“There's this line in Hamilton,
'Let's have a drink, the four of us. Tomorrow there'll be more of us.'
And when I started out in green buildings, it definitely felt like there were just four of us. Today there are many more of us on this journey."
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Episode 68 is a conversation with Ben Myers, Vice President of Sustainability at Boston Properties. This was a fun one!
Ben started out in the industry in energy management like I did and has expanded his expertise into enterprise sustainability, carbon accounting and reporting, de-carbonizing construction, and much more.
This is a great look at one of the most progressive building owners in terms of their commitment to reducing the carbon intensity and user experience of their building stock.
Without further ado, please enjoy the Nexus Podcast with Ben Myers.
Mentions and Links
- Boston Properties (0:36)
- Nexus Episode 53 with Jim Whalen (1:13)
- Nexus Episode 56 with Sabine Lam (30:49)
- Nexus Podcast 66 with Cara Carmichael (38:03)
- Greenbiz (38:56)
- The Energy Gang Podcast (39:05)
- Healthy Buildings by Joeseph Allen (53:33)
You can find Ben Myers on LinkedIn.
- What sustainability means to each stakeholder and how to message it to them (6:54)
- Ben's working theory about what it takes to move the market and the 5, 15, 30, 50 rule (15:32)
- How BXP tracks their portfolio consumption, emissions, targets, and progress (18:11)
- How other cities can improve on NYC's Local Law 97 (20:44)
- Keys to success for scaling sustainability in a large portfolio (23:55)
- Ben's great take on how to balance competing energy and IAQ goals (32:20)
- BXP's lessons learned from building green since 2008 (40:48)
- Ben's focus(es) for 2021-22 (51:37)
- The ESG reporting, standard, and framework nightmare and Ben's thoughts on improving it (1:07:53)
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
[00:00:03] James Dice: hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.
[00:00:31] James Dice: This episode is a conversation with Ben Myers, Vice President of Sustainability at Boston Properties. This was a fun one!
Ben started out in industry in energy management like I did and has expanded the expertise into enterprise sustainability, carbon accounting and reporting, de-carbonizing construction and much more.
This is a great look at one of the most progressive building owners in terms of their commitment to reducing the carbon intensity and user experience of their building stock.
Without further ado, please enjoy the nexus podcast with Ben Myers. Hello and welcome to the nexus podcast. Can you introduce yourself? Hey
[00:01:06] Ben Myers: James, I'm happy to be here. I'm Ben Myers. I'm the vice president sustainability at Boston properties.
[00:01:11] James Dice: All right, well, thanks for, thanks for coming. We had Jim on the show what in spring, uh, Jim recommended that I have you on and I'm so excited to have you here.
Can you tell me about your background before Boston
[00:01:22] Ben Myers: properties, please? Like Jim's podcast, I've listened to so many of yours and I was, I was flattered by the number of times. My name came up. I have a lot to live up to here. Yeah. But I, yeah, I just start from the beginning. I guess I, I grew up in Western, Massachusetts and I got the bug early playing in the conservation areas, uh, really connected with nature and ended up at UMass Amherst, studying civil and environmental engineering.
And that got me connected with green building through a senior advisor, uh, on my senior development project. We looked at a green building, so there's pretty early, like 2005, uh, looking at the lead rating system and how to create a green office. Conceptual project at UMass Amherst. I loved it, uh, everything from waterless urinals to, I think I had Palm trees on the roof of my building.
They were shading some solar panels. I wouldn't do that now. I just loved it and then ended up going on to get a master's degree in urban environmental leadership. After a few years of construction management and the downturn of 2009, recognizing that I should really follow my passion. And I think the downturn was an opportunity for me to strengthen my toolset, sharpen, sharpen my skills and go back to school.
And from that experience I joined Harvard university and their green building services group, uh, while finishing up my master's degree. And that was where I cut my teeth. Uh, doing commissioning work, lead, work, energy auditing, uh, it was a great team. A lot of them are still very close. Friends of mine can't speak highly enough of what Harvard has done and is doing and the opportunity they gave us to be really hands on and get a view of how you run a campus.
Sustainability program across schools and units, which is what I'm doing at Boston properties. We have regions, I'll talk more about the company. But we have regions very much like the schools and units at Harvard that operate autonomously. And I work in corporate implementing our sustainably program across those regions across a platform of 52 million feet of commercial, uh, class, a office, primarily in some residential.
So that experience being hands-on with people that became friends and mentors that were just really gifted on green building was great. I was listening to Hamilton the other night. I have three girls, they love Hamilton. And so there's a line in there. Let's have a drink, uh, the four of us.
Tomorrow there'll be more of us. And when I was in green building services, it definitely felt like there were four of us raising our glass. And today there are many more of us in the Greenville on this journey. Yeah. Yeah. I feel that same
[00:04:05] James Dice: way. And yeah, Kara and I were talking about that, you know, two weeks ago and the podcast, uh, it feels like there are a lot more of us these days.
And that was part of like, when start, when started in nexus, I was like, there has to be more people out there like me and I definitely definitely found. I've been to UMass Amherst. So I played soccer at St. Louis university, UMass and SLU. Uh, I don't know how big the rivalry is now, but when I was in school, the Atlantic Atlantic 10 conference, there was pretty big rivalry.
We didn't like each other very much so lucky to keep, keep you on
[00:04:41] Ben Myers: here. Act. That was a UMass soccer ball boy when I was nine or 10 years old. So that was, uh, that was a formative moment for me and ended up playing rugby at the school, which we didn't get the good dining hall, like the soccer team. Okay.
[00:05:00] James Dice: Awesome. Well, yeah, tell us a little bit more about Boston properties for those that haven't listened to the episode with Jim, which we'll link to in the show notes.
[00:05:09] Ben Myers: Sure. So Boston properties has been around for 50 years. Uh, as I mentioned, we're a class, a owner manager, developer, uh, of commercial real estate.
We have a portfolio of about 190 buildings concentrated in markets like Boston, DC, New York, San Francisco, LA, and recently announced our entry into Seattle. So we are, we are growing and continue to, uh, develop, uh, life science buildings, office buildings for clients and our markets. So very active development pipeline.
A typical year would be about a billion dollars of new development in the ground, but we have this huge platform. Of 50 million, 52 million feet in service that, uh, I oversee and look at energy emissions, water, and waste performance, green building certifications, and try to improve, uh, performance with a great team here.
Uh, we're vertically integrated. We actively manage our properties and that means I get to spend a lot of time with the people that are, uh, in the boiler room. So I really am excited about what we've done and what we have left to do and happy to share with you here today. Absolutely. Yeah, let's
[00:06:19] James Dice: dive into it.
So I think one of the things I want to ask you about, because he just kind of led us. There is like from the boiler room to the boardroom might not be the right, the top of things, right. The next level might be investors. It sounds like you're going you're, you're, you're sort of engaging stakeholders at all.
Lovable levels around the sustainability and green building. Process, I guess, for lack of a better word. W what's that like, and maybe can you, can you also talk about at each layer, what they all want, right.
[00:06:52] Ben Myers: Uh,
[00:06:54] James Dice: what, what does sustainability mean for
[00:06:55] Ben Myers: each of them? it's, it's definitely a challenge to.
Learn about the perspectives and appreciate the perspectives of all, all the different stakeholders. My master's thesis at Lesley university in Cambridge was on action research and it was all about listening to perspective, attitudes, and opinions, measuring them, and then seeing how they change through a process.
And so I've seen a lot of that stakeholder change over the last several years. We could start with our own teams right on operations. We, we had random acts of sustainability and, and I think since we started, we, we set real intentionality around environmental performance, through goal setting. So setting public targets is no small feat and I can't do it without buy-in.
And so a lot of my time. Spent with operations is all about buy-in, you know, what can we do? What opportunities are there, how do we quantify the work that we are doing to become more sustainable? And how do we set a path for greater sustainability in the portfolio? So that involves identifying energy conservation measures, water conservation measures, and then setting some targets.
As I mentioned, we have a energy use reduction target it's 32% by 2025 below a 2008 base year. So we're 27% reduce below a 2008 based here at this point. So we've cut our energy significantly 27%. We still have a ways to go. And I think we're gonna keep pushing even once we hit that goal because I think more is possible.
You know, many of the reasons why, but I I think that with operations, it's really about getting buy in being there, showing up, not taking no for an answer and just continuing to develop trust and cultivate relationships. It's really about relationships and trust and time. And, and then with our, our employees, I think it's a very different stakeholder, right?
It's about wanting to work for an enterprise that is doing good in the world. And so we have more employees joining the company that are interested in our sustainability initiatives. What is BXP doing? What's their company look like everything from the environmental side, through the social side, obviously you know, recruitment, retention, talent development, et cetera.
So. I I spent a lot of time messaging to our employees what we're doing, because I want them to understand the value we're providing and that we're taking a responsible stance towards climate change and resilience issues. And then the next group is our communities. Almost everywhere we operate has a decarbonisation goal by 2050.
So that's not far off. We may think it is, but in order to get there, we have to do a lot and move quickly. The company has set a, a goal of decarbonizing operations by 2025. That's one of those goals that we set with the buy-in of our operating team. But our communities are looking for us to do that.
And our regulating us to do it by 2050 and the regulations don't always align with what we're doing here. And sometimes it's certain buildings we need to do it faster. So we're having to adapt to regulation and the interest of policymakers to decarbonize and electrify, et cetera. I'm sure we should get into some of that.
And then investors the top of the food chain, if you will, of the stakeholder audience at first were kind of, eh, you get the hairy eyeball. When you mentioned sustainability, it was the back of presentation decks. The sustainability person really wasn't involved in a lot of those conversations.
And there was a, usually a sheep in the investor deck with some green leaves on it. Talking about what the company was doing for sustainability, the marketing fluff, you try to avoid here, James. Now it's at the top of the deck, right? And there are institutional investors. That are intentionally reaching out to firms that have ESG commitments because they want to be able to allocate there's these investments that ESG dedicated funds and those funds have exploded.
I think since from 2018 to 2020, they increased 42%. Just so up to like $17 trillion in the U S right now, U S domiciled assets under management are being professionally managed that are ESG. That is an insane amount of growth that it continues to grow. So we meet with a lot of them. We want to become a part of any investible universe of ETFs that are ESG dedicated or any other decisions they're making around sustainability want to let them know what we're doing.
And we want feedback from them. You know, what matters a lot more investors are willing to share what matters. So, meeting with investors a lot, meeting with employees, a lot meeting with community members and policy makers quite a bit, and always with our operations team embedded, trying to advance our performance.
I have three
[00:11:38] James Dice: follow-up questions here, and I'm going to try to remember them as I ask them, the first one is around the
[00:11:45] Ben Myers: tenants. I have this slide in my,
[00:11:49] James Dice: in our foundations course where I talk about this, basically, a feedback loop or flywheel, whatever you want to call it, where, you know, the local city regulations are happening, investors are getting worried about risk, right?
And then they'll also, the tenants are saying. You know, if I'm a Microsoft and I'm renting space in your building and I have my own, you know, decarbonization goals, I need you to help me get there. I'm only going to rent space in a building that is, you know, on the path towards decarbonization. Are you guys doing that as well?
And do you do a lot with tenant, uh, sort of tenant
[00:12:26] Ben Myers: engagement? Yes. I think certainly the one you've just mentioned has been very active and we've had a number of meetings with them, uh, and others, uh, on sustainability. And so. I think that's great. I mean, obviously we want to convert our sustainability activities and to stick your relationships with our customers.
So as our customers have developed more of their own sustainability strategy and plans, we get more questions from them about what we're doing at their buildings. Uh, even the least sophisticated customers are now paying attention to sustainability. Microsoft with the carbon negative commitment is I'd say out in front with a few other tenants like Salesforce, for example, who is a great tenant of ours and Wellington and I own at Google, I don't like naming tenants because they, there are quite a few that are really helping us.
Move forward and we want to help them. So all I can say is we want to be a class, a service provider and operator, and sustainability is so interlinked with quality now and quality offering that it becomes a part of every leasing discussion. We're we're going into a pitch right now where we are pitching net zero, uh, and not just in a small way, not with offsets and wrecks, like with real investments, repositioning a building that was developed in 2001.
So we're hopeful. And we believe that we're going to have more customers that are attracted to buildings that have decarbonized have electrified have removed onsite combustion because that aligns with their ESG goals and the stance they're taking as an organization.
[00:14:10] James Dice: Yeah, I love that. I love that answer because I feel like it's showing that a full market is being created here.
Whereas that's something that we didn't have in the past. Right. And someone was just bringing this up on LinkedIn today in the context of IAQ,
[00:14:26] Ben Myers: they're basically saying like, what's,
[00:14:27] James Dice: what's going to have to happen for IQ to be taken seriously. And I, I started to type, and then I realized that my, my comment was going to be like a full essay.
And I was like, I have to disengage. I have to do other things. But what I was going to write, it was like, At what point is a market going to be created? You need, you know, depending on the type of business, it is, you need that business to have a business case and you need their customers to care and you need to have like some competition around it.
And that, you know, this is the best practice in this industry. And I feel like a lot of the conversations sort of like devolve into like there are these broad questions about smart buildings, technology, when will I ACU take off? And it's really like a, like a, it depends answer related to each different individual industry.
And I feel like where we're at with sustainability right now is that market is finally getting credited where like all of these boxes are being checked from all these different angles. Is that kind of how you're seeing it?
[00:15:25] Ben Myers: Yeah. Well, first of all, I think you only write essays, James. That's true. That's true.
I have a working theory of what it's going to take to move the market and create broader change. And it's, it's like the 3 3300 role that I think JLL coin that's come up on your podcast at least a couple of times, but it's not as catchy. It's like 5, 15 30, 50. And if 5% of the market moves for just purely altruistic reasons, right?
We want to do the right thing. We want to get ahead of climate change and be a great steward that that's the only 5%. And then the next 15% are people that are focused on. This sort of customer experience and delighting their customers, right? So it's like a return on investment. That's a little bit more squishy.
It's it's not easy, easily quantified. It's not like an energy payback. And then the next 30% is that simple payback, right? Like that's a big market, the scale of the market. So about half the market is in simple payback customer experience, satisfaction, payback, and just pure altruism. Right? So that's half of it.
And I think the other half has mandates it's code standards, regulations. It's, it's bringing up the base of what you can do legally in jurisdictions. And you know, fortunately, or unfortunately I think mandates are going to need to move quite a bit to get us towards our 2050 targets on IQ. I'll say.
That market is being made. We, we are very excited about a proactive IQ management program that we've put in place. We've been messaging it to all of our customers routinely over the last 16 months for obvious reasons that just an explosion of focus on IQ. I know you got into that with Jim Whalen who was on the podcast and it's it's been a bit of a ride to, to get familiar with all the technology, hardware, software, all of the manners, all the ways you can go about measuring IQ, what should get measured, right?
And, and the bifurcation of the tenant interior spaces and base building and what you should be doing as a base building operator, just for raw assurance purposes communicate to your, your customers that you're paying attention and you care that their spaces are adequately ventilated.
[00:17:41] James Dice: But yeah, people can go back to that conversation with Jim.
We also did one. I mean, there's been several conversations around IQ, uh, search IQ and nexus, and you'll get a bunch of hits. My second question was around tracking all of this from an energy standpoint.
[00:17:57] Ben Myers: So you have
[00:17:58] James Dice: all these, these different cities that you're in, all these different buildings with baselines and projects going on all the time, the different cities have different ordinances or laws, depending on, you know, whether it's benchmarking or performance laws.
How are you tracking like where each building needs to be? You don't have to say like what software we're using or whatever, but in general it'd be, it'd be cool to know how your, how, like what the state of the art is in terms of tracking targets
[00:18:23] Ben Myers: and basically. Sure. So we've, we've been a long time partner of, of us CPA's energy star program.
We're an energy star partner of the year sustained excellence. And so everything we operate all of our office buildings, we record on a, at least a monthly basis, energy and water and waste data. So that's our book of record EPA portfolio manager. And then we have measurable as a partner of ours and them to do a trend analysis and look how buildings are changing over time.
And, and that helps us with those two tools to understand where there's some exposure. And then a lot of it's done outside on spreadsheets and with consultants on a regional basis where we do modeling of the fine exposure. And fortunately when we. Our markets were typically avoiding fines and where we see exposure like local law, 97 in New York, we're able to mitigate that exposure by accelerating investments like central plant.
So that's another reason I said that the mandates are, are helpful. They provide a price of carbon, right? We don't have a carbon tax in the U S and the building energy performance standard in DC, the local law, 97 in New York, although imperfect in many, many ways, which I'd be happy to talk about it.
And, and many others from the industry be happy to talk about do provide a service of assigning a price for carbon. Particularly when they're aligned around carbon. I think that's where they should be aligned in lieu of energy. Well, let's
[00:19:51] James Dice: do it. Let's go ahead and dive into that right now, as we're, before we kind of move on, uh, and talk more about your guys' portfolio.
Talk to me about local law, 97. And I think my, just like not knowing the nitty-gritty details because I'm kind of doing broader things now, but when I think about those programs, I think about how much would we need to scale them up. Uh, and how kind of, although, like, there are amazing champions, like promoting it and getting it implemented in each city.
Like we have a long way to go and they're still only applying in the city, uh, for the most part. So like we think about the 6 million buildings in the U S for instance, like we're a long way to go from scaling them up. I have a feeling of what you're thinking about is like how they're actually implemented in the city.
W what are your
[00:20:44] Ben Myers: thoughts? Well first, I think we need a framework that we can apply across more than one city. I think New York wanted to be first. They wanted to send a signal to particularly to large property owners in the city that they wanted action on climate. I do think we need a more universal framework that can be applied in the Institute for market transformation.
Cliff. a great leader is working on it's such a framework and we've, I've been working with the real estate round table where I serve as vice chair in DC on reviewing the framework and trying to provide real estate input earlier on that's the first place New York fail with local on 87 is not seeking input from the real estate community.
W forging ahead. The other, I would say key issue with local on 97 is the exemptions. A lot of the property area within the city is exempt from needing to comply with local law 97. There's no way we can achieve our climate goals, which we must achieve. Um, The results of, of inaction will be catastrophic if we exempt huge sections.
And I mean, legitimately like almost half of buildings that should be covered under something like local on 97 for various reasons. And then the third is just the crude metric of, of carbon intensity and caps and the carbon factors that were derived sort of in a not non-public non-clear way. And, and they're different from what's in the Ygritte data that's published by DOE and EPA.
So, so understanding how they're arriving at carbon emissions factors and getting more clarity on that, and also. Being able to normalize for our runtime and density that there's no normalization. So despite how an office building may be used in density is a good thing. Something I learned early on from a sustainable professional was density, density, density.
That's all you need to know, maybe more than uh, so, but that's a little oversimplified vacation, but density and office buildings and overutilization of office buildings is a good thing for sustainability, but you get penalized for higher energy intensities underneath these regulations. So there should be.
Normalization like EPA has worked into the portfolio manager platform for its energy star label, which is normalized for runtime and density. So those are just a few issues. There's a litany of issues. I think REBNY and others have presented in general, I don't want to come off as anti-regulation.
I think mandates codes and standards have helped propel our industry forward. And we're, as I said, like 5% of what we need to do is going to get done with altruism alone. So we do need more regulation and more incentives to achieve our goals.
[00:23:18] James Dice: Cool. Yeah. And that 50% of the people that aren't going to do anything that's good to at least make them do something, whether it's implementing well or
[00:23:27] Ben Myers: not.
Um, 80% is probably uh, it could be larger than that.
[00:23:34] James Dice: My big, my bigger, there's a couple of nexus audience numbers that are probably saying it's a lot higher than that. I know. I know a few.
[00:23:40] Ben Myers: I imagine that you have some success stories to
[00:23:45] James Dice: tell us about, right. So I think what I'm wondering is are there broad sort of someone that's trying to set up a sustainability program for a portfolio of buildings like you have, what are some of the keys to success with with kind of setting that up in such a big portfolio?
[00:24:02] Ben Myers: I think the first is being a very good listener, right? Which I'm not doing much of here, but I am I'm. We are listening to stakeholder opinions and trying to shape and influence opinions over time. And it's a soft power, a role, like in a lot of cases. So that, that advocate advocacy, those advocacy skills influencing without authority, I've heard it called that's a critical skill to develop also knowing how to call super efficient meetings, right.
Knowing what you want. You know, I, I report to the CFO on a monthly basis or so, and those meetings are tight. Like we go in with an agenda, we hit exactly what we need to hit, where we need approvals. Some it's just, you know, updates say with the CEO and president, just trying to be really efficient and time.
With what you're doing and, and, and delivering the message. And I mentioned it earlier, the buy-in is huge. Like, let people arrive at their own decisions and let them on the solution, like Jocko, Willink, who I'm reading a book on leadership and tactics right now talks about seal team one, where they had this commander, but tons of experience, a boat was very, had a loads of humility and let people solve their own problems.
And you contrast them with a guy who had no experience. That was like a dictator and the guy who had left had more experience that he had the humility to let people solve problems on their own was a much more successful leader. So I try to figure that out to like coax people towards what you want, but let them develop the solution so that they own it in the end.
And that is very important. Cool.
[00:25:38] James Dice: And then what does your team look like and how does it kind of fit into the organizational chart of the, the broader.
[00:25:46] Ben Myers: Uh, well, we were talking a little bit earlier and I know you have a lot going on probably more than I do, but we have, uh, an energy manager who joined our team and she just joined, uh, yesterday.
So that's been very exciting. Uh, I have a sustainability analyst who was a, it was a rockstar and a lot of the metrics that we, uh, create and get third-party assured come through her. And she really organized our data management system. Uh, and so that our team is three and it's grown from me who, who helped write the job description for this role?
Like many who are in ESG, leading sustainability for real estate organizations. They're the first one in programs. I was a construction manager in the Boston region for two years, doing sustainability work as a side job. And, uh, I actually just saw a friend of mine. Carolyn just became the head of sustainability for Pembroke.
And I was so happy to see that cause she was doing the same thing. Shared notes over the years. Like here's how you do it. You know, you're going to have a role here eventually just get in there advocate for the role to be created. And that's the first step. So we've gone from, you know, one person in 20, 15 to three people today.
And I feel really good about where we're at at the moment and ability of our team to continue to lead the XP and the industry towards more sustainable, well performance. Cool.
[00:27:08] James Dice: So two, two follow-up questions there. And one is around construction and kind of how that's different than operations, right?
Energy management for operations, and kind of how you engage the development team on the new buildings you guys built. And then this isn't kind of the same question, but you mentioned managing these certifications. So can you talk a little bit about how, you know, What standards do you guys have and how you hit those standards for, you know, green building certifications?
[00:27:39] Ben Myers: Sure. So I think we'll, we'll start with development and construction. I think the development team has green building standards that are very helpful. Uh, that's something I learned at Harvard is try to set some baseline standards. So we have a lead certification requirement for all new development.
Uh, as of today, over half of our portfolio is certified at the gold and platinum levels. And we want to get our total portfolio of lead energy star and Fitwell certified buildings to 87% by 2025. So we're at 77% certified under one of those three or two of three or three of three. And we would like to get that to 87%.
So having that goal again, coming back. Rolling in the same direction, setting some intentionality, uh, that's that's been helpful. We also, uh, have linked back goal to our credit facility. So our, our revolving credit line as sustainability linked metrics that give us a one basis point reduction, uh, on our interest.
We hit these goals. So that's another incentive to increase our green building certification. Along with all the incentives we get from, uh, groups like Graz and ESG raters and others investors that want to see more green building certification, activity, development, and construction, you know, right now I'm, I'm pushing a huge, uh, embodied carbon initiative.
When we set our science-based target at the one and a half degree level, the most ambitious level, we're the first office company in north America to do that. We, uh, learned about scope three emissions. I mean, we think about energy and steam and gas and electricity, and the carbon resulting from those energy sources.
And very little was spent on supply chain and cart and concrete and steel. I mentioned that we're an active developer. We've got several projects going on at the moment. Uh, wasn't focused on that. So, uh, that, that was an eye-opener. Uh, so we are now. Requiring assessment of embodied carbon on all of our projects.
And I think just like you can't manage what you don't measure. Uh, you have to start somewhere. And the assessment with tools like ECE three and tally at one-click LCA and the availability of these EPD forms is making it possible. And I think about it like the early days of lead, like you couldn't just pick up the phone and call Herman Miller and get a breakdown of how much recycled content was in their chairs.
But after like a year or two. Of lead, you could cause there was a, a market pressure to do it. And so what I tell our teams as they're like, oh, they don't have EPD is we can't get them to ask the question, right? Like we need to help drive market transformation. So if we're not asking, nobody's asking and there will be no action.
So I think that there's some, there's been a little bit of fear out the gate on embodied carbon, but we're, we're starting to get our first assessment results in and I'm confident that it'll just become standard, uh, over the next couple of years on, on projects, not just ours, but for many other developers across the country.
Yeah. It reminds me of what
[00:30:49] James Dice: Sabine said. When I, when Sabine was on the podcast a couple of months ago, it was just around the ability to ask these questions, you know, write your specifications in a way that communicates your expectations. And then the market will have to, we'll have to respond and shift.
Very cool. Yeah, the, the embodied carbon to me feels a little bit like the elephant in the room at this point. So yeah, it's great to hear that, you know, it's not great to hear, but, uh, it's kind of like the new, the new kid on the block, but it's also great to hear that, you know,
[00:31:21] Ben Myers: measuring first um, yeah.
And you asked about certification systems that we use and weed is, is absolutely our standard, but we have been increasingly focused on healthy buildings, right? Moving from a focus on energy, water waste, how buildings impact the environment to how buildings impact the lives inside. And so we've, we've been looking at well on certain projects with our customers and advancing some Wells certifications and also fit well, which is a great fit if you will, for our existing buildings, uh, it's a better core shell solution for Boston properties.
So we've, we've certified now 13 million square feet of our portfolio under Fitwell. And we also certified our entire portfolio under their viral response module, which was a great program that helped us operationalize the policies and practices to interrupt the communication of infectious diseases.
That's interesting. Cool. And how
[00:32:20] James Dice: do you think about the obviously inherent, you know, balancing energy and, and ventilation when it comes to indoor air
[00:32:28] Ben Myers: quality? Yeah. You know, I've read a white paper on this that didn't make me feel any better about that issue. They were like, no, you can, you can do both.
Yeah. I think. If we're going to be honest increased ventilation has an impact on, on energy intensities. And we will likely see you know, five to 10% increase in intensities, all of the things being equal. But the fact of the matter is occupancy at the moment remains below normal. So it's th th that gets diluted.
That impact of ventilation has been diluted. I do think though, at the end of the day we're over ventilating anyways, in a lot of cases. And one of the reasons I'm excited about IQ is that we're going to be able to fine tune ventilation to address air quality parameters. So we're gonna have a better sense of real time CO2, a very granular sense of real-time CO2 and PM 2.5.
And by looking at, or PM one, right, which is becoming more standard now with the fine particulate sensors and for using those metrics. And, and tuning our ventilation based on actual indoor air quality, I think that's gotta be the better solution than a prescriptive 30 CFM per person requirement that over ventilator and is wasteful.
So I it'll be interesting to see how this evolves, but I do think that we need better zoning of buildings. We need the ability to set back smaller sections of buildings. We have buildings built in the 1970s for large corporate occupiers. The operators is like one ginormous stack and that's, that's a problem.
So that's something we need to, we need to solve. And, and certainly are working with many people that listen to this podcast on that issue. Totally. Yeah.
[00:34:13] James Dice: How cool let's I want to circle back on the missions, so. You, you mentioned getting into embodied carbon. Can you just talk about how you as an organization think about emissions as a whole and how you kind of
[00:34:27] Ben Myers: categorize them?
Yeah. So this is gonna become increasingly important for publicly traded firms. Uh, potentially as soon as the end of this year with the sec rule-making on climate disclosures, uh, we're expecting Gensler will come out with some rules around, uh, scope, one scope, two emissions, and potentially scope three emissions requirements.
So that would mean in your financial disclosure, your 10 K form you're including emissions. Some radical stuff. You know, that five years ago, I would've never believed that would be a reality in 2021, but it looks like this is going to happen. We, so we bucket our missions scope one scope, two scope three, we follow the greenhouse gas protocol, uh, scope one emissions, our emissions that are produced on site, uh, from the question of fossil fuels.
And if you look at our just energy-related emissions, that's about 6% of our total. So it's not a huge. A portion of our total emissions, but it's what we directly control. So it's in that sense, it's, it's, it's important that we address it and, and seek to electrify as much as we can. And now new development, as you know, that's always easier to do than retrofitting existing buildings.
And so projects we're looking at in all of our markets, uh, are moving towards electrification electrification. I should just mention while we're on this subject is I read the ULI paper also on this, on this. And when you look at the case studies, it's really west coast where a lot of this electrification is taken off and it's because the climate is just much more suitable for electrification in a colder climate zones is a very different problem to solve, uh, because of the amount of equipment required.
Uh, we can, we can dive a little deeper into that if you like scope to That is everything procured offsite, so that steam it's electricity, uh, and that is, uh, increasingly where we're focused on greeting in our power. Steam is going to be a challenge, uh, because it's district thermal and there's a debate going on right now on how important our district thermal systems are to our cities.
Uh, and should we get rid of district thermal altogether? Because it is generated with gas. Uh, it was generated with fuel oil alive. It's been shifted now to gas and now is the third shift going to happen in time to decarbonize our cities at the rate necessary. And the third shift is probably to something like hydrogen, if I were to guess today, and it doesn't look like these plants are on track to shift to hydrogen anytime soon, because.
For hydrogen is just too high at the moment, but coming down to cost curve and we're following that, it's very exciting to see hydrogen uh, potential economically viable hydrogen for, for districts thermal. But we do use a lot of steam. Like 27% of our footprint is steam. 6% is, is gas and, and the rest is electricity.
Electricity. Is there a variety of ways we address that through onsite, renewable energy and offsite. The, the third bucket is the scope three and that's everything. There's 15 categories and the greenhouse gas protocol. So it's a big category. It's everything from business meals and travel through, uh, Embodied carbon for development and downstream leased assets, uh, triple net buildings where we don't have operational control, uh, on the energy side, it's rather small, but on the, uh, embodied carbon side, it's a, it's a big number.
So yeah, we're working on, that's why embodied carbon is really the focus of, of our company at the moment as we approach new development. Cool. And how are you
[00:37:53] James Dice: thinking about, so kinda assuming it on scope two. How are you thinking about kind of transitioning into, uh, like 24, 7 0 carbon?
Kara and I talked a little bit about a couple of weeks ago. Obviously Google has published a lot around this. I think Microsoft as well. How are you thinking about that aspect of, of the scope too?
[00:38:13] Ben Myers: I think about it by admiring Google. That's what I think of that. I'm like, wow, you guys are. Already thinking about 24 7 we've we've looked at it.
We met with wad time. We've looked at our, we have hatch data across our whole portfolio. So. We have a lot of the infrastructure necessary to do a real-time carbon inventory, if you will. Our first goal in near term objective in 2025 is decarbonisation just on a calendar year basis. I think once we hit that, we'll be able to pivot towards more focused on 24 7, but, you know, God bless him.
I am really impressed by Google and what they're doing every time I pick up the journal or GreenBiz, and I read about Google, it's just phenomenal and I'm, or listened to your podcasts and learn about 24 7 or, or um, you know, the energy gang. We spent a lot of time talking about them. I'm just super impressed that whole team.
And I think we'll, we'll certainly get there, but a few years behind Google I'm, I'm fine with that. As long as we hit our 0 by 25 goal. Yeah. I mean, it's just
[00:39:19] James Dice: certain. There the value of them just saying here, this is what we're going to do. We'll do it first. It's possible. Like here's how we're going to do it.
It's pretty, it's pretty amazing.
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all right, let's talk a little bit about, I wanna kinda talk about some of the things that you're doing, like case study type of lessons, and then I'll, I want to go back to kind of the areas you're focusing on next. So maybe we can kind of combine those or segue into them.
So, Talk to me about like the, like the evolution of green building for you guys and like how that's showing up on some of these bigger projects that you, you know, you read about and
[00:40:32] Ben Myers: the case studies like Salesforce tower,
[00:40:35] James Dice: uh, is one of them that, that, you know, I, I, I'm curious about, uh, cause I know Jim talked about it.
It's been talked about quite a bit on the internet. Talk to me about some of the, the, you know, the arc, the history of green buildings here and where you're at today.
[00:40:48] Ben Myers: Yeah. Well, our first experience was back in 2008. It was the first speculative green building in new England. We built a small building in Waltham, Massachusetts I think seven stories that, that became a signal for our company that you can do this and we really thought it was gonna, it was going to matter more to customers and that building.
It's just held up extraordinarily well, it's still like a very high quality building and I do, that's helped me confirm my belief that green building and quality are really inextricably linked because you look at the quality of the glazing systems, the mechanical systems. But you have to also remember we have the advantage of being a long-term.
Developers. So not just developing the flip and as low as first cost, highest IRR we're developing to hold over the longterm. And so we want the highest quality glazing systems and mechanical systems and finishes that are going to be durable and not need CapEx replacement soon. And those often, and also have lower operating costs.
Right? Cause we, we are responsible for those operating costs over the life of the project. So I think it was sort of a token thing. Let's do this, the lead thing in 2008 and then it became code requirement in the city of Boston to be lead silver certifiable, I think around 2010 at the same time. Building a project that the city was excited about and we decided just to go all in on sustainability, we've got an amazing EVP in Boston, Brian coop.
Who's been the spiritual warrior for sustainability, the company for years and years. And having that top-down champion saying, we're, this is the direction we're going in the moon. And, and make this building Boston's first screen skyscraper helped us learn how to, how to build more efficient VAV systems, more efficient placing, but still it was the, it was the lead playbook early days.
So it was really heavy focused on energy and water. You pick up points for being transit oriented it's right by a train station. And um, the infamous. Yeah. Oh yeah. We have definitely had the bike racks. People played the bike racks, but yeah, that building needed the bike racks though. So it worked out well and the showers, so that, that building ended up getting lead platinum.
And we ha we met with mayor Menino and Brian coop was there and he w Menino and coop like phrased the lead plaque. Like it was the Stanley cup. So it's amazing moment where the city and the developer are linking arm and arm in front of the press. And, and that's what developers, I think really crave deep, deep down it's that sort of prestige, right?
Prestige is a huge driver competition. Prestige. The lizard brain stuff really matters in development. And so that was a huge moment for, for the company, not to mention the finance financial performance, which I don't want to say. It's all wizard planning brain. A lot of it is performer and the performer on that project was phenomenal.
And we had a great customer uh, Wellington who took over as anchor. And that was a moment where they're like, oh, we believe what you believe. Like we believe in sustainability. We want to, we want this building and this to represent our. was pretty early signal that sustainability was going to matter to customers.
And when they talked about their program, what's more potent when you're bringing somebody into your house than saying this, this is our commitment to sustainability here. So, from there, we started getting more into LEED for existing buildings and looking more at our portfolio. What can we be doing at buildings?
Like a hundred fed a hundred federal street here in Boston. We had the first LEED dynamic plaque in the state. And that was an interesting ride with our early days of arc and dynamic plaque. We had that old, like retro plaque on the, on the wall. That was a beautiful piece of hardware. I wonder where it is now.
It's probably in a storage closet. And then, and then we we really went all in. A few more times, which culminated in a sort of Def identifying ourselves as a sustainable developer. And we acquired a site that was permanent by Heinz with with a great base building set of at Salesforce tower, a good, good foundational work on sustainability.
And we had the, the magic of a customer like Salesforce that really cared about it. And we had a team that was committed again to developing that relationship with a customer that stickiness by supporting what they wanted to do. So we developed a building that was the highest rated lead skyscraper in the, in the city.
San Francisco and the highest LEED rated project in the state of California. So when you, when you develop the greenest building in San Francisco, you're like in a bubble, in a bubble, in a bubble of sustaining and you are the most sustainable. So that a few things that really made that project special.
And I, I want to give Heinz credit as well as our team who delivered it certainly under floor air distribution, and a really low flow under air distribution system with, with small fan. So really low horsepower that serves outside air to every floor in the building. So that, that reduces a lot of static pressure, a lot of motor capacity necessary.
And then another thing I think is just great at that building is the purple pipe system. So we have water reclamation. So all of the rainwater runoff, all of the toilet water gets harvested.
The treated on site and that that system is now going to be commissioned. So, I think we're waiting for occupancy to tick back up again. And Salesforce was a huge champion for the water recovery saves nearly 8 million gallons of water a year, which in a region like San Francisco really matters, right where water scarcity has become a key defining issue.
So maybe that's the story. There is that this tower is addressing an issue that is regionally important and water really matters to that region. Now we're working on an office building down the street at fourth and Harrison that'll be a hundred percent electric. We were able to do that at real, no cost premium in that market.
Like I said, it's a lot easier to do in San Francisco and we're gonna, we're gonna serve that building with a hundred percent renewables a large solar array on the roof and, and that'll be our first. Real net zero ground up development. And so that, that I think has been part of the trajectory. I should also mention you know, resilience, which has been climate resilience has been a big piece of new development.
San Francisco is earthquake resilience. So we went to bedrock and Brooklyn Navy yard. It was about climate resilience and sea level rise because we're right there in the Navy yard developed a building called dock 72 with the Rudin family. And that 600,000 square foot asset is susceptible to sea level rise.
So you'll see it's up on a podium and all of the mechanical equipment has been elevated. And so a big focus was on resiliency and the ability to operate through storms, which with Ida we know are going to be frequent. And, you know, we had the first signal in 2012 with Sandy, and now very recently with that.
And so, I think climate resilience just continues to play an enormous role in development and how we plan our sites and how we decide where we're going to develop to make sure assets aren't vulnerable. Totally. You mentioned
[00:48:00] James Dice: champions, can you talk a little bit more about why you have a three person team for 50 million square feet?
Can you mention the, you're talking about all the people that you kind of lean on to champion these causes outside of that three person team? Uh, and, and sort of, I mean, we talk about a lot about this in my course is like the, the, like we have to have pretty much everyone involved be the champion for kind of moving forward.
Uh, how's it been
[00:48:27] Ben Myers: you? So, well, we have the three champions to certainly know the ropes and one that will know the ropes in a couple months. And then we have three very, uh, effective committees. So we've a board level sustainability committee that provides oversight and provides executive. View of what's going on and shares best practices.
That's chaired by, uh, Diane Hoskins, the co CEO of against Lou who happens to be a board member of ours and super happy to have her leading that group. We have an operational sustainability committee, as I said, I spent a lot of time embedded with operations and that's 35 member committee. It's very active.
When we were just about to do a regional round of summits. So I'll be in, in San Francisco on Monday and then, uh, DC on Thursday and then New York, uh, the following week. And. In Boston tomorrow, we have our summit. So these summits are, we go through every asset. We look at performance and as a sustainability committee members, typically that are in those meetings, plus some other property management folks of engineers.
But having a sustainably committee that's recognized by our executive team, I think is really important, right? So I try to get the committee as much recognition as I can for what they're doing and how they're contributing. Cause these are people are they're giving discretionary effort, right? They don't have to focus on sustainability.
Certainly we try to add sustainability to their professional goals right there for performance evaluation. And that happens quite frequently. But we need people that really care about this and take a personal view that this matters not only to the organization, but also to me. And, and so we, a lot of our similar committee meetings are, are educational and we developed content.
She also mentioned that going virtual. Well, I think has had some detrimental impacts. That's really helped with training and engagement across our company. We're using these tools more to meet across regions, and we didn't have much communication between our regions before teams calls for us became the norm.
So we were able to do a lot more training and engagement, and we want to use these tools as an advantage for the company. And we have a third committee, which is our corporate committee. It's more of a steering committee. We are a real estate organization. Uh, we do have restrictions on what we can say publicly.
I hope I haven't violated them here, but a lot of that group is. Reviewing disclosures, making sure we're, we're not making any, uh, inappropriate forward-looking statements. And also just making sure that our, our, we have the controls in place to do the data assurance and that we're putting out high quality indicators of ESG performance.
And because a lot more of this data is migrating from what was a standalone GRI sustainability report aligned with, uh, with the GRI index to a, uh, 10 K sec filings. So different levels of legal liability, uh, from one to the next, both have to be good, right. Both have to be on the mark, but there is a formality in the 10 K that, that I think elevates the, uh, this, the scrutiny.
Totally. Yeah. So
[00:51:32] James Dice: you talked about like the, like the evolution and where you've come from some key projects. Where are you at looking forward? Like 21, 22, 20 22. What are the, some of the areas that you're like, what the next phase of green building, if you will, like, where, where are you guys?
Where's your head at
[00:51:49] Ben Myers: that? Well, all I can say is if you're in sustainability, you better be a lifelong learner because it's an infinite learning curve. And that's what I think. Keeps me excited about this work. They, our company is, has been involved in life sciences. We have a lot of life sciences tenants.
The whole focus for us has grown as the demand for life sciences space has grown in our region. So that's where I'll be focused. How can we make life science, uh, operations, more sustainable? What, what types of mechanical interventions can we, can we do to, to make these air change requirements less impactful to our energy and carbon carbon performance?
I think electrification of life sciences is also a fascinating topic. It's sort of a hybridization of heating in these buildings with, with, uh, air to water, heat pumps that compliment, uh, gas fired systems, uh, where we can't eliminate gas fired systems completely. So what's the right balance of heat pump infrastructure to, uh, in some cases, reduce greenhouse gas emissions 90%, but still allow enough standby capacity to serve these buildings on the coldest days.
Sounds like Boston, New York, fascinating problem being solved right now. I think that the focus is going to be on, on de-carbonization by 2050, perhaps sooner of our entire supply chain. So looking at Steel and concrete and metals. And how can we, uh, make decisions as an organization that, that reduced the carbon impact?
So the back to the embodied carbon thing, that's, that's going to be a large focus for us. So those, yeah, and then health and wellness, I should have mentioned earlier. We, we partnered as an organization with Dr. Joe Allen and the Harvard school of public health. Joe Allen has published a book called healthy buildings, uh, best Building health book. I know they certainly has a title for it and the right timing. So it's, so we've worked closely with Joe on strategy, uh, and we're working on a project right now, 1 71 darkness street in Boston, Massachusetts, which is above the, uh, back bay station. So we're going to be building an 800,000 square foot office tower that we're positioning as Boston's healthiest office buildings.
So that's looking at everything from air quality to materials, to amenities. And how do you promote health and wellness and make that the office. Uh, to potential customers and we really want to lead there and lean in to the healthy building space. And I'm excited about that. I feel like especially now there's a flight to quality in the office realm.
People are wanting flexibility. They're working from home more. I think there's going to be more competition to, to attract tenants to buildings. And I think health and wellness is going to be at the center of the value proposition. Hmm. Very interesting.
[00:54:34] James Dice: So. Maybe if we could do this just real quick. So Jim Jim on the episode talked about the ICU committee.
So that's another committee, I think, from all the other committees you've named. Can you give us an update on that? Like w when you talk about this Dartmouth project, what are some of the use cases that you're talking about enabling from a ventilation then
[00:54:53] Ben Myers: monitoring and analytics standpoint? Yeah, so we are working on, we have a framework now, uh, it's a active management framework that has a monitoring standard where we're going to have.
Uh, thresholds do not exceed for fine particulate, CO2, relative humidity, which is harder to control. But certainly at the upper end it's easier to control. Uh, and we need to control because it's an act of chilled beam building. One of the things I should mention is we're moving from VAV to active chilled beam on all of our projects.
And that's been a big going go ass has, has been great. Uh, More efficient, like 40% more efficient and cooling is what we've seen on some projects. And we're able to get these unbelievable energies intensities. And in Boston, another project, I should have mentioned ADA Boylston street. Uh, Boston's most sustainable office building we developed in 2016 has an operating EUI of 39 for the office.
So that's really low. I mean, that's the percent below the regional average. And so it is possible. It's not a building that has a modest amount of glass. Like we're always concerned as developers around these little peoples, it's a glassy building that performs unbelievably well. Um, But the, uh, the focus at, at 1 71 Dartmouth street is going to be on.
Up-sizing systems to allow for that 30 CFM per person. Right. So making sure we can do that, but also making sure we have the fan power to overcome, you know, Merv 15 filtration. And so we're going to have, uh, that we're also looking at some, some carbon filtration potentially for that project. And, uh, we've also, you know, been talking to Envera to see, you know, is there a potential opportunity there to do more scrubbing of carbon?
I think we need to look at that as well. Uh, on certainly on projects where we can get comfortable with that technology. It's not been a great time to talk about, uh, diminishing ventilation and it is tough, tough conversation to have with customers, but the focus is going to be really on this proactive management and using air quality performance in lieu of prescriptive standards.
So having the capacity if we need it, but trying to really tune that capacity and right size, uh, the amount of air being delivered. So as not to be wasteful you know, we don't want to throw our sustainability goals out being wasteful on ventilation. So, I think a lot more monitoring, a lot more feedback to tenants.
One thing I think we, where we, I think we can improve, frankly, is on tenant engagement and providing the right information. It's hard to produce something like I've, I've worked on. So many dashboard projects, uh, dashboards. I've spent a career, a small career on, on sustainability dashboards, and it's just hard to create dashboards that get people's attention.
It just becomes noise in the background. So that's something I think we still need to solve, like what bits of information on health and wellness or energy and carbon or water, can we be giving our tenants to get them more engaged, right. And achieving sustainable outcomes for the whole building, but also just, you know, make them comfortable with the fact that we are.
Ventilating their space that we're testing air quality and that we're paying attention as an, as an operator. And we have their health and wellbeing in mind. That that I think is going to be a big project of ours. And when you ask what I'm going to be focused on, that's, that's something that's that, that I'm working on thinking about.
And a lot of it involves data and getting data into, uh, out of the silos and into an operating system and then into something that's manageable for people to, to take in every day and doesn't become noise. Cool.
[00:58:39] James Dice: Really cool. Those are, that's a lot to focus on. That's a lot. Uh, you sound like me, people are like, what are your goals?
And I'm like list off like 15 things. Those are all my priorities.
[00:58:52] Ben Myers: Yeah, it's a, it's it's really interesting work. Cause I, I mean, I haven't mentioned things that I'm thinking about constantly is Evie charging is a big one for us. That's been a focus of ours, uh, that I think we're going to have to see 10 X and Evie charging over the next two, three years.
I saw a electric Porsche in the garage downstairs today and was, I was amazed. So he played, I had to look twice, like, can't believe they've done that. Right. I'm going to get the Hummer coming now. It's ridiculous. I drive a Rav four prime, much more modest, uh, electric solution. But I I do think that these, uh, this focus on technology, the focus on sustainability, they're all complimentary, which is one of the reasons why I'm spending so much time with Jim and his team.
Uh, we really can't get these things done. Evie charging. ICU management real-time monitoring of energy and carbon, uh, without deep, deep integration with our ISI T team. So I, I'm learning more about smart buildings and technology because I have sustainability goals. Yeah. I mean,
[01:00:00] James Dice: that's what I mean, that's what a lot and the nexus community, you know, you, you start, hopefully you're starting with the end goal that you're trying to enable, but you quickly realize that there's a, an, a, an it problem that needs to be solved, uh, in order to get there.
Yep. Yep. Well, let's circle back on two things before we conclude here one is on like Kara and I were talking two weeks ago about all the retrofits that need to happen. So if you look across your portfolio, You mentioned the UCMS, there's probably, you know, a ton of retrofits that in order to hit your goals, you got to find the funding to go do them.
How are you thinking about like, paying for that? And
[01:00:38] Ben Myers: I guess
[01:00:39] James Dice: even if you do have the capital, how should others be? Like what's the state of, of financing these sorts of, of
[01:00:47] Ben Myers: retrofits today? Yeah, I think there's the standard 3.7 year payback that we've enjoyed on, you know, over 250 measures that we've counted.
It's only going to get us so far. And I think we have a real clear line of sight on like a 5% improvement from where we are today to that 32% reduction below 2008. And I, that I think we're going to get to. With the routine operating and capital investment that we make that's on the order of, uh, 11 to 14 cents per square foot per year on energy conservation.
But I do think that, and that's across our full portfolio. So it's not at one building where we're doing a major intervention, like 200 Clarendon street, the Hancock tower in Boston. We went in and spent $7 million just on controls and upgrading, uh, some equipment in the building and, and that paid back in, in under five years.
And so that was a good proof of concept. What I learned from that experience and where I think we need to go, James is on having very Wrong retrocommissioning requirements. And instead of energy audits where it's required and you just sort of put a report on a shelf and then walk away working with people who go through and they do the tuning in real time, as they're doing, you know, an assessment of the building and it's mechanical equipment.
So we need to do more functional testing, more, more, uh retrocommissioning and I think that's going to be what takes us to the rest of the week. I also think that we're gonna have buildings that are old, right? So we have buildings that are 40 gonna become 50 years old. And that's an opportunity to rescan and the, some of these life science projects I'm talking about or going office lab conversion, we're doing re-skin.
So that's a great opportunity when you have a large turnover, large conversion or reposition to really get into the envelope and increase the R value to 30 or 40. And w that one project I mentioned, I mentioned earlier, where we had this net zero reposition of a building we developed in 2001 is precisely that like finding that opportunity, that buildings lifecycle, that really go in and the capital investment, because it's going to land you the next tenant that wants that sustainable asset and wants something that's totally refreshed.
How do we take buildings that are. Occupied and just chugging along and re-skin them no idea. That's a million dollar question. How much re-skinning is going to be required. And what's the cost. I mean, I've heard, uh, you know, some very large numbers thrown around, uh, and, and I think we need to, we need to be looking at it and we need to find the right opportunity and the building life cycle to make those retrofits.
But I do think that the thing that the opportunities are still in the controls and they're still in the retrocommissioning and making sure the systems that we have in place are working properly. And then, and then we'll see where we get. But I, I, I think that it's, uh, it's going to require an enormous amount of capital, a re-skin.
And so I, I am. I'm thinking about this issue, like how are we going to triple pane glazing? That's the, that's been a discussion. Do we do dynamic glazing, electro chromic? What's the best investment in the glass. And I think you're gonna begin to see because of codes and standards, triple pane becomes the norm.
Uh, we have a backstop requirement, which is fascinating. There's a backstop requirement in Massachusetts. Now we used to have this work around where we would do, uh, uh, we would add more glass or be allowed to build a more glass because we would get the savings through lighting and mechanical equipment.
Now there's a backstop calculation. You need to submit with your permit that doesn't allow you to do that. So you need to hit a certain thermal performance in the facade itself. As a standard component of the building. So that, that I think is cool. That solves a problem where that tension between leasing and what we can sell and sustainability.
And what we need to do is kind of resolved by raising up the floor. And so that's where mandates and codes I think are really going to matter and doing it in a way that doesn't make the product less viable the lease, but it just raises that floor. You don't want Marcus to become less competitive because you have to build like buildings with little like shift portals, but you want to, you want to build buildings that are beautiful to be in that allow natural light again, back to health and wellness and also achieve the energy performance goals of the jurisdictions.
[01:05:09] James Dice: And how do you think about, so let's say you guys had like, And I'm just making this up, but there is some payback threshold that you're allowed to invest in. Right. So you said 3.7 years. A lot of organizations have like a two year payback threshold. I'm not doing anything unless it's under a two year payback.
What, like what options are there out there today to say, okay, across this whole portfolio, we're going to do everything with the 10 year plan and we're going to finance it. Like what, what, what's the, what is the thinking around that?
[01:05:40] Ben Myers: Because.
[01:05:41] James Dice: And I know you guys are like close to your goal, right? You're you're, you're pretty close.
You might not need to do stuff like that. But from a economy standpoint, we have to start doing like really deep retrofits.
[01:05:52] Ben Myers: I think what you're gonna see is, is a lot more creative finance structure. Uh, the capital stack right now is like, Hey, let's use our, our strong balance sheet to invest in conservation measures.
We, you know, we're well capitalized. I think we're gonna see stronger adoption of CPP. And which allows you to essentially use debt off your, your property tax assessment and, and take debt and then pass it through over a very long time period, like 30 years. So that's appealing for a lot of developers because off balance sheet, I think that you're going to see more ESCO work in this space companies like ESCOs have served municipalities that have no budget for stuff for a long time, or they haven't really been involved with Freed's very much.
So I think you're seeing more ESCOs, uh, working with reeds to make these larger investments. And, and so, yeah, I'd say ESCOs and C pace are going to play a larger role in financing projects. Okay. I also think we're going to need there's a, there's a federal tax. Uh, credit coming along for energy efficiency with the Biden infrastructure bill that everyone's excited about that may unlock some opportunities.
But I do think we don't have a solution that meets the magnitude of the challenge quite yet. So I do think an addition to creative financing like C pace and, and ESCO financing, we're gonna like performance contracting is the word I'm looking for. Uh, I think we're gonna see the, the, uh, the need for real strong federal public funding of investments.
And I'm not suggesting that those need to flow to a company like Boston properties, but I'm suggesting that for affordable multi-family, uh, sectors that are underfunded and don't have capital, we're going to need certainly some investment from the public. Totally. All right. I
[01:07:40] James Dice: just have one final question.
And it's you, you dropped so many different reporting acronyms, and I saved this till the end. I didn't want to interrupt your flow or you know, the sustainability. But I'd love for you to just clarify a little bit around ESG and sustainability reporting, like where we've come from and like what, what are the buzz words?
And like, just like demystifying that a little bit would be helpful for people I think.
[01:08:08] Ben Myers: Yeah. Yeah. Welcome to my nightmare. So there are a lot of acronyms there's a lot of acronyms in your world as well. You shared with us, but There right now, our reporting includes a GRI global reporting initiative, indexed ESG report, environmental social governance report that we issue on an annual basis.
And then some of the really important frameworks for our company and KRAS the global real estate sustainability benchmark. We've had a Greenstar for 10 years and we just got, we have the highest five star rating, the top 4% of the global universe, MSEI Sustainalytics, also ratings that we pay attention to.
I think that CDP is also an important one. Uh, Reporting continues to take up more time. Uh, That's the impact. You know, one of the reasons we have the analyst is to, is to do more reporting, but we, we try to balance the amount of time we spent reporting with the amount of time we spend implementing cause implementation requires engagement, engagement takes time.
Also just cultivating knowledge, right? By talking to peers, going to conferences, learning what best practices are. That's also very time consuming. I do think the and I've been arguing this for a long time. The, the amount of ESG raters. That it just increases every year and this gotta be consolidation.
Yeah. I also think that investors are looking for ways to quantify, you know, ESG metrics like what's material for an organization's performance. And they all have slightly different ways of looking at it. And it'd be great to get more consolidation and more standardization of ESG and metrics.
And one of the reasons why I think the forthcoming sec requirements aren't so bad is because with an sec requirement, you're going to get more standardization, right? They're going to set more guideposts for here's, what you disclose and how you have to disclose it. Versus people sort of cherry picking and disclosing metrics that they want, that aren't are garbage.
So I think that you know, Greg has done the industry, a service despite the you know, amount of time. It requires, I think MSEI and Sustainalytics. I've done the industry of service by providing these frameworks. I would like to see. No more standardization and less time required to do this. One of the ways we do that is by automating data, right?
So, one of the things I'm proud of that the company has been able to do is integrate portfolio manager with our bill pay system. So when we pay utility bill, it flows into portfolio manager and logs, the data there so that we have a running record of what we've used in our buildings. And, but 80% of our energy and water data flows that way, just an automated from our bill pay platform.
And the rest is collected from tenants sub-meters and keyed in. So that's that's helped to save a lot of time. And then also, you know, the, the partnership with measurable has helped us prepare our data for disclosure. And developing relationships over the years with assurance providers to know what we need to do to, to check everything.
When you look at the amount of people working on financial disclosure at large publicly traded companies, and think about the resources dedicated to ESG it's it's night and day, right? It's it's armies versus, you know, small tribes camping in the, in the woods. So it's, it's. It's it's going to take a while.
I think for the Infor I think w for us to be on par with what we do for financial reporting, but I think the controls could come along with the STC requirements, the control requirements that that would make us have to spend more resources on disclosure and certainly concerning to some folks in the real estate industry.
What's this going to take to do this? And my answer to that is I think we need more people than the sustainability people handle it. Like it should become part of an accounting discipline carbon emissions. It shouldn't be the people trying to advance green building strategy and innovation that the accounting side should take on the, the KPI tracking and logging and, and accounting function.
[01:12:06] James Dice: Absolutely. Yeah. That's exactly what I was thinking about when you started naming off all those different frameworks, standards, certifications. It's like the people that are working on that, especially your little team. You should be working on the retrofits and like the things that, the energy manager, the engineer, and you needs to be working on.
It's like, oh man, hopefully they're not getting bogged down. And, and all this other stuff. Anyway, that's just my soap box, I guess. But yeah, we've got, we've got to do some retrofits.
[01:12:35] Ben Myers: We've got to do some retrofits. We got to do some retro commissioning and a whole lot of initiatives. And the goals that we've set are ambitious.
And you know, I feel, I feel great here knowing the level of ambition that we've set for this group matches the level of commitment of our executive team. So I really mean that like, oh, and Thomas and Doug Lindy have been huge supporters of everything I've done. And I and Amy Kendall, who I work with has also been usually supportive and Mike LaBelle, I D you know, the list goes on and on.
I feel like I'm on an award podium. I could go on about all the folks who, who really make it possible. But there's just, it's, we're entering. Obviously a time where this situation with the AR six report that just was released by the ITCC signals to us that we need to take bold action. I love the term, the decisive decade.
I've heard, I've heard that from a number of people. We are truly in a decisive decade, and that's exciting because we have so many more of our stakeholders on the sustainability journey with us and, and, and including folks in, in, in your network, James, and you've done a tremendous service for all of us.
I've connected with a number of people through your podcasts, and really want to thank you for what you do in this forum and, and having Boston properties get to share a little bit, because I've learned so much from the people you've had. Yeah,
[01:13:59] James Dice: thank you for that. It's always great to have someone who's listened to so many episodes come on the show because it's like a, it's like you've continued the conversation.
So I appreciate that. Let's do, let's do two truths and a lie. You're ready. You ready
[01:14:12] Ben Myers: for it? I am ready. This is the one part of the session. I might need to reference some notes, but I'll cure ago. I got to read them all with the same level of, uh, overcoat, right. Poker face. So, uh, we talked about buildings a lot, so I wanted to talk about another sustainability issue, unrelated to the built environment.
And that is agriculture and food production. So we talked about scope three supply chain and food production is 26% of global emissions from supply chains. Right? So over a quarter. Okay. And one of the solutions to, uh, decarbonizing meat production is cultured meat, right? So this is lab grown meat. So I have three.
[01:14:59] James Dice: all right, you
[01:15:00] Ben Myers: ready? There's the first one we eat a lot of animal protein. The global animal protein market grows about 1%. Annually is expected to hit 531 million tons by 2030. That's about 125 pounds per person per year of animal protein. That results in about one ton of carbon per person.
That's the first statement. Okay. You're not going to like change one number and these stones are gonna cultivated. Meat could be the solution, but there are regulatory and cost challenges. Only a handful of countries that have approved consumption of cultured meat. So far include the U S Australia, Germany and South Korea.
So only a handful of countries have, uh, have approved the consumption. Third is the first cultured meat hamburger was grown in a Dutch lab and cost $300,000. This was in 2013, a culinary expert said that it was close to meat, but not that juicy since then, the cost of cultured meat products has dropped to around a hundred bucks a pound.
Okay. Those are the three.
[01:16:14] James Dice: I do a lot of overeating. Agriculture specifically they huge Michael Pollan fan. I don't know, uh, was out there mostly vegan. Uh, so I feel like I know more about this topic than most people would, but at the same time I'm kind of stumped. I'm going to say the second one.
[01:16:37] Ben Myers: Got it.
[01:16:38] James Dice: Is it because it's not approved anywhere? What's the technicality.
[01:16:45] Ben Myers: Yeah, only one country. Uh, so the, the, the, the statement was that a handful of countries have approved consumption us, Australia, Germany, and South Korea. None of those countries have approved and Sandra was going to say, okay, the one country that has improved consumption of cultured meat is Singapore, and it was a chicken nugget, uh, grown in a lab in 2010.
I love that.
[01:17:07] James Dice: Well done. I love how you zoomed in on like some other topic out there. Uh, that's awesome. Well, cool, Ben, this has been so much fun having you on the show. Thanks for bringing your passion to such a, a big problem.
[01:17:20] Ben Myers: Yeah. Well thank you for having us and, and I, you know, again, just want to thank you, James, because you've created a trove of information for the community to continue learning and continuing to get better.
And that's what it's all about. That is. All right. Thanks.
[01:17:37] James Dice: All right friends, thanks for listening to this episode of the Nexus Podcast. For more episodes like this and to get the weekly Nexus Newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry, please subscribe at nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.