Leader in the Light Working Forum 2017 Video Interview
Daniele Horton, Head of Sustainability, Parkway, Inc.
Founder & President, Verdani Partners
Last year, Parkway merged with Cousins Properties and spun off the assets into two different organizations. What are the challenges or issues that must be addressed when companies merge or acquisitions are made from a sustainability perspective?
One of our biggest challenges was the large amount of building-specific data that had to be shared between the two companies following the merger and the spin-off. Many of those buildings had been pursuing ongoing sustainability initiatives like LEED and ENERGY STAR, which hinge on maintaining a seamless record of energy, water, and waste data from one month to the next. We had a challenging task to ensure a smooth transition after the change in ownership for each asset. It required strong cooperation and coordination between both entities. In order to facilitate a smooth post-closing transition, we convened an in-person meeting after the transactions closed to get all the property teams on board with Parkway’s corporate sustainability initiatives. Parkway’s sustainability team spent two full days reviewing sustainability policies and programs with the senior management team and asset managers in Houston. Their entire team is now strongly committed to the pursuit of our shared sustainability goals. Parkway’s Director of Sustainability, Jeff Dunbar, our Regional Chief Engineer, Mike Shreve and our VP Director of Operations, Jack Gregoire and all the property managers and engineers were instrumental in making this effort a success.
Parkway has a goal to achieve a 20% energy reduction across its portfolio. What key steps you plan to take to make that happen?
To achieve that goal, we plan to continue implementing a comprehensive program including several portfolio and building-level initiatives. I will try to cover key aspects of it since a lot of these strategies are becoming best practices and can be easily replicated:
Portfolio-level strategies
Developed performance targets
Implemented an energy efficiency policy
Benchmarked and track data progress
Automated our utility data tracking
Implemented building-level energy management software
Implemented a sustainability due diligence process for new acquisitions
Included efficiency projects on annual budgets
Implemented high ROI efficiency programs
Implemented a robust tenant engagement program
Incorporated green lease language
Created internal & external recognition programs
Implemented a portfolio-level data management software
Publicly report our annual progress
Building-level strategies
Monitoring, metering and commissioning main building systems
Maximizing operational programs including heating and cooling efficiencies & Installing variable frequency drives on equipment
Implementing Lighting upgrades and controls
Installing building automation systems and investing in DDC, wireless controls, energy optimization software & demand response infrastructure
Retrofitting main building systems as feasible: chillers, cooling towers, boilers, and fan motors
Tuning up our Building Envelop including sealing windows as feasible
The planed and completed energy upgrades at our lower-performing buildings will be key areas to focus to achieve our portfolio-wide energy savings. In several cases, we got great savings and short payback times by focusing on key aspects of the energy efficiency picture, such as lighting retrofits. We have implemented and will continue to focus on major garage lighting retrofits at several properties. Switching thousands of fluorescent bulbs with ultra-low-wattage LED lamps have been a great area to focus on for energy savings.
We have talked in the past about Parkway’s participation in the LEED volume program. Can you update us on how that process is going?
Following the merger and spinoff, Parkway’s portfolio breakdown is as follows:
100% of our portfolio is benchmarked in ENERGY STAR
89% of our portfolio earned ENERGY STAR labels in 2016
100% of buildings have utility automation
95% of portfolio is LEED Certified (by both building count and square footage)
The new, more efficient portfolio was better suited to the USGBC’s new alternative LEED Performance Score Pathway with the new arc platform. Some of the benefits of this new certification path include:
Streamlined annual recertifications (much like ENERGY STAR) instead of a major LEED recertification effort once every 5 years
Far less paperwork and staff time required to prepare for recertification each year with far fewer requirements for ongoing data tracking, which enable us to refocus our efforts on actual improvements.
Focus on five key performance indicators: energy, water, waste, transportation, and indoor air quality.
A simple platform that automates data flow with key data sources like Energy Star Portfolio Manager that simplify the ongoing data tracking needs for energy, water, and waste on a monthly basis.
Can you talk about some of the goals Parkway has regarding advanced energy, water and carbon reduction strategies going forward?
Parkway plans to work toward achieving our long-term reduction targets of 20% in energy and carbon emissions and 30% in water use across the portfolio. Parkway has also set a long-term goal to reduce waste and increase waste diversion rates to 75%. With the recent implementation of waste tracking features in ENERGY STAR Portfolio Manager, Parkway can better track waste generation and identify high waste-producing properties. Because the company’s entire portfolio is located in Houston, Parkway expects to be able to optimize its recycling programs, meaning far fewer waste haulers and recycling vendors to manage. We also plan to implement a comprehensive tenant engagement and signage programs. Almost 70% of the energy use in buildings is the responsibility of building occupants, so it is essential to educate and engage our tenants on sustainable behaviors.
In addition to energy, water, waste, and carbon goals, Parkway also values the health and well-being of employees and tenants. For employers, this equates to increased productivity, lower absentee rates, and reduced healthcare expenses. For employees and tenants, a health and well-being program increases happiness and lowers illnesses. We introduced a comprehensive health and well-being program that we will continue to enhance. We have also implemented a Health and Well-being Guide and are focusing on initiatives that improve indoor air quality, improve access to physical activity and healthier food choices at our properties.
Resilience is also an important aspect of our program. We have implemented a Climate Change and Resilience policy and are working with our properties to make sure they are ready so sustain the impacts of stronger weather events and making them safer for our occupants.
Our achievements demonstrate Parkway’s commitment to enhancing the long-term value and sustainability of our portfolio. There is a greater push for sustainable, efficient, healthy, and resilient buildings from both tenants and investors. We believe that our stakeholders benefit from ESG initiatives. [While tenants benefit from lower operating costs, building owners/managers enjoy increases in rent, building values, occupancy, and retention. Meanwhile, lenders lessen their risk with reduced default rates and investors improve their ROI.
As the industry evolves, the demand for efficient buildings is steadily growing. We expect that the Parkway Green Sustainability Program will lessen our environmental footprint, increase the value of our portfolio, reduce operating costs and improve the quality of our buildings for our tenants.
