Global Sustainability Perspective magazine - Jones Lang LaSalle

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Global Sustainability Perspective magazine - Jones Lang LaSalle

China’s

Five-Year Plan

GLOBAL

SUSTAINABILITY PERSPECTIVE

Half-yearly Magazine | June 2012

Olympian Steps

for Sustainability

Eco Cities

Urbanization &

Sustainability

Focus on Asia

Catalysts for Sustainable

Neighborhood Development


Global Sustainability Perspective June 2012 Jones Lang LaSalle

GLOBAL

SUSTAINABILITY PERSPECTIVE

Half-yearly Magazine | June 2012

Welcome to Global Sustainability Perspective, a half-yearly publication developed

by executives of Jones Lang LaSalle to highlight real estate energy and sustainability issues

worldwide. You’re holding the first issue to be printed on paper, but our team has been discussing

and writing about global energy and sustainability concerns on a quarterly basis for more than two

years. Our initial goal was to foster a better understanding of what sustainability means around the

world on behalf of our global clients, including international real estate investors and multi-national

corporations. Along the way, we have learned that the discipline of sharing information from around

the world has uncovered ideas and practices that enrich our own knowledge and ultimately make us

all better at what we do.

In this issue we focus on Sustainable Urban Development and look at how the “Eco City” vision is

influencing the way cities are planned, built, lived and worked in. We comment on issues that stem

from thinking about the ultimate goal – built environments that provide environmental, social and

economic quality for today’s and for tomorrow’s citizens and organizations.

As a companion piece, we explore factors that define a sustainable neighborhood within a city and

examine the catalysts which we use with developers, city authorities and investors to model the

performance of these projects and measure their long-term success.

And in another timely feature, we note that planners of the 2012 Summer Olympics in London believe it

will be the greenest Games in history. With a couple of generations of lessons learned, from Montreal’s

Summer Games of 1976 to the 2008 Beijing Olympics, they may well prove to be correct – at least,

until 2016, when Olympics host city Rio de Janeiro plans to take sustainability to even greater lengths.

I hope you find this publication informative and helpful in understanding the complexities and

commonalities of sustainable real estate that we all face in balancing the long-term needs of

society with the immediate needs of commerce and quality of life.

Dan Probst

Chairman, Energy and Sustainability Services,

Jones Lang LaSalle

Table of Contents

1

Eco Cities

10

Urbanization & Sustainability

Focus on Asia

20

Australia’s Aggressive

New Green Mandates

28

The City of Light Goes Electric

Is Paris providing the model

for all cities to follow?

2

Olympian Steps

for Sustainability

12

China’s Five-Year Plan

Banking on sustainability

as a growth engine

22

City Conditions:

What real estate investors

know and don’t know about

climate change

30

LEED’s International Impact

An insider’s view

7

Catalyst for Sustainable

Neighborhood Development

Our model for developers and investors

18

The Growth of Eco Cities

A Chinese perspective

26

Changing U.S. Logistics Patterns

Bode Well for Sustainability

33

Introducing Sustainability

Transparency

All Rights Reserved © Jones Lang LaSalle 2012


Global Sustainability Perspective

Eco Cities

June 2012

The description “Eco” City has a strong,

optimistic, almost personal ring to it, as it

should have, being derived from the ancient

Greek term oikos meaning a “place to live.”

When Richard Register first coined the term in his 1987 book “Ecocity

Berkeley: Building Cities for a Healthy Future,” most of us would not

have foreseen the extent to which his thinking would eventually come to

influence the development of cities, nor how the changes he advocated

in the way cities are planned, used, lived and worked in would become

such imperatives. And even while the term Eco City may not yet be

wholly, comprehensively or consistently defined it has certainly entered

the mainstream and is used extensively as the backdrop for a wide

range of activities in urban sustainability.

The debate around what constitutes an Eco City has been gathering

momentum since the early nineties. Eco City summits in Montreal,

Istanbul, Shenzhen, Curitiba and others have explored philosophy,

policy and practice, while challenging thinkers like Herbert Giradet and

Mark Roseland have produced an extensive range of literature and

guidance on creating Eco and sustainable cities.

In the last five years or so it has been the likes of the ambitious and

high profile UAE Masdar City and the Sino-Singapore Tianjin Eco-city

which have gained the headlines. These showcase examples are rich

in intelligence around new technologies, innovative urban planning

processes, 21st century mobility, and funding mechanisms. They also

demonstrate the deep challenges of carbon neutrality and of proving

commercial returns.

But while these all inclusive models of urban sustainability are pushed,

pummeled and pressed to prove their durability, a huge range of

cities are testing micro models of Eco district and neighborhood

development. They are embracing in a more local way the core Eco

City principle of minimizing environmental impact and maximizing

social and economic good.

This incremental approach reflects both the difficulties of trying to create a

universal blueprint of the Eco City and the practicalities of large scale

transformation in established cities. What is clear however, is that Eco

City metrics of performance will be as important to the market as the

measurement of the value add of green buildings. Understanding risks,

returns and benchmarking one city against another, will be an important

feature in the Eco City arena. But how can we measure what is not well

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Jones Lang LaSalle

defined? This is an uncomfortable question from the purist researchers’

viewpoint, but pragmatism demands that some measures are better than

none and experience tells us that markers in the ground are important.

Companies like Siemens and their Sustainable Cities Index and Mercer with

their Eco City ranking have begun the process of measurement and

comparison. CDP Cities with whom Jones Lang LaSalle is proud to partner

are now delving very deeply into a very wide range of sustainability practices

in cities. Forty-eight cities are now filling in a very detailed questionnaire

about sustainability aspects of governance, strategy, finance, partnerships

and risk awareness amongst many other issues. The results of the survey

give a very clear insight into the different measures of challenge and

progress across cities and the very different routes they are taking

towards a sustainable future.

Our Global Sustainability Perspective comments on many of the issues

that stem from thinking about the ultimate goal – for all cities to be Eco

in the sense of working together towards a built and living environment that

gives environmental, social and economic quality now and protects it for

future generations. We look at the current gaps between the commercial

and city hall views with regards to creating a common approach to instilling

sustainable behaviors and outcomes, at the extensive activity in China, the

injection of major sustainable schemes in the London Olympics and inland

Ports in the USA and at Green City mobility in Paris.

The transformation of our cities will largely be through incremental change,

through the spread of best practice and through assessing and measuring

what works and what is, bluntly, effective and affordable. The likelihood is

that in the next few years this column will be covering the definition of not

just Eco Cities, but how we assess affordability in the light of continuing

environmental and social challenge.

For further information please contact:

Rosemary Feenan

Head of Global Research Programmes

Rosemary.Feenan@eu.jll.com


Global Sustainability Perspective

Olympian Steps

for Sustainability

When the torch is lit to launch the 2012 Summer Olympics in London

this July, planners maintain it will be the greenest Games in history. And

with a couple of generations of lessons learned – good and bad – from

previous Olympic efforts, they may well prove to be correct. The trend line

of Olympic Games in recent decades shows a steadily increasing focus on

sustainability as it relates to land use and real estate development. With the

2012 London Olympics right around the corner and Rio de Janeiro already

planning for the 2016 Games, the time is right to look at the evolution of

sustainability as envisioned by Olympic planners – past, present and future.

First, it’s important to understand that “sustainability” in this context means

much more than simply setting up recycling bins around the Olympic

Village and seeking ways to reduce the carbon footprint of the Games.

In its most generic form, it refers to activities that can be sustained

indefinitely. The term is appropriately applied to environmental concerns

as an antidote to non-renewable resources, non-recyclable products,

and pollution of our air and water supplies – all activities that lead to

an ecological dead end. But cities are also concerned with social and

economic sustainability, practices that help ensure the long-term viability

of the region in terms of attracting residents and businesses and enabling

them to thrive. Hosting the Olympics costs a city millions of dollars that

can’t easily be recaptured during the Games themselves; what happens

at the site and across the city after the Games ultimately decides whether

hosting the Olympics was financially worthwhile.

For cities, economic and environmental sustainability in particular are

highly interconnected concepts. Environmental programs to improve air

quality, address climate change threats or plant trees hold direct and

indirect economic benefits, such as promoting public health and helping

to attract environmentally conscious residents and businesses. Land use

and real estate development strategies are also central to both economic

and environmental sustainability, particularly because any large-scale

development will be in place for decades and must be viable from a

financial and ecological standpoint over the long term.

This long-term focus requires Olympic host cities to consider how sites

will be used long after the Games are over. The Olympics places a

spotlight on a city, hopefully to advance its position on the world stage

and help establish sustainable economic growth. But a poorly planned

development that fails to consider what will become of Olympic sites

and buildings after the Games are over can drive a city into debt,

squander economic development opportunities, and potentially damage

its international reputation. Recent Olympic host cities have shown

they understand the stakes by considering the long-term economic and

environmental sustainability of sites in their development plans.

Reining in “bigness”

June 2012

For the first half-century, the Olympic Games were a relatively modest,

if important, sports extravaganza. That began to change with the first

television broadcast of the games outside of the host country in 1956.

Viewership increased exponentially with the first worldwide satellite

broadcast in 1964, and had reached an estimated 600 million during

the Mexico City Summer Olympics of 1968. Increasingly, the whole

world was watching the Olympic Games, and host cities ramped up the

level – and expense – of their spectacle to make a global impression.

Like a spent marathon runner, Olympic “bigness” hit the wall at the

Montreal Summer Games of 1976. The city, flush with success from

its 1967 Montreal Expo – considered one of the most successful

World’s Fairs ever – was eager to expand on its new cosmopolitan

stature with a no-holds-barred financial approach to its Olympic

Games. Mayor Jean Drapeau, who had presided over the wellattended

Expo 67, famously declared that, “The Olympics can no

more lose money than a man can have a baby.” He estimated that

Montreal could stage the games for only $310 million.

To everyone’s shock the eventual cost spiralled to a then-staggering

$1.5 billion, more than $1 billion of which was spent on a new Olympic

Stadium alone. Its complex design was to include the world’s tallest

inclined tower, and the first retractable roof on an outdoor facility.

The overreaching project became an embarrassment: The tower and

retractable roof were not completed until the 1980s; and even then,

the roof performed so poorly that it was removed a decade later. After

the Montreal Expos baseball team left the city in 2004, the 66,000-seat

stadium has been used only sporadically while accruing maintenance

costs, and its debt was not fully repaid until 2006 – 30 years after it

had hosted the Olympic Games.

After a multi-nation Olympic boycott in 1980, Los Angeles hosted the

1984 Summer Games with the clear intent not to fall into Montreal’s

trap. Though “sustainability” was not yet a household word, the city

embraced the re-use concept by using existing facilities, including

the main stadium, which had been originally constructed for the 1932

Summer Games. Only two of the 31 venues were newly constructed,

and those were covered by corporate sponsorships. The Los Angeles

1984 Games are considered among the most financially successful

ever, and a victory for adaptive re-use of facilities such as the Rose

Bowl, which hosted the football (soccer) final.

Toward a greener games

In 1994 the International Olympic Committee added “Environment”

to “Sport” and “Culture” as a guiding principle. As such, the 1996

Summer Games in Atlanta advanced the concept of new Olympic

development from the start with an eye toward a legacy of community

service after the athletes had gone home. For the first time, more than

token consideration was given to sustainable re-use of new Olympic

construction after the Games. The Olympic Village and Centennial

Olympic Park, a major gathering area for spectators and athletes, was

repurposed from a run-down area of the city. Mid-rise dormitories in the

Olympic Village were successfully converted to college student housing

after the Games, and the park is now one of Atlanta’s most-visited

destinations. The 1996 Summer Olympics utilized nearby landmarks

such as the Georgia World Congress Center and Georgia Dome, and

subsequent developments immediately north of Centennial Park,

including Georgia Aquarium and the New World of Coca-Cola, were

made possible by the revitalization of the area due to the Olympics.

Even the newly-built Olympic Stadium, now known as Turner Field, was

designed upfront to be reconfigured after the Games into a new home

for baseball’s Atlanta Braves, with seating reduced by 40 percent to

save maintenance costs.

The 2000 Summer Olympics in Sydney were considered not only a

global coming-out party for the city “down under,” but also a showcase

for world-leading sustainability efforts in Australia. The Games were sited

on a spent riverfront industrial brownfield that had previously housed

brickworks, a slaughterhouse and eight rubbish dumps. The end result

was an Olympic Village that became the world’s largest solar powered

settlement at that time, comprising 2,000 residences with capacity for

5,000 people, all powered by 19,000 solar collectors capable of producing

160,000 kilowatt hours. Many of the competition venues generated

their own clean power as well, and virtually all the main Olympic

sites were served by public transportation, including a ferry service

that was commissioned just before the Games. After the festivities the

site became the Sydney suburb of Newington, with a comprehensive

sustainable plan for its next 30 years of growth.

Beijing raises the bar

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Jones Lang LaSalle

In contrast to Sydney’s long time environmental recognition, Beijing won

the competition to host the 2008 Games as one of the most polluted

major cities in the world. Chinese officials promised a green city by the

competition date, and while some have questioned their measurements,

many people were surprised by their genuine progress toward reducing

the city’s carbon footprint. Though the nation definitely used the Beijing

Olympics as a platform to “gain face” as a responsible world power,

China realistically had no choice but to address an environmental

condition that had dramatically worsened during almost 30 years of near

or above double-digit growth in gross domestic product (GDP).

Between 2001 and 2008, an estimated USD $17 billion was directed

toward a series of 20 key environmental improvements such as:

• Extension of public transit from 113 kilometers to 197 kilometers

of track, and building 53 new stations to help reduce the estimated

1,200 cars that were being added to Beijing streets daily.

• Planting a 126-kilometer ring of trees around Beijing to help absorb

surrounding pollen and dust before it enters the city. To help

cleanse air within the city, 720 acres of green space – three times

the size of New York’s Central Park – were cleared and planted with

more than 30 million trees and rosebushes.

• Renewable technologies such as a 130-kilowatt solar array to

light the National Stadium, and a geothermal system deployed for

heating and air conditioning at the Olympic Green Tennis Centre.

Overall, more than 20 percent of all electricity supplied to the

venues came from renewable energy.

• Vehicle emissions standards were raised to a Euro IV level

shortly before the Games.

The number of “blue sky” days – with an Air Pollution Index of 100

or below – rose from fewer than 180 days in 2000 to 274 days in 2008.

Though this measurement raised some skepticism since it was not

verified outside of China, a post-Games report by the United Nations


Global Sustainability Perspective

Environment Programme (UNEP) concluded that the air athletes and

spectators in Beijing breathed in August 2008 was much cleaner than in

previous years. Though conceding that weather conditions at the time in

Beijing such as evening showers and wind directions played a helpful role,

city conditions showed reductions of 47 percent in carbon monoxide, 30

percent in volatile organic compounds, 20 percent in particulate matter,

and 14 percent in sulfur dioxide. City authorities also achieved a complete

phase-out of hydrochlorofluorocarbons (HCFCs) 22 years ahead of their

2030 target.

• Waste classification and recycling goals were exceeded by 2 and

5 percent, respectively. Hazardous and medical waste treatment

facilities were expanded and updated, all solid waste was sorted in

venues, and the recycling rate in the Olympic venues was 23 percent

higher than the committed level.

From a development standpoint, from the visually spectacular venues

such as the “Bird’s Nest” National Stadium and Aquatics Center to the

huge Olympic Green park that housed venues and athletes, Olympic sites

are being actively used for sporting events or redeveloped for housing or

other useful purposes. The sustainability of Beijing’s other achievements,

particularly in air quality, are more subject to debate. Researchers from

the World Health Organization found that soot particles smaller than 2.5

microns, which are not subject to Chinese standards, exceeded safe limits

for the entire duration of the Games.

A team of scientists from Oregon State University in the U.S. and Peking

University in China went further in pronouncing the Beijing Games as the

most polluted Olympic event ever, with air contaminant levels two-tofour

times higher than Los Angeles on an average day. Soot levels were

allegedly 3.5 times higher than at the Sydney Games, the cleanest

Summer Olympics of the 21st century. The researchers, who took

samples before, during and after the games and published their findings

in the journal “Environmental Science and Technology,” found pollution

levels about one-third higher than Chinese government officials claimed.

Other critics pointed out that even the air quality increase Beijing achieved

was due in part to “artificial” means such as factory shutdowns and vehicle

use restrictions prior to the games that were not maintained. Even the

relatively benign UNEP report noted that, “there remains significant

room for improvement in Beijing’s air quality.”

On the other hand, questionable as Beijing’s air properties were, its

“before and after” improvement rate was arguably equal to or better

than most other Games. Ultimately, the 2008 Beijing Olympics probably

served as a laboratory for obtaining aggressive sustainable improvements

mandated in China’s more recent Five-Year Plan, rolled out in 2011.

Included in the plan’s national requirements are reduction of carbon

emissions per unit of GDP of 17 percent and an increase in the

percentage of clean fuels in China’s energy consumption mix.

London calling: What’s in store for 2012?

Organizers of the 2012 London Olympics have promised the greenest

Games ever, a guarantee that even the most optimistic Beijing principals

declined to offer. Teaming with worldwide environmental groups such as

the World Wildlife Fund (WWF) and BioRegional, London has created a

“One Planet Olympics” concept to position the world’s premier gathering

June 2012

as a model for global sustainable communities. The plan’s holistic goals

covering energy¸ carbon, water and waste reduction; biodiversity; access

and inclusion; health and employment, include:

• The development of a decentralized energy network using Combined

Heat and Power (CHP) technology. These systems are built around a

network of local infrastructure, taking advantage of efficiencies gained

from producing and consuming energy “locally” — typically saving up to

30 percent when compared to standard national grid-supplied electricity

and individual housing unit heating.

• Use of renewable sources for 20 percent of energy needs. This target

is in jeopardy; Bloomberg Businessweek has reported that due to

unforeseen problems such as an on-site 2-megawatt wind turbine that

was scrapped for safety reasons, the Commission for a Sustainable

London 2012 reduced its renewable energy forecast to 11 percent for

the Games. However, organizers report that through other measures

such as renting instead of buying many infrastructure components

and cutting 969,000 square feet from venue spaces, overall carbon

emission forecasts are about 315,000 metric tons – 20 percent less

than an estimate of two years ago.

One thing is clear:

Regardless of who wins the individual events at

London, Rio and beyond, it seems that the Olympic

Games will permanently encourage a gold medal

performance for sustainability.

• Venues that are being designed to use 40 percent less water,

and athlete housing 30 percent less, than standard. Much of the

improvement will come from a dual system in new buildings with

separate supplies of drinking and recycled water, to assure that

potable water will be used only when necessary.

• Instead of the frequent practice of landfilling contaminated soil – which

only shifts the problem from one spot to another – Olympic authorities

have chosen to clean up all contaminated soil on site, using five soil

washing machines and a bioremediation plant that will clean 1.3

million tons of soil by the time they are finished.

• Reclamation and re-use/recycling of 90 percent of demolition waste

by weight. To date, that goal has been exceeded with a remarkable

98 percent demolition waste reclamation. In addition, 63 percent of

new construction materials have been transported to Olympic Park

by rail or water.

• As part of a pledge to send zero waste to landfill during the Games,

food packaging that cannot be re-used or recycled will be made from

compostable materials such as starch and cellulose-based bioplastics.

After use, many of these materials will be suitable for anaerobic

digestion, enabling them to be converted into renewable energy.

• Making the Olympic Park one of the most nature-friendly Gamesrelated

venues ever, with 45 hectares of wildlife wetland habitat and

675 bird nesting boxes, ensuring that otters, swans, bats and scores

of other wildlife will occupy the same area as athletes and spectators.

In addition, remediation of invasive Japanese knotweed has enabled

more diverse native species to proliferate.

Perhaps the most advanced green thinking applied to the London initiatives

is the concept of not just adapting Olympic Park and sporting venues to post-

Olympic use, but making their sustainable legacy the primary consideration

in all design and planning. Flats built for about 17,000 athletes have been

built specifically to be used after the Games, as are 12,000 additional new

homes surrounding the Olympic Village in Stratford City, an East London

development located close to the city centre on the site of a former railroad

yard. A new legacy shopping centre in Stratford City designed for Olympic

use and beyond is also exemplary in its design, making use of natural

light, effective insulation, high efficiency lighting, heating and cooling, and

control of solar gain to ensure that the buildings are at least 10 percent more

energy efficient than local regulations require. The centre will use a

250,000-square-foot rainwater system for toilet flushing.

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Jones Lang LaSalle

In June 2012, Jones Lang LaSalle is also publishing a more in-depth white

paper on the sustainability achievements of the London Olympics and its

impact on the broader industry. When this white paper is published, it will

be made available on the Global Sustainability Perspective website.

Rio and the rainforest

Like London, Rio de Janeiro ran on a strong environmental theme, “Green

Games for a Blue Planet,” to help win hosting of the 2016 Summer Olympic

Games. And as with Beijing, the host nation – in this case, Brazil – will use

the Games to position itself as a first-tier global superpower with the seventhlargest

gross domestic product.

Environmentally, Rio already has some sustainable distinctions from

other Olympic host cities. For one thing, according to the Major Events

International information portal, a whopping 45 percent of Brazil’s energy

already comes from renewable sources. The city’s goal is to power 100

percent of its public transportation with clean biodiesel ethanol by the

Games, and create a network of bike paths connecting all Olympic facilities.

On the downside, according to the Rio 2016 Sustainability Management

Plan, as of 2008, only 32 percent of the waste dumped into Rio’s bays

was treated. Officials have set an ambitious goal of 80 percent treated

sewage by the beginning of the Games in 2016. Like Los Angeles and

Atlanta, Rio will “recycle” many existing facilities for key events, including

the opening and closing ceremonies, track and field, football, aquatics,

basketball, volleyball and gymnastics. And like post-millennial Games,

much of the energy for new venues will come from renewable sources.

One of the most dazzling components of the 2016 Rio Games should be its

Olympic Village, a green paradise of flora and fauna meant to emulate the

Amazon rainforest. It remains to be seen whether this verdant park will call

to attention the plight of Brazil’s actual receding rainforest, much as media

attention – and television cameras – in 2008 focused on the continual haze

in Beijing. Some critics have already pointed out that regardless of what

Brazil does at Olympic venues, its greatest sustainable legacy would be

to reverse deforestation of the Amazon jungle, an act considered by many

to affect global climate change. With the eyes of the world on Brazil, the

nation’s leaders may consider strengthening their efforts to preserve

one of the planet’s greatest natural resources.


Global Sustainability Perspective

For further information please contact:

Katie Kopec

Director, Development Consulting

Katie.Kopec@eu.jll.com

June 2012

Jones Lang LaSalle’s Olympics track record

Jones Lang LaSalle has a strong track record in advising on

Olympic infrastructure-related projects, particularly in the area

of city regeneration.

For Beijing 2008, Jones Lang LaSalle helped deliver a sustainable legacy

for China. From working with the Chinese government on their Olympic

vision, to contributing to more than 45 million sqare feet of Olympicsrelated

properties, including the “Bird’s Nest” national stadium, the Olympic

Village and International Convention Centre, we helped produce an

unforgettable Games.

Whilst much of our work for the London 2012 Olympics remains confidential

we have been from early on, and continue to be today, key project advisers to

the implementation and policy bodies involved in delivering the games. In

the bidding stage of the Olympics we advised the London Development

Agency and its stakeholder partners on the investment framework for the

Lower Lea Valley (LLV) Regeneration Strategy and from early in the process

we have been involved in a variety of stages for the Olympic stadium,

including a legacy option analysis for the venue. More widely we have also

acted and continue to act as development advisor to a joint venture for the

creation of a “metropolitan centre” for East London at Stratford.

Catalyst for

Sustainable

Neighborhood

Development

Our model for

developers

and investors

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Jones Lang LaSalle

The other day, a friend and I were discussing our sustainability “stories.”

Our personal elevator pitches. What was interesting was the commonality:

For both of us these stories involved moving from one neighborhood

to another neighbourhood in our childhoods, and viscerally feeling

the difference. I distinctly remember my 7-year-old self moving from

Germany to the U.K., feeling shocked: “Where are the trams?”; “Why do

I have to be driven to school?”; “Where are the cycle paths?”; “Where is

the recycling?” For my friend, it was noticing social differences in different

neighborhoods in the same city – a lower quality of life felt through an

absence of parks and a lack of beautiful architecture. Neither of us knew

what “sustainability” meant at young ages but both of us sensed the impact

in the neighborhoods and cities where we lived.


Global Sustainability Perspective

The global groundswell

As we move incessantly towards urbanization, an increasing amount of

the world’s population is also feeling that impact. It is almost as if there

is a collective global groundswell of understanding of the challenges

of, and interest in, sustainable cities and neighborhoods.

I experience this through the increase in the number of city authorities

and major developers who ask Jones Lang LaSalle about this topic. I

see this through the sheer number of conferences to which I am invited

addressing the topics of Eco Cities, SMART cities, sustainable cities and

low carbon cities around the world.

In response to this global sensibility around the importance of sustainable

cities, Jones Lang LaSalle has been exploring the factors that define a

sustainable city and, on a smaller scale, a sustainable neighborhood within

a city. We have been working with global developers, investors, occupiers

and city authorities to develop our thinking and approach, assessing

the progress made by a number of city developments and regeneration

projects around the world. More recently, we have been actively

exploring the drivers for low carbon investment in cities through

our research partnership with the CDP Cities, as discussed in this

quarter’s Global Sustainability Perspective

All of this thinking has led us to create our catalysts for sustainable

neighborhood development.

Catalysts for a sustainable neighborhood

development

These catalysts are criteria that we use with developers and city

authorities to ensure that neighborhood scale developments and

redevelopments are being designed to be successful and sustainable.

They are built on detailed analysis of what makes a sustainable

development at a large scale – and what ensures its success from

master-planning to design, construction and in to operational or legacy

mode. Our model is built to ensure success over at least a 20-year

time horizon, and on a development scale of up to 360 acres or 1.5

million square meters. Its preeminent aim is to make sure that the

aspirations follow through in to real performance improvements.

Catalysts for a sustainable

neighborhood development

1. A vision that is memorable

2. Engagemen that influences design and enables

sustainable outcomes

3. Leadership that thinks long-term

4. A governance structure that works

5. Targets and KPIs that are meaningful

6. Transparent communication of successes and failures

7. Consistent use of sustainability standards and ratings

8. A culture of constant innovation

Let me bring these alive with examples of neighborhood scale

developments that we believe demonstrate the application

of these catalysts around the world.

Catalyst 1 - A vision that is memorable

June 2012

For a developer, embedding sustainability clearly into the vision for

the neighborhood is vital for ensuring that design and project teams

understand what they are expected to achieve. Equally important is

engaging with both the local community and prospective tenants

during the creation of the vision.

As an example of a strong and memorable sustainability vision, Park

20|20 outside Amsterdam bills itself as “the first full service Cradle

to Cradle working environment in The Netherlands.” In Park 20|20 a

unique level of sustainability is created together with a human-centered

design approach to realize the cleanest, most inspiring and productive

working environment to date.

Catalyst 2 - Engagement that influences design

and enables sustainable outcomes

This catalyst recognizes the importance of people and the way that they

behave for driving social and environmental sustainability in a development.

You can design the most aesthetically stunning public realm but if you

forget to consider how the social fabric of the neighborhood will be knitted

together, then the space will become sterile and unused. Similarly, you can

design in the most efficient of environmental technologies but if the users

do not understand how they work, it is liable to lead to an increase in carbon

emissions, rather than a decrease. A project that is tackling this head on

is ProjectZero in Sonderborg, Denmark, which is running an active

Citizen Participation programme including ZEROfamily, where more

than 100 families learned how to save energy and water; ZEROhouse

to help 18,600 private house owners energy retrofit their homes; and a

3-month free testing programme for electric vehicles.

Catalyst 3 - Leadership that thinks long-term

Positively there is an increasing number of examples of long-term thinking

by leaders in city governments and in developers around the world. As

examples, I would point to all the city leaders and developers who

are involved in trialing the Climate Positive Development Programme,

formed by the Clinton Climate Initiative and the C40 group of cities. These

worldwide cities – through specific neighborhood developments – are

aiming to demonstrate that they can grow in ways that reduce the amount

of on-site CO2 emissions to below zero through efficient operations and

investment in community infrastructure and onsite energy production.

A participating city-scale development is Panama Pacifico, Panama.

Catalyst 4 - A governance structure that works

Experience has taught me many times that it is possible to have the

most innovative, exciting and aspirational sustainability vision for a

neighborhood but if you do not put in place the governance structures

– during planning, design, delivery and once the neighborhood is

inhabited and tenanted – then sustainable outcomes will not be

achieved. Furthermore, this governance structure must be clear to all

stakeholders, enabling full engagement. One of the best approaches

I have seen was taken by the London Olympics, one of the first

developments in the world where an auditing body, the Commission

for a Sustainable London, was involved regularly to support robust

and effective sustainability delivery. On the other side of the world, in

Barangaroo, Sydney, Australia, the New South Wales government

created the Barangaroo Delivery Authority to ensure project delivery

in a coordinated and financially responsible manner and is very

transparent about how this governance structure works.

Catalyst 5 - Targets and KPIs that are meaningful

Targets and Key Performance Indicators are the backbone of any

robust approach to sustainability implementation, whether it is for a

local government, a corporation or a development. They should be

selected to drive performance over time and potentially benchmark it

against peer developments. Sonoma Mountain Village, California,

U.S., a $1 billion redevelopment of an 81-hectare ex-industrial site, has

set itself targets aligned to the One Planet Living principles, including an

82 percent reduction in transport emissions, 65% percent of food for the

community to come from within 300 miles and 65 percent reduction in

use of municipal water. It reported in 2011 on how it was doing against

these targets.

Catalyst 6 - Transparent communication

of successes and failures

The London Olympics development is a world-class example of

communicating progress across all development phases and as

responsibility passes from different bodies. This development

is also a leader in realizing how important it is to share both

successes and failures. For example, we know that the Olympic

Delivery Authority has:

• Exceeded by 17 percent its target to deliver 50 percent of

materials by rail or water

• Missed its target of 50 percent fewer carbon emissions and is

instead offsetting by putting over £1 million into energy efficiency

for nearby homes and schools

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Jones Lang LaSalle

The Learning Legacy website is a fantastic resource, with numerous case

studies covering topics such as waste and resources management, biodiversity,

health and inclusion, and carbon management. This high level of transparency

means that the techniques, innovations and best practices can be adopted and

replicated within the wider industry.

Catalyst 7 - Consistent use of sustainability

standards and ratings

Exemplary practice here is to take a site-wide commitment to high LEED

or BREEAM ratings on individual buildings and increasingly to use a

neighborhood rating system such as LEED for Neighborhood Development

or BREEAM Communities. One hundred and five developments have

been certified to either the pilot or 2009 version of LEED for Neighborhood

Development. More than 80 percent of those projects are in the U.S., with

the remainder in Canada, China and the U.K. The first major development

to achieve BREEAM Communities with an Excellent Rating is Media City

in Salford Quays, U.K. One of the most significant neighborhood-wide

achievements here was a gas-powered tri-generation plant and district network

that uses water from the Manchester Ship Canal for cooling and is twice as

efficient as traditional grid electricity.

Other sustainability standards are important for other development phases.

In particular, as a best practice, I expect the use of an integrated quality health

and safety and environmental management system by both the developer and

the main contractor, ideally certified to independent standards including ISO

9001, OHSAS 18001 and ISO 14001. Use of these management systems

is particularly important in emerging markets, where the local standards and

expectations as set through legal codes may be lower than international best

practice, and these standards can be a key tool to influence the performance

of the local supply chain.

Catalyst 8 - A culture of constant innovation

A fantastic example of innovation, in terms of vision, visual architecture and

technology supporting this, is Gardens by the Bay in Singapore, which aims

to provide high-end entertainment and education within a sustainable green

infrastructure. The Gardens are being designed to enhance the image of

Singapore as a “Garden City,” including two biomes representing cool dry

conditions of the Mediterranean springtime and the cool moist conditions of

tropical mountain regions. As Singapore has a hot, humid environment, these

biomes are designed to minimize energy demand to exemplar levels and are

controlled with liquid desiccant systems and extraordinary “supertrees.” These

supertrees incorporate photo-voltaics, solar thermal panels and rainwater

harvesting. Further innovations include the installation of a plant that turns

horticultural residue into an active energy supply. It will displace the cost of

imported utility energy and the ash stream from the biomass boiler combustion

creates high-grade compost and concrete aggregates. This design is moving

towards a closed loop system.

For further information please contact:

Sophie Walker

Director, Energy and Sustainability Services

Sophie.Walker@eu.jll.com


Global Sustainability Perspective

June 2012

As increasing resource constraints and recent legislative policies accelerate the shift to greener

buildings, and the rate of urbanization multiplies adoption into an historic scale, we expect the

next few years will demonstrate the region’s emerging role as the leader in environmentally

Urbanization& sustainable business practice in real estate. As a committed partner to this shift, Jones Lang

LaSalle will continue to advise our clients and the community through channels like this

publication on how they can align these trends with their own business strategies.

For further information please contact:

Sustainability

Peter Hilderson

Jones Lang LaSalle,Asia Pacific, Energy and Sustainability Services

Peter.Hilderson@ap.jll.com

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Jones Lang LaSalle

Focus on Asia

Our Global Chairman of Energy & Sustainability Services, Dan Probst, recently spoke about

the trends impacting real estate sustainability practices – improvements in transparency,

consistency in standards, public-private partnerships and growth in solar. Across Asia Pacific,

these industry trends are encountering a set of regional dynamics that are likely to increase the

probability that Asia will soon become the world leader in environmentally sustainable business

practices. The impact on the real estate sector is immense, and is encouraging property

investors and occupiers to fundamentally change the way they approach the procurement of

assets or the acquisition of space.

The region is in the middle of a building boom unprecedented in human history. This

is driven by perhaps the single most seismic change under way, the rapid transition to

urbanization. At present only 40 percent of Asia’s population lives in cities, compared to over

70 percent in most Western countries. As the region develops and the population moves

to the cities for jobs, demand for built space seems insatiable. In China and India alone,

more than a half billion people are expected to move from the countryside to cities by 2050.

Such a rate of development, unless planned correctly, will lead to risks in the quality of that

development and adverse impacts on the environment.

The migration of people to cities, and the growth of companies and industry that follow, will

place a huge strain on the region’s natural resources. The economic and social ramifications

of this resource squeeze have thus far been mitigated by the leaps in “quality of life” stemming

from rapid growth. However, after a decade of development, the equilibrium between

improvement in “quality of life” from economic growth and deterioration in “quality of life” from

unchecked development is shifting. Local communities are becoming increasingly vocal over

the impact on the environment and their “quality of life.” This is leading property developers and

corporates around the region to aggressively improve and market their green credentials to the

point where building certifications will soon be the new “normal” for prime properties.

These threats of mass urbanization and resource constraints are leading Asia into progressive

environmental policy. The pressure is forcing policy makers to view sustainability as a vehicle

for growth rather than a hurdle, encouraging them to leverage proven economic models, such

as caps with trading options, to integrate sustainability into the fundamental underpinnings of the

region. The examples of these initiatives are many. Australia has introduced a carbon tax and

property disclosure requirements; China’s 12th Five-Year Plan is centered around clean tech

industries and carbon trading; and Singapore is mandating green buildings, to name just a few.


Global Sustainability Perspective

China’s

Five-Year Plan:

Banking on sustainability as a growth engine

Since 1951, the Chinese government has issued a Five-Year Plan (FYP)

as a strategic guideline for economic and social policy in the upcoming halfdecade.

Though not officially mandatory, FYPs have always been closely

adhered to in shaping subsequent legally binding policy, and they can be

reliably treated as a blueprint for future planning in China.

Priorities have changed dramatically as China’s economic structure has

evolved into a more market-driven “state capitalism” model, and the two

most recent FYPs in 2006 and 2011 have embraced sustainability. While

this is significant in itself for one of the world’s two largest carbon emitters

(the other being the United States), the most recent plan is notable for not

June 2012

only the “what” of its green goals but for the “why.” Sustainability is being

viewed not as just an environmental necessity but as one of the most viable

paths to business growth and job creation in the world’s largest nation

– soon to have the world’s largest economy.

This analysis explores the major sustainability goals of the 12th FYP, the

Chinese government’s incentives to meet those objectives, and the impact

on real estate and industry, including greentech, in China and beyond. We

also take a look at Australia, another Pacific Rim country entering 2012 with

some of the world’s most aggressive new green legislation.

Green means “go” in China

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Jones Lang LaSalle

For more than 60 years the FYP has been China’s largest policy-making event, generating the country’s

social and economic road map for the next five years. It covers a wide range of social and economic

issues including growth, industrial policy, healthcare, environmental issues and energy. It dictates

“end goals,” and primarily relies on regional and local stakeholder groups to achieve them. The one

constant over the years is that state and local officials who contribute to achieving the FYP priorities are

rewarded with recognition and political advancement, so this makes achieving them a very high priority.

The 2006 FYP ushered in China’s first important strides toward transparent sustainable

measurement and reporting. For the first time, the nation not only reported on but set

aggressive greentech targets to reduce:

• Energy use per unit of GDP

• Water use per unit of value-added industrial output

• Sulfur dioxide emissions

From 2006 to 2010, China exceeded all of those targets except one, achieving 19.1 of a mandated 20

percent reduction in the energy/GDP goal.

The 12th FYP, rolled out in 2011, established new metrics for continued improvement in all of these

areas, but also added specific goals for 2016.

Green targets for 2016 in China’s current FYP (based on 2010 levels)

• Reduction in energy use per unit of GDP: 16 percent

• Reduction of carbon emissions per unit of GDP: 17 percent

• Reduction of water use per unit of value-added industrial output: 30 percent

• Reduction of chemical oxygen demand: 8 percent

• Reduction of sulfur dioxide: 8 percent

• Share of non-fossil fuel in primary energy consumption: 11.4 percent

• Reduction of nitrogen from ammonia and nitrogen oxides: 10 percent

• “Strategic Emerging Industries” as percentage of overall GDP: 8 percent

• Annual energy consumption: 4 billion TCE (Tons Coal Equivalent)

• Reduction of carbon emissions per unit of GDP of 17 percent by

2015 over the 2010 level

• Increased share of non-fossil fuel in primary energy consumption

• Reduction of nitrogen from ammonia and nitrogen oxides

Also included as non-mandatory targets are 8 percent GDP growth for “Strategic Emerging Industries”

(such as cleantech) and annual energy consumption of 4 billion tons of coal equivalent.

Perhaps the most sweeping of the new mandates in the 12th FYP is the carbon reduction

requirement. China’s planning agency, the National Development and Reform Commission,

has informed seven provinces and cities that they need to set emissions caps to prepare for

sustainability measures such as a carbon trading program. Guangdong province, China’s main

manufacturing hub and largest emitter, has already received approval for its own plan, which

exceeds FYP requirements by cutting carbon intensity by 19 percent and increasing non-fossil

fuels to 20 percent of its primary energy mix by 2015.


Global Sustainability Perspective

Sustainability equals growth in the new China

There are three key themes running through China’s most recent FYP:

1. Economic restructuring:

• Promote a GDP growth rate target of 7 percent

• Move from investment and export-led growth

toward domestic consumption

• Promote the service industry

• Consolidate specific sectors

• Support China’s “Strategic Emerging Industries”

2. Social equality:

• Close the urban/rural divide and promote urbanization

• Support regional development in western and central China

• Close the income gap with higher minimum wages

3. Energy and environment:

• Create more mandatory “green” targets

• Promote industries for energy savings and clean energy

• Set green development indicators to hold local officials accountable

• Expand renewable energy such as hydro, solar, wind and nuclear

Aggressive green goals

China plans to ramp up power generation capacity from its 950 GW 2010

level to 1,350 GW by 2015. In doing so, the FYP calls for a renewable

energy increase during that period from 26.4 percent to 33 percent of

the overall electrical power mix. By comparison, 14.3 percent of overall

power supply in the U.S., the world’s other major consumer, came from

renewables during the first six months of 2011.

Targets for 2015 among China’s three largest

renewable electric power sources include:

Hydro (75 percent of the present renewable mix):

• 57 percent increase in installed capacity from 2010 levels,

from 211 GW to 331 GW

Wind (23 percent of the present renewable mix):

• 200 percent increase in installed capacity from 2010, from 35

GW to 105 GW

• Offshore installations are planned for 15 GW of the new capacity

Solar (1 percent of the present renewable mix):

• 733 percent increase in installed capacity from 2010,

from 0.6 GW to 5 GW capacity

June 2012

China’s Premier, Wen Jiabao, said in 2011: “We can no longer sacrifice the

environment for the sake of rapid development and rash construction.” In

reality, however, the drivers behind the FYP’s embrace of sustainability

reach far deeper than altruism. China needs to create a whopping 25

million new jobs each year to maintain its growth level within its 1.34 billion

population. The nation’s leadership clearly believes that sustainability

and greentech industries are among the most opportunistic routes to that

economic success.

Unlike in some nations, recent years have proven that China’s sustainable

goals are not just “greenwashing” ideals that are ultimately ignored.

During the recent recession, the Chinese government pumped a

massive infusion of cash into state-owned industries, creating a surge in

manufacturing production. By late 2009 leaders realized that this boost

threatened the green goals of the current FYP. In 2010 they ordered

regional authorities to get sustainability numbers back on track, enabling

local leaders with “Iron Fist” authority, such as ordering “brownouts” of

heavy industrial districts. Many factories were forced to close until the

power was turned back on. This dramatic gesture demonstrated that in

the world’s highest producing nation, green growth now trumps unbridled

consumption for future economic strength.

Water has been similarly targeted for sustainable improvement. The current

FYP calls for reducing economic loss from flood by 0.7 percent of GDP;

improving management of water supply and waste water; and controlling

phosphorus, nitrogen, heavy metals and ammonia nitrogen pollution.

Specific water targets include:

Water supply:

• 60 percent water intensity reduction by 2020, and 30 percent

consumption reduction in industry

• 40 billion cubic meters addition to urban water supply capacity,

and 70 percent improvement of large irrigation districts

Waste water:

• Nearly 50 percent more standards by 2015, including more urban

wastewater treatment plants and rural small-scale treatment systems

“What I love about China is that it’s transparent

... you don’t have to guess. You just say: ‘What’s

the next Five-Year Plan? OK, here’s our company

strategy ... here’s where we’re going.’”

Jeffrey Immelt, CEO, General Electric, speaking

at the 2010 Shanghai World Expo

The current FYP also includes

aggressive targets for green

building such as:

• New buildings: A 65 percent reduction in energy

consumption compared to 1980 building stock, an

increase in the number of buildings that qualify for

China’s 3-Star sustainability rating, and a housing

industrialization program

• Retrofits: Secondary energy audits for large urban

public buildings, and continuation of national energy

efficiency programs

While China’s FYP mandates exponential growth for

most renewable energies, it is also slowly putting the

brakes on fossil fuel sources.

The plan calls for differences from

2010 to 2015 including

• 30 percent reduction in total oil consumption and

carbon intensity from new vehicles

• 15 percent emissions reduction and 30 percent lower

energy use for passenger operators such as buses

and taxis

• 20 percent emissions reduction and 12 percent lower

energy use for freight operators such as trucks and

barges

Coal, the backbone of China’s energy supply (at 47 percent

of the world’s total consumption), is not going away anytime

soon. Although its share of the energy mix is mandated

to reduce from 70 percent to 63 percent, consumption is

projected to grow by 18 percent, from 3.2 billion to 3.8 billion

tons. Much of this demand will be met by new generation

“clean coal” plants replacing older ones. The government is

expecte to increase capacity for other conventional energy

forms such as oil and natural gas, and nuclear as well.

Nuclear alone is forecast to increase from 11 GW production

capacity in 2010 to 50 GW by 2015, with the help of a $75

million investment from the United States.

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Jones Lang LaSalle


Global Sustainability Perspective

Green pastures for cleantech players

All of this means a huge playing field of opportunity for greentech

manufacturers, energy suppliers and investors. Though many of

the “how tos” of the current FYP are being worked out, the Chinese

government has used a “carrot and stick” approach in recent years

to help achieve its sustainability mandates. It is easier to apply for

loans and purchase land for an industrial development that will run

on renewable energy. And thanks to government tax credits and other

incentives, prices are competitive with – sometimes even lower than

– rates for power from conventional sources. As a result, mandates to

meet FYP goals through required use of renewable energy seem less

onerous because the price is frequently more attractive.

For those wishing to make the most of China’s sustainability drive,

opportunities abound for greentech companies that supply components

and technological expertise for renewable energies, as well as lowercarbon

fossil fuel solutions such as clean coal. Among those cited in the

FYP as ‘Strategic Emerging Industries’ are:

• Energy saving equipment, energy service companies

and recycling providers

• Renewable energies, nuclear and clean coal

• Hybrid and electric vehicles and advanced batteries

• LED lighting and green building materials

• High-speed railway equipment

• Smart grid and smart metering

Understand, though, that the Chinese themselves have given a green

light to domestic renewable energy initiatives such as solar plants and

cell manufacturers, as well as wind farms and windmills over the past

few years, as much of the rest of the world was backing away due to

the recession. By the end of this year, while China is expected to be the

world’s largest consumer of both wind and solar energy, it is also the

largest producer of windmills and solar cells. Other nations entering the

Chinese market may find it tough to establish a foothold, since they will

be jumping on an already-rolling bandwagon.

Foreign companies establishing plants or offices in China will

have to be as sustainable as their domestic Chinese counterparts.

Offshore organizations that don’t align their operations with the FYP

can expect hostile local authorities, expensive and possibly scarce

energy resources, and competition that will crowd them out by

toeing the government’s line.

For further information please contact:

Parker White

Greater China Head of Energy and Sustainability

Services parker.white@ap.jll.com

Breaching China’s great green wall:

what foreign companies can expect

June 2012

Whether you’re already manufacturing or marketing in China, or preparing

to venture into the nation for the first time, here’s what you will encounter

as a result of the 12th FYP:

• China is probably the world’s greatest market for greentech products,

technology and services. By the end of this year, the Chinese will be

the largest consumers of wind and solar energy. Among fossil fuels,

clean coal will be in demand.

• Competition for this market will be intense from the Chinese themselves,

who ramped up their cleantech capability as many other nations held

back during the recession. China is the largest producer of windmills and

solar cells, and foreign competitors for these and many other cleantech

products will find it challenging to beat their price points. Some of the

best opportunities for overseas firms may be in transfers of sophisticated

green technologies, or specialized expertise in areas the Chinese will

need, such as offshore wind farms and utility-scale solar.

• When trying to align a China strategy for real estate with the prevailing

national trends, the FYP should be the primary source for setting strategy

at the highest level. Narrowing that strategy down into a portfolio or

asset level or generating specific, actionable tactics can be much more

difficult without clear visibility of the intricate and unique rollouts of

the FYP at the ministerial, provincial, and even district level. Investors

and occupiers aligning with the FYP can mitigate the risk of missed

government incentive by establishing public-private partnerships

with local government ministries. With support from professionals

who have proven, on-the-ground track records of working with

local governments and capturing national subsidies, creating such

partnerships and necessary visibility can ensure the FYP is a tool for

increasing competitive advantage rather than a bureaucratic obstacle.

• Foreign companies opening manufacturing or other operations in

China will likely find environmental standards for emissions tougher

than those in most other locations. And there is rarely much “wiggle

room”: Companies must comply or face stiff penalties, even potential

cutbacks in power supply. The good news is that China is ahead

of the curve on bringing down the cost of renewable energy and,

with support from government initiatives, clean power should be

competitively priced in coming years. There should be some carbontrading

opportunities as well.

• For new industrial plants and other foreign-driven developments

in China, the greener the better as far as applying for loans,

purchasing land, even getting basic cooperation from regional

and local authorities. A plan for a sustainable facility running on

clean energy will likely pass through Chinese bureaucracy much

quicker than one that is not.

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Jones Lang LaSalle

Not easily replicable, but not to be ignored

China’s 12th FYP is “game on” for most A-list global sustainability

initiatives, including carbon taxation; improved building standards and

requirements; mandates for energy efficiency; several government

incentives for solar, wind and geothermal power; and better access to

grid connectivity. Why doesn’t the rest of the world just fall in line?

For one thing, democracy, and the dissent inevitably accompanying it,

creates an obstacle for Western powers such as the U.S. and Europe.

As New York Times columnist Thomas Friedman notes in his book “Hot,

Flat and Crowded,” an important advantage is “the ability of China’s

current generation of leaders – if they want – to cut through all their

legacy industries, all the pleading special interests, all the bureaucratic

obstacles, all the worries of a voter backlash, and simply order top-down

the sweeping changes in prices, regulations, standards, education, and

infrastructure that reflect China’s long-term strategic national interests

– changes that would normally take Western democracies years or

decades to debate and implement.” Add to that leverage the fact that the

Chinese government controls its national flow of capital more directly

than any other major power in the world, and the nation’s fairly short

history of capitalism makes it less tradition-bound and more nimble than

its Western counterparts.

It is true that most of the world’s economic leaders cannot mandate broad

sustainable gains with the unequivocal alacrity of the Chinese. That doesn’t

mean that the nation and its mandates shouldn’t be held up as a model

for linking sustainability to economic growth, a major goal of virtually all

industrialized nations. At the very least, China should be closely watched as

a laboratory to see how well a green economic machine can work.


Global Sustainability Perspective

The Growth of

Eco Cities

A Chinese perspective

June 2012

Interview with Parker White, Greater

China Head of Energy and Sustainability

Services, Jones Lang LaSalle

How would you define an Eco City?

It is very difficult to define what an Eco City is, because you have so

many different variables at play with a city. It becomes very regional in

terms of defining specific parameters. I think you would end up falling

back on the general definition for sustainable development, which is

to leverage your existing resources today without sacrificing future

resources for generations tomorrow.

Are there any overall standards for these Eco Cities?

There are emerging standards, and specifically within China the

framework for that has really been the 12th Five-Year Plan, which

has refined further what government has already been doing with

Eco Cities. It’s very much like a building process, what was an Eco City

yesterday is not an Eco City today.

Who actually comes up with the idea for an Eco

City? Is it pitched? Or do the governments go to

someone to do it?

There’s no one size fits all in China, and there very rarely is for any

major economic policy. China is famous for the approach of letting the

different districts and regions work for themselves and seeing which

system works out the best. In some cases the mayor of a city may have

a development in place and chooses to set environmental parameters

around that development.

What about the financing here for these cities?

Just like any other real estate development project, it’s entirely contingent

on the type of development. If you were to look at the Langfang Eco City,

south of Beijing, this was a private developer, so he was driving that.

Compare it to the Hongqiao transportation hub – that’s the Shanghai

Airport Authority. That’s very much a government entity, and they were

driving this project at a district level.

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Jones Lang LaSalle

So investors vary, as well, depending on the project?

In Tianjin, for example, you have the Chinese government, the Tianjin

government and the Singapore government coming together as a

partnership. They did all the master planning work. Then they sold

off the plots of land within the community to individual developers. So

that means you have a lot of stakeholders involved. You have got the

initial investment in the form of land coming from the government, the

subsequent investment coming from developers buying the land and

constructing the buildings, and you have the integrated master plan that

comes from the front end with the government as the primary driver.

What opportunities are there for foreign developers

and contractors?

We spend most of our time connecting the right solution providers

to the right consumers, and with what we’ve seen, there’s no shortage

of demand in this market for best practice. If anything, there’s a

shortage of suppliers. It’s an ever-growing market because it needs

to be. As long as the need for development continues, there will

continue to be a need for solution providers.

As far as these Eco Cities go, are governments

addressing that after these Eco Cities are built,

people may not want to live there?

The first test of development is to go through a financial feasibility

assessment. If it is financially feasible, it means that there is a natural

demand; and that’s always a first consideration: Is there a natural

demand for this? A lot of times it’s years and years of pent up demand.

As people migrate to jobs, there’s new demand.


Global Sustainability Perspective

Australia’s

Aggressive New Green Mandates

China isn’t the only Pacific Rim nation with a government bullish on

sustainability. Australia enters 2012 with tough new green mandates

of its own. Among them, beginning in July 2012, is a carbon tax of

$23 (Australian) per metric ton on about 500 companies accounting for

about 60 percent of the nation’s greenhouse gas emissions. Most of the

companies subject to the tax are producers of non-renewable fuels such

as coal, oil and natural gas; power companies that rely heavily on fossil

sources; and members of industries emitting high carbon levels in

production such as steel, cement and aluminum. Few commercial

properties such as office buildings, which account for only about 10 percent

of Australia’s carbon emissions, should be directly subject to the tax.

While “the jury is still out” on the full impact of the carbon tax on

commercial portfolios, here are some likely scenarios:

• Cost of building supplies such as cement and steel could rise 2 to

5 percent at the source, but expected government assistance to

polluters in their efforts to become more sustainable should reduce

that impact to an actual price increase of about 0.5 percent or less

for new construction and renovations.

June 2012

• After a decline in real expense for the past 50 years, electricity

costs will rise for most commercial users as energy companies

invest in green production technologies. For example, in 2011

electricity generated from wind farms cost approximately $100 to

$125 per megawatt-hour (MWh), while existing coal-fired generation

cost approximately $30 to $40 per MWh. This disparity will decline

steadily with increases in renewable production efficiencies and

potential government subsidy increases, but expect to see higher

electricity costs in the near term.

• As with all cost increases, investors and landlords that provide some

or all of utilities in their leases will have to determine whether to absorb

them or, most likely, pass them on to tenants. Tenants paying their

own utility costs will have increased motivation to seek energy-efficient

buildings where their expenses will be lower.

Another measure that will directly impact office stakeholders will be

Australia’s Commercial Building Disclosure (CBD) program, which went

into full effect at the end of 2011. CBD requires the disclosure of a Building

Energy Efficiency Certificate (BEEC) during the sale, lease or sub-lease

of commercial office space greater than 2,000 square meters.

The BEEC must include:

• A NABERS Energy rating, Australia’s efficiency measurement that

awards buildings between 0 and 6 stars in half-star increments

• A tenancy lighting assessment that provides a nominal lighting power

density measurement in watts per square meter, and grades the result

on a scale of excellent to poor

• General energy efficiency guidance not specific to the disclosureaffected

area

The NABERS rating system – comparable to ENERGY STAR in the

US – has already been implemented in many Australian office buildings.

The new requirement will not only make it mandatory, but will strengthen

the role of sustainability in commercial property transactions. Potential

buyers and lessees can now determine at a glance how buildings

compare in energy efficiency. Though owners are not required to reach

a particular NABERS level, highly rated buildings already use their

achievement as a marketing tool, while those that disregard it, do so at

their peril. At this early stage, CBD seems to be affecting leasing more

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Jones Lang LaSalle

than sales transactions, but as NABERS triggers full energy efficiency

transparency in buildings, it is expected to be a larger consideration in

all office deals.

CBD will complement Australia’s Green Star measurement system

for new buildings (comparable to LEED in the U.S.), but is forecast to

have an even greater impact since only about 2 percent of the nation’s

building stock is replaced each year. Like China, Australian businesses

and investors have, for the most part, supported the majority of the

nation’s sustainable measures to position Australia among the leaders

on many global green indexes.

For further information please contact:

Joel Quintal

Director of Sustainability, Australia

joel.quintal@ap.jll.com


Global Sustainability Perspective

City Conditions

What real estate investors know and

don’t know about climate change

The power of cities: understanding

their significance

Cities hold a pivotal role in achieving a sustainable future. You don’t agree?

Let’s start with a few facts: Cities consume approximately 60 percent

to 80 percent of the world’s primary energy production. They occupy

only 2 percent of the world’s land surfaces, but are home to more than

50 percent of the world’s population. And if you are not convinced yet,

estimates show that urban areas could be responsible for up to 80

percent of total greenhouse gas emissions.

According to “The Case for City Disclosure,” a report jointly authored by

the Carbon Disclosure Project (CDP) and Accenture, this is a challenge

cities are willing to take, as they are “well placed to act quickly and

June 2012

effectively to combat climate change and its effect.” But does the right

information exist for investors to make informed decisions at the citylevel?

Do city leaders truly understand the impacts and sources of their

highest emitting activities?

We think cities and the investment community are still trying to come to

terms with the necessary information, which is why Jones Lang LaSalle

and CDP Cities are publishing a series of research snapshots on the

implications of city climate change data for investors and businesses,

focusing on the real estate sector.

“New York is concerned

about the quality of the

building and its impact

on the environment. In

Sao Paulo, there is not

the same level of concern

yet. So one needs to ask

‘what’s the difference?’

The difference is the city.”

Fabio Maceira (Sao Paulo)

Large World Cities (ranked by 2010 GDP)

22 23

Cities

New York

Paris

Moscow

London

Shanghai

Sao Paulo

Delhi

Sydney

Tianjin

Johannesburg

Dubai

Country

United States

France

Russia

United Kingdom

China

Brazil

India

Australia

China

South Africa

UAE

* PPP = Purchasing Power Parity adjusted values

** Some stock figures relate to Grade A only

*** These are Prime Office Rents

Source: Jones Lang LaSalle

City GDP 2010

US$ PPP* in billions

1,206

618

547

491

355

348

222

174

148

144

67

Jones Lang LaSalle

This article is our first research snapshot, revealing our findings to date

and the future direction of our collaborative research. It also features

quotes from interviews with our own local expert panel around the world.

Cities are significant: New York City’s 2010 GDP is roughly equivalent

to Korea’s, Mexico’s or Australia’s GDP. The economic scale and

impact of cities is great and growing relative to national GDPs in many

cases. This is evident in the eleven cities around the world seen in the

chart below, taken from data held by Jones Lang LaSalle as part of its

World Winning Cities database of 660 cities. But there’s still progress

to be made around cities’ abilities to enable attractive investment

conditions through meaningful information.

Investment Volumes

US$ in billions

34

27

8

46

11

3

0

8

na

na

0

Office Stock**

Millions m2

58

52

13

33

4

3

5

9

0

8

6

Office Rents**

US$/m2/pa

771

1,094

1,200

1,636

751

881

443

484

230

320

439

Vacancy

In %

10.5

6.8

16.5

5.4

11.9

11.9

17

8.8

28.7

9.8

45.0


Global Sustainability Perspective

Shedding light on the ideal conditions:

what we’ve found so far

Due to this current state of play – the fact that cities hold a lot of

significance, but do not provide investors with robust and detailed

information – we have endeavoured to better understand the levers

required for cities to increase economic competiveness, including

how climate change data impacts investment in real estate. We are

addressing the following through our research: firstly, what creates

attractive urban investment conditions; secondly, what is the role

of a city government in creating these attractive urban investment

conditions; thirdly, how climate change will impact the value of real

estate investments; and finally, what is the role of climate change data

in enabling decisions at the city level.

To shape our initial findings, we conducted 13 interviews across the 11

cities listed in the chart on the previous page with Jones Lang LaSalle

experts who were asked to reflect on their view of the market and

externalities. We also carried out a series of brainstorming workshops

to facilitate conclusions and to conduct a global review of our experts’

insights.

Outcomes to date reveal five main themes:

• Short-term vs. long-term investment outlooks: Unsurprisingly, climate

change is not currently front-of-mind for real estate investors, as most

investment horizons are three-to-five years, whereas climate risk is

perceived to be on a 25+ year horizon. Investors consider anything

that is cost-related in the short-term; and outside of energy costs,

climate change is perceived to pose little to no known short-term costs.

Platforms such as CDP Cities, which provide annual self-reported risk

assessments, have the potential to reduce this investor myopia. In

particular, CDP Cities can provide current snapshots of city risk and

can help accelerate the time lapse as we move towards an undefined

tipping point in investor perception.

“I think most people know climate change is a real risk, but I also think

it is human nature to not respond practically to long-term risk. It’s the

same reason people ignore the long-term consequences of smoking.”

— Dana Schneider (New York City)

• Challenges of key city “actors”: There is a gap between the data

investors have access to and the data investors need to make

informed, long-term decisions and to understand climate change

risks. Equally, city incentives, such as tax deductions or incentives

based on a location decision, are rare in relation to low carbon real

estate investment. Thus, city representatives and policies seldom

influence investor behavior by rewarding them for considering

climate change as a primary criterion. Additionally, we found that

cities could appeal directly to investors through better marketing of

their sustainability initiatives.

“In terms of attractiveness, governance is absolutely critical. Having

a ‘go to person’ in a strong position of power is vital to encourage the

flow of real estate investment.”

–Lee Elliott (London)

June 2012

• Established cities vs. growth cities: Different factors should be

considered depending on the maturity of the market, which is one

of the key aspects an investor considers, given varying drivers and

priorities related to economic progression. For example, growth cities

offer significantly higher margins than established cities. Therefore,

investment in growth cities is less likely to be driven by criteria such as

environmental regulation, governance and labor markets.

“That’s the challenge: basic information that is readily available in other

global cities is still not readily available in India.”

— Deepak Bhavsar (New Delhi)

• Transparency: Investors look for good economic growth prospects,

robust governance, sufficient labor, regulatory incentives and solid

infrastructure as a few examples of criteria that create attractive

urban investment conditions. We found that roughly half the cities

in our study do not effectively and openly communicate the status of

these conditions. Thus, markets lack the transparency necessary for

investors to make informed decisions. City governments must enable

more comprehensive and more readily available information, thereby

increasing the attractiveness of the urban landscape.

“There is a general lack of transparency in Shanghai’s market – it is

improving and has been improving for years – but if you look at Jones

Lang LaSalle’s Global Real Estate Transparency Index (the 2012 Index

will be released in June), it is one of the most important aspects for

investors. Transparency applies to sustainability just like any other

metric you are trying to measure.”

— Parker White (Shanghai)

• City level indicators: The Financial Times recently concluded: “Global

investors usually think in terms of countries. They should be paying

more attention to cities.” For years, investors have paid careful attention

to the actions of national governments to determine if their investments

will remain safe and remunerative. As the world urbanizes, however,

city governments are also playing an increasing role in creating lowcarbon,

climate-safe communities that are attractive places to invest.

The investment community must better understand the role of the local

government in minimizing risk and maximizing investment opportunity

in cities.This is true of all data, not just sustainability data.

“Defining a new indicator for investors won’t make them change

their behavior in a fundamental way. I think if we want behavior to

change, the legal approach has to be more constrictive by saying,

for example, ‘buildings have to enhance performance on item x by

y percent.’This, in conjunction with a shift in occupiers’ demands for

green buildings that cause investors to adapt accordingly, will lead to

progressive changes.”

— Virginie Houzé (Paris)

Collectively, these five themes set the stage for defining the ideal

scenario to enable sustainable investment in cities.

Next steps: how we will shift the debate

and enable action

Now that we have an understanding of the challenges for investors

and businesses, what’s our plan? We will take a collaborative, multistakeholder

approach to more precisely express the barriers and the

potential solutions. Our aim is to define the ideal scenario for enabling

sustainable investment in cities, which will be brought to life through

10 conditions. Our resulting recommendations are intended to shift the

debate and to move from the current state to the necessary threshold

for low-carbon, sustainable cities. We are aiming to publish the results

of this endeavor jointly with CDP Cities later in 2012.

Progress by cities to date: a special

preview of 2012 CDP Cities report findings

CDP Cities hosts disclosure from 73 cities and local governments this

year – up from 48 last year – from all corners of the globe. Participants

range in size from the city of Tokyo, with a population of 13 million, to the

village of Kadiovacik in Turkey, with a population of 216.

For further information please contact:

Sarah Nicholls

Jones Lang LaSalle

Sarah.Nicholls@eu.jll.com

Conor Riffle

CDP Cities Project

24 25

Jones Lang LaSalle

The CDP Cities report findings will show:

• Reducing citywide emissions through actions related to energy

demand in buildings is a key area for private sector involvement.

Although cities are for the most part relying on their own budgets

to finance emissions reduction projects, actions related to reducing

emissions from energy demand in buildings show high utilization

rates of outside or private funding sources.

• Planning and construction of the built environment is a key area for

cities’ adaptation and resilience strategies. A large number of the

adaptation actions reported by cities fall under this important category.

The full report will be released 7 June 2012 on the CDP Cities website.


Global Sustainability Perspective

Changing U.S. Logistics Patterns

Bode Well For Sustainability

Inland Port Connections

USA-Canada-Mexico

Due to increasing demand for speed to market at minimum cost –

particularly in retail and most especially for the booming e-commerce

segment – shipping procedures are changing at major U.S. seaports and

inland logistics hubs. And though the evolving supply chain efficiencies

are driven more by savings and speed than by sustainability, the results

are greening U.S. commercial transportation as well. Trends that provide

environmental as well as economic benefits include:

• More trains, fewer trucks by comparison: The economics of

American long- and short-haul rail shipping are steadily improving.

Railroads have made major financial commitments to infrastructure

and terminal overhauls, as well as service, in recent years.

Though trucking still accounts for more than 70 percent of U.S.

freight shipments according to the American Trucking Association,

the fastest growing mode of transportation has been intermodal.

According to the U.S. Bureau of Transportation Statistics, over 440

billion rail freight revenue ton miles were recorded for Q1 2012,

22 percent above that shipped during the same period three years

June 2012

ago. This is good news since rail is a far more sustainable mode of

transportation – producing up to 10 times fewer carbon emissions

per ton-kilometer than trucking, according to a recent University

of California-Berkeley research report on Transport and Carbon

Emissions in the United States.

Rail and intermodal transportation will likely continue to increase

in popularity as rail’s economies of scale continue to improve with

rising fuel costs. Union Pacific, for example, expanded its intermodal

volume about 20 percent between 2009 and 2010. Rail’s biggest

inroads are expected in shipments of less than 500 miles, where

trucking has traditionally been considered more competitive.

• The rise of “inland ports”: Economic and efficiency gains in

U.S. railroads are well timed as a means of helping to relieve

increasing congestion at U.S. seaports. Increasingly, inbound

cargo from overseas will be transferred directly from an ocean

vessel to railcars and then transported to an inland location, away

from the more congested port itself, for further processing and

distribution. These inland locations, or intermodal centers, serve

as “inland ports,” with some handling as much cargo volumes

as their coastal counterparts.

Inland ports act as an integrated component to U.S. port systems,

creating a logistics “barbell.” With port systems growing in size

and capacity, the inland port provides the counterbalance, with

the two ends connected by a dedicated rail line, originating ondock

at the container terminals with direct access to the inland

port destination. In such fashion, the inland hub provides the

means for ocean cargo to pass through the waterfront terminals

more quickly and more cost effectively, literally “clearing the

decks” for the arrival of the next vessel.

Conclusion: Less shipping pain is sustainability’s gain: What does all this

mean for sustainability? Besides an increase in more environmentallyfriendly

rail transportation, many inland ports are less established than

their coastal counterparts that have been around for decades, even

centuries. Inland ports can be designed from a comparatively clean slate,

incorporating green technologies and practices ranging from renewable

power and water conservation to site plans that preserve natural habitat.

Even when sustainability isn’t in the forefront of American logistical

planning – which is often the case – one thing is clear: The changes

afoot to streamline distribution patterns within the world’s largest

consumer economy should make the U.S. a greener country, as well.

For further information please contact:

Aaron L. Ahlburn

Vice President, Americas Director of

Research, Industrial & Retail,

aaron.ahlburn@am.jll.com

26 27

Jones Lang LaSalle

About 40 miles from Chicago, bordered by a BNSF

main railroad on one side and Interstate 55, a major

highway, on the other, is possibly America’s most

sustainable inland port. The RidgePort Logistics Center

contains 14 million square feet of buildings ranging from

200,000 square feet to 2 million square feet, but equally

impressive are environmental benefits such as:

• Almost one-third of the land area set aside for natural habitat

• Wastewater filtration using four different green technologies

• A required tenant composting program, with the end result

used in site planting and landscaping projects

• Plans to construct a limestone mine 200 feet under the

property for aggregate stone used for roads and buildings; this

is expected to eliminate truck trips using 540,000 gallons of

fuel and prevent 10,476,000 pounds of CO2 emissions

• Best management practices to minimize storm water impact

• Solar and wind energy generation

• A sustainable tree farm


Global Sustainability Perspective

The

City of Light

In the last few years, rising oil prices and increasing awareness

of environmental challenges have caused the re-emergence of car

sharing initiatives in large cities throughout the world. In 2008, the car

manufacturer Daimler launched Car2Go, the first car sharing program

that allowed customers to leave the car in any available public parking

space. The program was implemented in cities in Germany, the U.S.

and Canada with gasoline versions of Smart Fortwo cars, and at the end of

2011 two fleets of 300 electric vehicles (EV) were launched in Amsterdam

and San Diego, as a test for large scale electric vehicle car sharing.

The example of Paris

Goes Electric

After the successful introduction of its public bicycle sharing program in

Paris in 2007, with more than 20,000 bicycles and 1,800 renting stations,

the City of Paris decided to mark a significant milestone in December

2011 when the Autolib’ electric vehicle car sharing program was started.

The goal to be reached before 2014 is to have 3,000 EVs available. The

June 2012

car sharing scheme uses Bluecars – specially designed EVs by the

French manufacturer Bolloré. The cars are available for short-term

rental in Paris and 45 surrounding cities, under the Autolib’ brand.

The Autolib’ system is based on self-service and maximum autonomy:

Once registered as a member, one can pick up a car in any station,

drive around and leave the car to recharge in the station of choice. The

payment is based on the time spent in the vehicle on a roughly 7-europer-half-hour

basis. The service offers a 24/7 videophone assistance

and the possibility to book a vehicle or a parking space.

A flexible feature of the scheme is that Autolib charging stations are not

reserved for Bluecars only: Privately owned EVs, outside of the Autolib’

scheme, can also be left to recharge. This results in an increase of

publicly available charging points in the city and the end of “range

anxiety” for EV owners, i.e. the fear of running out of battery and not

being near a charging point.

Rapid impact

Is Paris providing

the model for all

cities to follow?

In April 2012, Autolib’ reached the 100,000th rental, with only 1,740 vehicles

released so far into the streets. Five hundred stations are spread around

Paris and the neighboring cities. By October 2012, 100 more should be

installed in underground parking areas and the total should reach 1,000

stations with more than 5,000 charging points. Bolloré claims that every

week, its member base increases by 10 percent.

Once the 3,000 Autolib’ EV goal is completed, Bolloré will start manufacturing

Bluecars for private owners. The Paris experience will be both a largescale

test and a showcase for the car before its arrival in a market

that is expected to take off in the next few years: All the major car

28 29

Jones Lang LaSalle

manufacturers already have or are designing hybrid vehicles, and there is

serious competition in fully electric motorization. There are still a number

of technical, usage and production cost issues to be solved, with batteries

and their costs of up to one-third of an electric car’s total price tag, as

one of the main drivers for slow take-up.

What are the benefits?

The wide-spread usage of such EV car sharing programs will allow for

considerable reductions in local Greenhouse Gas emission, as well

as in noise and city traffic congestion. Such measures will contribute

to France’s commitment to reduce GHG emissions by 20 percent by

2020. In addition, it provides a means for developing a more healthy

and comfortable living environment in urban areas through reduced local air

pollution from fuel combustion.

The City of Paris has estimated that once the Autolib’ program has

reached its full capacity, it should replace the need for 22,500 private

vehicles and save 165 million kilometers driven per year. Such a largescale

experience has never been attempted before. According to plans of

the French government, there will be 400,000 public charge points put

in place across France by 2020. It expects to take the number of EVs and

hybrids in circulation to 2 million by 2020.

The EV car sharing scheme example could be followed by large campuses,

where the experience of Autolib’ is replicable on a corporate scale, with dozens

of small EVs serving as an intermodal link to mass transit stations during

commuting hours and as a corporate fleet during working hours.

What does this mean for property owners?

Related to the push for introducing electric vehicles in France and to create

user interest in EVs through EV car sharing schemes, the French government

introduced a complementary new obligation for property owners in terms of

the construction of the infrastructure for electric and hybrid vehicle charging

stations. This obligation covers enclosed and covered parking areas in office

buildings, which need to allow at least 10 percent of their parking space

to be EV-friendly. In practice, it means that cable ducts and cable trays

must be provided from the central electric panel to the parking spaces,

and that electricity supply must take into account those future EV charging

demands. The obligation is already in force for all new office buildings with a

planning permit received after 1 July 2012 and will be extended to existing

buildings from 1 January 2015.

For further information please contact:

Franz Jenowein,

Director, Sustainable Real Estate Consulting & Research

franz.jenowein@eu.jll.com


Global Sustainability Perspective

The US Green Building Council’s (USGBC) LEED program is the world’s

most widely followed green building rating system, as owners, developers

and tenants in more than 30 countries have sought and received LEED

certification; however, it is not the only system. Countries around the world

have their own rating systems designed to address their national priorities,

and owners seeking green building certification must decide whether to

pursue the national system, LEED or both. Those who choose LEED may

face special challenges in interpreting and applying the system.

The USGBC is the first to recognize the need for guidance to practitioners

outside the U.S., and has a dedicated International Operations Division not

only to work with its own members and LEED Accredited Professionals

(AP) throughout the world, but also to provide cooperative support for nonaffiliated

green building organizations at national and regional levels.

Global Sustainability Perspective recently asked USGBC Vice President of

International Operations Jennivine Kwan to share her insights on LEED’s

relationship to other certification initiatives throughout the world, and how

different organizations can work together toward common green building

goals. Here are some excerpts from our conversation:

Q. How would you characterize USGBC and LEED’s

accord with other green building groups and systems

in different parts of the world?

A. We definitely see our relationship as symbiotic, not competitive.

All the groups coexist toward the same end result of increasing green

building initiatives, regardless of the impetus. Our own goal is to

enable LEED to be a catalyst for sustainability however it can best

be utilized in any particular location throughout the world. If that’s

determined to be LEED certification, fine, but if LEED can be used

as a benchmark or facilitator for another group’s effort, that’s just as

valuable as far as we’re concerned.

For example, the measurement tool preferred by China’s government

is its Three Star System, with One Star and Two Star versions geared

to regional and local markets. We support that system in any way we

can, because it encourages the entire green building industry to grow in

China. From my perspective of working in China for several years, I think

that LEED’s international reputation as an effective tool helped the China

Green Building Council in developing its own preferred system. And it’s

notable that more than 300 Chinese buildings have received or applied

for LEED certification, which demonstrates how LEED and USGBC can

contribute to and learn from sister initiatives throughout the world.

June 2012

LEED’s International

Impact: An insider’s view

Q. USGBC has some chapters in other countries, but

it seems to be somewhat limited, even though LEED

is internationally recognized. Is this your preferred

approach, and why?

A. Our international strategy is not really to develop as many chapters

as possible. It is to make LEED the common language of green building;

to provide a sense of unity, community and a common way to talk about

the same thing. We know that there are different regional characteristics

and issues, and we try to make LEED adaptable for use itself, or as a

benchmark for a nation’s own system.

By the same token, our overall strategy behind forming international

USGBC chapters is that we want to support the local green leaders

as effectively as we can, while making the best use of our resources.

We take a case-by-case approach. If the local interest is high but the

organization level is not, then a new chapter might be in order. If the

area already has a strong green building network, it makes more sense to

support their efforts than to devote our time and resources toward forming

a chapter that, instead of helping the overall effort, may even be seen

as divisive by the local leaders. Most often, the most productive path for

us seems to be supporting the local infrastructure with LEED and other

assistance we can provide.

Q. Is there confusion internationally about the

difference between USGBC, the World Green

Building Council (WGBC) and other worldwide

councils and green building organizations?

A. You bet. And the confusion extends beyond USGBC to LEED

itself. A surprising number of outsiders think that both LEED and the

USGBC are run by the U.S. government, and as such are biased

toward “American” interests. Needless to say, one of most important

tasks is to remove that type of misconception, and convince them that

we are totally transparent in partnering toward whatever best serves

their sustainable goals.

And yes, we do get confused with WGBC. As the name infers, WGBC

is an umbrella organization for green building councils at national,

regional and local levels throughout the world. USGBC did have an

important development role as one of the eight national councils that

launched WGBC in 1999, and we’re gratified that with the support

of WGBC, green building councils are on the ground partnering with

industry and government in more than 80 countries. I think that as

the market matures, so will the understanding of distinctions among

LEED, USGBC, WGBC and other green building councils.

Q. How do LEED practitioners share ideas in

countries where LEED is not the primary system?

A. Until a couple of years ago, even though we had LEED chapter

members and APs in many countries, the personal motivation and sense

of urgency to bond together to share information wasn’t always there.

The situation has changed a lot in recent years. Sustainability has

proven to be more than a fad, and it is becoming government mandated

in many places. Though some markets are more mature than others,

there’s a hunger for green building information at some level almost

everywhere in the developed world.

LEED interest has always been very much a grassroots movement. It’s

a voluntary system and its practitioners are in it for their passion for

sustainable living. Increasingly, I’m seeing LEED APs getting together

informally with non-LEED people with green interests as professional

colleagues, or just groups of friends with a shared environmental

commitment. They talk about LEED and other green facilitators, sharing

ideas and experiences and discussing how sustainable building can best

move forward in their part of the world. It really mirrors the scenario in the

US that led to the USGBC and LEED, and it’s very satisfying to see that

initial enthusiasm rekindled in so many new places.

30 31

Jones Lang LaSalle

Q. Many LEED credits are based on standards set

by other organizations, such as the American Society

of Heating, Refrigeration, and Air-Conditioning

Engineers (ASHRAE), which may not be the

applicable standards in every country. How adaptable

is your system in allowing standards other than

ASHRAE to be used in LEED certifications?

A. That’s a complex issue that USGBC is discussing right now. We really

want to make LEED as flexible as possible, and one way we’re doing

that is by establishing alternative paths for LEED pursuits outside the

US. The challenge is to achieve this without either raising or lowering

the measurement bar, because LEED’s utility is based on its consistency

everywhere it is used. We look at the outcome and what we want the

building to do in the end through LEED certification, rather than try to

micromanage the steps in getting there. For some of the LEED credits,

it’s a simple matter of a change in the credit language that enables

people to use something that is an apples-to-apples equivalent.

With ASHRAE, that might not be so easy. LEED is not a standard itself, but

a measurement tool that relies on other standards USGBC has chosen as

benchmarks for sustainable building excellence. ASHRAE is a great standard

that predates the development of LEED. A lot of work went into creating the

ASHRAE standards, and we don’t need to re-create it. If people want to use

another standard for measurements covered by ASHRAE like the energy

credits, we have to make sure that it is fully compatible with the ASHRAE

standard requirements; otherwise LEED loses its validity as a measurement

tool. That’s not saying that other standards might not be as demanding as

ASHRAE; some may indeed be more stringent. LEED is neither the easiest

nor the toughest measurement system around. What is critical is that any

other international standard used must really align with the LEED standard it

is replacing for our tool to remain consistent.

Q. Are LEED materials available in multiple

languages?

A. Currently much of our information is available in English, Spanish,

Chinese, Portuguese, French and Italian versions. These cover a

large percentage of the world’s population, especially where there is

green building going on. We’ll certainly consider other languages as

the demand occurs.


Global Sustainability Perspective

Q. Our LEED APs in countries with other systems

sometimes run into difficulty getting construction and

design professionals to guarantee compliance with

LEED criteria. The same issues arose in the U.S. at

first when LEED was not well-known. Overall, how has

the international reception toward LEED compared to

that of the U.S.?

A. The initial reception is almost the same. When people in both the

US and other nations are getting acquainted with LEED, there are

some enthusiastic supporters and, quite frankly, a larger number of

skeptics. There are always those who say that it just can’t be done

June 2012

in their organization; that the necessary green products and technologies

cost too much, or are not adequate for their operational needs; that they’ll

be over budget and in trouble with their executive leadership; that they

don’t have time to spend learning and fulfilling LEED requirements.

USGBC faced the same hurdles when they introduced LEED into the U.S.

in 1999 because people were doubtful of the unknown. Now we have

a strong American track record, and we can demonstrate as proof that

LEED certification can be achieved by almost anyone if they make the

commitment, and it’s not a budget breaker. It’s the same story elsewhere

in the world as green building emerges. We try to communicate with and

educate people to help them make the right decisions upfront for the green

building process. If they do, it is possible, for little extra effort and often no

extra expense, to create a green building that will save money in reduced

energy costs, and be a marketing tool in satisfying tenants or employees.

What we need in every new region is that first success story. I worked in

Chile for a company that originally stonewalled green building, except for

one charismatic leader who kept championing a LEED pursuit for a new

facility until it became a reality. This company has since become one

of the biggest leaders of sustainable building in that region and a leader

of the emerging Chile Green Building Council.

Q. What’s ahead internationally for USGBC

and LEED?

A. Our tangible goals include a greater outreach toward our existing

USGBC members and LEED APs throughout the world. We want to

bridge any gaps, assure our international stakeholders that they are

valued, and set up channels such as a forum for their insights and

questions to make sure this happens. On the technical side, we’re

working on making LEED more user-friendly for people of all nations.

And since China is surging in LEED interest and applications, we are

hiring someone who will focus specifically on our member and AP base

in that nation. We also want to integrate the entire life cycle of a building

more fully into our process, so LEED more automatically becomes the

first step of an ongoing sustainability effort where it is used.

Beyond outreach, we are trying to become more international ourselves

by learning from our colleagues in other nations, and trying to create

a more international voice for everything we do. We want to effectively

connect with green building advocates everywhere so they can

understand the thought and complexity that goes into developing the

LEED system. We want to help them understand that LEED is not a

tool to push American interests, but a system developed by volunteers

who care very deeply about sustainability. We hope to augment our

world-class tool with insights from those with an international point of

view to make LEED as valuable as possible for everyone in the green

building community, all around the world.

For further information please contact:

Jennivine Kwan

Joined USGBC in 2010 as Vice President of International Operations. She

previously held regional responsibilities in energy and green solutions for

Johnson Controls, working in China and Chile.

Introducing

Sustainability

Transparency

A new index tracking transparency

of sustainability-related issues

The Global Real Estate Transparency Index has been published by

Jones Lang LaSalle since 1999. It is a unique survey that quantifies

the key components of real estate transparency such as performance

benchmarks, market fundamentals data, transaction process and the

regulatory environment across almost 100 markets worldwide. This

year, we have for the first time included a quantitative assessment of the

transparency of sustainability related issues.

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Jones Lang LaSalle

For a subset of 28 countries covered by the Index, we have looked at

a number of elements that render sustainability features of markets

and assets more transparent. An assessment of building energy

efficiency requirements, energy performance benchmarking, carbon

emissions reporting, green building rating systems, green lease clauses

and performance indices of green real estate has been undertaken

to produce the world’s first comparative benchmark of real estate

transparency of sustainability-related issues.


Global Sustainability Perspective

Real Value

34

June 2012

We are in business to create and deliver real value for clients, shareholders and our own people in a complex world that is constantly changing.

Jones Lang LaSalle is a financial and professional services firm specializing in real estate services and investment management. Our more than 40,000 people in 1,000 locations in 70

countries serve the local, regional and global real estate needs of those clients, growing our company in the process. In response to changing client expectations and market conditions,

we assemble teams of experts who deliver integrated services built on market insight and foresight, sound research and relevant market knowledge. We attract, develop and reward the

best, and most diverse, people in our industry, challenging them to develop enduring client relationships built on quality service, collaboration and trust.

Global Energy and Sustainability Services Contacts:

Dan Probst

Chairman, Energy &

Sustainability Services

+1 312 228 2859

dan.probst@am.jll.com

Julie Hirigoyen

EMEA Head of

Sustainability Services

+44 (0)20 7399 5330

julie.hirigoyen@eu.jll.com

Peter Hilderson

Asia Pacific Head of Energy

& Sustainability Services

+61 2 9220 8735

peter.hilderson@ap.jll.com

More than 120 offices worldwide

Bob Best

Americas Head of Energy &

Sustainability Services

+1 312 228 2047

bob.best@am.jll.com

Franz Jenowein

Global Sustainability

Perspective

+33 1 40 55 85 31

franz.jenowein@eu.jll.com

COPYRIGHT © Jones Lang LaSalle IP, INC. 2012

This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from

sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for

any loss or damage suffered by any party resulting from reliance on this publication.

This magazine is printed on 30% recycled paper. Please recycle.

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