SUSTAINABILITY:

ITS ALL ABOUT GETTING ON BASE, NOT ABOUT HITTING A HOME RUN

F. Joshua Millman, AIA, NCARB, LEED-AP, CFM Facilities Planners + Architects, Inc. 4201 East Park Circle Harrisburg, PA 17111 (717)221-9700 jmillman@facplan.com www.facplan.com SUMMARY The media seeks opportunities to profile the latest LEED Platinum Office Building or Net Zero interpretive center. These projects are the homeruns of the sustainability world. It is possible to lose sight that sustainabilityto stretch the metaphoris really about getting on base. Indeed, seeking LEED certification at any level is more like trying to hit a triple at every at bat, a strategy that never wins a batting crown or a championship. The tried-and-true method of systematically working your way around the bases suggests a tiered approach to achieving levels of sustainability. A model is proposed that identifies four (4) tiers of sustainability, each starting with an assessment process: Tier 1: Basic Sustainability Assessment Tier 2: ENERGY STAR Assessment Tier 3: LEED Assessment Tier 4: Net Zero Assessment The tiered approach defines the right assessment tool to compile the right level of data appropriate for desired outcomes; what is needed to move from base-to-base. I wasnt surprised to see Mac at my IFMA Chapters annual Night at the Barnstormers, a chance to watch our local minor league team, network with chapter members, eat greasy food, drink beer, and people watch. Mac shares my passion for baseball at any level of talent. His usual enthusiasm was absent as he approached me with a worried look that suggested wed spend more of the next few hours talking about something other than the intricacies of the game we both love. That suspicion was quickly confirmed when confessed that he had just been made his companys Sustainability Officer. The Old Man started talking about the US Army and Net Zero, how hed love to see us earn Gold EBOM, and that hed be looking for my implementation plan at the corporate review in 90 days. He moaned, I dont know what half that alphabet soup is. I was sure a few years ago that this was just the latest management fad, and by now wed be into some new on-the-floor, cross-legged, cross-disciplinary listening program. Macs supposition wasnt far from the mark. I explained in probably more detail than he wanted how five years ago many were taking that view. For example, the term became so over used, Advertising Age

INTRODUCTION: THE SCOUTING REPORTS

magazine picked "sustainability" as number eight among words editors wished would no longer be used in their list of the "Jargoniest Jargon of 2010 in their December 2010 issue. The overuse of sustainability in advertising gave rise to the pejorative term of greenwashing to describe the simplistic view of sustainability. A generation earlier, everything was reduced fateven Ben & Jerrys ice cream! Now everything was green. In real estate, the push was on to offer buildings with green features as a differentiator and means to sell or lease the property for more. The same hype word as premium. Developers wanted their buildings to be in the process of LEED certification. If the prospective tenants or buyers had no interest in LEED certification, this feature was quietly dropped. There were also ABC buildings, meaning, all but certified. Those a bit more serious about sustainability wanted to know how to gain LEED for as few dollars as possible: Imagine, 1 point for the cost of a bike rack, even though the building was far from any safe bike path. Around 2010, there was an important shift. As a LEED-AP, I thought it was due to the much smarter LEED certification system released in 2009. Others have suggested that LEED was finally understood as an overhead cost saving strategy that had the patriotic side benefit of reducing national energy consumption levels and foreign dependence. It became an easy way to whip-up enthusiasm among employees when the recession was cutting into exotic company off-sites. As stilted as the concept of a Triple Bottom Line sounds, employees were connecting with the ideas of: Contributing to profits by lowering energy costs. Reducing the amount of waste going to landfills by recycling just about everything (and contributing to profits by lowering the companys waste removal costs). Creating a healthier work environment through better air circulation, less toxic cleaning supplies, and more natural light and ventilation; resulting in a nicer place to come to work and healthier work environments (and contributing to profits by increasing the companys productivity).

As Mac again moaned into his beer about wishing the old man had started on this track back in 2010 (coincidentally before Mac had started at the company), Miss Millersville of 2012 singing our national anthem started coming over the loud speaker, and we quickly stood up and took off our major league caps. So whats Net Zero all about, and how do I get my company there before my career is forever mired in green? Mac asked as the announcer unenthusiastically mispronounced the starting lineup of the visiting team. Slow down, I urged. Thats like asking me to teach a new little leaguer how to hit a homerun the first time he ever grips a bat. I went on explain that net zero which is the practice of generating enough energy to offset any power needs from the grid, is the homerun, perhaps the grand slam, of sustainability strategies. When I asked Mac, whose two sons are budding little leaguers, what was the first thing you taught about batting, without a pause he responded, getting on base. And how to score runs? Setting a batting order that moves your guys around the bases. And setting the batting order? Figure out what talent you have and work on skills. Mac was making this easy, as I noted that our home team now had a man on first and third courtesy of a walk and a single that advanced the runner two bases. I started with his last response about assessing the skills and attributes of your players. It was not too far a leap to think of your facilities as your players. They each had their pluses and minuses. While some of the minuses could be mitigated and in rare occasions turned into pluses, those pluses could be leveraged to create outstanding facilities (or hitters). The pluses, thats where most of your focus should be! As if to emphasize my point, there was the crack

THE FACILITIES BASELINE: SETTING THE BATTING ORDER

of a bat and the latest homerun from last years number one draft pick making his way through the minor leagues. Sadly, hes on the other team. Figuring out what you have is actually the easiest part. There are several industry standard tools available to you. The nice thing about these tools is that if you have a portfolio of buildings under your management (or you are determining which among a group of buildings to purchase or sell), you have an accepted method to compare those facilitiesapples-to-apples. The two tools I favor are ASHRAE Level I and II Energy Audits and the ASTM Standard E2018-08 Facilities Condition Assessment. So whats the process? Mac asked, as our home team manager was coming out of the dugout to call in a reliever for our starting pitching who had just managed to load the bases with no outs. Too many of my rookie mistakes of trying to solve all my worlds problems with a single project (or a swing of the bat to try to send the ball to the bleachers) have lead me in my dotage to always take the tiered approach. If for some reason the plug is pulled, I have results for my progress. In the case of developing a Sustainability Plan, I use four (4) tiers: Tier 1: Basic Sustainability Assessment Tier 2: ENERGY STAR Assessment Tier 3: LEED Assessment Tier 4: Net Zero Assessment Each tier involves setting a baseline. The detail in the baseline is proportionate to the goal of the assessment. For example, in Tier 1, you are looking for low hanging fruit and what you dont know. A building envelope integrity analysis might be something you note to have a baseline in the future. Tier 1 Basic Sustainability Assessment is a limited walk through the facility to identify easy opportunities (low hanging fruit) and impediments (roadblocks) to significantly increase sustainability. Facility managers and sustainability officers have used this assessment tool for such objectives: Achieve an easy first success for a sustainability program, developing momentum for future efforts Reduce number of prospective facilities to a manageable few being considered for upgrade or disposition Perform due diligence on a facility acquisition or triple-net lease Develop a sustainability assessment strategy and goals Like the minor leagues, the place you got to start, Mac opined. Now he was surpassing his mentor in metaphors. Meanwhile, our home team was slowly chipping away at the run deficit, but would there be enough innings to make up the gap (and to explain all four tiers)? Tier 2 ENERGY STAR Assessment identifies what actions should be considered to move from current conditions to the desired ENERGY STAR rating. I took a few minutes to explain that ENERGY STAR is a joint program of the US Environmental Protection Agency and Department of Energy, making it the national standard for saving money and protecting the environment through energy efficient products and practices. An ENERGY STAR rating of 75 is the minimum for certification. The higher target the rating, the lower the energy usage per square foot, the lower the energy costs. Some reasons for initiating the ENERGY STAR process through this assessment: Use a standard and systematic approach to reducing energy costs that can be benchmarked with other facilities Compare the energy uses of multiple faculties in order to identify which to upgrade or acquire Set a minimum ENERGY STAR rating for the building portfolio Provide data as well as a KPI for prospective buyers Identify locations to add sub-metering to better utility usage Identify errors in utility bills, such as overcharges Comply with municipal requirements to post ENERGY STAR ratings on commercial properties for sale

 Develop data required for some LEED certification points and programs These two tiers seem to focus on just energy use and cost reduction. Sustainability is more than that, right? Mac asked. It was the bottom of the ninth, we were behind by a run and the latest arrival from the farm team was up, with the jumbo-tron reporting that no data was available on whether this kid can hit or not. In other words, no baseline. Tier 3 LEED (Leadership in Energy and Environmental Design) Assessment employs the whole sustainability packagethe triple bottom lineas envisioned by the US Green Building Council. While it is not the only available rating system, it appears to be becoming the international standard. A new version is scheduled for release in mid-2013. Along with energy, this program looks at waste streams, water usage, ventilation, sunlight in work areas and how buildings are maintained and cleaned. Aside from all the direct cost benefits and indirect productivity and community benefits, this program has succeeded for several reasons: The bar is raised with each new version Minimum certification can be readily achieved by complying with building codes, at no extra construction cost The program continues to expand to cover more building types Certification is adjudged by a single independent third party; this ensures that the building is as green as the owners or their consultants assert, and that the same standards of certification are used for all locations Any downside to the program? Mac inquired. The concern I had was that the design data was supplied by the LEED design and construction team, and not independently verified that the facility was built as designed, or that the conservation systems were maintained and not deactivated. Like catalytic converters, Mac suggested, though looking too young to be driving when those were first introduced. At which point the youngster who had just been called up hit a blooper single over the second basemans head, scoring the tying run with two outs. A ground out for the next batter on the first pitch, and we were into extra innings, with time to consider the grand slam of sustainability. Tier 4 Net Zero Assessment identifies all energy uses, water uses and waste streams toward identifying the means to self generate all energy needed, use local water include rainwater harvesting and desalination, and create no waste streams. A chief proponent? I asked Mac, as our relief pitcher was mowing down each opposing batter. The military. Mac missed a called third strike as he answered, Huh? Think about it, I implored. A military unit in the middle of nowhere, like the Iraqi desert, with no access to power, water or sewer. When they try to truck those things in and out, they create easy targets for the bad guys. So if you conserve energy and generate energy, same with water, you can hold out for a long time. Apollo 13, said Mac. My turn for, huh? as the home team came to bat. Remember how the guys at NASA tried to cut energy use in the crippled spacecraft so it could make it back to Earth, Mac explained. Same theory. Net Zero. The military is also a huge user of energy and water, and a huge producer of waste. Besides saving lives, Net Zero will save significant amounts of taxpayer money. Applied to building design and operation, going completely off the grid may not be practical, but reaching toward that objective is like, well, pursuing the batting crown starting on Opening Day. Bottom of the tenth, score tied, our team is up. Or rather, they are all milling around the dugout, waiting to see whom the visitors send to the pitchers mound, and who is warming up in the bullpen. This

ASSESSING THE FACILITIES OPPORTUNITIES FOR SUSTAINABILITY: THE OPPONENTS PITCHERS

seemed a good metaphor for my next point. These different assessments, they are tools for your tool box, depending on the need. Just like the pitchers. Pick the right one for the batter we cant pinch hit. When Mac asked me for some examples, I came up with four: 1. New Construction: Tier 3 LEED Assessment is a great tool for designing a new building. Once you have a preliminary design that meets all your functional and process flow requirements, you determine how you can plan the building envelope, systems and site to maximize the LEED point count. The more points, the lower the operating costs, the better the return in investment. 2. Facilities Renovations: Tier 2 ENERGY STAR focuses on energy usage, the greatest opportunity to enhance the building operations, where so many other features of the building may be too costly replace. For example, unless the roof is shot, adding additional insulation and reflective surface may never offer a satisfactory payback. Maintenance: Tier 1 Basic Sustainability Assessment focuses on the low hanging fruit. Too often the easiest fruit to pick happens to cost the least. Changing air filters as often as the manufacturer recommends may mean a significant energy cost savings. If your building is next to a construction site, changing the filters more often than recommended may mean better control of your energy budget for a slight overrun of your filter budget. An easy first success. Supply Chain Management: The Tier 4 Net Zero Assessment dovetails well with this conceit of managing upstream and downstream value. Just as with the supply chain, the facility is synchronized to reduce energy, reduce waste and still achieve the mission.

3.

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Bottom of the eleventh inning, and it is looking like a long night. With a breakfast meeting early tomorrow, I am tempted to bail out and catch the rest of the game over the car radio on the way home. Still, the additional innings does give me the chance to make my most crucial points: Once you have identified sustainability programs, dont expect the executive suite to lift you up on their shoulders, I cautioned, as our teams best hitter was hoping to hit his fifth walk-off homerun of the season and be carried just that way to the dugout. The key will be the financials. Sustainable design and practices are useless if they do not sustain the companys bottom line, I went on to explain. You might be real comfortable now with CAD and CAFM software, but you are about to get a whole lot more agile with spreadsheets. The first step is to construct a Return On Investment model. This will require befriending the companys CFO or accounting firm to determine the cost of capital; the marginal tax rate; the preferred depreciation approach; and the ROI hurdle rate. The question is not whether your ROI is positive, but how positive and how soon. Few companies are willing to wait 5 years for an acceptable return on investment. You will also need to get a handle on utility costs, where they are now and where they might be headed. You will need an ROI for each of several energy cost scenarios. After youve modeled your ROI, next try to improve the results by investigating tax incentives and energy rebates. This can be risky, as government and utility programs change. If your company is privately held, it might require revealing more financial information than the company is willing to release. Your companys asset depreciation strategy might also nix the incentives. The final step in the process is to relate the sustainability program to the companys mission and profitability. Tying the sustainability program to a corporate objective on sustainability may overcome an ROI that only works if energy prices rise. A more potent argument is to go back where we started: its about lowering overhead costs and increasing productivity. Linking productivity to sustainability is not too

OBTAINING THE FUNDING: LATE INNING TACTICS

easy, but cutting utility costs will directly increase profitability. The other side of that coin is the failure to control and decrease energy costs will make the companys pricing model less competitive. Macs attention had again been diverted from the game to me, although I was wondering if the lateness of the hour, the summer heat, and the beers might have been contributing factors. There are more complexities to this that I had first thought, he admitted. Just like baseball, I had to respond. The game was over on a questionable call of a line drive to the left field corner: was it fair or was it foul? The call of fair brought the runner from second home, and allowed the rest of us to go home, too. As Mac and I slowly followed the other diehards out of the stadium, Mac was musing about how this new assignment would be broadening his contacts within and outside the company. His rising enthusiasm encouraged me to talk about three other opportunities to extend his reach: Due Diligence on a Building Acquisition through Total Cost of Ownership: Once the sustainability model and program is in place, it can support the real estate departments evaluation of potential sites to acquire through purchase or long-term triple net leases. Moving the focus beyond cost per square foot, looking at energy and maintenance costs over ten years may sway the decision past initial costs and finance or rental costs. Ultimately, extending the model to measure the total cost of ownership (TCO) will lead to a better-considered selection. Which is to say, there are many more measurements of a batters potential value than his current batting average. Maintenance Action Plans: Sustainability programs often realize their best returns on predictive maintenance; relatively low cost programs that assure that the initial energy and other utility use reductions continue. Periodic retro-commissioning should also be part of the program. Capital Reinvestment Plans: Sustainability programs rarely are fully funded in Year 1. Often they include plans to introduce more efficiently systems when current systems reach the end of their useful lives, whether these systems are mechanical, electrical or building envelope. What results is a long-term capital reinvestment plan, identifying a year-by-year expenditure budget, with each item having a calculated ROI. This is a more robust approach than an annual allowance for capital replacement.

EXTENDING THE RESULTS: POST-GAME PLANS

LESSONS LEARNED: THE BATTING CROWN I did not see Mac again until well after the chapters summer meeting. We finally connected at the holiday party. He joined me at the cash bar, beaming.
Thank you for the key to the C-Suite, he gushed, as he handed the grad student behind the bar a ten note to cover our drinks. The old man hadnt realized that when he made me the Sustainability Officer, I became the bridge between operations and support. Mac went on to tell me how, after he completed the Tier 1 Basic Sustainability Review, he made his presentation to the company executives. They approved many of his recommendations, and set up an interdepartmental sustainability team to implement them. This was one of the few company-wide teams, and aside from working on sustainability programs, its members started finding other common projects. And Mac kept being invited back to the monthly corporate operations reviews. His team first introduced a recycling program that put paper-only wastebaskets at each persons desk, and made each person responsible for emptying the baskets at a receptacle by the stairway on each floor. Everyone loved the program because it was green; the cost of trash went down; and they were able to eliminate two third shift janitors from the cleaning vendor.

He also discovered that the mechanics were trying to save money by replacing those air filters less often so they could buy test equipment. Once the filters were back on schedule, energy costs dropped; maintenance costs dropped; and the savings will be used to help acquire some sub-meters that were identified in the Tier 2 ENERGY STAR Assessment. Then what? I asked. Mac had a number of other ideas in his Sustainability Action Plan from his Tier 2 Assessment, but his eye was now on initiating a Tier 3 LEED Assessment next summer toward achieving LEED EBOM (Existing Building Operations and Maintenance) certification. Do you know anything about that? he asked. Seems I do. And just in time for the start of another baseball season.