Sustainability is a hot topic in the development industry these days. The climate crisis is the most pressing issue of our time and has prompted a massive rethinking across the development and construction sector of the role that buildings play in contributing to climate change. The built environment accounts for roughly 40% of global carbon emissions, 10% of which is contributed to construction and the fabrication of building materials. UrbanToronto spoke with Marlee Kohn, Executive Director of ESG at Starlight Investments, to discuss what industry-wide initiatives are being implemented to tackle the climate crisis, and how Starlight is paving the way toward a green future.
Across the development industry, Kohn notes that there is a clear shift from focusing on energy efficiency to focusing on carbon emissions. “Energy is critically important, we know this,” explains Kohn. “It is the key driver of carbon emissions in buildings, but energy efficiency is not the end point anymore; low-cost, low-carbon energy is. This means that we need to spend more time thinking about what types of energy we are using and when we are using it rather than simply reducing the amount of energy we are using.”
While carbon emissions reduction and the transition to zero-carbon is at the forefront of the development industry, Kohn notes that government policy is a little slower to catch up. “Everyone is trying to figure out how to get to zero,” says Kohn, “looking at operations, ensuring low or no carbon sources of energy, and looking at development and embodied carbon – what goes into making building materials, and sourcing low carbon materials. There is high level guidance around getting to zero, but a lack of integration to support organizations’ commitments.”
She points out that while there are many regional, national, and international standards to follow in terms of implementing sustainability initiatives, they often lack a clear direction to help determine which ones to follow, and there is limited integration of these standards with Building Codes. The City of Toronto has some of the most stringent sustainability requirements in the country with the Toronto Green Standard, but equivalent mandatory standards are either lacking or lagging behind at the provincial and federal levels. There is, however, forward momentum in establishing more standardized policies, such as with the formation of the International Sustainability Standards Board by the International Financial Reporting Standards (IRFS) Foundation in 2021, which focuses on setting baselines at a global scale, and Starlight is actively involved in industry discussions to help push the development of sustainability standards forward.
When it comes to implementing sustainability initiatives, Kohn stresses that there are many benefits beyond the environment that come as a result. “Overall, it’s not just about doing what's right,” she explains. “There is a clear, compelling business rationale for doing so. We believe addressing this helps future-proof our buildings and enhance their value and livability, while lowering operating costs.”
There is also a shift toward building and retrofitting for resiliency and adaptability, both in the physical sense, where buildings must withstand the increasing frequency and strength of natural disasters in the face of climate change, and in a transitional sense, where buildings must respond to a low-carbon future of stricter environmental regulations, heftier penalties and taxes for falling short of standards, and a shift in the valuation of greener versus more environmentally-harmful assets.
Starlight is making a concerted effort to retrofit their extensive portfolio in order to decarbonize their buildings, increase their resiliency, and shift toward a low-carbon and just future. The company, which the Global Real Estate Sustainability Benchmark (GRESB) ranked first amongst its Residential Non-Listed peer group for its ESG efforts in 2022, has a dedicated energy management team to assess and audit buildings at acquisition, where a capital plan is created for every building in order to improve operations, increase energy and water efficiency, and reduce carbon emissions. There is also a dedicated ESG Team to monitor and benchmark building performance, and to set new targets and actions to advance their efforts in creating a more efficient and resilient building stock. Through their efforts, Starlight was able to reduce carbon emissions by 12% and energy intensity by 11% across their building stock since 2019. By continually integrating new technologies and energy efficient retrofits year after year, and by developing new low-carbon and smart buildings, Starlight has the ambitious goal of ensuring all buildings in their portfolio achieve net-zero by 2050.
These initiatives also carry with them a social benefit. As Kohn explains, a more energy efficient building creates more comfortable living spaces for the residents. There is an increased focus on social sustainability, where buildings provide larger and better shared spaces for the residents to use, including lounges; efficient laundry, fitness centres, and recreational facilities; outdoor gardens and common areas; and accessible green roofs.
In order to implement, monitor, and analyze sustainability initiatives in new and existing buildings, it is important to have comprehensive data management. “Data is at the foundation of any ESG program,” explains Kohn, “and it remains an issue that requires ongoing vigilance to ensure high quality, accurate, relevant, timely data for a growing portfolio. It starts with collecting quality, whole-building data from both tenants and owner-controlled spaces, then it's about measuring and improving performance.” Integrating new technology is a huge part of it, as digital capabilities can be leveraged to provide greater insight and analytics of building performance. “For example, we have a central data platform that monitors, analyzes, benchmarks and demonstrates trends across utility and resource data,” says Kohn, “and we also capture qualitative performance indicators, allowing for a system-level approach to benchmarking, target setting, and ultimately greater insight around our business.”
Sustainability continues to drive much of the decision-making in the development industry as both new construction and the management of existing buildings evolve in the face of increasingly urgent responses to climate change. Starlight has been working for years toward a more sustainable and resilient building stock, and their efforts are paying off with positive progress across all metrics. The future is green, and the development industry is evolving to make sure that happens.
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