to generate35 million kWh annually [12]. Ken Bonning, executive vice president for Kohl’s,said, “Kohl’s is committed to being environmentally responsible. We are actively

6.1 The Solar Power Movement 89

seeking ways to make a difference as an organization. Our continued commitmentto green power is an important way Kohl’s can make an immediate and long-termimpact” [13].

Other retailers with solar power announcements include:

• On Earth Day 2008, Macy’s announced a plan to install solar power systems ontwenty-eight stores [14]. For fifteen of the stores, Macy’s will purchase solar-generated electricity from a third-party financier. At the end of 10 years, Macy’scan renew the agreement, transfer the equipment to a new site or buy the sys-tem. Macy’s plans to purchase outright solar power systems for the other fortystores [15].

• Target installed solar panels on the roofs of eighteen of its California stores in2007 supplying 20% of their electricity needs [16].

• In August 2008, JCPenney announced plans for solar and wind power projects tosupply electricity to ten stores in California and New Jersey and one distributioncenter in Nevada. “These projects further our commitment to incorporate sus-tainability into all aspects of our operations. We will closely monitor the resultsto determine how we can best leverage these innovative methods to increase ourparticipation in renewable energy projects while also benefiting our business,”said Jim Thomas, vice president and director of corporate social responsibilityfor JCPenney [17].

• In 2007, Costco installed its second solar system at one of its California ware-house facilities [18].

• In January 2009, the Kona Commons shopping center in Kailua-Kona, Hawaiicompleted a 803-kW project consisting of seventeen distinct rooftop PV systems.Each system is net-metered, and tenants enter into separate agreements with thedeveloper to purchase power from the system [19].

• By late 2008, REI, the outdoor gear and apparel consumer coop, installed solarsystems on three San Francisco Bay Area stores, bringing the retailer 50% closerto its goal of installing solar on 10% of its stores [20].

• The largest U.S. solar power system installed in a shopping mall was inauguratedin February 2009, when The Shops at Mission Viejo in Mission Viejo, Californiaadded a 20,000-ft2, 173-kW rooftop system costing more than $1 million. To fundthis project, Simon Property Group entered into a power purchase agreement withHouston, Texas–based Element Markets. The system will supply an estimated 5%of the mall’s total annual electricity consumption [21].

Third parties finance most of these projects, with various end-of-lease arrange-ments. (See the section entitled “The Solar Services Model” in this chapter fora more extensive description of how third-party equipment leasing partnershipswork.) Typically, the retailer agrees to take all energy generated by the system(which is typically no more than 30% of its daytime needs) and to pay prevail-ing or slightly reduced retail electrical energy rates. Ownership of the renewableenergy credits created by the solar power output is negotiable between the retailerand the solar system provider. Since the systems provide less power than the typical

90 6 Solar Power

daytime demand of a retailer, except on those rare holidays when a store is closed,there is no need to sell power back to the electrical grid, effectively displacing themarginal price of electricity that would otherwise be purchased during those hours.

According to one source [22]. SunEdison, the largest commercial solar powerprovider in the U.S., sells commercial solar power at or below the going rate forelectricity, by leveraging capital from Goldman Sachs and other investors to coverthe initial capital cost of installing PV panels on customers’ roofs. By mid-2007,SunEdison already had built 127 of its distributed generation systems nationwidefor many customers, including retailers Staples and Whole Foods.

6.2 Solar Technology

PVs come in two basic forms: stand-alone PVs, which are typically installed onrooftops (but could be used as shading devices for surface parking lots); andbuilding-integrated photovoltaics (BIPVs), which are usually placed on sunshades,skylights or spandrel panels, or integrated with roofing tiles. For most retailers,the roof-mounted stand-alone solar arrays are probably the system of choice, pro-vided there is enough roof area to make for an economical installation. In general,a free roof area of at least 50,000 ft2 will provide this required area and generateup to 500 kW (peak) system power output, given the efficiencies of today’s PVtechnology.1

With today’s technology, it is probably better to use single-crystal or polycrys-talline solar modules, since they produce about twice as much power per unit area asthe “amorphous” silicon panels; hence, they require only half the roof area. In turn,this means that a given area of roof can generate twice as much power. However,solar thin-film technology is advancing rapidly, and retailers should consider newadvances from major manufacturers when examining the costs and viability of solarpower for their facilities.

Some estimates are that the cost of solar power may decrease to about the levelof that of conventional power by 2014 (a phenomenon known as “grid parity”), assolar cell production costs continue to fall and retail electricity prices continue togrow. One research firm estimated that venture capital firms pumped $264 millioninto solar companies in 2006, which is one indicator that expected cost reductionsare likely to be achieved [23].

6.3 The Current Market

The current U.S. market for photovoltaics for retailers is dominated by investmentpartnerships, or by large vendors with financing to complete the transaction and takeall the tax and utility benefits. In this context, the market is vastly changed from the

110–12 W (AC) of peak power per ft2 (100–120 W/m2) is typically the output of today’s solartechnology.

6.3 The Current Market 91

PV market during the 1980s and 1990s, when energy was a lot cheaper and PVsystems were much more expensive. Consider these points about solar energy inthe U.S.:

• For commercial systems, costs have come down, from about $10 per W (peak) afew years ago to less than $6 per W (peak) in 2008.

• For systems placed in service before the end of 2016, the federal tax credit forPVs is 30%.

• Accelerated depreciation tax deduction adds about 25% (net) to the tax benefitsof PV systems.

• Many state, city, and utility programs are offering additional incentives, in theform of tax credits, subsidies based on system size or payments for power gener-ated.2

Fig. 6.2 This Office Depotstore in Austin, Texas, usessolar power to offset a portionof store electricity needs.Photo courtesy of SBLM

2For a updated directory of state incentives for renewable energy and energy efficiency, visitwww.dsireusa.org, accessed December 21, 2008.

92 6 Solar Power

• Most experts expect the price of electricity to rise considerably in the future,probably faster than the rate of inflation, making the output of PV systems morevaluable over time.

• Globally, the solar power industry is projected to grow fourfold by 2010, from$20 billion in 2006 to $90 billion in 2010 [24].

Figure 6.2 shows a typical retail solar power system, in this case on top of anOffice Depot store.

6.4 Economics of PV Solar Power

Without access to third-party financing, of course, a company must make its owninvestment in solar PV systems. Without tax incentives, feed-in tariffs or other finan-cial supports, the economics of solar power are not very favorable. Take a look atthe basic economics of PVs as an add-on power source for buildings (this is a roughorder-of-magnitude approach, but not far off), shown Tables 6.1 and 6.2.

Table 6.1 Basic Economics of PV Systemsa

System cost (50 kW—peak output) $300,000 (assuming $6/W-peak installed)Annual energy output: 75,000 kWh (assuming 1,500 kWh/kW-peak/year)Value of output: $9,000 (at 12 cents/kWh)Annual return on investment: 3.0%, assuming no maintenance costsPayback: 33 years (at 0% discount rate); never (at 5% discount)

a Examples calculated by the author.

An easy way to estimate the cost of PV-generated power is to first collect thefollowing information:

1. Cost of installation, excluding the value of all incentives, expressed as dollarsper kW (typically given at peak power output).

2. Annual energy generated (the typical U.S. range is 1,200–1,800 kWh per year,per kW-peak power rating)

3. Value of power generated: typically the retail rate, 8–12 cents per kWh (althoughsome places may have slightly higher average rates)

Table 6.2 Average Cost in Cents/kWh over 20 Years for Solar Power Panelsa Production(kWh/kw-Peak/Year)

Net Cost $2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800

3000 $/kWp 12.5 13.6 15.0 16.7 18.8 21.4 25.0 30.0 37.54200 $/kWp 17.5 19.1 21.0 23.3 26.3 30.0 35.0 42.0 52.54600 $/kWp 19.2 20.9 23.0 25.6 28.8 32.9 38.3 46.0 57.55000 $/kWp 20.8 22.7 25.0 27.8 31.3 35.7 41.7 50.0 62.5

a Examples calculated by the author. Production is actual kWh (AC power) output.

6.5 Financial Benefits of PV Solar Power 93

4. System lifetime: assume 20 years5. Net Present Value (NPV) factor: Determine the best way to discount the value of

future electricity—typically, figure a 5% discount rate (like a twenty-year gov-ernment bond); over twenty years, the value of getting $1 each year at 5% isworth $12.46 today. Remember, this is pretty risk-free, and typically generates afairly reliable return.

Then apply this easy formula:

Value of PV electricity = (Annual kilowatt-hours produced) × (retail electric rate)× NPV factor.

(For example = 1,500 kWh × $0.12 × 12.46 = $2,243.)

This sample result says that the system cost could be $2,243 (per kW-peak) andit would generate a 5%, 20-year return, at 12 cents per kWh. If the retail rate is 15cents, then one could pay up to $2,803 for the same return. If power costs increasefaster than the rate of inflation, then even more could be spent on the system, aftertaking all incentives into account. The fundamental economic problem is: if thesystem costs $6,000 per kW, there will never be a return on investment, withoutconsidering tax and other benefits.

From Table 6.1 and the sample calculation, it is easy to see that without taxincentives and utility payments, there is little direct economic justification for pho-tovoltaics as an add-on energy supply system for private projects (in areas with noutility credits or low peak period power rates).

Table 6.2 shows how to calculate the cost of solar-generated electricity, given theamount of sunshine available and the installed (net) cost of solar power systems.Readers can apply their own economic variables to come up with a similar table.The calculated values in the table reflect the total cost in cents per kWh produced.They assume a 10% total capital cost (for instance 4% interest rate, 1% operatingand maintenance cost, and depreciation of the capital outlay over twenty years).The table can be modified based on the unique variables of the country in which thebusiness is operating.

6.5 Financial Benefits of PV Solar Power

But now, the potential financial benefits to PV system owners are shown in the listin Table 6.3. These can change the economic outlook dramatically for most users.

Despite the unfavorable “raw” economics of implementing PV systems, Table 6.4indicates that in some cases, at least, it may pay to look at a full range of economicand financial benefits, particularly those that will reduce initial costs or secure arapid payback. For example, some states, such as Oregon, offer a 50% solar taxcredit and allow projects to “pass through” state tax credits to other private entities,making this benefit realizable to private investment partnerships. In such situations,a PV project may command a return on investment (or internal rate of return) of upto 10–12%.

94 6 Solar Power

Table 6.3 Financial Benefits to PV System Owners

• Federal and state accelerated depreciation (for stand-alone systems) might be worth 25% net• Federal tax credits (30% for commercial PV systems put in place by the end of 2016)• State tax credits (e.g., Oregon tax credit is valued at about 25% of initial cost)• State and local subsidies ($2,000–$3,000 per kW in some places like California and Arizona)• Utility credits and payments for power produced (15–30 cents per kWh or more)• Peak period power savings, in areas where power demand is monitored “real time”• Greenhouse gas emission reduction credits (Renewable Energy Credits)

The financial benefits of solar power have been significant enough to generatetens of millions of dollars for investment partnerships dedicated to investing in solarpower on buildings, including retail stores. Many of the larger retailers have onevery under-utilized asset: the large expanse of roof area that serves now mainly tokeep the rain out. Typically retailers do not have to worry about shading of rooftopsolar panels, either, since they are surrounded by parking lots. The rooftops are alsolargely vandal-proof, since they are generally out of sight and/or hard to reach, with24/7 security the norm in large retail environments.

Table 6.4 Noneconomic or Intangible PV System Benefits

PV feature Benefit to user or owner

PV systems on buildings are visiblefrom the street

It is immediately recognizable to the public that youhave a green building that uses solar energy

PV output can be measured anddisplayed easilya

PV can be incorporated into public education aboutgreen buildings

PVs are a visible commitment torenewable energy

They may generate support for retail projects andresult in faster entitlements for developmentprojects

Larger PV systems are stillnewsworthy in most locations

Because they are visible and do not pollute, PVsystems may be perceived as attractive and thusgain media attention to publicize the project

Rooftop PV systems can bephysically separated from theunderlying building and owned bydifferent entities and taxed asphysical property instead of realestate, which is beneficial underU.S. tax law

PVs can be part of a “micro-utility” that can beowned and operated by a private company, evenfor public projects, qualifying them for full taxbenefits. As physical property, PV systems mayqualify for accelerated depreciation

To the public, PV systems represent acommitment to using renewableenergy

PVs can be part of the branding of a retail company

PVs can help get additional LEEDproject credits for energyefficiency and renewable energy

The value of moving from a basic LEED-certifiedproject to a LEED Silver level may be significantwhere there are tax credits, or where there is anowner or public policy requirement for attainingLEED Silver (or higher) certification

a For one example, see http://www.qualityattributes.com/greentouchscreen

6.7 The Solar Services Model 95

6.6 Noneconomic Benefits of Solar Power

Consider, too, the noneconomic benefits (some tangible, others intangible) that maycome with installing PV systems, as shown in Table 6.4, which describes how PVsystems may translate into user or owner benefits. The major point of this discussionis that PV has a prime benefit for retailers, because it is a visible commitment torenewable energy, or because “The six o’clock news will have something to film.”

Based on the list of benefits in Table 6.4, it is clear that the decision whether togo with PVs should not be made just by the electrical or energy engineer, but thesenior corporate leaders.

Proponents of photovoltaics have to be creative in presenting the economics andfinancing of solar energy systems, as well as the nonquantifiable benefits, to uppermanagement. Architects, engineers and contractors who are PV proponents shouldalso incorporate these benefits in presentations to owners and design review com-mittees.

6.7 The Solar Services Model

Installation of PV systems accelerated from 2006 to 2008 because investors, storeoperators and developers figured out how to separate ownership of the PV systemfrom that of the underlying building. This micro-utility model was first used in the1980s to install solar water-heating systems in apartment buildings in California; atthe time, there was a 55% state solar tax credit, a 25% federal solar tax credit, andgenerous depreciation schedules. However, as energy prices decreased in the early1980s, the psychological preference for renewable energy waned, and when thosetax benefits disappeared in 1986, so did these programs.3

In the more recent solar services model, a company agrees to buy all the solarelectricity generated by a rooftop PV system for a period of at least ten years, atthen-prevailing commercial electrical rates. (In essence, the company is running itsmeter backward.) According to a 2007 report, General Motors, Alcoa, Staples andWhole Foods were installing such units on the roofs of their warehouses and big-box retail stores. These facilities typically had more than 80,000 ft2 of rooftop area,as well as unimpeded access to sunlight and plenty of electrical demand [25].

In the solar services model, investors build, own and operate the PV systems,while leasing the rooftop for a nominal amount. Typically, the units are larger than100 kW ($600,000 installed cost), which helps pay for the cost of installation and allthe sales and marketing expenses. For a $1,000,000 system, for example, the currentU.S. federal tax credit would be $300,000, and accelerated depreciation could addanother $250,000 in net benefits. In the state of Oregon, a solar tax credit would netanother $250,000 in state tax benefits, as well as electricity payments of $0.15 per

3Personal experience of the author, at one time director of solar industry commercialization pro-grams for the state of California.

96 6 Solar Power

Table 6.5 Considerations in Purchasing Solar Power from Investment Partnerships

1. Length of contract? Anything over 15 years may tie you up for too long2. Options to renew after 10 years or purchase the system3. Provisions for default or lack of production, including system removal4. Level of experience of vendor and reliability of its financing source5. Can the investment partnerships get access to product, so that the installation will finish

before December 31, 2016?6. Will the installation have any effect on the roof warranty?7. What if the investment firm goes out of business? Will you have the right to take over the

system?8. What is the price for electricity in the contract? Is it pegged to prevailing utility rates (e.g.,

10% off the going rate), or is it level for the term of the contract?9. Who will own the renewable energy credits? You may want to own these for offsetting

other corporate carbon generation

kWh. Table 6.5 presents some of the considerations to explore when an investmentgroup approaches a company or vendors representing them.

Tax benefits and utility payments can meet 80–100% of total system cost. Thus,investors would not have to rely on the rather small 2–3% of capital cost generatedeach year by the electricity from the PV system. For example, at $0.10 per kWh pay-ment and 1,500 kWh/kW per year net power output, a 1 kW system costing $6,000would generate perhaps $150 a year in income—a 40-year payback, without taxand/or utility incentives.

Retailers thinking about investing directly in solar power should be sure to con-sult a knowledgeable tax advisor, to ensure they can use all the tax credits and otherbenefits in a reasonable period of time.

6.8 Summary

Solar power is a visible signal to consumers that a retail operator or a shoppingcenter operator has a commitment to renewable energy. Depending on the particulartax, utility and incentive programs of a given country or region, a retailer mightchoose a direct purchase or a third-party supplier. Of all the energy technologiestoday, solar power offers the best indirect benefits in terms of marketing, politicalissues and consumer preference; it is also the technology with the greatest potentialfor future cost reductions. As a result, 2009 and 2010 might be opportune years forretail organizations to get some experience with solar power systems and to figureout how to incorporate them into future planning for stores and centers.

References

1. Yudelson, Jerry. (2007, December). Letting the sun shine on the retail sector. ICSC ResearchReview, 14 (3), p. 3.

2. Weng, Rainer. (2007, April 23). Photovoltaic investments outside Germany? Looking intothe southern EU states. Retrieved on December 21, 2008, from http://www.solarserver.de/solarmagazin/solar-report_0407_e.html.

References 97

3. Wal-Mart launches solar power pilot project. Retrieved December 1, 2007, from http://www.walmartfacts.com/FactSheets/Solar_Power_Pilot_Project.pdf.

4. Charles, Zimmerman, December 2007, personal communication.5. Wal-Mart and SunPower complete work on solar power system in Hanford store. (2008,

December 12). Retrieved on February 15, 2009, from http://www.walmartstores.com/FactsNews/NewsRoom/8885.aspx.

6. Grover, Sami. (2009, January 22). Wal-Mart Mexico launches largest solar arrayin Latin America. Retrieved on February 12, 2009, from http://www.treehugger.com/files/2009/01/wal-mart-mexico-solar.php?daylife=1&dcitc=daylife-article.

7. Safeway Celebrates Earth Day with Two New California Solar-Powered Stores. (2008,April 21). Retrieved on February 12, 2009, from http://www.foxbusiness.com/story/markets/industries/retail/safeway-celebrates-earth-day-new-california-solar-powered-stores/.

8. Bruce, Allison. (2008, October 21). Pavilions store unveils alternative power source.Retrieved on February 12, 2009, from http://www.venturacountystar.com/news/2008/oct/21/going-solar-in-simi-pavilions-store-unveils/.

9. Safeway to install solar power panels on 23 stores. (2007, September 14). Retrievedon December 13, 2007, from http://www.environmentalleader.com/2007/09/14/safeway-to-install-solar-power-panels-on-23-stores/.

10. Solar power partners completes flagship Safeway solar project.(2007, Septem-ber 18). Retrieved on December 18, 2008, fromhttp://www.energyrecommerce.com/index.php?fuseaction=public.news_article&id=13.

11. Kohl’s web site. Retrieved on February 12, 2009, from http://www.kohlsgreenscene.com/KohlsInitiatives/EnergyManagementPrograms.html.

12. Hajewski, Doris. (2007, April 26). Kohl′s to go solar in California. Journal Sentinel. Retrievedon December 15, 2007, from http://www.jsonline.com/story/index.aspx?id=596541.

13. Kohl’s readies its California rooftops for solar power. (2007, April 26). Retrievedon December 18, 2007, from http://www.kohlscorporation.com/2007PressReleases/News0426Release.htm.

14. Macy’s hails Earth Day with SunPower solar dedication in San Jose. (2008, April21). Retrieved on February 12, 2009, from http://www.foxbusiness.com/story/markets/industries/energy/macys-hails-earth-day-sunpower-solar-dedication-san-jose/.

15. Macy’s installs solar power in 26 stores. (2007, June 6). Retrieved on February 12, 2009, fromhttp://www.environmentalleader.com/2007/06/06/macys-installs-solar-power-in-26-stores/.

16. Target web site. Retrieved on February 12, 2009, from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-031814.

17. JCPenney launches solar and wind power projects. (2008, August 13). Retrieved on February12, 2009, from http://www.csrwire.com/News/12855.html.

18. Costco expands solar energy system. (2007, February 6). Retrieved on February 12, 2009,from http://www.environmentalleader.com/2007/02/06/costco-expands-solar-system/.

19. Sunetric completes largest rooftop solar project in Hawaii. (2009, January 30). Retrievedon February 12, 2009, from http://www.solarindustrymag.com/e107_plugins/content/content.php?content.2457

20. Guevarra, Leslie. (2008, November 14). REI forges ahead with solar plan. Retrieved on Febru-ary 12, 2009, from http://www.greenerbuildings.com/news/2008/11/14/rei-solar-plan.

21. Simon completes solar panel installation at The Shops at Mission Viejo. (2009, February 4).Retrieved on February 15, 2009, from http://www.csrwire.com/News/14498.

22. Park, Andrew. (2007) The 6th annual Fast 50. Fast Company. Retrieved on December 18,2007, from http://www.fastcompany.com/magazine/113/open_14-sunedison.html.

23. Davidson, Paul. (2007, August 28). Forecast for solar power: Sunny. USA Today.Retrieved on December 18, 2007, from http://www.usatoday.com/tech/science/environment/2007-08-26-solar_N.htm

24. Marsh, Peter. (2007, April 4) Solar energy demand soars. Financial Times Retrieved onDecember 18, 2007, from http://www.ft.com/cms/s/edfdbbf0-e248-11db-af9e-000b5df10621,

98 6 Solar Power

Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fedfdbbf0-e248-11db-af9e-000b5df10621.html%3Fnclick_check%3D1&_i_referer=&nclick_check=1.

25. Deutsch, Claudia H. (2006, October 21). New York Times. Retrieved on December 18, 2007,from, http://www.nytimes.com/2006/10/21/business/21solar.html.

Chapter 7Greening Shopping Centers

At the first European green shopping center conference, Centrebuild, hosted by theICSC in 2008, it was obvious to the author that elements of the European retail realestate development community were doing a lot to incorporate low-energy designand sustainability concerns into their new projects, perhaps even more so than NorthAmerican developers.

At this time, beyond new development, few developers are tackling the refur-bishment of existing centers to secure greater energy savings, except at normal—8-to 15-year—intervals when the retail environment itself requires major alternations.Let’s look at some European shopping center developers and their sustainabilityprograms.

7.1 European Green Building Programs

Jerry Percy, head of sustainability for the Gleeds management/construction consult-ing firm in the U.K., says [1],

We’ve seen an acceptance of low-energy and sustainable design in the retail sector fromsome of the key leaders. The owners of most of the retail projects, particularly for new devel-opments, tend to be out-of-town developers—large developers looking to secure anchorstores and subsequent tenants. Because the vast majority of them are public companies,those large organizations have corporate responsibility targets that involve sustainability intheir developments. They’re setting building performance standards of BREEAM Excellentor Very Good, the LEED Gold equivalent.

What we’re finding is that some of the larger retailers are now demanding certain lev-els of building performance to be incorporated into the core and shell. In the U.K., Marks& Spencer is a good example; they’re setting requirements, specifications and design stan-dards, and making them a condition of signing up as the anchor store.

7.1.1 SES SPAR European Shopping Centers, Austria

Another example of sustainable retail development on the continent is SESSPAR European Shopping Centers (SES), headed by Marcus Wild, CEO. Filipa


100 7 Greening Shopping Centers

Fig. 7.1 EUROPARK in Salzburg, Austria, is an award-winning green retail development fromSES. Courtesy of SES SPAR European Shopping Centers

Fernandes is head of sustainability for SES. She led their sustainable devel-opment of the EUROPARK center in Salzburg, Austria (Fig. 7.1), which wonseveral awards for its sustainability strategies including the International Designand Development Award in 2007 from the ICSC. EUROPARK Salzburg con-tains 130 shops in a nearly 51,000-m2 (550,000-ft2) shopping center. It openedoriginally in 1996 and was later expanded by 20,000-m2 and reopened in late2005. EUROPARK sets a benchmark with its use of sustainable materials, itsclimate control system, its reuse of the energy in exhaust airflow for heatingincoming air and its strong focus on tenant and shopper recycling.

Another important project for SES, and one that also garnered its share of awards,is the ATRIO center (shown in Fig. 7.2), in the Austrian province of Carinthia.Completed in 2007, the project’s sales area is 38,000-m2 (400,000-ft2), with 82shops; total project cost was about $140 million. Unique to this project is the use ofground-coupled energy for both heating and cooling, with 652 geothermal energypiles containing piping driven into the ground, supplying about 7,000 kW of heatingand cooling energy. The project uses trans-seasonal storage, with waste heat fromsummer cooling stored in the ground to facilitate winter heating. This has the majoradvantage of removing cooling towers from the roof and reducing exterior noiselevels dramatically. The project saves an estimated 500 metric tons of greenhousegas emissions per year [2].

7.1 European Green Building Programs 101

Fig. 7.2 The ATRIO Center in Villach, Austria, connects that country with nearby Slovenia andItaly. Courtesy of SES Spar European Shopping Centers

7.1.2 Forum Duisburg, Germany

Forum Duisburg is Multi Development’s first BREEAM-certified mainland Europeretail project and the first retail project to be certified at the Very Good level, mean-ing it garnered more than 70% of the possible points. Forum Duisburg not onlyhas impressive environmental features, including a green roof, but the project alsoincludes social features, such as a complimentary service for assisting disabled peo-ple to shop in wheelchairs, with an attendant paid for by the center, working witha local social service group. Paul Appleby of URS Corp. was involved with theBREEAM assessment of this project. There’s an important lesson for green devel-opment to be learned from this project [3]:

Certainly the Forum is a landmark project for Multi Development. No expense was spared,so it is a very high-quality project, but it also has some unique features, both architecturaland sustainable. It has an impressive array of low carbon technologies, which although wellestablished, have not been widely used for shopping centers. These include combined heatand power with absorption chillers and linked with the city’s low-carbon district energysystem.

The most important advice I would offer is to get the [sustainability] process started asearly as possible. On both of these projects [the other is a C&A store in Mainz], we camein quite late, so the opportunities to influence design were fewer. Sustainability needs to befactored into the design from day one. The projects that we’ve had the most success withare those where we’ve been appointed at about the same time as the architects; and thosein which we’ve provided a full sustainability advisory service, which carried through theproject all the way from design through construction to delivery.


[Compared with BREEAM], one of the advantages to LEED is that it is quite process-driven. You’ve really got to commence a LEED assessment as early as possible and it hasto continue on through the construction process. It has a stronger intrinsic quality to it andthat means you have to take it seriously from day one.

7.1.3 ECE, Germany

ECE is the European market leader in the field of inner-city shopping centers. CEOAlexander Otto spearheads the firm’s approach to sustainable shopping center devel-opment [4]. The company’s first certified shopping center will be the Ernst-August-Galerie in Hanover, Germany, shown in Fig. 7.3. The investor in this project wasHGA Capital Grundbesitz und Anlage GmbH. In this center, ECE’s developmentapproach includes an intelligent building control system for natural ventilation, agreen roof, rooftop PV system, recyclable insulating material, purchase of greenelectricity and use of local materials. According to Otto:

We are undergoing a LEED certification for the Ernst-August-Galerie and are also choosinganother project for a BREEAM certification. At this stage we would like to get familiar withthe most important and best-known rating systems.

We have found out in an investors’ survey that the LEED and the German DGNB ratingsystems are the ones that are mainly demanded. When making the decision for a ratingsystem [to use on a particular project], we will have to take the needs of our investors intoconsideration.

Fig. 7.3 ECE shopping centers receive a total of about 155 million kWh per year of hydroelectricpower. Ernst-August-Galerie in Hanover is one of 48 ECE shopping centers participating in thecompany’s green energy initiative. Courtesy of ECE/Ernst-August-Galerie


ECE created a very interesting tenant interaction program called “Cool Down”to get tenants to use less lighting. Otto says,

Energy costs are not in our tenants’ focus so far. But we are sure that, with the increas-ing expenses, attitudes will change. “Cool Down” was launched in conjunction with ourpartner Philips. The first phase of “Cool Down” consists of collecting and analyzing dataof the current energy use in the shops of the ECE shopping centers. The second phase ofthe program, that is the discussion with the centers’ tentants and the implementation of theresearch results, just started at the Elbe-Einkaufszentrum in Hamburg. One challenge is toconvince retailers to apply the research results despite the fact that they have to invest timeand money at first. But in the long run, energy savings will also result in money savings.ECE is planning to support the retailers with lighting workshops. Together with the design-ers of the shops ECE aims at finding means to redesign the use of light and to use lightmore efficiently. “Cool Down” is about to be implemented in a second shopping center inViernheim. The program will be installed in all ECE centers in the medium-term.

This approach illustrates two key principles for introducing sustainable programsas a developer. First, there must be experiments; every new idea has to be tried outsomewhere. Second, there must be active engagement with the tenants, sometimesin the form of technical assistance, such as the lighting workshops. Often it is possi-ble to partner with nonprofits, local government or electric utilities to support suchprograms. As Otto mentions, the lighting designers or store architects must also beengaged.

7.1.4 PRUPIM, U.K.

PRUPIM is a top-twenty global real estate investment manager. It manages 415retail and leisure properties, 246 offices, 166 industrial assets, and 95 other proper-ties. In the U.K., PRUPIM manages 12 shopping centers worth about $2.9 billion.Sustainability is a core value across the portfolio, including fund management, assetmanagement and property management [5].

The company adopted a target in 2006 to have an approved formal procedure forBREEAM ratings on new development schemes. As of 2007, this procedure was50% complete. All projects with a value exceeding £5 million would be BREEAM-assessed with the goal of gaining a Very Good rating. Two developments were slatedto undergo BREEAM assessments. In general, the company expects that commer-cial office developments will be 25% more efficient than the minimum energy effi-ciency building regulations, and retail and industrial projects will beat the minimumrequirements by 15%.

In its 2007 Interim Sustainability Report, the company reported that it “reducedCO2 emissions (measured as kg of CO2/m2) from shopping centers and managedoffices by 14%, compared to the 2006 baseline. This means that we have succeededin achieving our 2012 emissions reduction target 4 years ahead of schedule.” In2007, the company launched its Sustainable Development Framework, which aimsto promote increased understanding of sustainability issues through informed debateamong design and construction teams.


The emission of 55,000 metric tons of CO2 was averted with the continuing pur-chase of green electricity across a large number of the company’s managed proper-ties. Purchasing green electricity remains a key driver in PRUPIM′s efforts to reduceits environmental footprint.

Paul Cornes is director of sustainability for the company. Cornes says thatPRUPIM has taken a different approach from some of the other developers profiledin this book [6].

We’ve not built any “green” shopping centers or stores as such, although we do apply sus-tainability measures on all new builds and refurbishments. All our larger managed prop-erties have ISO 14001 certification. We also have an innovative Sustainable DevelopmentFramework that brings together all consultants and professionals and encourages them toapply as many sustainability features as possible within the financial constraints of eachproject.

PRUPIM’s sustainability targets are:

• Comply with SMART principles (i.e., targets that are Specific, Measurable,Achievable, Realistic and Time-bound).

• Make reference to peer group sustainability targets to ensure alignment withindustry good practice.

• Performance-related wherever possible, relating to the achievement of formalstandards or thresholds of performance and seek to reduce and/or improve theimpact in question.

• Based on sustainability KPIs (key performance indicators) wherever possible toensure continuous improvement over time [7].

The Sustainable Development Framework includes six KPIs that in 2007included the following activities:

1. Development: In 2007, PRUPIM launched what it calls “an industry leadingdevelopment brief” entitled Sustainable Development: A Framework for Deci-sion Making, to guide its design and construction teams. One area of focus wasdevelopment of brownfield properties.

2. Investment: Work continued on the Improved Portfolio for existing properties.PRUPIM conducted environmental and energy audits at all of the Portfolio’sproperties. PRUPIM expects that the information from the audits will enable it toidentify key performance indicators to measure improvements in the Portfolio’sperformance, such as reduction in carbon emissions.

3. Property Management: PRUPIM continues to focus on improving the efficiencyof electricity, gas and water purchased, ultimately reducing the absolute con-sumption of each. The company also aims at increasing the amount of wasterecycled at the managed properties, which in 2007 was about 25% by weight.

4. People: The company spent £1,394 average per capita on green training in 2007,an increase of 49% from the 2006 level. (The discussion in Chapter 12 points outthe importance of staff training as part of any sustainability program.)


5. Greening the Supply Chain: In 2007 PRUPIM worked with the organization Buy-ing Force to raise sustainability standards in the supply chain. Buying Forcequestioned its preferred suppliers on their sustainability credentials, and 77% ofrespondents said that they already had a sustainability policy in place.

6. Community Investment: PRUPIM’s community investment during 2007, mea-sured by the London Benchmarking Group methodology, was just over£400,000. PRUPIM staff also spent 1,165 hours volunteering in the community.

7.1.5 Redevco, U.K.

Redevco is another U.K.-based developer with a different approach to sustainability.Derk Welling is manager of sustainability, energy and environment for the firm.Welling describes Redevco’s key sustainability principle, Business in Balance [8]:

Balance is the keyword both in how we do business and in the activities we carry out for ourclients. Business in Balance means combining people, planet and profit in a balanced way.

Redevco is committed to a program for implementing sustainable solutions. Keyelements of the program are:

1. “Policy of Small Steps”: the company prefers achievable “small steps” that cangradually attain concrete improvements as against idealistic requirements thatare difficult to implement in reality.

2. Eco-efficiency: Redevco aims to go green, but in an economic way. If a projectis not economically feasible, they will not do it. Therefore Redevco considers“eco-efficiency” as a key principle.

3. Continuous Improvement: Redevco seeks continuous improvement in environ-mental performance in seven areas through performance measurement againstenvironmental performance indicators (EPIs), and an annual program of chal-lenging yet realistic targets.

4. Compliance: Redevco complies with or stays ahead of all legislation that relatesto its activities, prepares for expected forthcoming legislation, and adopts envi-ronmentally aware practices in those instances where legislation does not meetthe company’s own minimum requirements.

5. Stakeholder Engagement: Redevco wants to raise awareness of environmentalissues within the company and among all stakeholders and encourages them towork in an environmentally responsible manner.

In practice, these principles are implemented through three core activities. First,Redevco carries out BREEAM assessments on all new development projects withconstruction costs in excess of C10 million with the intention of obtaining a ratingof at least Very Good. Second, all existing properties are certified in accordancewith the E.U.’s Energy Performance of Buildings Directive. When the BREEAMIn Use (equivalent to LEED for Existing Buildings) rating system becomes readily


Fig. 7.4 Redevco plans to assess its retail developments in Europe according to green building rat-ing standards; 40 Princess Street in Edinburgh was the first Redevco building to receive BREEAMcertification. Photo: © Redevco

available, the company plans to certify its existing stock according to this standard.Third, all mall management activities are certified against ISO 14001.

Redevco is very supportive of the BREEAM rating system. In 2006 Redevco’sproperty at 40 Princess Street in Edinburgh (Fig. 7.4) was certified according toBREEAM. Since then, BREEAM assessments have been carried out on more prop-erties, including shopping centers in Turkey (Ankara, Manisa and Erzurum) andthe first C&A Eco Store in Mainz (Germany). This eco-store has been awarded aBREEAM Very Good rating, an excellent achievement for refurbishing an exist-ing store built in the 1960s. Energy consumption was reduced more than 10%and carbon emissions were also reduced, partially by installing PV panels on therooftop.

7.2 North America

Two of the earliest LEED-certified shopping centers in the U.S. were the AbercornCommon project by Melaver, Inc., in Savannah, Georgia, and the Northfield

7.2 North America 107

Stapleton project by Forest City Stapleton in Denver, Colorado completed in 2005and 2006, respectively and profiled in Chapter 2. More recently another LEED-certified center is the Uptown Monterey Center in Monterey, California, completedin 2007. Moreover there is a project completed in the summer of 2008, the GreenCircle in Springfield, Missouri, aiming at LEED for Core and Shell Platinum-levelcertification. Let’s take a look at the two more recent projects.

7.2.1 Uptown Monterey Shopping Center, Monterey, California

This 40,000-ft2 project was developed by Douglas Wiele of Foothill Partners, Cali-fornia. It was certified LEED Silver under the LEED-CS program, with a net greencost premium of about $30,000 [9]. Uptown Monterey Shopping Center redevelopeda former Safeway grocery store at the entrance to the City of Monterey’s down-town shopping district. A Trader Joe’s Neighborhood Grocery Store anchors theproject. The project was developed as a public/private venture between Foothill Part-ners Granite Land Company and the City of Monterey, which owns the underlyingland [10].

7.2.2 Green Circle Shopping Center, Springfield, Missouri

Shown in Fig. 7.5, Green Circle is a high-performance strip retail center, completedin the summer of 2008. The development exemplifies design integration. EMSI [11]was the sustainable design, energy and LEED consultant. According to the consul-tant, the 26,000-ft2 project is on track to achieve LEED Platinum, scoring 53 of apossible 61 points in the LEED-CS 2.0 system. Site measures include an intensivevegetated roof and pervious concrete for 100% of parking; water efficiency mea-sures include use of captured rainwater and an overall 70% reduction in potablewater use. Energy use is estimated to be 53% below a comparable standard retailshell building, and there is a central geothermal system that supplies both heatingand cooling. There is recycled content decking/siding and a steel structure with ahigh level of recycled content. The building contains extensive daylighting and useslow-VOC paints and finishes. In terms of innovations, there is an extensive greenbuilding education program for the public and a commitment to green housekeep-ing measures by the owner.

7.2.3 Station Park Green, San Mateo, California

This project is one of the first transit-oriented developments (TOD) to be certifiedunder the LEED for Neighborhood Development (LEED-ND) pilot program. Sta-tion Park Green developer Ed Lipkin of EBL&S says [12]:


Fig. 7.5 The 23,000-ft2 Green Circle Shopping Center in Springfield, Missouri, is the first shop-ping center in the U.S. pursuing a Platinum-level LEED certification. Courtesy of Bob Linder,Green Circle Projects

Currently, we’re in the final stages of entitlement with the City of San Mateo. (Entitle-ment refers to the process of working to secure government approvals for zoning density.)This process also includes the negotiation of a development agreement whereby we willbe granted the rights to proceed with this type of development for a certain period of time.This particular project has a 10-year time horizon, which begins after the entitlements aregranted.

We view transit-oriented development as a means to enrich the entitlements since TODsintrinsically benefit from high densities. When more uses are available close to the transitnetwork access point, more riders will use the area. By incorporating green building andsustainable design with the higher density component located adjacent to transit, the devel-oper is able “do good” while “doing well.” Station Park Green is a prime example of projectthat results in a win-win for the community, the developer and ultimately for the consumersthemselves.

7.2.4 Northgate Mall Redevelopment, San Rafael, California

Macerich is a large retail developer that is renovating suburban Marin County’slargest enclosed shopping center at Northgate Mall, with a goal of recycling overhalf of the materials of the existing center. The retail project is aiming at LEEDfor Core and Shell certification when completed in 2009. Overall, the companyexpects the energy-saving techniques to reduce energy use by 20–30% over tra-ditional systems [13]. Specifically, among green building aspects of the Northgatedesign are:

7.2 North America 109

• A mild-weather natural ventilation system that brings in fresh air throughclearstory windows in a roof element that will open and close automatically,with rollaway entry doors/walls to take advantage of Marin County’s temperateclimate.

• High-efficiency lighting systems and a dramatic increase in natural light throughextensive skylights and glass openings in the building envelope.

• A white roof to reduce the urban heat island effect.

The San Rafael property is Macerich’s first of several current redevelopmentand new development projects that are targeting LEED certification. Jeffrey Bedellis vice president, sustainability, at Macerich [14]. According to Bedell, Macerichadopted a 5-year sustainability plan in 2008, with reporting to begin in 2009. Thereare four key focus areas that incorporate all major areas of sustainability, as statedby the company.

Macerich is committed to providing a healthy environment for its employees, retailers,shoppers and the communities it serves, which is sustainable for future generations. Toachieve this, we will develop and utilize new and emerging technologies, processes andpractices while balancing economic, social and environmental impact.

• Corporate Responsibility: Encourage and implement tools and programs that contributeto an environmentally focused, efficient and effective organization.

• Operations and Asset Management: Provide a healthy, clean and efficient environmentfor employees, retailers and shoppers.

• Development Pipeline: Add value through sustainable building practices that aresocially, environmentally and economically responsible.

• Community Connection: Provide leadership and promote sustainability with our partnersand in our communities.

To measure the success of our efforts, we will begin by establishing the carbon footprintfor each property and our company as a whole. With this information, we will determineincremental, realizable goals.

Bedell said that his immediate plans are to learn from the three shopping centerscurrently pursuing LEED certification. He said,

We are seeing additional costs which can vary from 1 to 4% depending on the projectbut we have also found that in total these measures can have very good marginal returns(ROI), typically 15–25% on incremental investment. There has to be a positive economicbenefit to the programs we implement, based either on reasonable ROIs or operational costreduction or long-term cost control. At Macerich, we are committed to measuring quan-tifiable results from all major sustainability initiatives. In 2008, our focus has been largelyinternal, but in 2009 our program will start touching our customers and tenants, and weexpect the response to be very positive. To date, we have focused heavily on internal com-munication and education to help gain the cultural change we are looking for within thecompany.


7.2.5 Tanger Outlet Center at the Arches, Deer Park, New York

Opened in the fall of 2008 and shown in Fig. 7.6, this $400 million, 83-acre (33-hectare) redevelopment of a former industrial brownfield site is targeting LEEDSilver certification [15]. The 800,000-ft2 (74,350-m2), one-story, open-air mallfeatures covered walkways and a large public plaza, with an ice skating rink inthe winter and a live entertainment area in the summer. The architecture aims forthe center to look like an Italian village, with cast stone and Venetian plaster anda lot of landscaping. The roof sports Spanish clay tiles, and the hardscape designincludes unit pavers and high-end colored concrete in a complex design.

Fig. 7.6 The Tanger Outlet Center at the Arches on New York’s Long Island transformed a formerindustrial site into a 800,000-ft2 open-air mall. Courtesy of Adams + Associates Architecture

7.3 Summary

The retail industry has awakened to the sustainability theme, and one can alreadysee that there are good examples of leadership in this arena. Green consultants fullyexpect that there will be a widespread movement toward green building in Europeanand American shopping centers, with the consensus that BREEAM will be the rat-ing standard of choice in most European countries, with LEED reigning supremein the U.S., Canada, India and a few other places. Green Star will continue to bethe standard of choice in Australia and New Zealand. The Deutsches Gütesiegelnachhaltiges Bauen will certainly become Germany’s dominant standard; France,

References 111

Switzerland and the Netherlands also have their own national standards for greenbuilding certification. There are growing numbers of European retailers who areembracing green and who would be the tenants in these centers, so there is likely tobe a meeting of the minds over the next 3–5 years on green shopping center devel-opment. With its stronger environmental ethos, the European public may very wellreward green shopping centers with increased patronage.

References

1. Interview with Jerry Percy, Gleeds, August 2008.2. Trigos award/Kärnten for Atrio. (2008, April 29). Retrieved on September 6, 2008,

www.atp.ag/frameset/news-e.html.3. Interview with Paul Appleby, URS Corp., November 2008. Mr. Appleby recently retired from

URS, so these viewpoints are his own and not the company’s.4. Email interview with Alexander Otto, ECE, November 2008.5. PRUPIM sustainability report. (2007). Retrieved on December 20, 2008, from

http://www.prupim.com/about/sustainability?contentId=5327.6. Interview with Paul Cornes, PRUPIM, November 2008.7. PRUPIM web site. Retrieved on September 25, 2008, from http://www.prupim.com/

about/sustainability/targets.8. Interview with Dirk Welling, Redevco, November 2008.9. Presentation at 2008 ICSC ReCON show in Las Vegas. Can be located at http://www.

icscseed.org/files/leed.pdf, retrieved December 30, 2008.10. Pharmaca web site. Retrieved on December 30, 2008, from http://www.pharmaca.com/

pr_090208.html.11. EMSI web site. Retrieved on February 14, 2009, from http://www.emsi-green.com.12. Interview with Ed Lipkin, November 2008.13. Northgate aims for added sustainability, targets rare LEED certification for shop-

ping center design. (2008, October 7). Retrieved on December 20, 2008, fromhttp://www.redevelopmentatnorthgate.com/pressreleasefull.aspx?id=8632.

14. Interview with Jeffrey Bedell, November 2008.15. The Tanger Outlet Center at The Arches. Retrieved on December 30, 2008, from

www.auroracontractors.com/PDF/Top-25-New-York-Projects-Tanger-Outlet-Center-at-The-Arches.pdf.

Chapter 8Greening Retail Buildings

After dealing with the shopping center itself, there are of course many developmentswith stand-alone retail spaces, including both large spaces (30,000-ft2 or more) andsmaller spaces, including banks, coffee shops, juice bars and so on. This chapterdeals mostly with the larger stand-alone stores, which are easier to certify as greenbuildings, since the fixed costs of additional design and construction costs can beapplied to more square footage.

Through 2008, the largest non-grocery user of the LEED certification system fornew buildings has been PNC Bank, one of the ten largest U.S. banks, which hadcertified about 50 of the company’s small (3,500-ft2) retail branch banks. Neverthe-less, the trend seems firmly established now that many retailers are implementingsignificant energy efficiency and green building initiatives.

Grocers have been big adopters of greener construction measures, since they uselots of energy in their large warehouse-like stores and have to pay all the energybills. With much contemporary focus on prepared foods and refrigerated foods in amodern grocery store, there is a lot of energy to save, both in new store design andin existing store remodels.

Brian Fleener is senior principal at Mulvanny G2 Architecture, a leading retailarchitecture firm based in the Pacific Northwest of the U.S. He said [1],

A trend that we’re seeing in the retail industry is the retailers are past just getting on thebandwagon. They’re now seeing how sustainability strategies are relevant to their businessstrategies, where they overlap and they’re trying to find where those overlaps make themost sense. For example, Kroger has looked at heat reclamation (taking heat from variousappliances and using it to heat the store) and found it makes a lot of sense to its businessstrategy, so it’s a “no brainer.” If you were trying to get Kroger to do a green roof, forexample, that wouldn’t make much sense to their business strategy.

8.1 Wal-Mart Case Study

As the world’s largest retailer, Wal-Mart’s five-year experimentation with sustain-able buildings deserves serious study by other retailers. According to Don Moseley,director of sustainable facilities at Wal-Mart [2],


114 8 Greening Retail Buildings

We built two experimental stores in 2005 in McKinney, Texas and Aurora, Colorado. Wehave a process where we like to test things and then, if it’s appropriate, we will incorporatethem in to the store prototype program. So the experimental stores were, in essence, thetest-phase and we incorporated a great number of different sustainably related initiatives.

We learned a lot from those stores. We incorporated some of the early lessons from thosestores into a set of pilot stores that we refer to as “higher efficiency one” or “HE.1.” Thereare three of these stores and they opened in 2007. These stores were projected to reduceenergy requirements by 20% compared to a 2005 baseline. We then tried to figure how bestto further enhance efficiencies and get higher-performance which resulted in a second setof pilot stores. Referred to as HE.2 pilots, four stores opened in 2008. They are projected tobe up to 25% more energy efficient than our 2005 baseline.

In March 2008, Wal-Mart opened a store referred to as an HE.5 store in LasVegas, Nevada. It was designed specifically for the western dry air climate and isprojected to perform up to 45% more energy-efficiently than the stores Wal-Martprototypically built in 2005.

Those stores were working towards a specific goal stated in CEO Lee Scott’s speech ofOctober 2005 to design and build a prototype within three years that would be 25–30%more energy efficient. We’re taking progressive steps towards that new prototypical designwhich we’re anticipating to be on track in late 2009.

Wal-Mart is retrofitting existing stores by incorporating technologies for newstores back through its scheduled remodel program, with the goal of constantlyimproving and enhancing the existing store footprint. Some of the technologiesinclude enhancements to HVAC systems, using LED technology in freezer casesand exterior signage and adopting water efficiency measures for toilets and urinalsand some of the water flow devices.

One of Wal-Mart’s three primary goals is zero waste. Moseley says:

We’re trying to be more efficient. We’re determining how to generate less waste through theconstruction process by working with the waste removal companies to recycle that material.At the same time we’re attempting to specify materials that are recycled and we’re trying toevaluate materials that at end of life do not have to go to, as their only choice, the landfill.We’re early in that process, as we’ve been extremely focused on energy efficiency. We’vebeen very focused on water. Materials recycling is bit more of a challenge.

Wal-Mart also evaluated photovoltaic systems at both of its experimental stores,then determined that due to the flexibility of roof-mounted systems along with thesize of the store roofs, a solar pilot program would be appropriate. Using third-partyfinancing and ownership, Wal-Mart has installed nineteen solar power systems sinceearly 2007, including two stores in Hawaii and seventeen stores in California. Threedifferent vendors own and operate the solar power systems. Wal-Mart purchasespower from them through a power purchase agreement at or below the cost it wouldpay for utility-supplied power.

At this time Wal-Mart does not seek LEED or other third-party certification forits buildings. It doesn’t feel that these programs offer much to a dedicated ownerthat is very familiar with its buildings, especially one that is intimately involved inthe design and has a vested interest in the long-term commitments related to energy

8.1 Wal-Mart Case Study 115

and maintenance. The company’s goal is to serve its customers’ needs as well asthose of the store operators. Moseley comments:

We feel that we have done and are continuing to do a very good job at making good businessdecisions that result in reductions in our energy footprint and water footprint and also aresustainable to our business. We don’t feel that third-party certification is a benefit to whatwe’re doing and we haven’t pursued it. The majority of the decisions that are being made,specifically to the buildings, have a typical return on investment of 2–3 years. We’ve alwaysbeen focused on keeping our costs down to better serve our customers.

Wal-Mart has also been using skylights for over 12 years and has them in morethan 2,200 stores. There are times when you can go into a Wal-Mart and all of thelights are off. Because of the way the building is set up, it’s not even noticeable tothe customer when lit by natural light. Interestingly, Wal-Mart may be ringing upadditional profits because of sales gain associated with extensive daylighting.1

With respect to the HE.5 prototype for the Western U.S., the real backbone ofthe system is an integrated refrigeration/HVAC system. Instead of a refrigeration

Fig. 8.1 Energy use in retail stores varies dramatically by end-use and type of activity, as shownby the annual energy use index (EUI). Source: www.nrel.gov/docs/fy08osti/41956.pdf

1See recap of studies by the Heschong Mahone Group for the California EnergyCommission,http://www.h-m-g.com/projects/Daylighting/summaries%20on%20daylighting.htm#Daylight%20and%20Retail%20Sales%20%E2%80%93%20CEC%20PIER%202003, retrievedFebruary 15, 2009.


rack-house system that sits on the outside of the store, used to supply the coolingneeds of freezer and refrigerator cases, the equipment is now on the roof. It is inte-grated with the HVAC equipment that is used to heat and cool the building. Wasteheat from the refrigeration equipment is being harvested to provide the building’sneeds for space heating and hot water.

In Las Vegas, the most recent iteration of the HE.5 system, the system runschilled water through tubes in the floor slab, with the slab acting as the building’scooling element.

Figure 8.1 illustrates why energy use is so important to control in retail buildings,with a special emphasis on restaurants and food service (highest energy use persquare foot, smaller retail area) and grocers/food sales (large retail area, high energyuse per square foot), in comparison with general merchandise retail and warehousestores, even those with refrigeration.

8.2 LEED Certification for New and Renovated Retail Buildings

Not every store operator has the size or financial resources of Wal-Mart to be ableto afford extensive experimentation. Yet many other store operators are designingLEED-certified stores in the U.S. and BREEAM-certified stores in the U.K. Certi-fying a building as green can be done both with stand-alone stores and with thoseplaced in a mall or lifestyle or strip center setting. In the case of a mall, the morelikely program would be LEED for Commercial Interiors or BREEAM for Fit Out,a subject taken up in Chapter 9. This chapter treats mainly design and constructionof freestanding stores or those with large footprints such as grocery or large retailbig box operators such as electronics, department stores, home improvement andoffice supplies.

8.2.1 Sustainable Site Features

If you are working with a new development or major renovation of an existing cen-ter, and you are an important tenant such as a national retail chain, you should askthe developer to do more environmentally friendly site work, then take the credits forthat in your green building certification application. Such site work includes build-ings with solar power systems already on them, buildings with reflective roofs orgreen roofs and those with rainwater harvesting systems that provide recycled waterfor toilet flushing and irrigation. Also, look for centers located near public transit,centers that have rehabilitated contaminated sites and centers that provide amenitiesfor bicycle commuting, including showers and secure storage for bicycles.

Figure 8.2 shows the exterior of a store in Chile, part of the Falabella chainwhich has operations in Chile, Peru, Colombia and Argentina, with 1.3 million-m2

of selling space. The company is committed to sustainability initiatives. For exam-ple, in the fall of 2007, Falabella decided to take part in the LEED-CI for Retail

8.2 LEED Certification for New and Renovated Retail Buildings 117

Fig. 8.2 Falabella’s center in Chile aims to become the first LEED-certified shopping center inSouth America. Courtesy of S.A.C.I. Falabella

Volume-Build Pilot Project, becoming the first retail chain outside the U.S. to dothis. Falabella has already started to implement some of the green concepts in itsnew stores, even though the company is still in the process of certifying its pro-totype, and the results have been very positive for their business. The efforts havebeen spearheaded by the Corporate Projects Department and will continue into thefuture [3]. Once the LEED-CI prototype is approved, the company expects to applythe measures to up to fifty stores.

8.2.2 Water Efficiency

Try to locate in a building with water-efficient landscaping and with water-efficientfixtures already installed. If the retailer has to install water closets and lavatoryfixtures, choose the most water-efficient plumbing selections already on the mar-ket, including dual-flush toilets, automatic faucets and water-free or ultra-low-flushurinals.

8.2.3 Energy Efficiency

Ensure that all the energy-using equipment in the building is properly commis-sioned, that it meets minimum energy standards and that none of the equipmentwithin the fitout scope of work contains ozone-damaging refrigerants such as CFCs.Then go to work on reducing lighting power density by as much as 35% belowcurrent codes, install lighting controls (including occupancy sensors in changing


rooms, for example), provide zones for various lighting and HVAC equipment (ifthere is a storeroom, for example, its temperature can be different from that of theretail show floors) and use ENERGY STAR–labeled equipment (or similarly labeledequipment in other countries). Try to get your space separately metered so that youdo not have to pay for other shops’ inefficiencies. Finally, purchase green powerfrom certified sources to make up whatever energy use you still have. The areaof energy-efficient retail fitout is the place where you can really take measures toreduce your company’s carbon footprint (see the discussion in Chapter 12).

Here is an example of the energy strategies employed at a new Chipotle MexicanGrill in Gurnee, Illinois, a Chicago suburb, certified LEED Platinum in 2009. It isthe first LEED-certified restaurant for the chain, which participated in the LEED forRetail pilot program. The goal was to reduce the energy use of the overall buildingby 17.5% compared with a standard restaurant. To accomplish this goal, Chipotlefocused on three fundamental strategies: reduce demand, increase efficiency andharvest free energy. Below is a list of how those strategies were realized in thisrestaurant. Figure 8.3 shows a typical Chipotle store interior.

• Efficient building envelope and building systems (HVAC, water heating, makeupair and hood).

• Low-e glazing, keeping heat outside in the summer and inside during the winter.• The lighting design for this store utilizes only LED lamps, both saving energy and

reducing the amount of heat introduced to the dining room. LED lamps containno mercury and last for thousands of hours. The LED lamps in this restaurantwill not need to be replaced for 7–8 years.

Fig. 8.3 Chipotle Mexican Grill shows that even small quick service restaurants can achieveLEED certification. Courtesy of Chipotle


• ENERGY STAR–rated kitchen equipment was used where available (icemachine, fryer, refrigerator and warmer).

• A 6 kW wind turbine on-site, capable of supplying renewable energy to the store,is estimated to provide about 7.5% of the store’s energy needs.

The restaurant is equipped with an energy management system (EMS) capable ofmonitoring all major building systems (HVAC, wind turbine, water heater, makeupair, hood and lights). In addition, this system will keep daily performance records ofthese systems that will be available online and in real time. The EMS will controllighting so that the lights are on only when necessary. For example, the lights will beon in the kitchen during morning prep, but off in the dining room until the restaurantopens for business.

8.2.4 Materials and Resource Conservation

If you are renovating an existing space, at least 60% of interior, nonstructural com-ponents, such as walls and floors, along with ceiling materials, should be reused.For whatever construction waste left from renovation or new construction, divert atleast 75% (by weight or volume) from going to landfills. (Existing carpeting may becovered by a manufacturer’s takeback program, for example.)

Other resource conservation measures that can be included in store remodelingor fitout include purchasing fixtures, carpeting, resilient flooring and other materialswith a high-recycled content, with materials made locally (within 500 miles), usingmaterials containing biobased materials such as wheat board and strawboard cabi-netry and using only sustainably harvested wood (certified by the Forest StewardshipCouncil) for both soft wood and hard wood applications.

8.2.5 Indoor Environmental Quality

In this last category, LEED requires minimum ventilation rates of 10 ft3 (0.28-m3)per minute per person.2 Additional measures include installing carbon dioxide mon-itors so that ventilation rates are controlled based on occupancy levels. Perhaps themost important step to take to provide healthy air in the store is to make sure thatthe fitout work is done in accordance with leading standards for maintaining indoorair quality during construction, including wrapping ductwork with plastic, keeping

2This requirement may bother some retailers, because without heat recovery ventilation, it can leadto greater energy use for heating in cold climates and cooling in very hot climates, especially instores (such as department stores) with very high ceilings. However, the benefits of adequate freshair are significant for both employees and customers.


absorptive materials out of the weather and using low-VOC (low-toxicity) paints,coatings, sealants, adhesives, carpets, flooring and composite wood materials. Thismeans carefully supervising the contractor’s staff.

Lighting controls, temperature controls that staff can access, appropriate thermalcomfort and daylighting will add to indoor environmental quality. Of course, manysmaller retailers have little control over elements such as daylighting, but largerretailers, particularly grocery stores, are discovering the sales benefits of that prac-tice. (When signing a lease for space that hasn’t yet been built or even fully designed,the retailer should ask the center developer to include skylights in the retail space ifat all possible).

8.2.6 Daylighting and Retail Sales

In a 1999 study for the California Energy Commission, sales performances in 108stores were compared. Two-thirds had daylighting; one-third did not. Monthly grosssales per store were averaged over an eighteen-month period. Statistical analysiswas used to control for the influence of other variables. Skylights had the largestexplanatory impact of five factors (skylighting, number of hours open per week,population of zip code, average income of zip code and number of years since store

Fig. 8.4 A variety of studies over the past decade strongly suggest that using skylights to increasedaylighting in stores can increase retail sales significantly. Source: www.ci.seattle.wa.us/light/conserve/sustainability/studies/cv5_ss.htm


remodeled), boosting sales index by an average of 40%. For example, if a non-daylitstore had sales of $200 per ft2, sales in a daylit store could be expected to increaseto between $261 and $298 per ft2.

An updated study in 2003 from the same research team looked at seventy-threestores for another retail chain. This time, the median gain was only about 5%, notnearly as much, but still significant. Interestingly, the value of the sales increase wassaid to be about 20–50 times the value of the energy savings! [4] Fig. 8.4 shows theeffect of daylighting on total sales per square foot.

8.2.7 LEED Project Results

A typical LEED-NC “scorecard” for several retail stores, in terms of points achiev-ing in various LEED-NC or LEED for Retail-NC categories, is shown in Table 8.1.

Most retail projects do not score very well on energy efficiency, primarilybecause their prototypes have never been optimized for this cost. Second, it is fairlyeasy to get water efficiency points in LEED (but note that LEED 2009 will requireat least a 20% savings in water use compared with a conventional retail building).Third, sustainable site points vary a lot. Focusing on Sustainable Sites credits inthe initial planning and construction site work will assist with accumulating LEEDcredit points for eventual building certification. Fourth, there are a lot of points to begained in both the materials credits and indoor environmental quality credits. Fifth,

Table 8.1 LEED-NC Points Achieved for Several Retail Stores a

LEEDcategory/LEED project

Target,McKinleyPark,Chicago

Home Depot,North Hill,Alberta,Canada

WholeFoodsMarket,Sarasota,Florida

PNC Bank,AdamsTownship,Penn

GiantEagleMarket,Columbus,Ohio

Sustainablesites

5/14 7/14 6/14 1/14 5/14

Waterefficiency

3/5 3/5 3/14 5/5 4/5

Energyefficiency

6/17 0/17 (LEEDversion 2.0)

3/17 12/17 9/17

Materials andresources

7/13 6/13 3/13 5/13 7/13

Indoorenvironment

6/15 6/15 11/15 12/15 9/15

Innovation indesign

5/5 4/5 4/5 5/5 5/5

Total points/certificationlevel

32/Certified 26/Certified 30/Certified 40/Gold 39/Gold

aScores show the number of points achieved in each category out of the total available points.


many of the “barely certified” projects rely heavily on innovation credits, so it isworthwhile to consider these credits from the beginning of the project. Innovationcredits can include 100% green power purchases, a commitment to public education,commitment to green cleaning practices and similar efforts.

8.3 Case Study—Target, McKinley Park, Chicago

Designed by Perkins+Will, this 138,000-ft2 store contains a number of sustainablefeatures [5]. The McKinley Park store, located in Chicago, is one of three LEED-registered Target projects representing an internal LEED Pilot Program exploringthe use of LEED as a continuing part of Target’s building program. According to thecompany, the use of LEED represents a broadening of Target’s green building focusbeyond energy efficiency and successfully leverages Target’s goal of zero waste intoits building designs.

Some sustainable elements of the project include a 61% recycling rate in the storeoperations; more than 19% recycled content material used in construction; recyclingof about 91% of the waste generated during construction; the specification of low-mercury lamps throughout the building; a large area of green roof, in keeping withChicago’s focus on green roofs; and energy savings of 25% compared with LEEDbaseline building standards.

8.4 Case Study—Kohl’s

In October 2008, Kohl’s department stores announced that the company had com-pleted precertification of forty-five stores according to the LEED standards [6].Kohl’s now has opened more than 1,000 retail properties. The company announcedits LEED initiative in July, when fifty of its stores earned the ENERGY STAR labelfor energy efficiency. The designation was the largest of its kind for a retail groupparticipating in the ENERGY STAR program. As of September 2008, 100 Kohl’sstores had received the ENERGY STAR label.

David DeVos is director of architecture and sustainable design at Kohl’s. Heexplains the volume certification program this way [7]:

The prototype store has been pre-certified at the Silver level. To actually certify the pro-totype, the USGBC asked us to fully document three stores. That documentation has beencompleted, except for the enhanced commissioning phase, which occurs 7–10 months afterconstruction completion. To certify the prototypes, we did virtually all of the documenta-tion for those three stores. In addition to that, the USGBC is spot checking 20% of thosestores—nine stores. So there are another nine stores that we’re submitting documentationfor as well. We are just wrapping up the collection of that data to submit to USGBC. Onceall of that is done and approved, we will then submit the scorecards for the remaining 33stores and then they will be certified. All 45 stores are open for business—they were all newconstruction totaling 3.8 million ft2.

8.5 Case Study—SUBWAY 123

In DeVos’s experience, the only way to tackle mass certification of retail build-ings is to roll up your sleeves and go to work on it.

We work with a prototype design team, I’ve got a handful of consultants that really knowour building: architecturally, mechanically and also structurally. As we went through theanalysis of the credits early on—which ones did we think we wanted to work towards andwhich ones did we think were doable—I worked with that small team way in advance oftalking with the contractors. So we knew what we wanted to do. We then validated the costsand got [the measures we wanted] into the construction documents.

8.5 Case Study—SUBWAY

SUBWAY R© is a chain of small franchised stores making sandwiches to order. As ofearly 2009, the company claims more than 30,000 restaurants in 87 countries [8]. InNovember 2007, the company opened its first “Eco Store” in Kissimmee, Florida, aunit that received LEED Silver certification, showing that even a small retail storecan achieve this designation [9]. At the time, three more stores were aiming at LEEDcertification.

The sustainable elements of the Kissimmee Eco-Store include high-efficiencyheating, ventilation and air conditioning systems; remote condensing units forrefrigeration and ice-making equipment; daylighting and controls for high-efficiency lighting; LED interior and exterior signs; low-flow water fixtures andbuilding and decor materials from sustainable sources. There is also an extensiveuse of recycled products and furnishings in the construction of the restaurant and anincreased emphasis on recycling in customer areas.

“SUBWAY Eco-Stores are designed to reduce energy and water consumption andwaste by using more efficient equipment and practices,” said Bill Schettini, chiefmarketing officer for the chain. “Our Eco-Store program is just one area where weare trying to make our restaurants and operations more environmentally account-able. As a worldwide chain, we have also taken steps to reduce packaging anddevelop more energy-efficient distribution practices” [9].

SUBWAY is also committed to benchmarking the Eco-Stores against similar con-ventional stores nearby. The Kissimmee location provides an opportunity for thebrand to measure and compare energy and water use against a similar conventionalSUBWAY restaurant 3 miles away. The company reported that preliminary figuresshowed that the Eco-Store reduced energy use by about 20%. According to an articleabout the Kissimmee Eco-store:

Peter DiPasqua, a SUBWAY franchisee with 89 stores in central Florida, said he origi-nally thought his green store in Kissimmee was largely a “feel-good thing.” But he saidas construction progressed, he became more impressed with the benefits of LEED-certifiedconstruction. The store cost about 20% more to build, DiPasqua said. But he said he wassaving 20% a month on electricity even though the store, in a prime location, was selling43% more than a store down the street. “I underestimated it all,” he said. “What’s amazingis having 43% more bakes in the oven, and doors opening and toilets flushing. And to have20% less energy consumption?” [10]


8.6 Case Study—ASDA

ASDA is one of the U.K.’s largest supermarket chains and is owned by Wal-Mart[11]. ASDA has a goal of sending no waste to landfills by 2010. ASDA servicecenters receive waste from stores in the local area on trucks returning from delivery(backhauling); this means less miles traveled to collect waste. As of 2008, therewere five service centers with three more under construction. In 2007, the servicecenters recycled more than 150,000 tons of cardboard and almost 9,000 tons ofplastic wrapping. Recycling prevents 65% of store waste being sent to landfill. Theremaining 35%, representing mainly biodegradable materials, is intended to be usedas energy through “anaerobic digestion, or at combined heat and power plants.”

ASDA has spent £3.5m on a plan “to give shoppers incentives such as aluminumcan-crushers in return for boycotting single-use plastic carrier bags.” ASDA intendsto reach the Courtald Agreement’s goal of reducing “the environmental impact ofplastic bags by 25% by the end of 2008.” Customers are encouraged to use a “Bagfor Life” and every time a customer reuses a bag, a point is given to local schoolsunder a “Go Green for Schools” scheme whereby the school can claim green prizes.ASDA reached the goal of a 10% reduction in packaging and in 2007 used 18,000fewer tons of packaging. By the end of 2008, the goal was to reduce food labelpackaging by 25% and other packaging by 20%.

ASDA’s goal is for all stores and depots to be powered by renewable energy.ASDA has a comprehensive energy-efficiency program and, by using devices likemotion-controlled lighting and advanced boiler systems, is on track to reduce energyuse by 20% by 2012, compared with the company’s current average energy use.Furthermore, all new stores are intended to use 30% less energy. ASDA has soughtpermission to build wind turbines at six distribution centers.

A flagship green store under construction in Bootle, U.K., will use “natural light,using north facing skylights to let in light” and have “translucent paneling on thesouth-facing wall to increase natural light, plus under-floor heating from a geother-mal source and recycled materials throughout.”

ASDA intends to reduce its transportation fleet’s emissions by 40% before theend of 2009. Local distribution hubs allowing suppliers to drop off at one point havesaved about 7 million miles traveled. Furthermore, approximately 80 double-deckedtrailers were in use by the end of 2008, saving 5 million miles annually. Expandingrail and sea use (with a new seaport facility) has also helped reduce miles driven indistribution.

8.7 Case Study—The John Lewis Partnership

The John Lewis Partnership, which includes the supermarket Waitrose, is a largeU.K. department store chain with twenty-seven outlets [12]. One of its major ini-tiatives, in partnership with the sustainable development consultancy Forum forthe Future, is the development of the Sustainable Construction Framework. Theframework’s intention is to offer an evolving document that allows the company to

8.8 Case Study—Tesco 125

build new stores and make adjustments to existing ones that promote economic andenvironmental success.

John Lewis is a member of the Corporate Leaders’ Group on Climate Change—a group of nineteen business leaders determined to combat climate change. It haspledged to reduce overall corporate carbon dioxide emissions by 10% by 2010, 20%by 2020, and 60% by 2050. In partnership with EDF Energy, 100% of the company’senergy comes from renewable sources.

The company’s immediate goal is to improve energy efficiency in stores by20% by 2010. To this end, John Lewis is taking the following steps: All storeshave energy managers and an energy manual that gives detailed advice on how toimprove efficiency. All stores receive monthly energy reports assessing their abilityto meet targets. Waitrose does not use CFCs in refrigerators and is close to remov-ing all HCFCs.3 Biomass boilers are being added to the Oxford Street franchisestore and the new distribution center. (In the U.K., biomass is considered a renew-able resource, although some studies have pointed out that only about 20% of thecountry’s needs for heating and hot water could ultimately come from this source.)

In terms of transport initiatives, John Lewis has partnered with Cenex, thenational center of excellence for low carbon and fuel cell technologies, to chal-lenge vehicle manufacturers to produce a fleet of energy-efficient vehicles withinthe next two to three years. The challenge will cover four categories of vehicle:3.5-ton refrigerated vans; 7.5-tonners; 38-ton trailers; and a refrigerated trailer. Theresult is intended to reduce CO2 emissions by 30% compared with 2007 levels.

8.8 Case Study—Tesco

Tesco, one of the world’s top five retailers, is Britain’s biggest supermarket chain,taking in $1 out of every $8 in the industry [13]. In fiscal year 2008, Tesco recorded£2.8 billion in profit and £51.8 billion in sales [14]. Tesco estimates its annual carbonfootprint at about 4.5 million tons [15]. As part of a ten-point plan introduced in2006, Tesco has taken several steps to green the company [16].

In September 2008, Tesco’s CEO, Sir Terry Leahy, stated:

All too often, politicians and businessmen have said to me: “You’re a businessman, so surelyyou’re opposed to the green agenda?” They think: “You cannot make a profit and go green.”They think: “A consumer society cannot be a green society.” And they believe that develop-ing economies cannot afford to go green. From my perspective, this is all muddled thinking.I fundamentally disagree, and say that if we want long-term growth, we must go green. Fail-ure to act now means risking economic and social disruption on the scale of the great warsand economic depression of the last century. The means to tackle climate change lies notjust in the hands of politicians or regulators, the UN or the G-8. If climate change is tobe tackled successfully, we need a new framework in which governments, businesses andconsumers each play their part [17].

3CFCs are chlorinated fluorocarbons and HCFCs are hydrochlorinated fluorocarbons. Both havebeen shown to damage the Earth’s stratospheric ozone layer and are being phased out of productionglobally.


8.8.1 Sustainability Initiatives

Tesco is investing £500 million in refitting stores to meet emissions standards andto fund research into energy-efficient operations [18]. The company created a £100million Sustainable Technology Fund to develop green technologies [15]. For exam-ple, Tesco is working with the Carbon Trust and Brunel University to develop tri-generation (combined heat and power) technology that could save over 10,000 tonsof carbon emissions each year [15]. Tesco has also funded a £25 million SustainableConsumption Institute to look for ways to reduce its carbon footprint [19].

Tesco’s goal is to reduce its carbon footprint 50% by 2020, compared with 2006levels. To achieve this goal, the company expects that all stores built between 2006and 2020 will be 50% more energy-efficient than a typical store built prior to 2006.The store at Wick, U.K., was built to have a carbon footprint 50% less than stores ofequivalent size. Energy efficiency and renewable energy systems included five windturbines, photovoltaic panels on the roof, water-cooled refrigeration units with LEDlighting, 50% higher efficiency ovens and rooftop water collection for toilets andcar washes, saving approximately 1 million l (264,000 gal) of water use annually. Atthe company’s store in Shrewsbury, U.K., zero-emission battery-powered vans save100 tons of carbon dioxide emissions, equivalent to replacing 6,000 auto journeysannually.4

8.8.2 Cutting Carbon Dioxide Emissions

Tesco’s goal is to reduce CO2 emissions by 50% over the next five years (to 2013),compared with 2006 levels, by employing some of the following measures:

• A train with the capacity of twenty-eight trucks traveling between two main dis-tribution centers saving 14,560 journeys and more than 5 million miles annually.

• Shipping wine from Liverpool to Manchester on barges cuts emissions by about80%, uses 50 fewer trucks, and results in 1.1 million fewer heavy truck journeysannually. Instead of being driven from southern ports, such as Southampton toManchester, a distance of 225 miles, the wine travels only 40 miles.

• Wine is transported in bulk and bottled less than a mile away from where itis delivered, resulting in savings of 1,800 container trips annually, and morethan 20,000 tons of glass is not imported from wine-producing countries everyyear [15].

4Note that any electricity produced with fossil fuels, which is used to charge batteries, will stillresult in carbon dioxide emissions.

References 127

8.9 Summary

Retail store operators in North America and the U.K. have begun serious efforts toreduce energy use in stores and carbon emissions from company operations. Manyof them are using the LEED and BREEAM systems for evaluating new store con-struction, building renovations and continuing operations. Most larger chains arecreating sustainability programs, setting serious short-term and midrange goals forreducing carbon emissions, tracking progress on an annual basis and figuring outhow to meet these goals cost-effectively. Retail operators around the world can learna lot by studying these early-stage sustainability programs.

References

1. Interview with Brian Fleener, March 2009.2. Based on an interview with Don Moseley, director of sustainable facilities at Wal-Mart,

November 2008, and review of the company’s sustainability web site,http://walmartstores.com/Sustainability/, retrieved December 30, 2008.

3. Information provided by Falabella, February 2009, http://www.falabella.com.4. Daylight and Retail Sales. (2003, October). Retrieved on January 6, 2009, from http://www.h-

m-g.com/downloads/Daylighting/A-5_Daylgt_Retail_2.3.7.pdf.5. Case study information furnished by Perkins+Will.6. Kohl’s opens 46 new green stores. (2008, October 6). Retrieved on October 16, 2008, from

http://www.greenerbuildings.com/news/2008/10/06/kohls-opens-45-new-green-stores.7. Interview with David DeVos, November 2008.8. Subway web site. Retrieved on January 4, 2009, from www.subway.com/subwayroot/

AboutSubway/subwayFaqs.aspx.9. Subway chain becoming more environmentally friendly. (2007, November 21). Retrieved on

January 4, 2009, from http://www.subway.com/dm_public/Press_Releases/YHMM6039.pdf.10. Martin, Andrew. (2008, November 8). U.S. chains aim at saving energy—and

money. New York Times. Retrieved on January 5, 2009, from http://www.nytimes.com/2008/11/08/business/08build.html?_r=1&scp=1&sq=subway%20kissimmee%20LEED&st=cse.

11. ASDA web site. Retrieved on December 28, 2009, from http://www.about-asda.com/sustainability.

12. John Lewis CSR Report 2008. Retrieved on January 4, 2009, from http://www.johnlewispartnership.co.uk/Download.aspx?ResourceId=41214.

13. Madden, Peter. (2007, January 25). Brit’s eye view: British supermarkets aregoing green but why? Retrieved on January 4, 2009, from http://gristmill.grist.org/story/2007/1/24/15106/8886.

14. Tesco web site. Retrieved on January 4, 2009, from http://www.tescoplc.com/plc/ir/financials/highlights.

15. Reducing energy use. Retrieved on January 4, 2009, from http://www.tesco.com/greenerliving/what_we_are_doing/reducing_energy_use/default.page?.

16. Finch, Julia. (2006, May 11). Tesco plans to be green and a good neighbor.The Guardian. Retrieved on January 4, 2009, from http://www.guardian.co.uk/business/2006/may/11/supermarkets.tesco.

17. Leahy, Sir Terry. (2008, September 3). Tesco Chief: “We must go green.” TheGuardian. Retrieved on January 4, 2009, from http://www.guardian.co.uk/environment/2008/sep/03/corporatesocialresponsibility.carbonfootprints.


18. Muang, Zara. (2007, July 6). Climate change: Tesco’s strategy—green revolutionin store. Retrieved on January 4, 2009, from http://www.ethicalcorp.com/content.asp?ContentID=5228.

19. Sustainable Living. Retrieved on January 4, 2009, from http://www.tesco.com/greenerliving/what_we_are_doing/sustainable_living/default.page?#L2.

Chapter 9Greening Retail Interiors

Many of the retail stores in a shopping center are integrated with existing structures.The process for greening smaller retail buildings has been covered in Chapter 8,in the discussion of LEED for New Construction and BREEAM for Retail. Thischapter presents ideas for how smaller retail stores can use green design and con-struction methods to upgrade the environmental performance of their stores. Largerstores doing in-store remodels, typically undertaken while the store remains in oper-ation, can also use these guidelines. The main guidance comes from the ratingsystems for commercial interiors, especially LEED for Retail Commercial Interiorsand BREEAM for Fit-Out.

9.1 LEED for Commercial Interiors

LEED provides clear guidance for how to green retail interior spaces. The main issuefor most retailers is that in most cases they don’t control the building envelope (shelland windows) or the HVAC system, so a lot of what they could do to reduce energyuse is not available to them, except by reducing lighting energy use, somethingthat many are reluctant to do because of the potentially negative effect on sales.A secondary consideration, of course, is that they do not control site work, either.So what are the green building options left for a smaller retailer locating inside anexisting shell retail space? It turns out that there is still quite a lot one can do. Someof the options are discussed below.

9.1.1 Sustainable Site Features

If you’re building a new store in a shopping center or renovating a retail space, findout if the center has made environmental improvements that result in less impact-ful site operations. By locating in an ecologically appropriate site, that informationbecomes part of your green building story. As with the discussion in Chapter 8, suchsite work may include buildings with solar power systems already on them, build-ings with reflective roofs or green roofs and buildings with rainwater harvesting


130 9 Greening Retail Interiors

Fig. 9.1 Marks & Spencer’s Bournemouth store is one of the chain’s many green building projects.Courtesy of the project architect, 3DReid, Marks & Spencer

systems that provide recycled water for toilet flushing and irrigation. Also, tenantsshould look for centers located near public transit, centers that have remediatedpreviously contaminated sites and centers that provide amenities for bicycle com-muting. Figure 9.1 shows a typical Marks & Spencer store in the U.K., illustratingsome of the exterior aspects.

9.1.2 Water Efficiency

If a store must install new fixtures to achieve water conservation goals, it shouldchoose high-efficiency toilets (1.12 or 1.28 gallons, 4.2 to 4.8 liters, per flush), ordual-flush toilets, 0.5 gallons (2 liters) per minute faucets and water-free or low-flow(1 pint or 0.5 liter per flush) urinals.

9.1.3 Energy Efficiency

Ensure that all heating, ventilating and air-conditioning equipment in the space isworking according to original design, a process called building commissioning (anda prerequisite in LEED for Commercial Interiors). Also ensure that all energy-usingequipment meets current energy codes in the local jurisdiction or national minimumstandards, whichever is more stringent. Since lighting quality is so critical in retail,employ a lighting design professional who can help you reduce lighting power den-sity at least 10 percent below current codes (reductions of up to 35 percent are often

9.1 LEED for Commercial Interiors 131

possible without reducing lighting effectiveness), install lighting controls (includingoccupancy sensors — heat and motion detectors — in changing rooms, for exam-ple), create specific control zones for various lighting and HVAC equipment to allowfor better modulation of energy use and purchase energy-efficient appliances, officeequipment, electronics and commercial food service equipment. Finally, considerpurchasing green power from certified sources to supply the remaining energy use.Energy-efficient retail fitout measures allow tenants to reduce their company’s car-bon footprint. Another way to reduce energy use is to employ LED lighting fixturesand lamps, something that many retailers are trying because of the stunning visualeffects possible with these lighting fixtures.

A McDonald’s restaurant in the Chicago area is pursuing a LEED for Retailcertification. To upgrade its energy efficiency beyond current company stan-dards such as ENERGY STAR appliances, the store installed high-efficiency boil-ers and an energy management system. The project also has a vegetated roofand an upgraded stormwater management system. Similarly, a LEED-certifiedDunkin Donuts green store in St. Petersburg, Florida, opened in October 2008with insulated concrete form walls to reduce energy use and also supplied anon-site earthworm composting facility (using vermiculture) to reduce food wastedisposal [1].

9.1.4 Materials and Resource Conservation

Stores should provide for recycling of at least paper, corrugated cardboard, metal,glass and plastic from store operations. This is often a very visible sustainabilitymeasure that customers can see. When renovating existing spaces, try to conservematerials by reusing at least 60% of interior, nonstructural components. To con-tribute to green practices, make sure that the remodeling contractor diverts at least75 percent of construction waste from landfills.

It is possible to use recycled or refurbished shelving and other store fixtures.Consider what Office Depot is doing, shown in Fig. 9.2. According to the company’ssustainability director:

Anytime we remodel or take apart a store, rather than selling, liquidating or trashing thefixtures (shelving, movable gondolas, etc.), we take them apart and ship them back to oursupplier warehouse. In 2007, we actually reused about 1,800 tons of store fixtures ratherthan liquidating, selling or trashing. Spending some time up front to create the logisticsprogram with your supplier pays off, so they know that at takedown they’re going to besorting similar fixtures and storing and coding at their warehouse so there’s traceability offixture types. So in the next store, if we need 100 of a specific fixture, we can get them fromour inventory rather than buy them. In the long run, it not only saves a substantial amountof money but also reduces environmental footprint and ultimately results in less overallhassle, because we don’t have to respecify, repurchase and issue purchase orders for thesefixtures [2].

Consider purchasing fixtures, decor, carpeting, other flooring and other fin-ish materials with a high-recycled content, with materials made locally (within


Fig. 9.2 Office Depot usesskylights as well as signage totell customers about theirgreen commitment. Courtesyof Office Depot

500 miles), and only using wood products that come from sustainably harvestedforests (certified by the Forest Stewardship Council.)

9.1.5 Indoor Environmental Quality

To maintain adequate indoor air quality, LEED requires certain minimum ventila-tion rates for all retail spaces and gives an extra credit point for increasing the mini-mum required rates by 30 percent.1 LEED also recommends that all tenant improve-ments consider installing carbon-dioxide monitors to control ventilation rates based

1The benefits of adequate amounts of fresh air are significant for both employees and customersand are typically required by building codes in most jurisdictions. The additional credit point is

9.2 Wachovia Bank 133

on occupancy levels. This is especially important in retail, since occupancy ratesvary so dramatically over the course of a day and a week. The retailer should alsoensure that all remodeling work is done in accordance with appropriate considera-tion for maintaining indoor air quality during construction, including good construc-tion practices such as wrapping all ductwork with plastic and using low-toxicity(low-VOC) paints, coatings, sealants, adhesives, carpets, carpet backing, resilientflooring and cabinets composed of composite wood materials. To increase comfortof store staff and customers, consider alternatives that include lighting and occu-pancy controls, temperature controls that staff can access, and (where appropriateand possible) good daylighting. Many small retailers have little control over ele-ments such as daylighting, but larger retailers have discovered the sales increasesfrom daylighting. (In some cases, a smaller store could consider asking the devel-oper to include skylights and daylighting measures in retail spaces.)

High-quality lighting can have a dramatic effect on employee productivity andstore sales (discussed in Chapter 8 and illustrated in Fig. 8.3).

9.2 Wachovia Bank

In June 2008, Callison Architecture partnered with the U.S. Green Building Councilto develop two new sustainable models designed for retailers: LEED for Retail andLEED Portfolio Program, also referred to as LEED Volume Certification.2 The Seat-tle, Washington-based firm Callison led architectural development for both pilotssimultaneously, developing a prototype for Wachovia’s regional financial centers.The Wachovia prototype received the first LEED Silver Commercial Interiors (CI)and Portfolio certification under the new system. “For the first time, national retail-ers can build to LEED standards across their portfolio of stores without having togo through the certification process for each individual site,” says Chris Hamilton,principal at Callison. “This results in an efficient, streamlined process for buildingsustainable on a large-scale, thus saving time, money and manpower for retailersthat want to go green” [3, 4]. According to another source, “A survey conducted forWachovia indicated presence of sustainable strategies added to customers’ overallfeelings of goodwill toward the brand, and further helped validate their own choiceof Wachovia as their banking partner” [5]. Figure 9.3 shows a typical Wachoviainterior designed by Callison.

found in the LEED Reference Guide for Green Interior Design and Construction, 2009 edition,Washington, DC: U.S. Green Building Council, page 305.2The LEED Portfolio (or Volume) system allows retailers to certify all subsequent projects oncean initial prototype has met the established criteria. Typically the program requires specific certifi-cation information for every tenth unit installed. If site data are important to the certification, thenthat information must also be provided.


Fig. 9.3 Wachovia Bank was the first to receive “volume certification” under the U.S. GreenBuilding Council’s LEED for Commercial Interiors program. Courtesy of Callison/Chris Eden

9.3 Grocery Store Remodel

A large grocery store chain remodeling a store in Southern California in 2009decided to pursue LEED for Commercial Interiors certification for an in-storeproject [6]. The design team took the following measures:

• Sustainable Sites: The store is located close to public transit and in a denser, morewalkable community. Additional measures were taken to reduce the volume andimprove the quality of stormwater runoff from the roof and parking lot.

• Water Efficiency: Reduce water use inside the store by 30% through selectingwater-conserving fixtures.

• Energy Efficiency: Lighting power density is reduced by 35%, compared withthe state building codes, and new lighting controls were installed to help withpower management. The store intends to purchase power generated by renewableenergy off-site for 2 years to service 50% of its needs.

• Materials and Resources: The store will reuse an existing building, includingmaintaining more than 60% of interior nonstructural components; will divert 95%of construction waste from landfill disposal and will reuse more than 30% ofexisting décor and fixtures.

• Indoor Environmental Quality: The remodel includes measures to increase theuse of outdoor air, to manage the construction according to best practices for

References 135

keeping indoor air quality levels high, for using low-VOC paints and coatings andfor meeting more stringent thermal comfort standards. The project also providesdaylight for 75% or more of regularly occupied spaces through skylights.

• Innovation and Design Process: Develop a signage and public education programwith fourteen signs throughout the store telling shoppers what measures weretaken in the remodel. Additional credits may come from adopting green cleaningand green exterior site maintenance standards and from reducing process energyuse from refrigerated cases.

9.4 Summary

Even though a remodel has fewer degrees of freedom in design and constructionthan a new build, there are still many opportunities for creating energy-efficient andenvironmentally friendly stores that will help meet carbon reduction goals and alsoprovide a positive public relations and marketing benefit with consumers.

References

1. Hoyland, Christa. (2009, January 6). QSRs learn lessons from building green. Retrieved onJanuary 11, 2009, from http://www.qsrweb.com/article_printable.php?id=12917&page=146.

2. Interview with Yalmaz Siddiqui, Office Depot, November 2008.3. Callison Design is first to receive sustainable retail certification. (2008, June 23).

Retrieved on December 31, 2008, from http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080623005952&newsLang=en.

4. Boye, Will. (2008, December 23). Wachovia shareholders OK Wells deal. TheBusiness Journal. Retrieved on December 31, 2008, from www.bizjournals.com/triad/stories/2008/12/22/daily23.html.

5. Interview, Cindy Davis, Callison, November 2008.6. Confidential consulting client of Yudelson Associates, February 2009, personal communica-

tion.

Chapter 10Operating Green Retail Spaces

Ultimately, sustainable retail development is going to be mostly about sustainableretail operations, for the simple reason that new building is always going to be asmall portion of the total building stock at any given time. How developers oper-ate their properties is the real sustainability story. Reducing one’s carbon footprint,lowering water uses, recycling more waste—all of these questions represent oper-ational performance. This chapter covers the LEED for Existing Buildings Opera-tions and Maintenance 2009 (LEED-EBOM) rating system, which can be used toimprove retail operations, add profitability to the store or center and give employee-associates concrete guidance for sustainable operations.

LEED-EBOM 2009, like the rest of LEED 2009 rating systems, is based on a 110-point scale, as shown in the Appendix. Unlike the others, it had very little changingto do from the previous version (LEED-EBOM 2008), adding only 18 points and nonew categories of concern. As do the other LEED systems, LEED-EBOM has fivebasic categories (Sites, Water, Energy, Materials and Indoor Environment), plus acategory for innovation credits and the new category of regional issues.

While it functions as a rating system, LEED-EBOM is a set of voluntary per-formance standards for the sustainable upgrading and operation of buildings notundergoing major renovations. It provides sustainable guidelines for building oper-ations, periodic upgrades of building systems, minor space use changes and build-ing processes. LEED-EBOM is a collection of generally recognized “best practices”compiled into a point-based rating system, so it’s not as intimidating.

How does one operate a retail store or center in a more sustainable manner? Thisdiscussion begins with site issues. For many store operators, of course, there is littlecontrol over the site, and most of the site issues would fall to the shopping center ormall management. Nevertheless, large anchor tenants do exert influence over centermanagement, particularly for newer centers or newly renovated centers.

10.1 Sustainable Site Management

This section addresses environmental concerns relating to building site, landscapingand exterior building management practices. Sustainable site credits promote thefollowing measures:


138 10 Operating Green Retail Spaces

• Practice low-impact hardscape management strategies• Plant sustainable landscapes• Implement effective integrated pest management control• Reduce emissions associated with transportation to/from site• Protect surrounding habitats• Manage stormwater runoff• Reduce heat-island effects• Eliminate light pollution

10.1.1 Exterior and Site Maintenance

The first thing a developer can tackle is site maintenance, including landscaping,hardscape areas and building cleaning. This is easy and cheap to do, but it maymean rewriting some of the standard maintenance agreements with local or nationalcompanies. Typically these are annual contracts and so the changes can be madefairly quickly. Most of these practices will involve greater use of labor and less useof chemicals, so the net financial impact should be minor.

For site maintenance, LEED-EBOM requires the development and implementa-tion of a plan that employs best management practices to maintain building exteriorand hardscape in an environmentally sensitive manner. The following elements mustbe addressed:

• Maintenance equipment choices• Snow and ice removal• Cleaning of building exterior• Paints and sealants used on building exterior• Cleaning of sidewalks, pavement and other hardscape areas

Revising the landscaping plan may have to wait until a major renovation, but inconcept it is quite easy. Plant native trees, shrubs and other flora, and don’t provideextra irrigation beyond an establishment year or two, depending on climate. Then,use integrated pest management strategies to reduce the need for chemical pesti-cides and herbicides. Use locally generated compost to keep adding nutrients to thelandscape.

10.1.2 Reducing Single-Occupant Auto Use

One of the best ways to reduce a shopping center’s carbon footprint is to offer alter-native means of getting to and from the shopping center, via public or dedicatedtransit systems, providing both employees and consumers the opportunity not to use

10.1 Sustainable Site Management 139

their cars. This is especially important for employees, since retail tends to be a fairlylow-wage business.

Some specific measures a developer might use include the following:

• Consider the opportunities and limitations based on the building’s location• Provide bicycle racks, changing facilities, preferred parking, access to mass tran-

sit, or alternative-fuel refueling stations• Offer incentives to building occupants such as additional vacation days or various

rewards, in exchange for carpooling, mass transit ridership, etc.• Provide discounted or free mass transit passes to employees and building

occupants• Guarantee rides home for employees who typically use mass transit or carpool• Communicate alternative transportation opportunities to building occupants;

facilitate communication to increase ride-sharing

Many shopping centers are located in city centers or built-up areas and offer someof these incentives as a matter of course. However, those located in suburban areasare going to be challenged to develop programs to reduce auto traffic. Figure 10.1shows a shopping center in Berlin located in a dense urban area. This is typical ofmany centers on the European continent.

Fig. 10.1 The Alexa center in Berlin, Germany, is another of Sonae Sierra’s green projects.Courtesy of Sonae Sierra


10.1.3 Open Space

To reduce site disturbance and maximize open space, conserve existing naturalsite areas and restore damaged site areas to provide habitat and promote biodiver-sity, a center can use native or adapted vegetation for a minimum of 25% of thesite area, excluding the building footprint. Other ecologically appropriate features,such as water bodies or exposed rock, can be used in lieu of vegetation. Improvingand/or maintaining off-site areas are other means of providing this benefit. For urbanprojects with little or no building setback, developers might consider using native oradapted plants to build a vegetated roof surface that covers an area equivalent to atleast 5% of the project site.

Especially for new centers or those undergoing major renovations, a developershould perform a site survey to identify unwanted site elements and/or desirableelements, then consider removing excessive paved areas or turf grass and replac-ing them with ecologically appropriate landscaping. Finally, in areas with exten-sive landscaping, developers can work with local agricultural extension services ornative plant societies to identify native and/or adapted plants and to remove invasiveor ornamental plantings.

10.1.4 Stormwater Management

The next consideration deals with management of stormwater runoff. To operate thesite sustainably, developers should implement a stormwater management plan thatincludes measures that infiltrate, collect, reuse or evapo-transpire runoff from at least15% of the annual precipitation falling on the whole project site. This will reduce theimpact of runoff from the project site on nearby watersheds and reduce the impact onpublic conveyance facilities. With more investigation, it may be possible to containall or most of the annual rainfall on-site, treat it and use it for irrigation, exteriormaintenance, toilet flushing and cooling tower makeup water.

To implement this plan, developers can provide systems that collect rainwaterrunoff from roofs, along with storage and treatment so that it can be reused forother purposes. Alternatively, developers can use alternative surfaces like perviouspavement to infiltrate rainwater into the ground, or nonstructural techniques like raingardens and vegetated swales to increase soil perviousness can be employed, withthe benefits of reducing peak stormwater flows and increasing infiltration into thegroundwater.

10.1.5 Urban Heat Island Effect

We’ve known for the past fifty years that cities are hotter than the surrounding coun-tryside, with attendant impacts such as increased electric power use for summer air

10.1 Sustainable Site Management 141

conditioning and changes in local microclimates [1]. With large paved areas, shop-ping centers and large retailers should explore means to reduce the local heatingcaused by their activities.

Consider one or more of the following measures to affect at least 50% of thepaved site area: provide shade from new or existing trees; provide shade from solarphotovoltaic panels (for example, above a parking structure); provide shade fromarchitectural devices or paving materials (such as light-colored concrete) that havea solar reflectance index (SRI) of at least 29. When renovating a center, the ownershould consider placing a minimum of 50% of parking spaces under cover. For thoseoptions using a reflective surface, the owner will need to adhere to a maintenanceprogram to ensure that surfaces are cleaned at least every two years to maintain goodreflectance.

For the roof surfaces, developers should consider reroofing with a reflective mate-rial so that incoming solar radiation is reflected away from the site, or else puttingsolar panels or even a green roof on the top of the buildings, to keep them fromheating up.

10.1.6 Light Pollution Reduction

Many people are becoming increasingly concerned about the loss of night and itseffect on both people and ecosystems [2]. For example, in the Sonoran desert ofArizona most creatures are nocturnal. The city of Tucson (Arizona) and surroundingareas have controlled light pollution from human activity for more than fifty years,so that there is plenty of retail commerce, but the skies are still quite dark at night.Humans get the blessings of stargazing without excessive light, and the animals getto do their business the way nature intended.

What should one do? First of all, shopping center developers should try to elim-inate light trespass from the building and site by dealing with both interior andexterior lighting. Since many centers have activities such as movie theaters andrestaurants that run until midnight, one has to deal with safety and security issuesthat require a certain amount of lighting. All non-emergency interior lighting with adirect line of sight to any openings (windows or skylights) should be automaticallycontrolled to turn off during all after-hours periods, except for manual overrides forcleaning purposes. For exterior lighting, one can partially or fully shield all fixturesrated at 50 W and higher1, so that they do not directly emit light to the night sky. Onecan take direct measurements to determine that when the lights are on, the averageillumination level is not more than 20% above the level measured when the lightsare off.

1A standard 50-W incandescent bulb will produce about 800 lm of light, where one lumen (lm)per square meter is equivalent to one lux (European standard). A well-lit office will have about 500lux of light intensity.


10.2 Water Conservation

Water conservation may not seem like an important issue for retail, but a large urbancenter can use quite a bit of water, both for landscaping, cleaning, cooling and toi-lets. Throw in a few restaurants, and water use goes up dramatically. What can theretailer and center operator do to protect and conserve water resources, while reduc-ing the burden of the center on local water supply and treatment infrastructure?

10.2.1 Indoor Water Conservation

Reduce potable water use from indoor plumbing fixtures and fittings throughautomatic water control systems. Where possible, install water-conserving indoorplumbing fixtures and fittings that meet or exceed the most recent plumbing coderequirements in combination with high-efficiency or dry fixture and control tech-nologies. Focus upgrade resources in areas of high water usage. Train maintenancestaff on the unique operations and maintenance of water-efficient equipment. Exam-ples of water-efficient plumbing fixtures and fittings include:

• High-efficiency valves and aerators for existing water closets, urinals, and faucets• Automatic fixture sensors or metering controls• Flow restrictors on lavatory, sink and shower fixtures• Dual-flush toilets• Ultra-low-flush and water-free urinals

10.2.2 Water Metering

From a center operations viewpoint, an effective means to reduce water use is tosubmeter each tenant. Install a building-level water meter to measure and track totalpotable water consumption in the facility. Install subsystem-level water metering tomeasure and track potable water consumption by specific building systems; prior-itize metering for those systems that use the most potable water. In the same waythat a retailer would use energy data to reduce a building’s carbon footprint, estab-lish a program for using water data to understand consumption patterns and identifyopportunities for water conservation.

10.2.3 Water-Efficient Landscaping

Specify water-efficient, climate-tolerant native or adapted plantings. Implement ormaintain high-efficiency irrigation technologies, such as micro-irrigation, mois-ture sensors, or weather-data based controllers. Feed irrigation systems with

10.3 Energy Efficiency 143

captured rainwater, gray water (on-site or municipal), municipally reclaimedwater or on-site treated wastewater. Consider not operating an irrigation systemor using xeriscaping (dry climate landscaping) principles in arid or semi-aridclimates.2

Other strategies include:

• Directing some stormwater runoff to planted beds and bioswales (vegetatedditches and runoff channels)

• Minimizing the amount of conventional (turf) grass• Mulching and using compost to maintain plant health; this compost can be com-

bined with a food-waste composting system• Determining which plants need less water in winter• Using drip irrigation

10.2.4 Cooling Tower Water Conservation

It’s important to reduce potable water consumption for cooling tower equipmentthrough effective water management or the use of nonpotable makeup water. Devel-oping and implementing a water management plan for the cooling tower thataddresses chemical treatment, bleed-off, biological control and staff training as itrelates to cooling tower maintenance can do this.

One effective way to reduce water consumption is to use cooling tower makeupwater that consists of at least 50% nonpotable water, such as harvested rainwa-ter, harvested stormwater, air-conditioner condensate, cooling tower rejected water,pass-through (once-through) cooling water, municipally reclaimed water or anyother appropriate nonpotable water source.

10.3 Energy Efficiency

Most retailers and shopping center operators realize that reducing their carbon foot-print is critical to achieving sustainable operations. There are many tools and tech-niques available for reducing energy use in existing centers and stores. (Figure 10.2shows an energy-efficient shopping center in New Jersey.) Existing centers andstores present greater challenges for energy conservation than new construction ormajor renovations, since it is harder to change the building envelope (glazing, walls,floors and roofs) to save energy.

2 XeriscapeTM is a trademark of the Colorado WaterWise Council, www.xeriscape.org.


Fig. 10.2 Best Buy, Dick’s Sporting Goods and PetSmart are tenants in the $400 million,100,000-ft2 Stafford Park shopping center in New Jersey. Michael Lewis Photography

10.3.1 Reducing Energy Consumption

The overall goal should be to achieve an increased level of operating energy effi-ciency performance relative to typical buildings of similar type to reduce environ-mental impacts associated with excessive energy use.

For buildings eligible to receive an EPA rating using ENERGY STAR’s PortfolioManager tool, developers should try to achieve an energy performance rating of atleast 75. For buildings not able to earn an ENERGY STAR rating, the center shoulddemonstrate energy efficiency in at least the 75th percentile for typical buildingsof similar type by benchmarking against national energy use data. The 2003 U.S.Commercial Building Energy Consumption Survey is an example of energy dataused to establish the national median.3

Reducing energy demand, harvesting renewable energy, increasing equipmentand systems efficiency, and recovering waste heat are all methods of improvingenergy performance.

ENERGY STAR’s Portfolio Manager web tool provides a way to keep scoreof both the current energy use and the effects of future improvements. PortfolioManager applies both to grocery stores and retail establishments.

Under the E.U.’s Energy Performance in Buildings Directive [3], a building’senergy use is benchmarked against national data, with a letter grade and/or score

3 This document will be updated sometime in 2009, based on 2007 U.S. national energy use surveydata.

10.3 Energy Efficiency 145

assigned, along with recommendations. By 2010, every building in the E.U. mustevaluate and provide its energy use data to all prospective buyers, renters andlessees.

10.3.2 Building Commissioning

Through a systematic commissioning process, an owner can develop an understand-ing of the operation of the building’s major energy-using systems, create optionsfor optimizing energy performance and generate a plan to achieve energy savings,along with a series of budgeted improvements.

To implement the process, planned capital projects should be identified to ensurethat the building’s major energy-using systems are repaired, operated, and main-tained effectively to optimize energy performance.

There will also be a need for ongoing commissioning of all portfolio buildings,to address changes in center or store occupancy, usage, maintenance, and repair.Periodic adjustments and reviews of building operating systems and procedures areessential for optimal energy efficiency and service provision.

Beyond building commissioning, a building automation system (BAS) can beused to provide information to support the ongoing accountability and optimizationof building energy performance and to identify opportunities for additional energy-saving investments.

The BAS monitors and controls key building systems, such as heating, cooling,ventilation and lighting. A BAS manages energy consumption and delivery of opti-mal lighting and thermal conditions by providing integrated control and monitoringof fans, pumps, HVAC equipment, air dampers and mixers, and thermostats.

10.3.3 Renewable Energy Systems

The arguments for solar power systems were presented in Chapter 6; some shoppingcenters can also consider using wind power, biomass boilers, geothermal systemsand other forms of on-site renewable energy. In addition, operators can purchasepower from off-site renewable sources, to reduce their carbon footprint. Off-siterenewable energy sources are defined by the Center for Resource Solutions (CRS)Green-e products certification requirements [4]. In the U.S., green power or off-siterenewable energy may be procured from a Green-e–certified power marketer or aGreen-e–accredited electric utility program, or through Green-e–certified tradablerenewable energy certificates (RECs), or the equivalent.

10.3.4 Emission Reduction Reporting

Identify building performance parameters that reduce conventional energy useand emissions, such as energy efficiency measures, operational improvements,


renewable energy and other building emissions reduction measures to documentthe emissions reduction benefits of building efficiency measures. Then reductionsshould be reported to a formal tracking program such as the U.S. EPA Climate Lead-ers [5], ENERGY STAR, protocols from the World Resources Institute or WorldBusiness Council for Sustainable Development [6], International Performance Mea-surement and Verification Protocol [7], CERES Facility Reporting Project [8] andother systems.

10.4 Materials and Resources Conservation

There are three basic considerations in the area of resource conservation: what ispurchased, how repairs and renovations are performed and how materials at the endof their useful life are disposed.

10.4.1 Sustainable Purchasing

To reduce the environmental impacts of materials acquired for use in the opera-tions, maintenance and upgrades of buildings, building owners should develop asustainable purchasing policy that addresses purchases for the building and site. Ata minimum, the policy should address ongoing consumables that meet one or moreof the following criteria: recycled material containing at least 10% postconsumer or20% postindustrial material; at least 50% rapidly renewable materials (such as agri-cultural fiberboard, cork, bamboo and linoleum); at least 50% materials harvestedand processed or extracted and processed locally (within 500 miles of the buildingor center); at least 50% Forest Stewardship Council (FSC) certified paper products;and purchase of rechargeable batteries.

This policy should be the basis for evaluating items that are purchased for thebuilding and site. It should identify clear objectives and establish a verification pro-cedure for sustainability claims. The U.S. EPA provides guidelines for develop-ing an Environmentally Preferable Purchasing (EPP) Program [9]. Developers maywish to consider incorporating the life-cycle costing (LCC) method, which not onlyassesses initial cost but also the ongoing operations, maintenance and disposal costsassociated with purchased products. Most large organizations that operate multiplesites will have a purchasing catalog that makes it fairly easy to “hard point” purchaserequests to products that will meet these criteria. Part of the sustainability programshould include keeping track of purchases that meet these criteria and making it partof the organization’s annual reporting. In that way, baseline data for meeting therequirements of the LEED-EBOM program will be established.

10.4.2 Purchasing Consumables

Clearly, the majority of purchases will be for consumables. When purchasing mate-rials, supplies or equipment, those that meet one or more of the environmentally

10.4 Materials and Resources Conservation 147

responsible criteria listed above should be specified. Product certifications such asGreen Seal, the German Blue Angel [10] and ENERGY STAR can be used as veri-fication for meeting sustainability criteria. Following the U.S. EPA’s EPP programis also helpful. Retailers should work with their suppliers and purchasing agents toincrease the amount of sustainable purchases.

10.4.3 Purchasing Durable Goods and Facility Alterations

For durable goods, the focus should be on buying efficient electric power equip-ment and furniture and fixtures that contain salvaged material, high recycled contentor certified wood products. For facility renovations, demolitions, retrofits and newconstruction additions, a sustainable purchasing program covering frequently usedmaterials can be maintained. This program should apply to base building elementspermanently or semipermanently attached to the building itself. For renovation pur-chases, the goal should be to ensure that at least 50% have recycled or local content,sustainably harvested wood and rapidly renewable materials. Since many materialsare going into buildings, it is wise to make sure that they meet sustainability criteriafor low-toxicity materials, including paints, resilient flooring, panels and carpeting.

10.4.4 Low-Mercury Lamps

One of the primary means for reducing environmental impact and energy use is torelamp from incandescent to lower-wattage fluorescents and LEDs. Unfortunately,fluorescent lamps require mercury to work, and mercury is a highly toxic substance.Therefore, make sure that your purchases of fluorescents and CFLs contain as littlemercury as possible. A good baseline for purchasing agreements and lamp change-outs is an average mercury content of less than 70 pg per lm-h.4

10.4.5 Responsible Waste Disposal

To reduce the amount of waste and toxins that are hauled to and disposed of in land-fills or incineration facilities, a retailer will want to focus also on waste managementand disposal, both through educating center and store operators and through nationalor regional waste disposal contracts. At a minimum the policy should address thefollowing: recycling of all mercury-containing lamps; reuse, recycle or compost50–70% of the ongoing consumables waste stream; reuse or recycle 75% of thedurable goods waste stream; and divert at least 70% of waste generated by facilityalterations and additions from disposal to landfills and incineration facilities.

4 A picogram is one-trillionth of a gram, or a microgram times a microgram. A lumen-hour (1m-h)derives from taking the average lumens of a lamp and multiplying by the expected lifetime. Forexample, a CFL with 1.5 mg of mercury, 1,000 lm in brightness and a 30,000-h lifetime wouldcontain 50 pg per lm-h.


10.4.6 The Waste Stream Audit

Conduct a waste stream audit of the building’s or center’s entire ongoing consum-ables waste stream. Use the audit results to establish a baseline that identifies thetypes of waste in the waste stream and the amounts of each type of waste. The auditshould help the operator identify opportunities for waste diversion and increasedrecycling. Waste stream audits are also known as “dumpster diving,” and make greatstudent projects for a nearby college or technical school!

For most operators, establishing the baseline involves integrating data from recy-cling and waste hauler reports with data obtained from the actual sorting andweighing of materials in the waste stream. Opportunities for additional sourcereduction, reuse and recycling become clearer once you establish the baseline. Thewaste stream audit analyzes the two major waste streams, waste that goes to landfillsor incinerators and waste diverted from disposal by recycling, reuse or composting.

10.4.7 Ongoing Consumables

To facilitate the reduction of waste and toxic substances generated from the use ofongoing consumable products by store operations and center activities, a retailercan implement a waste reduction and recycling program that addresses relativelyinexpensive, regularly replaced materials such as paper and toner, with a goal of atleast 70% diversion from landfills. Have a battery-recycling program in place thatimplements the battery-recycling policy, with a target of diverting at least 80% ofdiscarded batteries from the rubbish.

10.4.8 Durable Goods Recycling

The retailer’s and center operator’s waste reduction, reuse and recycling programshould collect and measure all durable goods leaving the building or site. Considertaking part in a leasing or donation program to help maintain waste reduction. Inaddition to any local or statewide electronics recycling efforts, consider using theUnited Nations’ StEP initiative for guidance in disposing of electronic waste or formanufacturer and provider takeback options [11]. In the E.U., of course, takeback isthe standard practice for electronics, appliances and other products [12]. In the U.S.,for example, carpet manufacturers have all adopted takeback programs through theirdistributors [13].

10.4.9 Waste Disposal from Tenant Improvements and StoreRemodels

For facility alterations and additions in cities, project teams should be tasked withdiverting at least 75% of waste (by volume) from disposal in landfills or incinerators.

10.5 Indoor Environment 149

Waste products suitable for recycling include base building elements such as wallstuds, insulation, doors, windows and trim. Furniture and electronic equipment areexcluded from this calculation because they are covered in the disposal of durableequipment.

10.5 Indoor Environment

The quality of the indoor environment is obviously a critical issue for retail oper-ations. First of all, to support good hygiene, ventilation rates should be at least 10cubic feet per minute, (cfm) (about 0.3 m3 or 300 l) per person in the store.5 Thiscan be accomplished by modifying or maintaining each outside air intake, supply airfan and ventilation distribution system to supply at least the outdoor air ventilationrate under all normal operating conditions. Additionally, ventilation air rates can beadjusted with carbon dioxide monitors that provide more fresh air when occupancyis greater.

10.5.1 Green Cleaning

An intelligent retailer or center operator will develop a green cleaning program toreduce the exposure of building occupants and maintenance personnel to poten-tially hazardous chemical, biological and particulate contaminants, those that mayadversely affect air quality, human health, building finishes, building systems andthe environment.

A green cleaning policy should address at least the following items:

• Purchase products and equipment that meet sustainability criteria for greencleaning.

• Establish standard operating procedures addressing effective floor cleaning andmaintenance issues.

• Develop guidelines addressing the safe handling and storage of cleaning chemi-cals, including a plan for managing hazardous spills or accidents.

• Develop staffing and training requirements. Specifically address the training ofmaintenance personnel in the hazards of use, disposal and recycling of cleaningchemicals, dispensing equipment and packaging.

• Implement a method for collecting occupant feedback on cleaning policies andeffectiveness.

• Install continuous improvement programs to evaluate new technologies, proce-dures and processes to promote green cleaning.

5 Some retailers believe that 7 cfm per person is adequate, but the LEED-cited reference standard,ASHRAE 62.1-2007, requires 10 cfm per person.


10.5.2 Maintaining Air Quality During Construction

Renovations and remodels are critical times for controlling potentially adverseimpacts of construction on air quality. Here are a few suggestions that should bemandatory for tenant fitouts and retailers’ own in-store remodels. The goal of thesepractices is to prevent indoor air quality problems resulting from new construction orrenovation and thus help sustain the comfort and well-being of construction workersand store employees and shoppers.

To accomplish this objective, retailers and center operators should develop andimplement an indoor air quality (IAQ) management plan for the construction andpreoccupancy phases. It’s especially important to protect stored on-site or installedabsorptive materials from moisture damage and to perform a preoccupancy flushoutwith new air filters.

10.5.3 Occupant Comfort

Store employees are more productive when they are comfortable and consulted ontemperature and ventilation levels. LEED-EBOM recommends regular surveys ofstore employees to determine if lighting levels, ventilation and temperature levelsare appropriate. Surveys every six to twelve months also form a baseline for deter-mining satisfaction with new levels of lighting and temperature, as stores modifytheir normal settings to save energy and to accommodate daylighting.

10.6 Case Study—Stop & Shop

Let’s take a look at how a major grocery chain, Stop & Shop, located primarily inthe eastern U.S., has implemented the LEED-EB 2.0 system in about 50 stores [14].Figure 10.3 shows a typical Stop & Shop grocery store.

Ahold is Stop & Shop’s parent company, and has a corporate responsibility com-mitment based on a partnership with customers to build a more sustainable future.Ahold operates 1,300 stores along the East Coast including the Stop & Shop chain,with about 15 million customers every week and 160,000 people employed.

Based in Quincy, Massachusetts, Stop & Shop and Giant Food (a sister Aholdcompany) have 575 stores in 10 states and the District of Colombia, employ morethan 82,000 associates and serve more than 500 million consumers a year. Itsbuilding program incorporates a constantly evolving, prototype-based store format.In the 1990s, store energy performance improvement was noted as a profit contrib-utor, which led the company to believe that conducting research to develop a newenergy-efficient prototype would be worthwhile.

In 1998, Stop & Shop developed what they called the Low Energy SuperStore(LESS) prototype [15]. As a result, Stop & Shop/Ahold set a goal of building asuperstore that uses about one-third less electricity than traditional supermarkets.

10.6 Case Study—Stop & Shop 151

Fig. 10.3 Stop & Shop is the first U.S. grocery chain to use the LEED-EB program to benchmarkperformance at more than 50 stores. Vanasse Hangen Brustlin, Inc.

To target transformative changes, the company focused on savings in lighting andHVAC, super-efficient refrigeration, systems integration, and building envelopeimprovements. In 2001, they piloted related innovations by opening a LESS facil-ity in Foxboro, Massachusetts. Annual electricity savings of 8 million kWh, whicheliminates emissions of nearly 1,000 tons of carbon dioxide annually, demonstratedthe success of the model.

A few years later, the company decided to benchmark its latest store prototype, astore in Southbury, Connecticut. Store 621 was an ENERGY STAR–labeled modelthat opened in 2005. The review concluded that Stop & Shop stores have excellentenergy efficiency, with high ENERGY STAR ratings, and confirmed that stores builtby Stop & Shop after the LESS facility were more sustainable, at least in energyterms.

In 2007, Stop & Shop also entered into a partnership with the USGBC to measurehow well they are accomplishing sustainability and to identify potential improve-ments. In mid-2007, Stop & Shop began the USGBC’s Volume Certification pro-gram, using the LEED for Existing Buildings (version 2.0) program as the basis forstore certification assessments.

The 51 Stop & Shop grocery stores in the certified portfolio are a subset ofa much larger group of grocery stores that share many similar characteristics,making them excellent candidates for the volume LEED-EB certification process.All of the buildings are built from a common specification and further selectioncriteria included preliminary LEED-EB checklist evaluations, ENERGY STARratings, store management/ownership, location and store age. All of the selectedstores are located in or near New England, including Massachusetts, New Jersey,New York, Connecticut, Rhode Island and New Hampshire.


To measure the benefits of their practices, Stop & Shop and its consultant team,led by VHB Engineers, prepared LEED documentation. In May 2008, after abouta year’s effort, the project team succeeded in achieving LEED Certified-level statusfor the 51-store portfolio, representing nearly 3.4 million-ft2 (316,000 m2). Stop &Shop is the first company and first supermarket chain in the U.S. to be awardedLEED Portfolio Volume Certification.

The approach taken by Stop & Shop will work for other large retail operators,wherein a few dozen stores can be carefully evaluated under the LEED-EBOM pro-gram, with results applicable to many more stores. But what’s the business casejustification for this program?

10.6.1 The Business Case for Ahold/Stop & Shop

Still, the business justification for tackling dozens of facilities all at once underLEED, which sometimes has an onerous and expensive reputation, was a giant leapfor Stop & Shop. The most prominent factors in making a business case for LEEDwere the ability to use the system as a framework for design metrics and to takeadvantage of reduced certification costs per unit under the new LEED Portfolioprogram’s Volume Certification approach. The switch from single-building certifica-tions to a volume perspective with attractive economies of scale is critical to givinglarge retailers, especially those with multiple facilities built on prototype designs,cost-effective incentives to comprehensively address their environmental impacts.

From a marketing perspective, LEED is an internationally known standard,which appealed to Stop & Shop as a nationally distributed retailer with a lot ofbrand equity.

The volume process allows building owners to integrate the LEED green buildingrating system into existing buildings in their company’s portfolio in a cost-effectiveway without sacrificing the technical rigor and integrity of LEED. The pilot initia-tive enabled Stop & Shop to further standardize environmentally responsible pro-grams in their stores by integrating green operations into multiple existing buildingsin their portfolio all at once, using the LEED-EB rating system. The certificationprocess met Stop & Shop’s overarching goal to confirm through third-party valida-tion that they were successfully applying sustainable principles to store operations.

10.6.2 What Did Stop & Shop Do for LEED-EB Certification?

To earn LEED Certified status for the portfolio, Stop & Shop achieved 35 out of 85points available in the LEED EB-2.0 system:

• Site Points Achieved/Available: 3/14• Water Points Achieved/Available: 3/5• Energy Points Achieved/Available: 12/23

10.6 Case Study—Stop & Shop 153

• Materials Points Achieved/Available: 5/16• Indoor Environment Points Achieved/Available: 10/22• Innovation Points Achieved/Available: 2/5

As you can see, energy and water savings were critical elements. To achieveenergy efficiency gains in existing stores, Stop & Shop employed “cool” whitereflective roof membranes, reducing solar heat gain and therefore lowering thedemand for air conditioning—and also adding extra layers of insulation. Insidethe LEED Portfolio stores, advanced energy management systems reduce electricityconsumption.

For energy savings, Stop & Shop focused particularly upon product lighting,including full-capacity bright ambient lighting, dimmable ballasts for low-mercuryT-5 fluorescent lamps, spotlights to highlight products, pendant luminaires to bal-ance ceiling brightness, end-aisle highlighting by continuous track lighting, in-aislehighlighting by localized track and added daylight with numerous skylights, lighttubes and large windows to further reduce load and create a bright, comfortableatmosphere. By specifying more efficient lighting and mechanical systems that pro-duce less waste heat, Stop & Stop saves a lot of energy.

The stores further conserve energy through appliances like ultra-efficient refrig-eration and heating and air-conditioning units. Stop & Shop’s advanced refrigerationmore accurately matches the specific refrigeration needs of products in differentdisplay cases while at the same time minimizing energy consumption. Energy-saving doors, light diffusers and anti-sweat heaters on glass freezer cases furtherreduce electric loads. In addition, waste heat from refrigeration units is used topreheat domestic hot water and provide direct store heating. During the winter,a high-efficiency natural gas unit supplements these “free” sources of heat. Theportfolio certifications included building commissioning and monitoring elementsof the LEED-EB program.

Indoor air quality is protected through the use of nontoxic, low- or no-VOC mate-rials like paints, sealants, and adhesives in store interiors. Similarly, stores employpolicies for green cleaning practices with nontoxic materials.

Indoor water conservation in restrooms and other facilities includes low-flowfixtures. Outdoors, stormwater management systems collect and filter runoff onStop & Shop store sites. Stop & Shop site landscaping limits the use of non-nativespecies that require frequent watering, which has resulted in near elimination ofirrigation systems. Stop & Shop’s LEED certification includes a plan for green siteand building exterior management, with protection of plant and animal habitats adja-cent to stores and integrated pest management.

Regarding best management practices for waste, Stop & Shop proactively chan-nels solid waste in a number of its stores into composting, and in all stores practicesseparation and recycling of plastic, cardboard and paper products. Over 50% of thefacility waste is recycled, including packaging, crates and containers; performancewas affirmed by store waste audits. In addition, Stop & Shop diverts plastic bagsfrom landfills and neighborhood streets by offering fabric totes and recycling forplastic grocery bags.


The final key element is Stop & Shop’s development of a customer educationprogram about green building to complement employee awareness training nec-essary for implementing policies and ongoing improvements. The shopper experi-ence in the LEED-Certified stores includes exposure to informational display boardsin high-traffic areas explaining Stop & Shop’s commitment to sustainability, whatLEED is and what green building characteristics make the store eligible for highperformance recognition.

10.7 Summary

From the examples in this chapter, you can see that there is a world of opportunity in“greening” existing shopping centers and retail stores. With the current slowdown innew retail construction, it’s more important now to focus on reducing the environ-mental footprint of existing operations. Several of the major green building ratingsystems around the world—LEED, BREEAM, Green Star—provide excellent guid-ance for this purpose. In addition, many retailers and developers are finding thatreexamining existing practices provides opportunities for engaging their employ-ees and connecting with their customers in a very constructive manner. Many havealso found significant savings in operating costs by reviewing and changing opera-tions on a comprehensive basis. Finally, sustainability programs should address allaspects of a company’s operations; clearly, existing centers and shops make up thebulk of impacts that need to be reduced.

References

1. U.S. EPA. Heat Island effect. Retrieved on December 27, 2008 from http://www.epa.gov/heatisland/index.htm.

2. Klinkenborg, Verlyn. (2008, November) Our vanishing night. National Geographic. Retrievedon December 27, 2008, from http://ngm.nationalgeographic.com/2008/11/light-pollution/klinkenborg-text.

3. European Energy Performance of Building Directive web site. Retrieved on February 16,2009, from http://www.diag.org.uk.

4. Green-e web site. Retrieved on December 26, 2008 from http://www.green-e.org/getcert_re.shtml.

5. U.S. EPA. Climate leaders. Retrieved December 26, 2009, from http://www.epa.gov/climateleaders.

6. World Resources Institute. GHG protocol initiative. Retrieved December 26, 2009, fromhttp://www.wri.org/project/ghg-protocol.

7. NREL. International Performance Measurement and Verification. (2002, March). Retrievedon December 26, 2008, from http://www.nrel.gov/docs/fy02osti/31505.pdf.

8. CERES. Facility reporting project. Retrieved December 26, 2009, from http://www.ceres.org/Page.aspx?pid=436.

9. U.S. EPA. Environmentally preferable purchasing. Retrieved December 26, 2009, from http://www.epa.gov/epp.

10. German environmental label: Blue Angel for several products. (2007, August) Retrievedon December 26, 2009, from http://www.cbi.eu/marketinfo/cbi/docs/german_environmental_label_blue_angel_for_several_products.

References 155

11. In the spotlight: the global e-waste problem. Retrieved on December 28, 2009, from http://www.step-initiative.org.

12. EU legislation: Take-back electronics (WEEE). (2008, May). Retrieved December 28, 2009,from http://www.cbi.eu/marketinfo/cbi/docs/eu_legislation_take_back_electronics_weee.

13. Carpet America Recovery Effort web site. Retrieved on December 28, 2009, from http://www.carpetrecovery.org.

14. Interview with Leo Pierre Roy, Vanasse Hangen Brustlin, Inc. (VHB) Engineers, Watertown,Mass., November 2008.

15. Case study—Stop & Shop. Retrieved December 28, 2009, from http://www.cleanair-coolplanet.org/information/pdf/StopShop.pdf.

Chapter 11Marketing Sustainable Retail Development

One of the primary benefits of sustainable retail over the long run has to be themarketing gain from having something other competitors do not: lower operatingcosts, a more socially responsible public profile, ease of gaining planning approvalfor new projects, better access to certain investment pools, higher rents (in the caseof developers), ease of recruiting and retaining key people. Each of these benefitsneeds marketing and public relations support; each benefits from a clear and consis-tent corporate message that promotes sustainable retail.

To date, there are very few retailers or developers who have championed sustain-ability long enough, consistently enough and with enough actual demonstration ofchanges in standard operations to gain the benefits of green marketing. Based onthe examples presented earlier in this book, one can point to a few examples suchas Marks & Spencer in the U.K., Sonae Sierra in Portugal, and Office Depot andperhaps Wal-Mart in the U.S., but the very paucity of examples serves to underscorethe point: the green marketing space is wide open for large retailers and developers.

What can a retailer and developer do to take advantage of this wide-open mar-keting space? The author’s experience indicates that there are some key marketinginitiatives that can and should be undertaken to establish a marketing presence ingreen building, green development and sustainability:

1. Make a commitment to reducing the center’s carbon footprint, through low-energy store design and solar power systems on rooftops, or high-efficiency on-site power systems such as geothermal or geo-exchange systems, combined heatand power systems and the like.

2. Certify all new buildings and centers to the applicable national or internationalgreen building/green retail center rating systems. Without a commitment to cer-tifying all new buildings, one is left with a rather weak marketing posture thatalways has a qualifying phrase.

3. Take the carbon footprint beyond just buildings to include all corporate opera-tions, much as Wal-Mart and Marks & Spencer have done, making sustainabilityas much a part of the corporate DNA as profitability. (Increasingly, of course,they are linked both directly and indirectly.)

4. Tackle the issue of the energy and environmental performance of existing build-ings aggressively, seeking where possible to have the buildings certified by an


158 11 Marketing Sustainable Retail Development

existing national program such as ENERGY STAR, BREEAM, LEED or GreenStar. After all, in this slowdown period for new store construction, many compa-nies are focused on upgrading existing store performance.

5. Engage with an accepted sustainability tracking system such as the GlobalReporting Initiative and begin the effort to document and report all actions,their benefits and the continuing challenges of a sustainable future for theorganization.

What would be the marketing steps that a company could take to benefit fromits “sustainability focus?” The key to any marketing program is to differentiate acompany’s actions from those of competitors and to do it along lines that its variousstakeholders care about. This practice of differentiation is often expressed as “find-ing a difference that makes a difference, to someone who makes difference to you.”This can be retail tenants in the case of a shopping center developer or consumersin the case of a retail store operator.

It is fairly easy to identify five key steps, all of them based around the soundconcept of differentiation. For a retail store operator, the aim of differentiation isprimarily the consumer, the person who must be drawn to the store for some reason.Green retail operators such as Patagonia and The Body Shop have benefited fromthis differentiation approach for a long time.

For retail developers, the first differentiator should be to attract more and bet-ter tenants to all of their centers, tenants who value lower operating costs andthe developer’s program of sustainable development and corporate social respon-sibility. But for the developer (and that could include stand-alone retail oper-ators such as Wal-Mart), there may also be important stakeholder groups whocan make or break development projects, including politicians, investors and themedia.

11.1 Four Key Marketing Steps for Sustainable Retail

11.1.1 Differentiation

Differentiation is an approach to marketing strategy that takes decisions regardingsegmentation, targeting and positioning variables and focuses them on particularmarkets. This approach must be coupled with a specific project type: geographic(urban versus suburban); greenfield versus renovation/refurbishment; or other focus.Differentiation is the primary marketing approach recommended by most expects.The main green building differentiators for developers and retail store operators are:

• Successful certified LEED, BREEAM, Green Star or ENERGY STAR projects.• Demonstrated corporate commitment to sustainability, through participation in

accepted reporting organizations such as the Global Reporting Initiative.• Reduction in the company’s carbon footprint by a significant amount each year.

11.1 Four Key Marketing Steps for Sustainable Retail 159

• For a developer, the demonstrated ability to deliver green retail projects onconventional budgets so that rents are competitive, but operating costs arelower.

A developer or retail operator usually needs to show high levels of attainment onseveral of these key variables to secure recognition for being a leader in sustainabil-ity in highly competitive situations.

Developers can find one or more approaches on this list that will successfullydifferentiate their services over a three- to six-year period in the green develop-ment business industry. Research shows that the leading companies are particu-larly adept at using differentiation strategies such as advertising, public relations,new visual identities and attracting key people. Improving or evolving the com-pany’s services typically takes place over the course of several green buildingprojects.

11.1.2 Become a Low-cost Provider of Green Developments andGreen Retail Stores

Given the tight budgets of many building projects and competitive environment inmost urban areas, the ability of developers and retailers to compete on price is a valu-able asset. These costs may be based on prior project experience, accurate productknowledge, good research, local or state incentives or a willingness to pay to getthe experience. Low cost of operations does not necessarily mean low profitability;instead, it gives a company more flexibility to negotiate profitable green buildingprojects, even in a very competitive environment.

For example, the ability to be creative with green building value engineering forenergy and water savings, along with high levels of indoor air quality, might helpan engineering company to create far more valuable green buildings for the samecost as a more conventional company. For example, David DeVos at Kohl’s cites thebenefits of rapid learning about cost management that occurred by putting dozens ofnew stores through the LEED for Retail Volume Certification program in a relativelyshort period of time.

Low-cost advantages might be even more sustainable than branding as a wayto compete in the marketplace, but most companies do not have the discipline tooperate in this fashion. A good example of the competitive advantage of lower costof operations is the almost unblemished success record of Southwest Airlines. ForSouthwest, the low prices made possible by lower operating costs have becomethe primary brand, along with fun. Southwest has been profitable almost every yearsince 1972, a record unmatched in the airline industry. Southwest succeeds by beingvery focused on their point-to-point routes, not trying to be all things to all people,but offering simple air transportation to budget-conscious business and leisure trav-elers [1]. This approach may not work for every developer or retailer, but neithershould it be dismissed out of hand.


11.1.3 Focused Differentiation

When embarking on a program of focused differentiation, remember that existingtenants or retail consumers already know your company and appreciate its strengths.Communicating a new message about green building or sustainability should not beat the expense of these relationships; instead, it needs to reinforce current percep-tions of the developer or retailer as a cost-conscious, schedule-conscious, customer-focused organization. Key relationship managers need to be detailed to meet withexisting tenants, for example, and explain how the new people hired, the newlyaccredited LEED professionals and the new green development focus of the devel-opment will benefit them. In turn, this requirement implies a need for strong internalcommunications before embarking on new green building marketing initiatives, sothat everyone inside the organization understands how to communicate the benefitsof the new direction.

The essence of marketing wisdom lies in knowing which markets to compete inand which to ignore, which customers a company wants to keep and which it doesnot. Without proper focus, a developer often will try to serve too many potentialtenants, at the expense of not securing the tenants it really wants. To derive an effec-tive strategy, marketers need to combine a laser-like focus on market segments andkey targets within those segments, with either low cost or differentiation. Points offocused differentiation can include:

• Regional versus national focus. Many developers operate regionally and only incertain project size ranges or by trying to dominate a local niche. Firms that arevery focused locally are often able to compete against much larger national firmsor else to team with them on larger projects where there is room for more thanone developer.

• Building or project types (or vertical markets) such as enclosed malls, lifestylecenters and big-box retail stores. Likely to be affected in the future by higherpeak-period electricity rates (up to $0.30 per kWh in some of the largermetropolitan areas in the eastern United States), these building types might begood candidates for energy efficiency investments, particularly in states or inutility service areas with significant incentives for energy upgrades. Therefore,a green developer can identify such project sites, make energy-efficient or zero-carbon operations a major marketing focus and direct most of its communicationsto that aspect of their business.

• Signature green measures, such as photovoltaics or green roofs, that a devel-oper or retailer commits to bring into play on each project. While it canbe risky for developers and retailers to always bring certain technologies totheir projects, it is more dangerous not to be known for anything in par-ticular. Branding a company in the green building arena with specific tech-nology solutions for particular building types and sizes can be an effectivemarketing measure, allowing such companies to secure other marketing and pub-lic relations benefits, as well as providing political cover against antidevelopmentforces.

11.2 Build a Brand Image 161

• Project size can also be a focus, allowing smaller developers, for example,to compete with larger and more capable competitors in the “under 100,000ft2” center business. An example might be a focus on maintenance and oper-ations costs for existing centers, allowing one to accurately judge how muchthey can be cut and then to use that as a marketing tool for prospectivetenants.

11.1.4 Name It and Claim It

A particular method of differentiation lies in the ability of a shopping center devel-oper or retailer to develop a particular approach to sustainability and then “put abox around it,” label it and claim that label for itself. For example, a commitmentto zero-net carbon development or retailing could eventually translate into “PlanetFriendly” or “Net Zero” labels. A major commitment to solar power at all centerscould lead a developer to claim that they are the “Solar Center.” A developer focusedon existing properties could pursue a LEED for Existing Buildings Operations andMaintenance certification for each center (this is easier for an enclosed mall) andthen develop a claim that it is the only “Eco Center.”

In 2007, I visited a LEED-certified center at the periphery of a major metropoli-tan area in the Western U.S. that abuts a major interstate highway, with traffic ofabout 100,000 cars per day. It was and is a great location for a center. But this cen-ter is also located in a very windy region. This could have been an opportunity toinstall a large wind turbine. In this flat terrain, it would be seen for miles and wouldinstantly allow the center to claim the crown of the most sustainable developmentin the region, as well as to be an immediate tourist draw and attract the attention ofpassing motorists.

11.2 Build a Brand Image

In today’s commercial world, the fifth major task is to create a brand that incorpo-rates the key differences in a developer or retailer that make a difference in the mindof a tenant or consumer. A retailer and consumer electronics company like Applemight want to be thought of as a leading-edge designer and technology company oras dominating a large product category (such as Nike), to broaden its market appealbut at the same time sharply defining itself to consumers who value that experienceor approach.

To understand the branding opportunity, consider the following statement: “Allmarketers are liars” [2]. One way to read this statement is to understand that busi-nesses are all creating stories about projects, capabilities, values and interests forthemselves and their customers on a regular basis. The story about the green devel-opment project or green building you just finished is already manifesting in theminds of all project participants, readers of new stories about the project and thegeneral client base (“It’s only a LEED Silver project, what’s the big deal?”). And it


will continue to be permuted, just like a message in the parlor game of Rumor,1 ifyou don’t proactively shape it. Therefore, you must tell a story about your project:If it is significantly different from the contractor’s experience and the architect’sexperience and the occupant’s experience, then one of you is a liar! The point is thatgreen building branding is best done when it is a story about project successes andlessons learned.

The essence of a brand is incorporated in how you deliver your services, in yourcompany’s personality and core values (which in turn determine who you hire andwho you encourage to seek another place to work), your culture (collaborative orconfrontational, or something in between) and all the promises you want your clientto believe (for example, clear and frequent communications on each project and thehighest level of expertise and technological competence). A brand is something thatcreates a strong personal and professional relationship between your staff and theclient’s staff, to build loyalty and lasting relationships.

The marketing benefits of branding are multiple. It can shorten the decision cycleof a client and reduce your cost of marketing. If you’re always shortlisted by certainclients and client types, you have a brand. It gives you some pricing flexibility; afterall, if they really want you, they’ll pay for all the special things you bring to theproject, within reason. It helps you attract the kind of people who in turn reinforcethe brand.

This point deserves even stronger emphasis: Marketing and recruiting are twosides of the same coin. The same values and branding attributes that attract tenantsand consumers attract good people, and a modern corporation is nothing if not atalent agency. Without talented people, you won’t be innovative, you won’t growrevenues and you will never be a market leader.

You can see, therefore, that this is a positive feedback loop. The clearer you areabout your sustainability positioning and corporate social values, the more likelyyou are to attract the talent that will help you grow market share and dominatevarious green development and green retail niches. And the successful execution ofyour brand promises also generates loyal tenants and customers, who in turn buildyour business. Since many tenants, for example, perceive retail developments as acommodity, and since many developers deliver them as a commodity (think of howmuch each shopping mall or lifestyle center resembles the competition, both nearbyand nationally), a brand differentiates your projects in a significant way from thoseof the also-ran competitors.

One large U.S. developer, Regency Centers, took a very proactive stance in 2007to building a brand around its green initiative, one called “greengenuityTM.” Accord-ing to COO Mary Lou Fiala [3]:

Greengenuity is a natural extension of our value proposition and our brand. What you’rereally talking about is delivering a higher-quality product, and one thing that is certain is

1In the game of Rumor, one person is given a short story to tell to another person; that personrepeats the story to the next person in line, and so on. As the line progresses, the original storygets lost over time and space, until it is totally unrecognizable or even takes on the characteristicsopposite to those of the original story.

11.2 Build a Brand Image 163

tenants want to lease space in high quality real estate. This initiative furthers our reputationof being a quality developer, owner, and operator. While it’s hard to put a value on thisbrand equity, it’s certainly not to be overlooked.

In terms of the benefit of a strong sustainability program and a strong brand foremployee relations and recruiting, Fiala says,

Employees have responded very favorably, from our executive team down to support staff.Everyone is enthusiastic, wanting to do his or her part. We feel this gives us a long-termadvantage in recruiting and retaining human capital, especially younger talent, who place ahigh value on working for companies with a strong environmental commitment.

What makes a brand in the green building marketplace?

• A brand is a story told between marketer and consumer, between developer andtenant. The story must resonate with the tenant or buyer to be effective. The sto-rytelling focuses on specific features of the project, but translates those featuresinto benefits that the recipient can clearly appreciate.

• A brand sells an experience or a series of benefits to the consumer. People mustbe led from understanding the value of the features to understanding how theywill benefit from them. Think of Starbucks: It sells a commodity product, coffee,you can buy in hundreds of locations in any big town, and at a significant pricemultiple. Starbucks has managed to create more than 10,000 permutations on thebasic “cuppa java,” to give you a unique taste experience.

• A brand delivers on its promises. For example, in my own LEED Gold-certifiedapartment building in Portland, the presence of a trash room with recycling bins,just down the hall, and on every floor, and the enforcement of the required “nosmoking” policy, both reinforced daily the promise that the green building expe-rience will be something different.

• A brand “walks the talk.” Consumers expect sellers to live by the values of whatthey are selling. A green retailer or developer should have offices in a green build-ing. A green developer or retailer should craft a LEED-EB or LEED-CI certifica-tion for its own offices. A green design developer or retailer should be promotingsustainability in all its activities, not just in a few projects here and there.

11.2.1 Green Power

Consider Table 11.1, showing the top ten purchasers of green power in the U.S., apartnership between the U.S. Environmental Protection Agency and various retail-ers. Participating in this Green Power Partnership is a good way to convince boththe public and a company’s employees that it is walking the talk of sustainability. Atthe top is Whole Foods, which in 2008 supplied 100% of its electricity needs frompurchased green power. (Note that this does not mean Whole Foods generated anyof this power, merely that it purchased electricity that was produced from solar andwind power.)


Table 11.1 Top Ten Purchasers of Green Power in the U.S., 2008 [5]a

CompanyAnnual green powerpurchase (kWh)

Percent of totalelectricity use Green power sources

Whole Foods Market 527 million 100 Solar, windKohl’s 259 million 22 VariousStarbucks 205 million 22 WindStaples 127 million 21 Biomass, solar, windLowe’s 101 million 2 Biogas, solarOffice Depot 100 million 16 Biomass, solar, windSafeway Inc. 93 million 3 Solar, windColdwater Creek, Inc. 81 million 100 WindREI 64 million 104 Biogas, solar, windFedEx Kinko’s 62 million 24 Various

a Totals represent the most recent 12 months of purchases for each retailer

Two smaller retailers, REI and Coldwater Creek, also offset 100% or more ofelectricity use from renewable power. REI also has developed anumber of LEED-certified stores in the U.S. REI’s prototype store in Boulder, Colorado, received the2007 national sustainability award from a leading trade magazine [4].

A brand communicates its differences effectively. A common belief is that theaverage adult is subjected to more than 2,000 commercial messages daily. Get-ting through that fog with effective communications is a great art. Most savvycorporations engage a strong public relations firm to tell their story and supporta continuing dialog with the marketplace as an integral part of their marketingeffort.

Of course, one can create differences for each market segment that one choosesto address: some might value innovation, while others value low-cost or specifictechnological choices, such as geothermal heat pumps, photovoltaics or roof gar-dens. The opportunity is enormous, because there are few established green brandsin the retail developer and store operator marketplace today.

Without a leading brand (and with due apologies to the major companies involvedin this business), the average customer will not have a basis for making a purchase.Even in commercial situations, the lack of a brand can have drawbacks (for example,imagine the confusion in the commercial air conditioning market without majorbrands such as Trane and Carrier). While a home builder can sell ENERGY STAR,General Electric (GE) or Whirlpool appliances to residential buyers, the lack ofname recognition for most green technologies forces the retailer or the developerto become the brand. This is a burden for most developers, but one well worth theeffort, even if it takes five years or more.

11.3 Sustainability Marketing as an Evolving Strategy

Developers and retailers need to understand how their sustainability marketing mustevolve in order to compete effectively:

References 165

• They must choose a strategy that incorporates higher levels of differentiation orlower overall operating costs (to attract tenants), with explicit focus on particu-lar market segments that might include geographic location, project type, ownertype, project size, specific technological approach or signature green measures.

• This strategy must be reinforced internally and externally so that it becomes rec-ognizable as a brand identity. Internal reinforcement includes training and certi-fication of employees as LEED Accredited Professionals, for example; externalreinforcement includes activities to increase the visibility of the company and itskey executives in the chosen market niches.

• Design firms must form close working alliances with contractors and clients toensure that their green building projects will actually get built within prevailingbudget, time, technology options and resource constraints.

References

1. Brancatelli, Joe. (2008, July 8). Southwest Airlines′ seven secrets for success. Wired. Retrievedfrom http://www.wired.com/cars/futuretransport/news/2008/07/portfolio_0708 .

2. Godin, Seth. (2005). All Marketers Are Liars: The Power of telling Authentic Stories in a Low-Trust World. (New York: Portfolio Hardcover).

3. Interview with Mary Lou Fiala, January 2009.4. REI Boulder Receives Chain Store Age’s Retail Store of the Year Award for

Environmental Sustainability. (2008, February 7). Retrieved February 15, 2009 fromhttp://www.rei.com/aboutrei/releases/08chainstoreage.html.

5. Top 20 retail. (2009, January 6). Retrieved February 15, 2009, from www.epa.gov/greenpower/toplists/top20retail.htm.

Chapter 12Sustainable Retail Organizations

There are many ways that retail developers and retailers can create a meaning-ful sustainability program. A developer’s detailed approach needs to be differentfrom that of a retail store operator, yet common themes emerge in each program.Figure 12.1 summarizes some of the main themes from the various firms profiled inthis book. In this chapter, we provide a framework for corporate sustainability effortsin the retail sector. The five common themes among the programs highlighted inthis book are these: CEO leadership, internal and external communications, knowl-edge management, education and training, and corporate operations (walking thetalk). These common themes contribute to the achievements of all retail sustainabil-ity programs and also underpin the successful approaches taken in other businesssectors.

12.1 CEO Leadership

CEO leadership is essential to any sustainability program. Without top-level lead-ership, nothing much happens beyond the operational adjustments that many firmsare making to respond to higher energy prices and the greater focus of local gov-ernments on green building issues. Particularly in this time of retrenchment in thedevelopment industry, it is important for employees and stakeholders to know thatthe CEO regards sustainability as essential to the organization’s future and thatthey should be paying attention to this initiative. For Sonae Sierra, CEO ÁlvaroPortela made environmental responsibility a cornerstone of the company’s develop-ment program many years ago. The same holds true for Sir Stuart Rose at Marks &Spencer, whose Plan A certainly captures the imagination not only of his company’sassociates, but also of the general public.

12.2 Communications

If a tree falls in a forest and there’s no one around to hear it, did it make a sound?If the CEO wants to rapidly transform the organization toward sustainable ends,


168 12 Sustainable Retail Organizations

Fig. 12.1 Corporatesustainability programstypically contain all of thesefive elements

will anyone notice without an active and effective communications program? So thesecond facet of this pentagonal program comprises internal and external communi-cations plans, programs, strategies and tactics.

All of the companies profiled in this book have been active at getting theiremployee-associates committed to the program and equally adept in getting externalrecognition for their sustainable achievements, especially through awards programs,sustainability reporting schemes and green building certifications.

Internal and external communications need to reinforce a company’s commit-ment to green design and sustainable practices. At the beginning, it can be hard onthe marketing staff to tell the company’s story because they may not really knowwhat it is. As a result, an early activity should be to develop coherent statementsabout its approach to sustainable design, construction and operations, with a com-pelling story about commitment, process and achievements. Once a company makesa strong commitment to communicating its interest in and commitment to sustain-ability, it’s amazing how many opportunities arise to present them to current andprospective tenants, public officials and other key stakeholders. People inside theorganization are also eager to hear this message, so it’s important that the companyuse all internal communication avenues, with frequent postings of interesting newsand links about sustainability in general, as well as the ongoing story of the com-pany’s actual achievements.

Figure 12.2 shows a Woolworths distribution center in Midrand, SouthAfrica, inaugurated in 2007, part of that company’s aggressive sustainability pro-gram. Woolworths’ goal is to reduce its carbon footprint by 30% in the nearterm [1].

12.3 Education and Training 169

Fig. 12.2 Woolworths madea major commitment to greenconstruction and operationsin South Africa with theirMidrand distribution center.Courtesy of Woolworths

12.3 Education and Training

The third facet has to do with developing the skills, knowledge and aptitude for sus-tainability inside the organization, through a strong commitment to education andtraining of employees. In the case of the retail developers we’ve profiled, each com-pany has a point person responsible for the success of its sustainability initiatives.For Multi Development, Technical Director Arco Rehorst has led the way by engag-ing the country managers to become advocates for the program through a trainingand monthly learning program. For Sonae Sierra, working with Elsa Monteiro onsustainability initiatives involved training its people in the ISO 14001 environmen-tal management system as a critical element in gaining acceptance for the system.For SES Spar European Shopping Centers, Filipa Fernandes has been the sparkplugfor directing their achievements. For Regency Centers, the path lay in hiring a new


company officer, the chief sustainability officer. For several retail clients of Yudel-son Associates, training a dozen or more people in each organization to becomecertified by the U.S. Green Building Council as LEED Accredited Professionals hasbeen the way that training needs have been fulfilled.

Extensive training may also be required in the development group, when a retaileror developer commits to a specific green building certification program. Kohl’sexpects to certify more than sixty stores in the LEED volume build program for retailstores. David DeVos is director of architecture and sustainable design at Kohl’s. Hediscusses the dimensions of a training program to serve just the design, constructionand certification function [2].

I think getting the training out to all of the people that need it is a challenge. Kohl’s trainedover 600 people for the stores [currently undergoing certification]. Training store manage-ment, the management staff, operating staff engaged in real estate, construction and facil-ities, is also important. There’s a lot of anecdotal information out there on green buildingand trying to get the information that’s correct and accurate for your program is a challengeand is certainly a barrier [to widespread implementation of LEED].

Beyond training to get stores built, there’s also the issue of operating them cor-rectly. We have also found that when store managers and others engaged in storeoperations understand and appreciate that the company is building healthier andmore efficient workplaces, they can effectively communicate the benefits of greenbuilding to all employees, which in turn, helps them to communicate to the customerbase.

12.4 Knowledge Management

The fourth facet of the sustainability program requires the organization to be deter-mined from the beginning to capture the lessons learned, as a developer, for exam-ple, through its attempts to build certified centers and to create green operationsprograms for existing centers. The organization needs to capture cost data and deter-mine which of its existing design teams, contractors and vendors are most coopera-tive and knowledgeable about sustainability issues.

For a retail store builder and operator, the ENERGY STAR program in the U.S.,EPBD in the EU, LEED, BREEAM and Green Star programs offer clear opportuni-ties for objective evaluations of achievements in store design and operations. In thiscase, capturing cost and performance data from various green building measures,such as weather-controlled irrigation systems, photovoltaics and green roofs, offersopportunities to learn from each project and develop a new prototype store that willperform at a much higher environmental level.

Many larger firms have hired sustainability coordinators, managers and directorsin the past few years, people whose main job is to maintain all of the informationflowing through the firm about green products, green specifications, green designmethods, new building systems and similar items. Often these people have technicalbackgrounds, but sometimes they do not. One key aspect of knowledge manage-

12.5 Corporate Operations 171

ment is capturing the lessons learned from each project, whether or not the firmdecides on a LEED certification. Some firms keep a LEED scorecard internallyand ask both internal and external design teams to prepare documentation, so thatthey can judge how well the company is doing in its commitment to sustainabledesign. That way, it becomes easier to move the entire firm along and to present tomanagement the cost and performance implications of their proposed project. In alarge company, of course, this process can also set off a healthy internal competitionbetween, for example, different regions of a large developer to be the most sus-tainable design group, or between different design consultants for a large retailer.The key with knowledge management is to capture the institutional learning, so thatfuture projects can benefit from new technologies, systems or products or documentmistakes on current projects that can be corrected in the future.

12.5 Corporate Operations

Finally, the company needs to “green” its own operations. This includes such activ-ities as engaging employees in “personal sustainability” projects, reducing overallfuel use, buying carbon offsets for travel (or reducing it through videoconferencingand other means), implementing environmentally preferable purchasing (EPP) pro-grams, supporting employee car sharing and public transit use and a host of otherprograms that show a strong corporate commitment to sustainability.

Typical sustainable operations involve such areas as recycling, transit subsidies,purchasing policies, analyzing overall use of paper products, green housekeepingand using the office as a laboratory for practices that can be brought to clients’projects. More adventurous firms also have begun contributing their new expertiseto the community by serving on advisory boards and commissions, getting involvedwith local schools and similar activities. And, as mentioned earlier, committed firmsalso seize on opportunities to green their own offices, either with a LEED-CI or aLEED-EB project.

But a company can always do even more, if the corporate leadership and seniorstaff are fully committed. For example, look at what one 80-person design firm,SERA Architects in Portland, Oregon, has done [3]. Through a commitment to the“Natural Step” principles for sustainability, beginning in 1997, the firm engaged ina decade-long internal study of how to make their own operations conform to theseprinciples. The Natural Step framework encourages dialogue, consensus-buildingand systems thinking (which are all key processes of organizational learning) andcreates the conditions for profound change to occur. From a business perspective, theNatural Step framework enables corporations to intelligently, and profitably, inte-grate environmental considerations into strategic decisions and daily operations.

Briefly stated, the Natural Step “system conditions” ask four key questions:

• Can the earth replace what I take in the form of resources?• Am I poisoning the earth, water or air with my activities?


• Do I respect the biodiversity of flora and fauna, with both my project work andmy daily activities?

• Are the choices I make fair and equitable—in other words, does everyone benefitfrom them?

Taken seriously, these seemingly innocuous questions can cause a revolutionat any company. Beginning in 2003, SERA Architects created an action plan thatencompassed nine major areas: energy, chemicals, materials use, travel, paper,food, furniture/finishes/equipment, the firm’s design library and human resources.Choosing to pick the “low hanging fruit” made the actions more understandable tothe firm’s staff and led to early “wins” that encouraged the process to continue.As a result, SERA matured as a sustainable design firm and began to win newbusiness [4].

Interface, Inc. is the world’s largest manufacturer of modular carpet. After tenyears of applied sustainable thinking on the part of the entire organization, Founderand Chairman Ray C. Anderson stated the business case for sustainable corporateoperations simply, profoundly and forcefully [5]:

Costs are down, not up, dispelling a myth and exposing the false choice between the econ-omy and the environment; products are the best they have ever been, because sustainabledesign has provided an unexpected wellspring of innovation; people are galvanized around ashared higher purpose; better people are applying, the best people are staying and workingwith a purpose; the goodwill in the marketplace generated by our focus on sustainabil-ity far exceeds that which any amount of advertising or marketing expenditure could havegenerated—this company believes it has found a better way to a bigger and more legitimateprofit—a better business model.

12.6 Case Study—SES Spar European Shopping Centers

SES Spar is a major central European developer with a strong sustainability pro-gram in place since 1999 [6]. The sustainability program is called Triple-BranchSustainability, and it addresses:

• New Developments—The company implements baseline sustainability measuresinto all new developments.

• Existing Centers—SES adopts baseline sustainable operating and maintenancepractices throughout its existing portfolio.

• Corporate Operations—SES uses sustainable practices throughout the corporateoffices and uses them to build a culture and awareness of sustainability.

In place since 1999, the program became more organized and structured with theexpansion of the award-winning project EUROPARK Salzburg in 2005.

For SES Spar the key elements for sustainability in constructing new shoppingcenters include consideration of the following:

12.7 The Sustainability Report 173

• The Environment—Land Use and Ecology• Health and Well-being• Water—Efficiency, Conservation and Reuse• Energy• Materials and Conserving Resources• Waste and Recycling• Social and Community Inclusion and Integration• Consumer Awareness of Sustainability• Transport• Pollution• Management of the Center

Each of the projects carries out a very detailed checklist that covers all the pointsof the known assessment methods. SES Spar considers the checklist to be even moreaggressive and stricter than LEED or BREEAM, since the checklists are controlledand certified by the Austrian government.

Several of the recent projects have won major awards, including EUROPARKSalzburg, the winner of the ICSC Best Sustainability Project of the World 2007and the Atrio project, the winner of the ICSC ReSource Award 2008, the EnergyGlobal Award 2007 and the Trigos—CSR Award 2008. The project Q19 won the2008 ICSC Resource Award, and SES won the ICSC Global Company ReSourceAward in 2008.

12.7 The Sustainability Report

Ultimately, all of the company’s sustainability programs need to become part of theDNA of the company. Each department has a role to play and an important contribu-tion to make. The annual or biennial sustainability report becomes an important partof the program, a way to trumpet achievements, acknowledge shortcomings and setthe stage for future activities. According to a 2008 study by KPMG, 200 of the 250largest companies in the world already produce regular sustainability or corporatesocial responsibility reports [7]. The KPMG survey also looked at the largest 100companies by revenue in 22 countries and found that overall uptake of sustainabilityreporting was 45%, with wide variation between countries. It seems clear that theretail sector will be moving decisively in this direction over the next five years.

KPMG and the Global Reporting InitiativeTM (GRI) also studied 50 corporatesustainability reports. Their analysis, Reporting the Business Implications of Cli-mate Change in Sustainability Reports, examines how companies are reporting onclimate change to their stakeholders. The study summarizes the results of a surveyconducted by the Global Reporting Initiative and KPMG’s Global SustainabilityServicesTM [8].

The survey’s main finding is that in reporting on climate change, many compa-nies emphasize potential opportunities arising from climate change rather than the


financial risks and other liabilities it could give rise to. This approach ignores newevidence that climate change presents a serious global economic threat. Just therapid rise in gasoline prices in 2007–2008 showed retailers that people will trade offmoney spent on fuel with money spent on discretionary retail purchases, so thereis clearly a direct link with climate issues, energy costs and availability, and retailsales.

The GRI/KPMG study suggests that many companies view climate change notonly as a threat but also as an opportunity for new products, services and trading.In this context, shouldn’t your sustainability reports and your corporate strategy beconsidering these opportunities as well?

Brian Fleener of Mulvanny G2 Architecture says [9],

My new advice to clients is to look at the opportunities that are in front of them for buildingsustainably and looking at the social implications of doing that. I think the retailers arebeyond the nuts and bolts of it. Now, I’m trying to get them to focus on the social aspects. Asdevelopment goes on and people are looking at new ways of living, these new developmentswill be part of that.

12.8 The Long-Term Benefit

Sometimes, in the daily busy-ness of our business, we forget that the real purpose ofour sustainability programs is to bring about a better world for ourselves and for ourdescendants. We forget how many people we influence through what we say, whatwe do and what we say about what we do. People need sustainability education,and the retail developer and retailer are in unique positions to provide this infor-mation and perspective for their customers. Crispin Burridge, head of sustainableconstruction at Marks & Spencer, puts the opportunity in these terms:

We’ve got approximately 35,000 product lines and, as you cascade down, there are 2,500factories, approximately 20,000 farms and 250,000 workers directly involved in producingthose 35,000 product lines. We have about 75,000 employees and we see 20 million cus-tomers a week. You can imagine that if you could shift even 1% of all of those people, movetheir hearts and minds and the way that they run their own lives, the scope of influence isquite large [10].

12.9 Creating a Sustainability Program

One of the hallmarks of corporate sustainability in the retail sector is that it keepsevolving rapidly. What worked two years ago to keep a company at the leading edgeis no longer seen that way today. But there are certain core principles and activitiesthat must be addressed in any sustainability program. Here is one example from aconsulting client of Yudelson Associates, Edens & Avant, a midsize developer ofgrocery-anchored shopping centers, primarily focused on the Eastern Seaboard ofthe U.S., from Massachusetts to Florida [11]. Led by President Jodie McLean, thein-house corporate task force engaged all corporate departments in a wide-ranging

12.9 Creating a Sustainability Program 175

Table 12.1 Corporate Departments Engaged in Sustainability Task Force

Department Role

1. Executive leadership Create the task force, keep it on task, provide closure whendone; oversee ongoing implementation; hire or appoint aCorporate Sustainability Officer or director to provideoversight and leadership to the effort

2. Development Guidelines for new buildings; work on LEED for Core andShell certification of new “shops” buildings; awareness ofpolitical benefits of a sustainability commitment

3. Center/Retail operations Greening existing properties; LEED for Existing Buildingsprograms; waste management; utilize local incentiveprograms; connect with Energy Service Companies(ESCOs), which may upgrade energy performance inexchange for a share of the savings

4. Administration Sustainable purchasing; corporate travel; creating andtracking carbon footprint; check for insurers offeringdiscounts for green buildings and green practices: providesupport for personal sustainability projects by employees

5. Leasing Work with tenants to get their buy-in; create and “sell” greenleases to current and future tenants; sell the tenantguidelines to existing and new tenants

6. IT Create an in-house sustainability web page using corporateintranet, wikis, blogs and other techniques

7. Legal Work with leasing department on green leases; watch forpitfalls in “promising” sustainable results; quantify riskmitigation benefits

8. Corporate communications Branding and communications strategy; sell the programin-house; integrate marketing packages with sustainabilityprograms; create external sustainability section of webpage; develop signage and marketing materials forretailers and consumers; secure public relations benefits ofsustainability achievements

9. Investment officers Sell the green program to potential investors; find newinvestment options with funds and investors committed tosustainability; evaluate each investment proposal withregard to sustainability objectives

10. Finance Investigate tax credits, tax deductions and other incentives forgreen shopping centers and green retail; investigate solarenergy third-party partnerships for off-balance-sheetfinancing of renewable energy

task force that drew on a wide range of expertise from within the company, shownin Table 12.1. Over a period of six months in 2008, the task force drew up a com-prehensive sustainability program for implementation beginning in 2009.

A typical shopping center developer should begin its sustainability planningefforts by addressing the four key functional areas shown in Table 12.2. Within eachof these areas, you can see the opportunities for the five key elements for successfulsustainability programs: leadership, operations, communications, knowledge man-agement and education and training. Leadership comes not only from the presidentor CEO of an organization, but from each key functional area director or manager.


Table 12.2 Key Functional Areas for Sustainability Planning

Functional area Examples of activities

1. Corporate operations Travel, human resources, marketing, accounting, purchasing,information technology

2. Leasing Green leases for tenants; operating guidelines for tenantimprovements; encourage tenants to participate in wasterecycling and reduced lighting power use

3. New centers Site selection; design and construction guidelines; commitment toLEED for New Construction certification

4. Existing centers Incorporate sustainable principles within the acquisition,operation, and redevelopment of existing buildings;commitment to LEED for Existing Buildings certification

Each functional area presents specific and usually distinct operations issues forsustainability planning. Each requires communication both within and outside theorganization, something that typically engages the skills of a corporate marketinggroup.

As ideas are tried out, it’s important to start gathering lessons learned into acoherent framework. This information would typically be collected by both thedevelopment staff and the center or retail store operations staff; it needs to be “nor-malized” to apply to all future activities, for example by putting cost data into acoherent format that recognizes changing building costs over time and in multipleregions.

Finally, employees need a continuing education program. In the case of Edens& Avant, there is a commitment to having about 5% of the staff become formallycertified as LEED Accredited Professionals. Other key people in the organizationwill look for similar accreditations in their fields of specialization.

12.10 Summary

Sustainable retail organizations are a work in progress. There are few companiesto which one can point and say, “They have the perfect program.” But one thing isclear: Without a commitment to get started, an organization will see itself laggingfarther behind with each passing year. In fact, if you review the discussion of thebusiness case for sustainable retail development outlined in Chapter 4, you willsee that the primary reason for engaging in this activity is to get and keep goodtalent. Without being competitive in the marketplace for good people, especiallyin the mature economies, it is almost impossible to grow revenues and profits ona consistent basis over the long haul. You might have your own “save the earth”reasons for wanting to promote sustainability, but the underlying reason must be toremain a competitive enterprise, as sustainability always balances economy, ecologyand equity concerns, the triple bottom line.

References 177

References

1. Woolworths web site. Retrieved on February 15, 2009, from http://www.woolworthsholdings.co.za/sustainability/journey.asp.

2. Interview with David DeVos, November 2008.3. SERA Architects. A Natural Step Network case study. Retrieved on March 17, 2009, from

http://www.thenaturalstep.org/en/usa/sera-architects-portland-oregon-usa.4. Oregon Natural Step Network. (2005, January). Retrieved December 29, 2008, from

http://www.ortns.org/documents/seracasestudyfinal_000.pdf.5. Interface. Toward a more sustainable way of business. Retrieved December 29, 2009, from

http://www.interfaceglobal.com/Sustainability.aspx.6. Email interview with Markus Wild, CEO, December 2008.7. Majority of global companies embrace sustainability reporting—Survey. (2008, October

27). Retrieved December 28, 2008, from http://www.sustainablebusiness.com/index.cfm/go/news.display/id/17021.

8. Climate change & sustainability reporting. Retrieved December 28, 2008, fromhttp://www.kpmg.com/Global/WhatWeDo/Industries/FoodDrinkConsumerProducts/Pages/Climate-change-sustainability.aspx.

9. Interview with Brian Fleener, March 2009.10. Interview with Crispin Burridge, November 2008.11. Edens & Avant web site. Retrieved December 21, 2008, from http://www.edensandavant.com.

Information used with permission.

Chapter 13The Ten-Point Program for Retail Sustainability

Let’s move now from description to prescription. What should a retail developerdo? How should a retailer respond to the sustainability imperative in these difficulteconomic times? Figure 13.1 shows some of the elements of sustainability programsand illustrates the benefits.

Clearly, news media are going to continue to report the claims of those whosay retail is not doing enough to “save the planet.” Consumers will continue to beexposed to these allegations, whether they are fair or not. Throughout this book,we’ve shown you what some of the early adopters are doing in the retail realestate sector. So, what should other developers and retailers be doing? This chapterpresents a simple, straightforward and effective approach to retail sustainability bysetting out a ten-point program.

1. Setting the Vision: This is the job for the CEO and senior management. Wheredoes management want sustainability to take the company? Is the goal to aim at“zero net impact” by 2020, like Interface, Inc.? Or, alternatively, is the goal tobecome “carbon neutral,” just like Dell Computer? [1] The leadership team mustscout the terrain and chart the course, as well as inspire the team to start down thepath. Sir Stuart Rose did this at Marks & Spencer with his Plan A.

Metro Group is a European retailer with more than 2,200 locations in 31 coun-tries in Europe, Asia and Africa. Eckhard Cordes is CEO and chairman of the man-agement board. He states the vision and rationale for sustainable retail developmentin these terms [2]:

To continue our profitable growth and optimize our investments, we have to ensure that wemanage our core business in a sustainable manner. For us, corporate social responsibility(CSR) means acting responsibly towards the people we deal with and the environment—inour stores and operations and along the supply chain. We can thus secure the future founda-tion for our business and potential competitive advantages and contribute to the sustainabledevelopment of society.

We use CSR as a tool to structure our business processes even more efficiently and increasethe benefits for our key stakeholders. It has also become clear that the only way to secureeconomic stability and social prosperity over the long term is through sustainable corporatemanagement.


180 13 The Ten-Point Program for Retail Sustainability

Fig. 13.1 The benefits of adopting sustainable retail solutions are multifaceted and long-lasting.Courtesy of Palladeo

Sonae Sierra was profiled in Chapter 1. It’s worth mentioning again howimportant corporate (social) responsibility (CR) is as a guiding principle for thecompany’s actions. The company’s CEO says [3]:

In our CR management system we have identified nine areas that represent the greatest busi-ness challenges and opportunities in the short and medium term: energy, climate change,water, waste, land use, the business chain (suppliers and tenants), communities (includ-ing visitors), employees, and health and safety. The CR Steering Committee, chaired bythe CEO, oversees the CR strategy pursued by Sonae Sierra. This steering committee setsthe long-term objectives and goals for the company and agrees on annual plans for perfor-mance monitoring, target setting, and reporting and communicating. A number of individ-ual CR working groups have been established to govern each of the material impact areas.These groups prepare the decision proposals for the CR Steering Committee, and coordinatetheir implementation and delivery. A member of the CR Steering Committee chairs eachworking group.

The involvement of the CEO in the CR Steering Committee is critical for rein-forcing the vision that sustainable retail development is the mission of the company.Figure 13.2 shows the company’s Freccia Rossa project in Brescia, Italy.

2. The Task Force: Once the vision is set, then the real work begins. Typicallyand effectively, a corporate task force is formed, with the goal of developing aplan within a 12-month time frame. At Regency Centers, the task force comprisedten people, chosen from the vice-presidential and senior staff level of the devel-opment, construction, operations, leasing and investment departments, and withwell-thought-out geographic diversity. With strong internal leadership and an out-side consultant, the group delivered a set of recommendations that were adopted

13 The Ten-Point Program for Retail Sustainability 181

Fig. 13.2 Freccia Rossa is agreen shopping center inBrescia, Italy. Courtesy ofSonae Sierra

with little change by senior management and the board of directors.1 At anothercompany, the president acted as chair of the task force, effectively translating visioninto recommendations, along with senior staff.

3. Examining Green Options: Now the tough work begins; what should the com-pany do? Typically, there are three areas of consideration: new construction andmajor renovations; existing properties; and corporate operations. Within these threespheres of continuing activity, there are multiple options to be considered. Shouldthe company focus on green building certifications, upgrading the energy perfor-mance of existing properties, tracking its carbon footprint, increasing its purchasesof environmentally preferable products or some combination of all of these? The

1Full disclosure: The author served as the outside consultant to Regency’s internal task force during2007.


developer also has to take into account its tenants and customers—what are theywilling to pay for and what will they support in the years ahead?

4. Adopting Sustainability Initiatives: At some point, choices must be madeand the team must move forward. All options involve budget considerations. Seenas a major strategic initiative, sustainability isn’t free. In fact, it may be a costlyinitiative at the beginning, if major changes are made to new construction designs,fitout guidelines and product specifications. Ideally, the suite of initiatives would beincorporated into a multi-year plan, with funds set aside for the first 3 years ofactivity.

Office Depot’s program, “Buy Green, Be Green, Sell Green,” initiated under theleadership of Yalmaz Siddiqui, director of environmental strategy, provides a tellingexample [4].

This environmental vision statement is stated in all communications about our program. Itsounds like a simple slogan but it’s a lot more, because all of our metrics are tied directly tothat vision statement. For example, under “Buy Green” we track the products we resell—thenumber of stock-keeping units (SKUs) with green attributes—against the goal of increas-ingly buying green. So if we increase the SKUs with green attributes, that shows that weare being successful against that strategic intent.

That direct line is very important and, in fact, is often missing in [other companies’] envi-ronmental position statements. Usually there’s a sort of goal established or a high levelstatement about wanting to follow good environmental practices, but it’s rare to find thelinkage between that overall goal and a measurable performance indicator.

In the dashboard [on Office Depot’s corporate citizenship report], you’ll see that there’s avery clear line between the goal, the type of initiative it implies and the owner within theorganizational context (e.g., merchandising, supply chain, logistics, sales teams). That fullalignment is part and parcel of our environmental strategy.

Office Depot uses its green stores to promote their green initiatives. Office Depotalso buys green power for 16% of its annual electricity needs (Table 11.1).

5. Staffing the Green Initiative: Who’s going to do the work? In a typical devel-opment or retail organization, everyone is working hard and long hours already.Often, someone needs to be hired, or someone from the in-house task force needsto be put into a different position, to act as the corporate sustainability director.This position must have enough clout to get things done, but can’t just be a staffposition, removed from the daily work of the company. Many companies continuethe consulting relationship from the task force, so that initiatives will be properlyadvised and the balance of the company’s work force can be engaged over a multi-year period.

Crispin Burridge is sustainability manager at Marks & Spencer and has been inthe job since late 2006. Regarding the relationship between sustainable constructionand the company’s overarching Plan A, he says,

Twelve of the 100 targets outlined in Plan A could be attributed to having a direct impact onthe built environment. The business wants to become carbon neutral and to reduce energyconsumption in head offices, stores and warehouses by 25% compared with 2006 levels. Somany of the decisions we make in relation to the built environment influence our ability to

13 The Ten-Point Program for Retail Sustainability 183

achieve these targets. The starting point for us, when I first took on my role 2 years ago,was to write a detailed document called “The Marks & Spencer Sustainable ConstructionManual.” We started with Plan A at the very top and then looked at the impacts of carbon,water, waste, materials, biodiversity, travel and access, supporting community, archeologyand heritage, procurement and their impact on the built environment. We’ve mirrored thePlan A process by aligning all of those areas over the same 5-year period and to settingtargets and KPIs for each.2 We broke down each of those targets into incremental annualtargets to assist both our internal colleagues and our supply base in ensuring that they cantake bite-sized steps.

Some people had an expectation that we would meet our targets quite early on. What wehave to realize, in terms of sustainable construction, is it’s a very immature industry. Heartsand minds and required skill levels are not where they need to be. It is also about the lan-guage that you use. If you talk about zero-carbon buildings, everybody turns their backsand runs to the hills. However, if you ask somebody to get involved in a low-carbon project,you are almost run over by the rush. We have to find a common language and make itincrementally easier for people to approach [5].

6. Internal Education and Training: There must be a commitment to educationand training. For many staff, this means literally “going back to school,” for exam-ple, studying to become a LEED Accredited Professional or some other certifiedsustainability professional. For others, it’s training in how to apply BREEAM orGreen Star to current design and construction projects. For property management, itmight be training in the LEED for Existing Building: Operations and Maintenanceprogram. For the leasing and legal staff, it might be training in constructing andselling green leases to tenants.

7. Green Building: At some point, the outside world is going to ask the companyhow it is expressing its sustainability values in its buildings, both new and existing.Is it certified green by some independent third party? Is it significantly lower inenergy use, water use and waste disposal? The company should be prepared to spendreal money in this area of sustainability until the entire system is reworked so thatgreen becomes the norm. This process will probably involve rewriting your standardspecifications for new construction, refurbishments and tenant improvements, forstarters.

8. Green Operations: There is much to do on the property management side. Inthe arena of commercial offices, CB Richard Ellis, the largest such property man-ager, has committed nearly 100 of its managed properties to certification throughthe LEED for Existing Buildings program [6]. Your efforts may involve negotiat-ing national waste recycling contracts, engaging with Energy Service Companies(ESCOs) in shared-savings contracts, negotiating third-party solar energy invest-ments on larger properties, renegotiating janitorial and landscape maintenance con-tracts, recycling mercury from fluorescent lamps and a host of other activities thatgo well beyond compliance with local and national energy and environmental regu-lations. The authors of “Greentailing” comment [7]:

2 KPI is corporate-speak for key performance indicators.


Because green is comprehensive, it needs multiple looks and multiple touches to alignaspects of real estate, merchandising, operations, procurement and other functions. It won’thappen, however, if there isn’t a mandate. In a similar way, retailers need to get suppli-ers involved early. Best-practice sharing is a highly effective way to learn and find quickwins.

9. Communications: Every serious sustainability effort requires effectivecommunications, but the “story” can’t outrun the achievements, so there has to bea close linkage between the communications function, typically housed in a cor-porate marketing department, and the operations sides of the business. Companiesshould be tracking and reporting their carbon footprint, issuing an annual or biennialsustainability report, taking part in conferences and industry forums, having agreen or sustainability web site and other activities that tell both the internal andexternal stakeholders what you’re doing and where you expect to be in a yearor two.

Figure 13.3 provides an example of the type of communications vehicle—thegreen website—that most retailers and developers will be using to sell their sustain-ability programs to consumers and to provide continuing information.

10. Continuous Improvement: What has impressed me in preparing this bookis the number of developers and retailers who are using continuous improvementtools, such as the ISO 14001 environmental management standard (EMS), to setgoals, reengineer processes and track progress toward explicit goals. As demon-strated by Sonae Sierra (Chapter 1), as a continuous improvement tool, an EMScan be a strong part of a quality management program, in addition to deliveringsustainability monitoring benefits.

Fig. 13.3 Communicating your sustainability progress is an essential part of every successfulprogram. Courtesy of Forest City

13.1 Looking to the Future 185

13.1 Looking to the Future

In today’s difficult economic climate, there would be little discussion about sus-tainable retail development were it not for important, larger issues facing peopleeverywhere: planetary issues of global warming and unpredictable climate change.People would just say, “Well that’s a nice idea; we’ll get to it when things pick upagain.” Instead, the push for corporate social and environmental responsibility haspicked up steam in the past 3 years and is likely to continue, no matter the temporaryeconomic situation. Sustainability is about looking beyond, not just the next quarteror the next year, but the next quarter-century. After all, most of the buildings we putin place today will still be here 25 years from now, whether they’re energy hogs orlean, low-carbon machines.

Michael Nates is head of environmental, health, safety and sustainability forNakheel, the largest developer in the United Arab Emirates, until late 2008 the bus-iest place on the planet for new retail construction. Here’s his perspective [8]:

The biggest issue for me with sustainability in a word is time—it’s not just about now, it’sabout inter-generational ideas, 20–40 years ahead. You can build a mall today or a retailexperience today, but how do you “future-proof” it, so its adaptable, renovatable, open butyet still has an essence, something unique, while still being functional and comfortable in20 years time?

In many ways, Wal-Mart’s sustainability efforts aim at meeting this test of thelong term. According to Don Moseley, director of sustainable facilities at Wal-Mart:

Wal-Mart’s sustainability program has some basic goals: to be supplied 100% by renewableenergy, to create zero waste and to sell products that sustain our resources and the envi-ronment. Those were set out and publically initiated in a speech that Lee Scott, Wal-Mart’spresident and CEO, gave in October of 2005, entitled the “Twenty-first Century LeadershipSpeech.” Those were three specific elements of his speech that framed the objectives of oursustainability efforts.

In terms of implementation of sustainability initiatives, Moseley says that thereare a lot of variations one can make even on a simple theme, such as creating zerowaste.

There are a lot of different approaches towards the three primary goals. We’ve looked atzero waste and applying it to a lot of things such as the trash that you can physically see orthe water that you might be utilizing and we’re trying to take unnecessary resources out ofour footprint by being more efficient.

Zero waste might be a good starting point for a sustainability program, and itis a good ending point for this book. Anyone who has studied the Toyota produc-tion system knows that it is grounded in the concept of “muda,” or eliminatingseven types of waste, and engaging the entire company in eliminating waste—of


materials, of energy, of other resources, of people’s time and so on [9].3 Retailersand developers could start by looking at the entire retail concept through the lens ofzero waste, from the beginning of product design, manufacturing and distribution,to store design, construction and operations and seeing where there is waste that canbe eliminated.

Finally, it’s likely that zero-net-energy developments—including stores and shop-ping centers—will become more prevalent over the next 5 years, spurred on byEPBD disclosure requirements in the E.U. and by competitive pressures to standout in a cluttered retail environment. Paul Appleby of URS Corp. has watched thisdevelopment as a green building and sustainability consultant for many major com-panies in Europe [10].

It’s a changing market place. There is competition in trying to get tenants to take up unitsin any new shopping center. There are a lot of shopping centers going up across Europe anddevelopers have to attract tenants. The fact is that a well-designed shopping center that ishighly sustainable should also be significantly cheaper to run. The hook is that you bringpeople in and sell them energy for far less than they would be buying it elsewhere. And ifthey’ve got a CSR policy, it helps them meet their energy and carbon objectives.

If you ignore the economic environment—I know it’s hard to, but there’s absolutely nodoubt—and I think President Obama in the U.S. is going to have a big impact on this—thatpeople will be forced down the road of reducing carbon emissions associated with buildings.They’ll be forced into generating electricity on-site.

Internationally, the role of the feed-in tariffs4 is absolutely fundamental in encouragingpeople to generate a surplus of energy from their development, making it like a mini-powerstation. We’re involved in a positive-energy office building on the outskirts of Paris that iscovered in photovoltaics. We’re involved in a number of them here in the U.K. because that’sthe way our government is thinking and that’s the government’s strategy towards buildingregulations. As we’re looking at drivers, things that will drive down carbon emissions, peo-ple will have stronger and stronger CSR policies to meet these carbon objectives, and we’reheading toward the zero carbon shopping center within the next 10 years.

Sustainable development and operations represent the future of green retail, apoint made throughout this book. Within 5 years, it is likely that every major devel-oper and retailer will have a significant sustainability program. Now is the time tocreate a point of sustainable differentiation that can be expanded over time. Sus-tainable retail development is a journey that many leading companies have begun,while some are just starting and others are yet to begin. The journey toward sustain-ability promises to provide challenges and rewards for the company and for everyperson in it who participates in sustainability initiatives. It is a journey of discovery.Many companies have found profitable changes that can be made within existing

3As stated by Toyota, the core principles that emanate from this zero waste philosophy are “just intime” (no waiting) and “automation with a human touch” (prevent defects). See, for example, thecompany’s description at www.toyota.co.jp/en/vision/production_system/, accessed December 30,2008.4A feed-in tariff is a direct payment for electricity generated on-site. Many feed-in tariffs aregreater, sometimes by 500%, than current retail prices for electricity, to encourage people to makethe investment in on-site power generation.

References 187

organizational conditions, while others have found it necessary to review all theirassumptions about the business. No one has found this journey without drama orchallenge, or without substantial rewards. Isn’t it time to begin or accelerate yourcompany’s journey toward sustainability?

References

1. Ball, Jeffery. (2008, December 30). Green goal of ‘carbon neutrality’ hits limit. WallStreet Journal. Retrieved March 17, 2009, from http://online.wsj.com/article/SB123059880241541259.html.

2. Metro Group. 2007 Sustainability Report. Retrieved December 30, 2008, fromhttp://www.metrogroup.de/servlet/PB/menu/1000174_l2/index.html.

3. Sonae Sierra interview, Álvaro Portela, November 2008.4. Interview with Yalmaz Siddiqui, Office Depot, December 2008.5. Interview with Crispin Burridge, November 2008.6. David Pogue, February 2009, National Director of Sustainability, CBRE, personal communi-

cation.7. Stern, Neil and Ander, Willard. (2008). Greentailing. p. 114. (Hoboken, NJ: John Wiley &

Sons).8. Interview with Michael Nates, November 2008.9. Ohno, Taichi. (1988). Toyota Production System (Portland, OR: Productivity Press).

10. Interview with Paul Appleby of URS Corp., November 2008. Mr. Appleby is now retired fromURS, so these viewpoints represent his personal observations and not the company’s.

Appendix AGreen Building Rating Systems Aroundthe World

A.1 Australia

The Green Building Council of Australia (GBCA) developed Green Star as a ratingsystem for evaluating the environmental design of buildings. This system is usedto assess buildings across a number of environmental impact categories. The ninecategories are as follows [1]:

• Building management• Indoor environmental quality• Energy• Transport• Water• Materials• Land use and ecology• Emissions• Innovation

Within each of the categories listed above, there are credits that measure vari-ous dimensions of environmental performance. Points are achieved when the spec-ified actions for each credit are successfully performed and demonstrated. Thenumber of credits for each category is totaled and a percentage score is calculated asfollows [2]:

Category Score(%) = (Total number of points acheived/Total number of points

available) × 100

Environmental weighting is applied to each category score, which balances theinherent weighting that occurs through the differing number of points available ineach category. The weights reflect issues of environmental importance for each stateor territory of Australia, and thus differ by region. The weighted category score iscalculated as follows [2]:

189J. Yudelson, Sustainable Retail Development, DOI 10.1007/978-90-481-2782-5,Copyright C© 2009 by the International Council of Shopping Centers

190 Appendix A: Green Building Rating Systems Around the World

Weighted Category Score(%) = Category Score(%) × Weighting Factor(%)/100

Table A.1 Australian Green Star Rating Levels

Green star rating Points

One star 10–19Two star 20–29Three star 30–44Four star (Best practice) 45–59Five star (Australian excellence) 60–74Six star (World leader) 75 +

The sum of the weighted category scores, plus any awarded innovation points,determines a project’s rating. Only buildings that achieve a rating of four stars andabove are certified by the GBCA. The rating levels and their respective scores arelisted in Table A.1 [2].

Green Star can be used to rate a variety of buildings. The GBCA recently releasedthe Green Star—Retail Centre v1 rating tool to assess the environmental attributesof new and refurbished retail centers in Australia. It includes benchmarks and calcu-lators tailored for the shopping center industry. The tool is best suited to the designphase of a project (Fig. A.1) [3].

Fig. A.1 Australia’s GreenStar program is a crediblerating system used also inNew Zealand and SouthAfrica

Appendix A: Green Building Rating Systems Around the World 191

A.2 Canada

The Canada Green Building Council seeks to transform the built environment bydeveloping best design practices and guidelines for green building. It has adaptedthe USGBC’s LEED rating system to Canadian climates, construction practices andregulations (see “U.S.” below). Currently LEED Canada has New Construction andCommercial Interiors rating systems. Core and Shell and Existing Building ratingsystems are being developed. The system is so similar to the USGBC’s LEED sys-tem that it is not profiled further here.

The prerequisites and credits in the LEED Canada system are organized into sixprincipal categories [4].

1. Sustainable Sites2. Water Efficiency3. Energy and Atmosphere4. Materials and Resources5. Indoor Environmental Quality6. Innovation and Design Process

Project ratings are determined by the number of points awarded for the successfulcompletion of credit requirements. Depending on the number of points awarded,there are four possible levels of certification [4].

1. Certified2. Silver3. Gold4. Platinum

A.3 France

Since 2004, French projects have used the voluntary Haute Qualité Environ-nementale (HQE, or high-quality environment) standard to assess green and high-performance buildings. HQE features two interconnected components, defined asfollows [5].

• Explicit Definition of Environmental Quality (EDEQ)—This component definesenvironmental targets for building development and operations.

• Environmental Management System (EMS)—This is the benchmarking compo-nent of HQE, and it is closely tied to the format of standard ISO 14001. It isdesigned to guide project owners through the implementation of the fourteen tar-gets that HQE emphasizes.


Table A.2 French HQE Targets

Impact mitigation on the external environmentCreation of a satisfactory internalenvironment

• Eco-construction • Comfort1. Relationship between buildings and their

immediate environment8. Temperature and humidity

comfort2. Integrated choice of products, systems

and construction processes.9. Acoustic comfort

3. Low-impact work sites.10. Visual comfort11. Olfactory comfort

• Eco-management • Health4. Energy management 12. Healthy living spaces5. Water management 13. Healthy air6. Industrial waste management 14. Healthy water7. Maintenance and facility repair

management

Like the CASBEE system in Japan (see “Japan” below), the fourteen targets inthe French HQE system are divided into the external environment and the internalenvironment. The targets are listed in Table A.2 [5].

A.4 Germany

The German Sustainable Building Council (Deutsche Gesellschaft für NachhaltigesBauen, or DGNB) was formed in 2007 and is the leading authority on voluntarysustainable design in Germany. The German certification system (Deutsches Güte-siegel Nachhaltiges Bauen) for green buildings is modeled after the American andBritish standards, but includes some very German touches. The German systemcovers more than fifty sustainability criteria, and the certification levels are namedafter the Olympic bronze, silver and gold medals. A numeric rating is given toeach building, with 1 being the highest rating and 6 being the lowest rating. Uponcertification a building will be given a German Sustainable Building Certificate(GSBC) [6]. The system also allows for precertification, something which shouldinterest retailers.

One of the main differences for the German rating system is its target orientation;there are target values for each sustainability criterion. A building achieves 10 pointswhen it fulfills the highest target value in each category. Proportionately fewer pointsare achieved for lower target values. A minimum of five points must be achieved ineach category [6]. The first certificates were issued in June 2009 by the DGNB.

A.5 Hong Kong

The Hong Kong Building Environmental Assessment Method (HK-BEAM) devel-ops and implements standards for “building assessment, performance improvement,


Table A.3 HK-BEAM Performance Categories and Available Points

Performance categories Total points available

Site aspects 25– Land use– Site design appraisal– Pollution during constructionMaterials aspects 23– Building reuse– Rapidly renewable materials– Demolition wasteEnergy use 78– Annual building energy use– Embodied energy in building structural elements– Air conditioning, appliances and lighting– Testing and commissioningWater use 14– Annual water use and monitoring– EffluentIndoor environmental quality 49– Safety and security– Indoor air quality and ventilation– Thermal comfort– Lighting– Acoustics and noise– Building amenitiesInnovation and performance enhancements 5 (Bonus credits)– Innovative techniques– Performance enhancements

certification and labeling” in Hong Kong. The HK-BEAM Society is a nonprofitorganization that oversees the rating system. The Business Environment Council(BEC) conducts HK-BEAM assessments on behalf of the Society. The assessmenttool can be used for new and existing buildings. The performance categories in thisassessment tool cover a wide range of environmental concerns. The categories, sub-categories and total points available in each category are listed in Table A.3 [7].

The number of credits earned compared to the number of credits available deter-mines a building’s overall rating. This is a percentage referred to as the OverallAssessment Grade. Given the importance of Indoor Environmental Quality (IEQ),the HK-BEAM system requires that projects obtain a higher minimum percentageof IEQ credits to qualify for the overall grade. The rating levels and their respectivegrades are listed in Table A.4 [7].

A.6 Japan

The Japan Green Building Council (JaGBC)/Japan Sustainable Building Consor-tium (JSBC) were organized in 2001 and together form the leading authority on


Table A.4 HK-BEAM Rating Levels

Rating level Overall percentage (%) IEQ percentage (%)

Bronze (above average) 40 45Silver (good) 55 50Gold (very good) 65 55Platinum (excellent) 75 65

sustainable design in Japan. They have developed the Comprehensive AssessmentSystem for Building Environmental Efficiency (CASBEE), a green building ratingsystem now used in many projects throughout Japan. The following four basic sus-tainability criteria are covered by CASBEE [8].

• Energy efficiency• Resource efficiency• Local environment• Indoor environment

The CASBEE system is unique in that it separates construction projects intointernal and external spaces by a hypothetical boundary. The internal space is eval-uated on the basis of “improvements in living amenities for the building users” andthe external space is evaluated on the basis of “negative aspects of environmentalimpacts.” The internal and external spaces are also referred to as private propertyand public property respectively. The core concept of this rating system is an equa-tion that is comprised of an internal or “quality” category in the numerator andan external or “loadings” category in the denominator. The equation is labeled asfollows [9].

Building Environmental Efficiency (BEE) = Q (Building Environmental Quality

and Performance)/L (Building Environmental Loadings)

The four basic criteria listed above are further broken down into assessment itemsthat pertain specifically to the numerator (Q) and denominator (L), as shown inTable A.5 [9].

Projects are graded according to the BEE ratio. The higher the Q value andthe lower the L value, the more sustainable a building is. For instance, when Q

Table A.5 BEE Criteria

Q-1 Indoor environment Numerator of BEEQ-2 Quality of serviceQ-3 Outdoor environment on-site

L-1 Energy Denominator of BEEL-2 Resources and materialsL-3 Off-site environment


Table A.6 CASBEE GradesCASBEE grade RatioC (poor) 0.5B – 0.5–1B + 1–1.5A 1.5–3S (excellent) > 3

is equal to L, the ratio is 1. However, when Q is greater than L the ratio is greaterthan 1. CASBEE gives buildings the following grades according to their BEE ratio(Table A.6) [9].

There are four different assessment tools in the CASBEE system. They aregeared toward various aspects of the building market [10].

• Predesign• New construction• Existing building• Renovation

A.7 United Kingdom

The Building Research Establishment (BRE) is the leading authority on sustainabledesign in the U.K. In the 1990s, BRE developed the Environmental AssessmentMethod (BREEAM), which assesses buildings against various sustainability criteria(referred to as sections in BREEAM) and provides an overall score that falls withina certain rating level. The sections and their respective weightings are listed inTable A.7 [11].

Within each BREEAM section there are numerous environmental attributes forwhich a project can receive credits. The number of credits for each section aresummed and compared to total number of credits available as follows:

Table A.7 BREEAM 2008 Sections and Weights

Section Weighting

1. Building management 122. Health and well-being 153. Energy 194. Transport 85. Water 66. Materials and waste 12.57. Waste 7.58. Land use and ecology 109. Pollution 10Total 100


Table A.8 BREEAMRatings Rating Score (%)

Unclassified < 30Pass ≥ 30Good ≥ 45Very good ≥ 55Excellent ≥ 70Outstanding ≥ 85

Section Score (%) = (Total number of points achieved/Total number of points

available) × 100

The resulting percentage is then weighted (according to the weights listed inTable A.7) as follows:

Weighted Section Score (%) = Section Score (%)× Weighting Factor/100

This produces a weighted section score. These section scores are summed, aswell as any innovation credits that have been achieved. This produces the finalBREEAM score, which translates to a particular rating level. The rating levels andtheir respective scores are listed in Table A.8 [12].

BREEAM can be used as an environmental assessment tool for any type of build-ing, in the U.K. or internationally. This system can be applied to single units orwhole developments, and it can also be tailored for various stages in the life cycleof a building. For instance, BREEAM Retail can be applied at four different stagesin the building life cycle [13].

• New build• Major refurbishment• Tenant fitout• Management and operation (for occupied existing buildings)

There are several types of retail developments that BREEAM Retail is well suitedfor, such as [13]:

• General display and sale of goods (showrooms and general retail outlets, shop-ping centers, etc.)

• Food retail (supermarkets, stores with food retail sections, etc.)• Customer service retail

A.8 United States

The United States Green Building Council (USGBC) introduced the LEED GreenBuilding Rating System in 2000. Since its inception the system has evolved andexpanded and is now considered a leading method of measuring and rating building


performance throughout the world. There are nine different rating systems that applyto particular building market segments. The LEED rating systems that apply to retailbuildings are:

• LEED Retail: New Construction (expected release autumn 2009)• LEED Retail: Commercial Interiors (expected release autumn 2009)• LEED for New Construction and Major Renovations (LEED-NC)—for stand-

alone buildings• LEED for Commercial Interiors (LEED-CI)• LEED for Existing Buildings: Operations & Maintenance (LEED-EBOM)• LEED for Core & Shell (LEED-CS)—for in-line or “vanilla shell” retail stores

These rating systems are currently undergoing a multifaceted initiative thatinvolves streamlining and increasing capacity for project execution, documentationand certification. This initiative is referred to as LEED version 3, or LEED v3. Sev-eral key advancements are taking place through this initiative. The rating systemsare being updated and revised, the prerequisites and credits are being aligned andreweighted and regional environmental priorities are being added. One of the biggestchanges being made through LEED v3 is the weighting assigned to various LEEDcredits. The available points in the LEED rating systems were redistributed so thata given credit’s point value “more accurately reflects its potential to either mitigatethe negative or promote the positive environmental aspects of a building” [14]. TheUSGBC used an environmental weighting method developed by the U.S. Environ-mental Protection Agency.

The LEED for Retail rating systems recognize the unique nature of the retailenvironment and address the different types of spaces that retailers need for theirdistinctive product lines. In 2009, the USGBC is working to unveil two new ratingsystems out of the LEED for Retail Pilot program, New Construction and Com-mercial Interiors. These rating systems will be aligned with LEED v3 and they areexpected to be ready for market launch in the fourth quarter of 2009. The LEEDfor Retail: New Construction Pilot gathered feedback from more than forty pilotprojects receiving public comments. The LEED for Retail: Commercial InteriorsPilot is gathering feedback from pilot projects and the public. The expected LEED-NC for Retail rating system is shown in Table A.9. Certification levels and totalpossible points for each credit category are shown at the bottom of the table. High-lighting indicates cumulative points. Innovation points can be earned for exceptionalperformance in most of the credit categories points with cumulative points.

LEED-NC is intended to guide the design and construction of high-performancecommercial and institutional projects. These projects include, but are not limited to,government, retail and service establishments and commercial offices. This ratingsystem provides a set of performance standards that ensures that certified buildingsare healthy, durable and environmentally sound.

LEED-CI is a set of performance standards intended to guide tenant improve-ments. This rating system is typically used in office, retail, restaurant, health care,


Table A.9 Credit Categories and Points for LEED for Retail: New Construction 2009 RatingSystem

LEED credit category LEED for Retail: NC 2009

Sustainable Sites Total points: 26Prerequisite: Construction activity pollution prevention RequiredSite selection 1Development density & community connectivity 5Brownfield redevelopment 1Alternative transportation Up to 10– Public transportation access– Bicycle storage & commuting– Low emitting & fuel efficient vehicles 1– Parking capacity 1– Delivery service 1– Incentives 1– Car-share membership 1– Alternative transportation education 1Site development– Protect or restore habitat 1– Maximize open space 1Stormwater design– Quantity control 1– Quality control 1Heat island effect– Non-roof 25% shade 1– Non-roof 50% shade 1– Roof 1Light pollution reduction 2Water Efficiency Total points: 1020% water use reduction RequiredWater efficient landscaping– 50% reduction 2– 100% reduction 2Innovative wastewater technologies 2Water use reduction– 30% reduction 1– 35% reduction 1– 40% reduction 1Energy & Atmosphere Total points: 35Prerequisite: Fundamental commissioning of the

building energy systemsRequired

Prerequisite: Minimum energy performance RequiredPrerequisite: Fundamental refrigerant management RequiredOptimize energy performance: 12–48% less use Up to 19Renewable energy: 1–13% on-site Up to 7Enhanced commissioning 2Enhanced refrigerant management 2Performance measurement & verification 3Green power 2Emissions reduction reporting –


Table A.9 (continued)


Materials & Resources Total points: 14Prerequisite: Storage & collection of recyclables RequiredBuilding reuse– Maintain 55–95% of interior non-structural

components1–3

– Maintain 50% of interior non-structural elements 1Construction waste management– Divert 50% from disposal 1– Divert 75% from disposal 1Materials reuse– 5% salvaged, refurbished or reused materials 1– 10% salvaged, refurbished or reused materials 1Recycled content– 10% (post-consumer + 1/2 pre-consumer) 1– 20% (post-consumer + 1/2 pre-consumer) 1Regional materials– 10% extracted, processed & manufactured regionally 1– 20% extracted, processed & manufactured regionally 1Rapidly renewable materials 1Certified wood 1Indoor Environmental Quality Total points: 15Prerequisite: Minimum IAQ performance RequiredPrerequisite: Environmental tobacco smoke (ETS)

controlRequired

Outdoor air delivery monitoring 1Increased ventilation 1Construction IAQ management plan– During construction 1– Before occupancy 1Low-emitting materials Up to 5– Adhesives & sealants 1– Paints & coatings 1– Flooring 1– Composite wood & agrifiber products 1– Furniture 1– Ceiling & wall systems 1Indoor chemical & pollutant source control 1Controllability of systems 1Thermal comfort– Design 1– Employee verification 1Daylight & views– Daylight for 75% of spaces 1– Views for 90% of spaces 1Innovation & design process Total points: 10Innovation in design Up to 5LEED Accredited Professional 1Regional Credits Up to 4Total rating system points available 110




Certification levels (minimum points)– Certified 40– Silver 50– Gold 60– Platinum 80

hotel and educational facilities. In the LEED system, tenants are defined as lease-holders or occupants who pay rent to use a building.

LEED-EBOM helps building owners and operators measure operations,improvements and maintenance on a consistent scale. The goal for project teamsemploying this rating system is to maximize operational efficiency while minimiz-ing environmental impacts. This rating system was designed to allow ongoing cer-tification for buildings throughout their lifetime. Buildings can be recertified everyone to five years under this system.

LEED-CS addresses sustainable design criteria for building structures, envelopesand HVAC systems. This system encourages green design and construction practicesin areas over which the developer has control but acknowledges the limitations thatdevelopers face for the ongoing sustainable operation of a building. This system isdesigned to complement the LEED-CI rating system.

The LEED 2009 versions of these four rating systems are compared inTable A.10. Certification levels and total possible points for each credit categoryare compared at the bottom of the table.

Table A.10 Comparison of Credit Categories and Points Across LEED Rating Systems

LEED credit categoryLEED-NCpoints

LEED-CIpoints

LEED-EBOMpoints

LEED-CSpoints

Sustainable SitesPrerequisite:

Constructionactivity pollutionprevention

Required – – Required

LEED-certifiedbuilding or othersustainable sitescredits (LEED CIonly)

– Up to 5 4 –

Building exterior andhardscapemanagement plan

– – 1 –




LEED-CIpoints

LEED-EBOMpoints

LEED-CSpoints

Integrated pestmanagement, erosioncontrol, andlandscapemanagement plan

– – 1 –

Site selection 1 – – 1Development density

& communityconnectivity

5 Up to 6 – 5

Brownfieldredevelopment

1 – – 1

Alternativetransportation/commutingreduction

Up to 12 Up to 10 3–15 Up to 13

Site development:habitat/open space

Up to 2 – 1 Up to 2

Stormwatermanagement

Up to 2 – 1 Up to 2

Heat Island Effect Up to 2 – Up to 2 Up to 2Light pollution

reduction1 – 1 1

Tenant design &constructionguidelines

– – – 1

Water EfficiencyPrerequisite: 20%

minimum indoorwater savings

Required Required Required Required

Water performancemeasurement

– – Up to 2 –

Water efficientlandscaping

Up to 4 – Up to 5 Up to 4

Innovative wastewatertechnologies

2 – – 2

Water use reduction 2–4 6–11 Up to 5 2–4Cooling tower water

management– – Up to 2 –

Energy & AtmospherePrerequisite: Energy

efficiency bestmanagementpractices

– – Required –




LEED-CIpoints

LEED-EBOMpoints

LEED-CSpoints

Prerequisite:Fundamentalcommissioning ofthe building energysystems

Required Required – Required

Prerequisite:Minimum energyperformance


Prerequisite:Fundamentalrefrigerantmanagement


Optimize energyperformance

Up to 19 Up to 5 Up to 18 3–21

Optimize energyperformance,lighting controls

– Up to 3 – –

Optimize energyperformance,HVAC

– 5–10 – –

Optimize energyperformance,equipment andappliances

– Up to 4 – –

Renewable energyproduction (on-site)

Up to 7 – Up to 6 4

Enhancedcommissioning

2 5 Up to 6 2

Enhanced refrigerantmanagement

2 – 1 2

Performancemeasurement &verification

3 2–5 Up to 3 Up to 6

Green powerpurchases (off-site)

2 5 – 2

Emissions reductionreporting

– – 1 –

Materials &Resources

Prerequisite:Sustainablepurchasing policy


Prerequisite: Solidwaste managementpolicy





LEED-CIpoints

LEED-EBOMpoints

LEED-CSpoints

Prerequisite: Storage& collection ofrecyclables

Required Required – Required

Sustainablepurchasing program

– – Up to 6 –

Building reuse Up to 4 Up to 3 – Up to 5Construction waste

managementUp to 2 Up to 2 – Up to 2

Solid wastemanagement

– – Up to 4 –

Materials reuse (sal-vaged/reclaimed)

Up to 2 Up to 3 – 1

Recycled content Up to 2 Up to 2 – Up to 2Regional materials Up to 2 Up to 2 – Up to 2Rapidly renewable

materials1 1 – –

Certified wood 1 1 – 1

Indoor EnvironmentalQuality

Prerequisite:Minimum IAQperformance


Prerequisite:Environmentaltobacco smoke(ETS) control


Prerequisite: Greencleaning policy


IAQ managementprogram

– – 1 –

Outdoor air deliverymonitoring

1 1 1 1

Increased ventilation(30% more)

1 1 1 1

Reduce particulatesin air distribution

– – 1 –

Construction IAQmanagement plan

Up to 2 Up to 2 1 1

Low-emittingmaterials

Up to 4 Up to 5 – Up to 4

Indoor chemical &pollutant sourcecontrol

1 1 – 1

Controllability ofsystems, lightingand temperature

Up to 2 Up to 2 1 1

Thermal comfort Up to 2 Up to 2 Up to 2 1Daylight & views Up to 2 Up to 3 1 Up to 2




LEED-CIpoints

LEED-EBOMpoints

LEED-CSpoints

Green cleaning – – Up to 6 –

Innovation & DesignProcess

Innovation in design Up to 5 Up to 5 Up to 4 Up to 5LEED Accredited

Professional1 1 1 1

Documentingsustainable buildingcost impacts

– – 1 –

Regional PriorityCredits

Up to 4 Up to 4 Up to 4 Up to 4

Summary—pointtotals

Total available pointsfor SustainableSites

26 21 26 28

Total available pointsfor Water Efficiency

10 11 14 10

Total available pointsfor Energy &Atmosphere

35 37 35 37

Total available pointsfor Materials &Resources

14 14 10 13

Total available pointsfor IndoorEnvironmentalQuality

15 17 15 12

Total available pointsfor Innovation &Design Process

6 6 6 6

Total available pointsfor RegionalPriorities

4 4 4 4

Total rating systempoints available

110 110 110 110

Certification levels(minimum points)

– Certified 40 40 40 40– Silver 50 50 50 50– Gold 60 60 60 60– Platinum 80 80 80 80


References

1. Green Building Council of Australia. Retrieved November 5, 2008, fromhttp://www.gbca.org.au/green-star/what-is-green-star/1539.htm.

2. Green Building Council of Australia. Retrieved November 5, 2008, fromhttp://www.gbca.org.au/green-star/green-star/green-star-rating-calculation/1542.htm.

3. Green Building Council of Australia. Retrieved November 5, 2008, from http://www.gbca.org.au/green-star/rating-tools/green-star-retail-centre-v1/1757.htm.

4. Canada Green Building Council. Retrieved November 5, 2008 from http://www.cagbc.org/leed/what/index.php.

5. Arene Ile-de-France. Retrieved on November 7, 2009, from http://www.areneidf.org/english/pdf/sb08english.pdf.

6. Yudelson, Jerry. Green Building Trends: Europe (Washington, DC: Island Press, 2009).7. HK-BEAM Society. Retrieved on November 7, 2008, from http://www.hk-beam.org.hk/

fileLibrary/_4-04%20New%20Buildings%20(Full%20Version).pdf.8. CASBEE web site. Retrieved on November 4, 2008, from http://www.ibec.or.jp/

CASBEE/english/index.htm.9. CASBEE web site. Retrieved on November 4, 2008, from http://www.ibec.or.jp/CASBEE/

english/methodE.htm.10. CASBEE web site. Retrieved on November 4, 2008, from http://www.ibec.or.jp/CASBEE/

english/overviewE.htm.11. BREEAM web site. Retrieved on November 6, 2008, from http://www.breeam.org.12. BREEAM web site. Retrieved on November 6, 2008, from http://www.breeam.org/

filelibrary/Non%20Domestic%20Manuals/Issue%202/BREEAM_Retail_2008_Issue_2.0.pdf.13. BREEAM web site. Retrieved on November 6, 2008, from http://www.breeam.org/

page.jsp?id=19.14. USGBC web site. Retrieved on November 4, from http://www.usgbc.org/

ShowFile.aspx?DocumentID=4121.

Author Biography

Jerry Yudelson is Research Scholar for Real Estate Sustainability for the Interna-tional Council of Shopping Centers. He is a “National Peer Professional” for theU.S. General Services Administration. From 2004 through 2009, he served as chairof the U.S. Green Building Council’s Greenbuild conference, the country’s largest.

He holds an MBA with highest honors from the University of Oregon. A regis-tered professional engineer in Oregon, he holds degrees in civil and environmentalengineering from the California Institute of Technology (Caltech) and Harvard Uni-versity, respectively.

Currently, as principal for Yudelson Associates, a green building consultancybased in Tucson, Arizona, he works for property developers, architects, builders,and manufacturers to develop sustainability programs and green building solutions.He works with developers and building teams to create effective programs for large-scale green projects, as well as with product manufacturers to guide them towardsustainable product marketing and investment opportunities.

Jerry served for eight years as one of the original LEED national faculty membersfor the U.S. Green Building Council (USGBC). In that capacity, he trained morethan 3,500 building industry professionals in the LEED rating system. His passionfor green building and green development makes him an in-demand speaker forconferences all over the United States, Canada, Australia and Europe.

Jerry is the author of nine previous books on green buildings, green homes, greenmarketing and green development. He lives with his wife in Tucson, Arizona, in theSonoran Desert bioregion.

207

208

About the ICSC Research Scholar Program

ICSC’s Research Scholar Program was launched in 2007 to provide members witha deeper understanding of specific issues affecting the retail real estate industry.ICSC Research Scholars work with ICSC to author books and articles, to speak atmeetings, conferences and teleconferences, and to make educational videos. Theirresearch includes policy and technical analysis, as well as best industry-practicerecommendations. Research scholars usually hold their positions for two to threeyears.

About SEED

In March 2007, ICSC launched the Sustainable Energy and Environmental Design(SEED) initiative to survey and support green construction practices. The SEED pro-gram encompasses education, best practices, recognition, conferences, publicationsand legislation to promote green building and business practices. In May 2007, ICSChosted its first-ever Green Pavilion and Green Zone at the annual RECON confer-ence, showcasing product and service providers who are committed to the environ-ment. In May 2008, the ICSC and SkySite Property, LLC unveiled the next evolutionin the SEED initiative, ICSCSEED.org, a new retail knowledge-based web portal.

ICSCSEED.org is a knowledge-based web portal providing the most comprehen-sive online green news and sustainable best practices for the entire retail real estateindustry. ICSCSEED.org provides a wealth of information for anyone interested inlearning about the greening of retail stores and shopping centers, or their company’soperations. Visitors to the site will find the information they need to advance theircorporate environmental and green building strategies and have a single point ofaccess to premium content, including the latest green news, research, white papers,case studies and best practices.

209

About the International Council of Shopping Centers

The International Council of Shopping Centers (ICSC) is the trade association of theshopping center industry. Serving the shopping center industry since 1957, ICSC isa not-for-profit organization with more than 60,000 members in approximately 100countries worldwide. ICSC members include shopping center:

owners retailers architectsdevelopers researchers contractorsmanagers attorneys consultantsmarketing specialists academics investorsleasing agents public officials lenders and brokers

ICSC holds approximately than 250 meetings a year and provides a wide array ofservices and products for shopping center professionals, including publications andresearch data.

For more information about ICSC, please contact:

International Council of Shopping Centers1221 Avenue of the AmericasNew York, NY 10020-1099Telephone +1 646 728 3800Fax +1 732 694 [email protected] (for general ICSC information)[email protected] (for information about ICSC publications)www.icsc.org

Index

AAaronson, Glenn H., 4, 5, 6Abercorn Common, 24–25, 106AEON Co. Ltd., 33–34

AEON Laketown Shopping Center, 34Ahold, 150, 152Air quality, 17, 37, 43, 46, 54, 55, 56, 119, 132,

133, 134, 149, 150, 153, 159, 193Altoon + Porter Architecture, 81American Institute of Architects (AIA), 59American Society of Heating, Refrigeration

and Air Conditioning Engineers(ASHRAE), 49, 149

Anderson, Ray, 1, 172Appleby, Paul, 101, 186Architecture 2030 Challenge, The, 59Arrabida Shopping Center, 12ASDA, 124ATRIO Center, 100, 101

BBedell, Jeffrey, 109Bournemouth Shopping Center, 13, 130Brand image, 161–164Branding, 15, 71–72, 94, 159, 160, 161, 162,

175BREEAM

categories, 61certifications, 60for retail stores, 61, 62, 63

Building Design & Construction, 80Building Information Modeling

(BIM), 84Building Research Establishment (BRE), see

BREEAMBuildings, 2, 3, 4, 6, 8, 9, 12, 14, 15, 16, 17,

21–39, 41–64, 67, 68, 70, 71, 72,74, 75, 79–86, 90, 94, 95, 99–106,

113–127, 138, 140, 142, 144, 145,149, 152, 183, 186

carbon dioxide emissions of, 33Burridge, Crispin, 174, 182

CCabot Circus, 29–32Callison, 38, 39, 133, 134Canada Green Building Council (CaGBC), 25,

43, 191Canadian Environmental Quality Guidelines,

10Carbon dioxide emissions, 2, 33, 61, 70, 125,

126Carbon neutral, 12, 13, 58, 179, 182CASBEE rating system, 33Central Walk Shopping Center, 38–39Centro Colombo, 9, 11Centro Vasco da Gama, 12Certified wood products, 46, 54, 147Chipotle, 118City Square Mall, 36, 37Cleaning, green, 7, 28, 35, 122, 135, 138, 141,

142, 149, 153, 203, 204Climate change, 2, 9, 13, 59, 70, 125, 173, 174,

180, 185Comfort, 29, 32, 46, 54, 55, 56, 57, 76, 83, 84,

120, 133, 135, 150, 153, 185, 192,193, 199, 203

Commissioning, building, 46, 50, 55, 68, 81,82, 122, 130, 145, 153, 193, 198,202

Cooling tower, 70, 100, 140, 143, 201water conservation, 143

Cordes, Eckhard, 179Cornes, Paul, 104Corporate Social Responsibility (CSR), 1, 3,

22, 77, 89, 158, 173, 179

211

212 Index

Corporate sustainability, 1, 3, 8, 12, 17, 33, 85,89, 167, 168, 173, 174, 175, 182

Costco, 89Costs

drivers, 83–84hard, 81–83, 84offsets, 70premiums, 81soft, 81–83

DDaylighting, 5, 6, 22, 32, 38, 46, 54, 56, 57, 62,

107, 115, 120–121, 123, 133, 150affect on retail sales, 120–121

Deer Springs Town Center, 15Design

charrettes, 84eco-charrettes, 81integrated, 55, 58, 84process and scope, 83–84team capabilities, 83

DeVos, David, 122, 123, 159, 170Differentiation, 29, 76, 158–159, 160–161,

165, 186Doak, Justin, 57, 58

EEBL&S Development, 107–108ECE Project Management, 102–103Ecological footprint, 2, 4Economy, U.S., 3, 38Edens & Avant, 174, 176Edwards, Paul, 29, 31El Rosal, 11Emission reduction reporting, 145–146Energy

incentives, 71photovoltaics, 11, 33, 53, 88, 90, 93, 95,

114, 126, 141, 160, 164, 170, 186power, green, 46, 54, 89, 118, 122, 131,

145, 163–164, 182, 198, 202renewable, 2, 21, 35, 46, 59, 71, 87, 88, 89,

91, 94, 95, 96, 119, 124, 126, 134,144, 145, 175, 185, 198, 202

Energy efficiency, 5, 9, 15, 25, 26, 29, 38, 46,49, 50, 55, 59, 67, 81, 91, 94, 103,113, 114, 117–119, 121, 122, 124,126, 130–131, 134, 143–146, 151,153, 160, 194, 201

Energy modeling, 82Energy Performance of Buildings Directive, 9,

105Energy Performance Certificates (EPCs), 61Energy Service Companies (ESCOs), 175, 183

ENERGY STAR, 43, 47, 50, 54, 55, 58, 67,118, 119, 122, 131, 144, 146, 147,151, 158, 164, 170

Entitlement, 17, 68, 70, 79, 94, 108Environmental Management System (EMS), 8,

9, 12, 119, 169, 184, 191Environmental Standards for Retail

Development (ESRD), 9, 11Ernst-August-Galerie, 102EUROPARK Shopping Center, 100, 172, 173Evaluation, post-occupancy, 45–53, 55, 151,

170

FFeldman, Joseph, 74Fernandes, Filipa, 99–100, 169Fiala, Mary Lou, 14, 15, 16, 17, 162, 163Financial incentives, 72–73First Capital Realty, 25–26, 27, 72–73Forest City Stapleton, 76, 107Forum Duisburg, 5, 6, 101–102

GGalashiels, 13, 14Giant Eagle Supermarket, 23, 27–28Gillis, Jaap, 63Global Reporting Initiative (GRI), 158, 173,

174Global warming, 2, 22, 33, 59, 185Greenbuild conference, 84Green building, initiatives, 21–23, 35, 39, 85,

113Green Circle Shopping Center, 107, 108Green cleaning, 7, 122, 135, 149, 153, 203,

204Green, David, 81GreengenuityTM, 15, 162Greenhouse gas, 9, 59, 88, 94, 100Greenhouse Gas Protocol, 9Green retail

benefits of, 68, 69challenges of, 76–77consumer demand for, 75–76drivers, 83six key areas of focus, 75

Green roofs, 6, 24, 35, 36, 38, 54, 101, 102,113, 116, 122, 129, 141, 160, 170

Green Star certification, 21, 22, 34, 35, 43, 48,59, 110, 154, 158, 170, 183, 189,190

Green Travel Plan, 9, 11Grocers, 14, 23, 57, 88, 107, 113, 116, 120,

134–135, 144, 150, 151, 153, 174

Index 213

HHammerson, 29, 30, 31, 61Healthy buildings, 56Highcross, 31, 32High-performance buildings, 43–45, 53, 55,

58–59characteristics of, 43–45

Home Depot, 28–29, 75, 82, 121

IIndoor air quality, 17, 37, 43, 46, 55, 56, 119,

132, 133, 134, 150, 153, 159, 193Indoor environmental quality, 21, 45, 119–120,

121, 132–133, 134, 189, 191, 193,199, 203, 204

Integrated design, 55, 58, 84Interiors, 21, 41, 46, 49, 50, 51, 52, 54, 55, 57,

61, 63, 64, 69, 76, 116, 118, 119,123, 129–135, 141, 153, 191, 197,199

International Council of Shopping Centers(ICSC), 6, 15, 32, 43, 63, 100, 173

International Standards Organization (ISO), 6,8, 11, 12, 104, 106, 169, 184, 191

Investment, return on, 2, 5, 6, 7, 12, 14, 15,16, 29, 32, 56, 58, 61, 68, 69, 74,81, 85, 90, 92, 93, 94, 96, 103, 104,105, 109, 115, 145, 160, 175, 179,180, 183, 186

JJohn Lewis Partnership, The, 124–125

KKohl’s, 71, 76, 88, 89, 122–123, 159, 164, 170KPMG, 173, 174

LLandscaping, 31, 38, 51, 79, 110, 117, 137,

138, 140, 142–143, 153, 198, 201water-efficient, 117, 142–143

Land use, 10–11, 61, 70, 173, 180, 189, 195Leahy, Sir Terry, 125LEED R© (Leadership in Energy and

Environmental Design R©)growth of, 42LEED 2009, 45, 47, 49, 50, 57, 60, 121,

137, 200,LEED for Commercial Interiors

(LEED-CI), 41, 42, 49, 50, 51, 52,57, 72, 76, 116, 117, 129–133, 134,163, 171, 197, 200, 201, 202, 203,204

credit distribution, 198–199

LEED for Core and Shell (LEED-CS), 22,23, 24, 37, 41, 42, 49, 50–51, 76,81, 82, 107, 108, 175, 197, 200,201, 202, 203, 204

credit distribution, 198–199LEED for Existing Buildings Operations

and Maintenance (LEED-EBOM),41, 51–52, 137, 138, 146, 150, 152,161, 197, 200

credit distribution, 198–199LEED for New Construction (LEED-NC),

22, 26, 41, 42, 43, 45, 46, 47, 49–50,51, 53, 54, 57, 60, 76, 82, 121, 129,176, 197, 200, 201, 202, 203, 204

categories, 121credit distribution, 198–199

LEED for Retail Commercial Interiors, 57,129, 197

LEED for Retail New Construction, 57,197, 198

number of certified projects, 43project results, 121–122volume certification, 122, 133, 134, 151,

152, 159LeSong Mall, 37–38Life-cycle assessment, 44, 45Lifestyles of Health and Sustainability

(LOHAS), 75Lighting

day, 5, 6, 22, 32, 38, 46, 54, 56, 57, 62,107, 115, 120–121, 123, 133, 150

design, 51, 54, 103, 118, 130productivity gains, 56

Light pollution, 46, 54, 138, 141, 198, 201reduction of, 141

Lipkin, Ed, 107Low-toxicity finishes, 56–57Luz del Tajo, 12

MMacerich Company, The, 108, 109Macy’s, 89Marketing, 13, 16, 22, 50, 68, 69, 71–72, 79,

95, 123, 152, 157–165, 168, 172,175, 176, 184

five key steps for sustainable retail, 158Marks & Spencer (M&S), 12–14, 61, 75, 76,

99, 130, 157, 167, 174, 179, 182,183

Plan A, 12, 13–14, 182, 183Materials, resource conservation, 21, 119,

131–132, 146–149Melaver, Inc, 24, 84, 106

214 Index

Melaver, Martin, 24, 25, 84, 85, 106Metro Group Asset Management, 35Meydan Shopping Center, 35, 36Mirvac Group, The, 34Morningside Crossing, 26–27, 73Moseley, Don, 113, 114, 115, 185Multi Development, 4–7, 16, 63, 101, 169Mulvanny G2 Architecture, 113, 174

NNakheel, 185Nates, Michael, 185Net Present Value (NPV) factor, 93Net Zero Energy Commercial Building

Initiative, 17Northgate Mall Redevelopment, 108–109

OOffice Depot, 48, 75, 76, 91, 92, 131, 132, 157,

164, 182Open space, 38, 46, 51, 140, 198, 201Orion Springfield Mall, 34, 35Otto, Alexander, 102, 103

PParque D. Pedro, 12Payback period, 35, 80Percy, Jerry, 99Peternell, Mark, 15, 17Photovoltaics

building-integrated (BIPV), 90cost of, 11, 33, 53, 88, 90, 93, 95, 114, 126,

141, 160, 164, 170, 186current market for, 90–92economics of, 92–93financial benefits of, 93–94non-economic benefits of, 95

Plan A, 12, 13–14, 167, 179, 182, 183Portela, Alvaro, 8, 11, 167Post-occupancy evaluation, 45–5340 Princess Street, 106Productivity, 17, 22, 55, 56, 57, 68, 69, 133PRUPIM, 103–105Public transit, 6, 116, 130, 134, 171Purchasing (sustainable), 45, 52, 96, 104, 119,

131, 146–147, 171, 175, 176, 202,203

RRainwater harvesting, 10, 30, 31, 35, 116, 129Rapidly renewable materials, 54, 146, 147,

193, 199Real estate, 2, 15, 17, 29, 37, 63, 67, 68, 83,

91, 99, 103, 163, 170, 179, 184

Recyclingdurable goods, 148waste, 9, 28, 32, 46, 81, 176, 183

Redevco, 63, 105–106Regency Centers, 14–17, 162, 169, 180Rehorst, Arco, 6, 169REI, 58, 89, 164Renewable

energy, 2, 21, 35, 46, 59, 71, 87, 88, 89, 91,94, 95, 96, 119, 124, 126, 134, 144,145, 175, 185, 198, 202

energy credits, 87, 89, 94, 96energy incentives, 71materials, 54, 146, 147, 193, 199

Reputation, 7, 29, 73, 74, 152, 163Retail

challenges of applying LEED to, 57–58interiors, 63, 129–135opportunities for, 22

Retail buildings, 22, 45, 51, 58, 61, 62, 63, 67,80, 113–127, 197

Return on investment (ROI), 2, 16, 69, 71, 85,92, 93, 109, 115

Rio Sul Shopping Center, 9, 10Rose, Stuart, 12, 13, 167, 179

SSES Spar European Shopping Centers (SES),

32, 99–101, 169, 172–173Shopping centers, 2, 4, 6, 7, 9, 10, 11, 12, 14,

15, 17, 21, 23, 25, 26, 27, 31, 32,33, 34, 35, 37, 39, 44, 62, 63, 64,68, 69, 70, 71, 73, 75, 79, 89, 96,99–111, 113, 117, 129, 137, 138,139, 141, 143, 144, 145, 154, 158,161, 169, 172–173, 174, 175, 181,186, 190, 196

Shops at Northfield Stapleton, 23–24Siddiqui, Yalmaz, 182Simple Food Stores, 196Singapore Building and Construction Authority

(BCA), 36Site restoration, 53, 54Solar

energy, 34, 71, 87, 91, 94, 95, 175, 183investment partnerships, 93, 94, 96power, 23, 59, 68, 71, 87–96, 114, 116,

129, 145, 157, 161technology, 90thermal systems, 35, 38, 46

Solar Services Model, The, 95Sonae Sierra, 7–12, 63, 139, 167, 169, 180,

181, 184

Index 215

Stafford Park, 144Station Park Green, 107–108Stop & Shop stores, 151Stormwater management, 46, 51, 67, 81, 131,

140, 153, 201Subway, 123SunEdison LLC, 87, 90Sustainability

communications, 184guidelines, 182–183initiatives, 182planning, 175, 176reports, 180, 182, 184ten-point program, 179–187

Sustainable design, 21, 22, 41, 45, 76, 99, 107,108, 122, 168, 170, 171, 172, 192,194, 195, 200

TTanger Outlet Center at the Arches, 110Target, 7, 9, 29, 33, 62, 63, 69, 89, 99, 103,

104, 105, 109, 110, 121, 122, 125,148, 151, 158, 160, 180, 182, 183,191, 192

Tax incentives, 22, 74, 92, 93Telsey Advisory Group, 74Tenant guidelines, 7, 24, 50, 76–77, 175Tenants, 7, 10, 11, 14, 15, 16, 17, 23, 24, 26,

29, 30, 35, 44, 46, 50, 51, 56, 57, 60,61, 67, 68, 69, 72, 73, 76, 85, 89,99, 100, 103, 109, 111, 116, 130,131, 132, 137, 142, 144, 148–149,150, 158, 160, 161, 162, 163, 165,168, 175, 176, 180, 182, 183, 186,196, 197, 200, 201

Tesco, 61, 75, 125–126Training, 15–16, 29, 30, 55, 68, 84, 85, 104,

143, 149, 154, 165, 169–170, 175,183

staff, 104, 143Triple Bottom Line, 3, 4, 5, 176Turner Construction Company, 80

Green Building Market Barometer, 80

UUptown Monterey Shopping Center, 107Urban heat island effect, 46, 54, 109, 140–141U.S. Conference of Mayors’ climate change

initiative, 59U.S. Department of Energy, 17U.S. Environmental Protection Agency, 58,

163, 197U.S. General Services Administration, 44U.S. Green Building Council (USGBC), 21,

26, 43, 44, 45, 49, 52, 54, 57, 60,81, 82, 84, 122, 133, 134, 151, 170,191, 196, 197

VVHB Engineers, 152Volume certification, 122, 133, 134, 151, 152,

159

WWachovia Bank, 133–134Wal-Mart, 23, 74, 76, 82, 87, 88, 113–116,

124, 157, 158, 185Waste

responsible disposal, 147stream audit, 148

Waterefficiency, 46, 67, 107, 114, 117, 121, 130,

134, 173, 191, 198, 201, 204efficient design, 9efficient landscaping, 117, 142–143, 198,

201metering, 142reclaimed, 143recycling, 10

Welling, Derk, 105Wild, Marcus, 99Woolworth (South Africa), 168–169World Business Council for Sustainable

Development, 8, 9, 146

ZZero net energy buildings, 58

Sustainable Retail Development: New Success Strategies

Documents

Transcript of Sustainable Retail Development: New Success Strategies