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Top tip for getting to Net Zero, ask for EPDs on assets 

NAREIM Architecture & Engineering meeting: Key takeaways

Sept. 23, 2022

In the journey to Net Zero, managers should start requesting environmental product declarations (EPDs) from design teams and architects to help focus attention and track embodied carbon in the asset.

The NAREIM Architecture & Engineering meeting held in Denver this week heard that even the simple step of requesting and talking about EPDs will get design teams focused on tracking and reducing embodied carbon, a critical step in attempting to decarbonized buildings. 

Members were told that 48% of all carbon in an office property came from the superstructure, notably the slabs and walls, with cement a major contributor to carbon emissions, accounting for 95% of carbon emissions but only representing between 7% and 15% of concrete volume. 

While there are promising solutions to cement replacement - including ground glass and limestone - members were told that asking and speaking about embodied carbon throughout the lifecycle of the asset, particularly during concept design, was vital to getting to Net Zero.

Other areas where members could focus included: 

  • Trade transportation and commutes to and from the site

  • Early electronification of work sites 

  • Construction waste, which was described by one speaker as a “hot mess”.

  • Green Badger was recommended as one tool to help track embodied carbon

  • Create your own embodied carbon baseline from prior assets or development projects - use that as the baseline for future projects. Focus on a whole-building life assessment in order to come up with assumptions to measure yourself.

Presentations and the attendee list from the NAREIM Architecture & Engineering meeting are available to members. You can download the presentations from the meeting here.

Contract reviews:

Members reviewed contract negotiations and clauses during the Denver meeting - and were advised to ask vital questions such as:

  • What are the goals of the project, how do we want to deliver it, and is scheduling important on this? 

“Construction carries a huge amount of risk with it,” one speaker said, noting that a best practice would be to have some form of bespoke document that would be a base level form to allocate the risk of any project.

Other recommendations to members included: focusing on risk allocation points, assert your ability to amend the contract, ensure the contract is finalized well in advance of deal close and look for assignment clause for all parties.

The growing risk of PFAs

Roughly one-third of investment managers have environmental experts in-house to help deal with emerging and existing contaminant issues and roughly half have purchased pollution legal liability (PPL) policies. However that may not be enough to deal with the growing issue of PFOA and PFOS in the US.

Part of the PFA “forever chemicals”, PFOA and PFOS are being closely studied by the US Environmental Protection Agency (EPA) and have already been designated hazardous substances under CERCLA (the Comprehensive Environmental Response, Compensation, and Liability Act, known also as Superfund, passed in 1980). 

Just 70 parts per trillion, the equivalent of three drops in an Olympic-sized swimming pool, would trigger the need for action by building owners – and it’s a designation is now becoming the standard for states wanting to act on PFOA and PFOS.

However, neither blanket nor standalone/asset-specific PPL policies may provide the protection managers need thanks to “endorsements”, which could exclude pre-existing conditions and even the presence of PFAs itself. NAREIM members were advised to carefully review PPLs – and to undertake Phase 1 and Phase 2 environmental reviews where assets may present red flags for PFAs.

Other key takeaways from the NAREIM Architecture & Engineering meeting included:

  • WEDG (Waterfront Edge Design Guidelines): The certification is offered for waterfront and flood risk mitigation work, and is increasingly being adopted by private owners as well as public entities. Members heard that promoting natural habitat and sustainability at sites can boost property values by 10%, with flood defences above code resulting in a 4:1 benefit-loss ratio for defences against flooding and a 6:1 benefit-loss ratio for protection against storm surge. 

  • ASTM update: hazard + vulnerability = risk. Why develop a Property Resilience Assessment Standard? There have been more than $1 billion of claims from climate disasters between 1980 and 2020. User and provider communities benefit from the consistency provided by ASTM standards, whcih require transparency for scope, resolution, resources and return periods and help align assets with existing due diligence standards already in place.

Hazard prep for extreme weather

When doing extreme weather scenario planning, why not remove phones and computers from your team so they really stress test their own reactions to earthquake, hurricane, fire etc?

In real life, teams will likely be without cell coverage or access to data and testing without devices is a great way to stress test team dynamics, highlight where mistakes may be made, and understand gaps in process and planning.

Members heard case studies on hazard prep planning for seismic risk and hurricane risk in particular. Key takeaways included:

  • The key obstacles in dealing with extreme weather is a lack of knowledge, reactive actions and delayed responses. It is crucial to address downtime, inspection delays and cost surges. It's therefore critical to get information as quickly as possible from the asset and distribute information within the organization. Goals should be to direct limited resources effectively, achieve functional recovery sooner and mitigate cost surges.

  • Building sensors are one missing link to understand damage in the immediate aftermath of an earthquake, better enabling owners to prioritize where to send inspectors. 

  • Also working with FEMA ahead of disasers to understand what permits and access rights are needed and what is allowed to be taken into disaster zones.

  • If able, create disaster response centers in central areas where supplies can be stocked to respond to extreme weather incidents and ensure a speedy response. Critical supplies include plywood, tarps, fuel, generators etc.

View the presentations, meeting agenda and attendee list here.

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