UK/GLOBAL - Prupim, the real estate investment manager, is planning to expand its approach towards sustainability worldwide and address the performance of its international portfolio, with research due to start in North America next month.
Prupim's North American properties and Jackson National Life - a subsidiary of Prudential plc - are taking part in the US ‘Climate Leaders' Programme, an industry and government partnership that works with companies to develop climate change strategies.
Under the project, all companies will have to complete an inventory of greenhouse gas emissions, set specific reduction goals and annually report on their progress, according to Paul Cornes, director of Sustainability at PRUPIM.
"We have started to look at the international portfolio," said Cornes.
"We are starting with our North American portfolio and will be working with Jackson and the US Government to carry out energy star ratings.We will have a US government benchmark and action plan," he added.
The research is designed to help achieve consistency in the standards it applies across Prupim's 1000 real estate assets across the globe and among its 6000 property tenants, and follows Prupim's Interim Sustainability Report 2007 on its UK properties, which helped to identify key performance indicators.
Prupim, which has over $37bn (€47.9bn) in assets under management, is also planning to conduct sustainability research in Asia next year to measure the performance of its Asian portfolio, although research is predicted to be more complicated because of the need to work with various governments.
Despite the various environmental management systems for properties worldwide, Cornes does not out rule the potential of having one global standard for managing all of its buildings and properties under sustainable criteria.
"It's quite difficult when you think how many different pieces of legislation there are. I think there is a way of doing it across Europe, but whether it can be applied worldwide we do not know at this stage. It would make it easier to adopt a global standard but to set it would be a tall order."
PRUPIM is one of the first real estate managers to implement the ISO14001, an international environmental standard which concentrates on reducing investors' energy, waste and water use.
Perhaps more importantly, the initiative has successfully reduced costs for tenants, says Cornes, which is a key factor in winning tenants around to complying with Prupim's sustainable real estate aims.
"We have reduced costs for tenants by using less gas and electricity. All these savings go straight through to the centre's service charge. They all pay a common service charge, so any of the costs that we can reduce through our ISO14001 will save them money."
Prumpim launched its Improver Portfolio in 2007, which was designed to quantify the impact of implementing low or no-cost solutions to reduce carbon emissions and increase property values.
A survey at Waterside shopping centre in Lincoln was carried out to replace all lights with energy efficient fittings, a move which could save up to £5,000 a year and reduce C02 emissions by 36.1% in a payback period of just over a year.
According to the Interim Sustainability report for 2007, energy efficiency in shopping centres and managed offices improved by 17% and 16% respectively following this test, exceeding the 3% target threshold set for 2008, while CO2 emissions from shopping centres and managed offices were successfully reduced by 18% and 12% respectively.
Prupim is currently working with the British Property Foundation and Lester - a landlords' energy statement and tenants' energy review created to bring landlords and tenants closer - to test the strategy on two of its large multiple-occupied buildings in London.
But the task of engaging tenants is a difficult one, noted Cornes.
"[Tenants] are driven by sales and their job is to get as much money through their tills as possible. But I think all retailers, especially in the economic downturn, are going to look at sustainable measures."
PRUPIM recently started measuring and targeting its own office waste recycling at its new head office in City Place House.
Cornes is also confident investors will be willing to pay more for environmentally-friendly buildings. "I think eventually they will because if you can develop a building which is efficient it cuts long-term costs for occupiers. It is going to be cheaper for them to have a sustainable building," he said.
Prupim launched its Sustainable Development Framework to promote understanding of sustainability issues by encouraging informed debates amongst design and construction teams, and collaborated with Royal South Alliance and Charterhouse Energy in October 2007 to develop a programme which would meet the requirements of the Energy Performance of Buildings Directive ahead of time.
The work began in January 2008 and involved gathering data, producing up-to-date floor plans, keeping energy logbooks and producing Display Energy Certificates. Energy Performance Certificates have been mandatory since April 2008 for any buildings that are constructed, sold or rented.
PRUPIM's full Interim Sustainability report for 2008 is due to be released in May 2009.