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GRESB | Siemens: 2018 Sustainable Real Assets Forum- Sydney

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June 26, 2018 at the InterContinental Sydney, hosted by Siemens

Slides:
Peter Halliday, Siemens - 5
GRESB - 16
Emma Herd, IGCC - 30
Adam Kirkman, AMP Capital - 35
Nina James, Investa Office Management - 47
Chris Pyke, GRESB Resilience -68
Arti Prasad, NZ Super - 93
Thomas Schroder, South Pole - 99
Jeremy Mansfield, Green Cross - 109
Natalia Moudrak, Intact Centre on Climate Adaptation, University of Waterloo -123
Azheem Haseeb, Siemens - 135
Carola Jones, Everty - 156
Frank Freitas, Four Twenty Seven, Inc. - 167

Publicada em: Imóveis
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GRESB | Siemens: 2018 Sustainable Real Assets Forum- Sydney

  1. 1. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  2. 2. J o r g e C h a p a H e a d o f M a r k e t T r a n s f o r m a t i o n G B C A Today’s MC Wi-Fi N e t w o r k : I n t e r n C o n t i n e n t a l G u e s t C a s u a l L o g i n : g r e s b
  3. 3. P R O G R A M 8 : 4 5 R e g i s t r a t i o n & N e t w o r k i n g O p e n i n g & W e l c o m e S e s s i o n 1 : R e s i l i e n c e , w h y i s i t i m p o r t a n t f o r t h e b u i l t e n v i r o n m e n t ? C o f f e e & N e t w o r k i n g S e s s i o n 2 : H o w d o e s r e s i l i e n c e t r a n s l a t e i n t o o p p o r t u n i t y a n d r i s k f o r r e a l a s s e t i n v e s t o r s a n d m a n a g e r s ? R e s i l i e n c e & G R E S B L u n c h 9 : 3 0 9 : 4 5 1 0 : 2 5 1 0 : 5 0 1 1 : 5 0 S e s s i o n 3 : C a s e s t u d i e s s h o w c a s i n g r e s i l i e n c e l e a d e r s h i p . C o f f e e & N e t w o r k i n g S e s s i o n 4 : W h a t a r e k e y i n n o v a t o r s w o r k i n g o n ? C l o s i n g & K e y T a k e a w a y s D r i n k s & N e t w o r k i n g 1 4 : 2 5 1 4 : 5 0 1 6 : 1 5 1 2 : 1 5 1 6 : 0 0 1 3 : 1 5
  4. 4. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  5. 5. GRESB/Siemens – Sustainable Real Assets Forum Peter Halliday – Global Head of Building Performance and Sustainability, Siemens Building Technologies www.siemens.com/buildingtechnologiesRestricted © Siemens Switzerland Ltd 2018
  6. 6. Restricted © Siemens Switzerland Ltd 2018 June 2018Page 6 Peter Halliday/Global Head of Building Performance and Sustainability Our world is undergoing big changes … … that influence your real estate portfolios Digital transformation Climate change Demographic change Urbanization Globalization Higher innovation speed Growing importance of efficiency in terms of energy, process, technology Increased need for security A world connected by complex and heterogeneous systems
  7. 7. Restricted © Siemens Switzerland Ltd 2018 June 2018Page 7 Peter Halliday/Global Head of Building Performance and Sustainability Occupants/tenant expectations are changing Sustainability targets are expanding Evolving safety and cyber security needs Demanding expectations of workplace from employees Aging in-house workforces and skill-set gaps Emerging technologies becoming viable quickly Growing reliance on OPEX for infrastructure upgrades
  8. 8. Restricted © Siemens Switzerland Ltd 2018 June 2018Page 8 Peter Halliday/Global Head of Building Performance and Sustainability 1 How buildings are evolving 2 3 Buildings are talking … … and today’s technologies allow us to understand their messages … … so that the people and businesses who invest in them can thrive
  9. 9. Restricted © Siemens Switzerland Ltd 2018 June 2018Page 9 Peter Halliday/Global Head of Building Performance and Sustainability Decentralized Energy Systems create resiliency Co-Op City in Bronx, New York Power generated by cogeneration plant, including gas and steam turbine and microgrid apartments world’s large cooperative housing project 14,000 generated independently of rest of power supply system 40 MW people provided with power during Hurricane Sandy – Rest of New York largely without power >60,000 Restricted © Siemens Switzerland Ltd 2018 June 2018Page 9 Peter Halliday/Global Head of Building Performance and Sustainability
  10. 10. Restricted © Siemens Switzerland Ltd 2018 June 2018Page 10 Peter Halliday/Global Head of Building Performance and Sustainability Companies started asking questions What is our exposure to …? Grid constraints Energy Price hikes Regulation Shifting consumer behaviors Reputational Risk Cyber Security
  11. 11. Restricted © Siemens Switzerland Ltd 2018 June 2018Page 11 Peter Halliday/Global Head of Building Performance and Sustainability Four levers How Siemens is responding Drive Energy Efficiency Leverage distributed energy systems Reduce fleet emissions Purchase green energy €2 m Expected annual savings from 2020 onwards Siemens path to carbon neutrality -20% Actual emissions reduction as of 2016 2020 20302014 2016 2.2 1.7 Million tons CO2 -50% -100%-20%
  12. 12. Restricted © Siemens AG 2017 Page 12 Resilient Real Estate Assets Provide continuous insights into operational performance Improve the productivity and well-being of employees Strengthen public perception and increase property values Generate savings to reinvest as needed … become active contributors Restricted © Siemens Switzerland Ltd 2018 June 2018Page 12 Peter Halliday/Global Head of Building Performance and Sustainability
  13. 13. Restricted © Siemens Switzerland Ltd 2018 June 2018Page 13 Peter Halliday/Global Head of Building Performance and Sustainability Royal Melbourne Institute of Technology Connected data points ~17,000 Annual water savings 28,598 kL Annual reduction in carbon emissions 19,114 tonnes Total annual utility savings $1.7 million 6%of Melbourne’s CBD is covered by RMIT’s city campus Sustainability goals In 2007 RMIT committed to reducing emissions associated with campus operations by 25 percent by 2020 Ranked in the top 1% of global universities1 87,000 students around the world 1 2017 QS World University Rankings Restricted © Siemens Switzerland Ltd 2018 June 2018Page 13 Peter Halliday/Global Head of Building Performance and Sustainability
  14. 14. Thank you Restricted © Siemens Switzerland Ltd 2018 June 2018Page 14 Peter Halliday/Global Head of Building Performance and Sustainability
  15. 15. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  16. 16. MISSION Enhance and protect shareholder value by assessing and empowering sustainability practices in the real asset sector
  17. 17. A Rising Tide Source: Munich Re, Geo Risks Research, NatCatSERVICE (2018) Number of Natural Disasters by Cause 0 100 200 300 400 500 600 700 800 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Meteorological: storms Hydrological: floods, landslides, avalanches Climatological: extreme temperatures, draughts, bush fires
  18. 18. Source: Deloitte Access Economics estimates (2017) Total Economic Cost of Natural Disasters Australia A Rising Tide
  19. 19. [INSERT DISASTER HERE]
  20. 20. RESILIENCE /rɪˈzɪlɪəns/ Definition The capacity of real asset organizations to survive and thrive in the face of stressors and shocks Scope The combination of management practices, assets and circumstances that create or mitigate risk
  21. 21. Risks… Stressors & Shocks Physical Social Economic Environmental Technological Regulatory Impact Asset Value Employees Environment Communities Businesses Tenants Supply Chain
  22. 22. “Better access to data will enhance how climate-related risks are assessed, priced, and managed.” …and Opportunities
  23. 23. 2424 Australian investors want bankable projects that help us adapt to climate change
  24. 24. Informing investors, accelerating market transformation GRESB Resilience Module
  25. 25. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  26. 26. S E S S I O N 1 Resilience, why is it important for the built environment ? M o d e r a t o r : R u b e n L a n g b r o e k H e a d o f A s i a P a c i f i c G R E S B M o d e r a t o r : C h r i s P y k e R e s e a r c h O f f i c e r U . S . G r e e n B u i l d i n g C o u n c i l R o m i l l y M a d e w C h i e f E x e c u t i v e O f f i c e r G r e e n B u i l d i n g C o u n c i l o f A u s t r a l i a B e c k D a w s o n C i t y R e s i l i e n c e O f f i c e r C i t y o f S y d n e y R o d e r i c k S i m p s o n E n v i r o n m e n t C o m m i s s i o n e r G r e a t e r S y d n e y C o m m i s s i o n
  27. 27. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  28. 28. S E S S I O N 2 How does resilience translate into opportunity and risk for real asset investors and managers? M o d e r a t o r : E m m a H e r d C h i e f E x e c u t i v e O f f i c e r I G C C P a u l i n e V a m o s C h i e f E x e c u t i v e O f f i c e r R e g n a n A d a m K i r k m a n H e a d o f E S G A M P C a p i t a l N i n a J a m e s G e n e r a l M a n a g e r , C o r p o r a t e S u s t a i n a b i l i t y I n v e s t a O f f i c e M a n a g e m e n t R o r y L o n e r g a n D i r e c t o r , C o r p o r a t e a n d P r o j e c t F i n a n c e C E F C
  29. 29. GRESB Siemens Sustainable Real Assets Forum 26 June 2018
  30. 30. IGCC: Investors, physical risk & resilience Workshop: Tools & Frameworks for managing physical risk 6 June 2018
  31. 31. IGCC: Investors, physical risk & resilience 6 June 2018 Co-hosted with NAB Summary reference guide to follow
  32. 32. @IGCC_Update emma.herd@igcc.org.au www.igcc.org.au Thank You – and now for the panel…
  33. 33. S E S S I O N 2 How does resilience translate into opportunity and risk for real asset investors and managers? M o d e r a t o r : E m m a H e r d C h i e f E x e c u t i v e O f f i c e r I G C C P a u l i n e V a m o s C h i e f E x e c u t i v e O f f i c e r R e g n a n A d a m K i r k m a n H e a d o f E S G A M P C a p i t a l N i n a J a m e s G e n e r a l M a n a g e r , C o r p o r a t e S u s t a i n a b i l i t y I n v e s t a O f f i c e M a n a g e m e n t R o r y L o n e r g a n D i r e c t o r , C o r p o r a t e a n d P r o j e c t F i n a n c e C E F C
  34. 34. SUSTAINABLE REAL ASSETS FORUM 2018 26 JUNE 2018 ADAM KIRKMAN HEAD OF ESG
  35. 35. PRIVACY AND SECURITY CLIMATE AND ENERGY TRANSITION TECHNOLOGICAL DISRUPTION DEMOGRAPHIC CHANGE GLOBALISATION AND URBANISATION REAL ASSETS GLOBAL FORCES OF DISRUPTION | 36 RESOURCE DEPLETION
  36. 36. GLOBAL FORCES ALL BREAKING TRENDS Source: McKinsey Special Collections Trends and global forces | 37 Data and communication flows have raised world GDP by 10% China and Africa trade increased from $9bn to $211bn over 12 years More than 1 billion people cross borders each year Urban population rising by an average of 65m people annually Urbanisation is empowering populations that exceed 1.5 billion across India, China, Africa and Southeast Asia 50 years to mass ownership of telephones 200 billion emails are exchanged every day 300 hours of YouTube content uploaded each minute Fertility rates have halved since 1955 Demographic deficit – Japan, Russia, China, Latin America Size of Japan’s workforce in decline since 1994 40% of NHS budget goes to over 65s
  37. 37. RISKS & OPPORTUNITIES IN CONTEMPORARY URBAN ENVIRONMENTS | 38 Concessions such as the $1bn terminal at Kansas City Airport provide investment into ageing infrastructure Increasing bottlenecks at cargo airports in the US from European cities caused by Amazon’s two-day delivery services The State of California has plans for 100% renewable energy by 2045 The Chancellor of the Exchequer has announced a £400m fund to develop electric car charging infrastructure across the UK Demand for rural fibre e.g. Ireland’s National Broadband Plan Infra funds entering the data centres sector where real estate players have previously dominated In the UK, bed occupancy in private hospitals remains above the recommended maximum of 85% A rising global middle class is leading to a growing prevalence of conditions and increasing complexity of care
  38. 38. IS IT POSSIBILE TO SELECT INVESTMENTS THAT ARE FUTURE PROOF?
  39. 39. AMP CAPITAL REAL ESTATE SUSTAINABILITY STRATEGY | 40 ENVIRONMENT Topic Energy & climate Climate Change risk analysis study MARKET SECTOR NO. ASSETS HEAT BUSHFIRE DROUGHT FLOODING STORMS CYCLONES COASTAL INUNDATION PRIORITISATION RATING RESILIENCE ASSESSMENT PRIORITY* Australia Gold Coast 2 3 1 2 3 3 2 3 17 High Perth 6 3 2 2 2 3 1 1 14 Medium Newcastle 1 3 1 2 3 3 0 2 14 Medium Brisbane 18 3 1 2 3 3 1 1 14 Medium Wollongong/Illawarra 1 3 2 2 2 3 0 1 13 Medium Canberra 1 3 2 2 1 3 0 0 11 Medium Adelaide 1 3 1 2 1 3 0 1 11 Medium Melbourne 22 3 1 2 1 3 0 1 11 Medium Sydney 23 3 1 2 1 3 0 1 11 Medium Western Sydney 17 3 2 2 1 3 0 0 11 Medium New Zealand Bay of PLenty 1 2 1 2 2 3 2 3 15 High Christchurch 1 2 1 2 2 3 2 1 13 Medium Table 3: Summary of market sector climate exposure by hazard
  40. 40. INFRASTRUCTURE - ESG POLICY GUIDELINES PRICE, TRANSFER AND MONITORING OF RISK | 41 DESCRIPTION METHODOLOGY Price the ESG factor into the acquisition model > Quantify financial impact of ESG events and commercial significance > Integration of material ESG issues into valuation models (assumptions and sensitivities) > Consideration of insurance scope and coverage to provide protection for issues that are difficult to mitigate through active asset management Transfer accountability to manage specific ESG factors > Identify counterparty best positioned to manage specific ESG factors (given transparency and influence) > Formally commit investees or counterparties to agreed processes or standards of performance > Formally commit and/or incentivise performance through contractual and financial arrangements Monitor ESG performance for lead indicators > Identify metrics highly correlated to financial performance and/or risk profile > Formal commitment of investees and/or counterparties to transparency over key ESG metrics > Clear accountability for ESG factors > Ensure board is managing key ESG risks and opportunities through standardised processes and reporting > Periodic appraisal of ESG monitoring practices and adherence to policy
  41. 41. GRESB GLOBAL BENCHMARKING WHY AMP CAPITAL USES GRESB > Consistent framework for analysing ESG performance of funds and assets > Extends active asset management, enhancing risk mitigation and identification of opportunities > Provides optics over value-add of improved ESG performance > Facilitates better reporting across funds, assets, investment teams and to clients > Learn by doing, encourages adoption of best practices and collaboration with global investor peers | 42
  42. 42. GRESB GLOBAL BENCHMARKING How our assets are using GRESB > Assisting leadership teams to manage businesses more sustainably > Improves rigour of governance and risk management oversight > Increasing focus on carbon footprint and energy supply > Encourages engagement with stakeholders > Provides annual ESG review mechanism > Results discussed by management and Board > Improves focus on sustainable business strategies & masterplans (1,3,5+ years) | 43
  43. 43. The information contained in this document, including any attachments (collectively, "information") has been prepared by AMP capital investors limited (ABN 59 001 777 591) (AFSL 232497) (“AMP capital”) and its associates for providing general information about the investment capabilities referred to in the information (“capabilities”) and is qualified in its entirety by any product disclosure statement, information memorandum, private placement memorandum or other relevant documentation. The information is not intended for distribution or use in any jurisdiction where it would be contrary to applicable laws, regulations or directives and does not constitute a recommendation, offer, solicitation or invitation to invest regarding the capabilities. Prospective investors should make their own inquiries and consult professional advisers as to applicable laws, regulations and directives (including any requisite governmental or other consents or prescribed formalities) in any particular jurisdiction (including, where the information is received) and the consequences arising from any failure to comply with them. While every care has been taken in preparing the information; except as required by law, none of amp capital or their associates makes any representation or warranty as to accuracy or completeness, including, without limitation, of any forecasts, or takes any responsibility for any loss or damage suffered as a result. Photographic images used are for illustrative purposes only and may not represent actual images of assets or opportunities described in the information. The information does not purport to be complete, does not necessarily contain all information which a prospective investor would consider material, and has been prepared without taking account of any particular person’s objectives, financial situation or needs. Accordingly, the information should not form the basis of any investment decision. A person should, before deciding, consider the appropriateness of the information, and seek professional advice, having regard to the person’s objectives, financial situation and needs. Past performance is not a reliable indicator of future performance and there can be no assurance or guarantee on the part of AMP capital or its associates that the capabilities will achieve objectives, target returns or a return of invested capital. The information is provided on a confidential basis and must be kept strictly confidential (with the exception of providing it to your professional advisors who are also contractually and/or professionally bound to keep it confidential) and may not be reproduced or redistributed (in whole or in part) or otherwise made available to any other person in any format without the express written consent of amp capital. IMPORTANT NOTE | 45
  44. 44. S E S S I O N 2 How does resilience translate into opportunity and risk for real asset investors and managers? M o d e r a t o r : E m m a H e r d C h i e f E x e c u t i v e O f f i c e r I G C C P a u l i n e V a m o s C h i e f E x e c u t i v e O f f i c e r R e g n a n A d a m K i r k m a n H e a d o f E S G A M P C a p i t a l N i n a J a m e s G e n e r a l M a n a g e r , C o r p o r a t e S u s t a i n a b i l i t y I n v e s t a O f f i c e M a n a g e m e n t R o r y L o n e r g a n D i r e c t o r , C o r p o r a t e a n d P r o j e c t F i n a n c e C E F C
  45. 45. ESG & Resilience Opportunity GRESB Sydney June 26 2018
  46. 46. Totality of Investa’s operations • +$11b total AUM • >200 Staff • $330m of Opex and Capex invested into the Australian economy in FY17 • +$250,000 in charitable donations FY17 Who is Investa? 48 Investa Office Management (IOM) ICPF MandatesIOF
  47. 47. ESG performance creating financial opportunity
  48. 48. Our Big Achievements 50 Set a Net Zero by 2040 emissions reduction target Issued 1st $AUD certified Green Bonds $250M Secured $110M investment based on ESG credentials Set diversity targets Big Steps
  49. 49. Our Results 51 Getting to Net Zero • Net Zero Emissions target by 2040 • First Australian property company to commit to set SBT • 58% Emission reduction since 2004 • 4% in FY17 65.00 67.00 69.00 71.00 73.00 75.00 FY15 FY16 FY17 IOM Carbon Intensity (CO2-e/sqm/yr) Science Based Target trajectory Performance
  50. 50. Our Results 52 Industry leading gender diversity targets unlocking performance value • Investa is the best performing of the Australian property companies with regards to women’s representation across all levels of the workforce – Set a 40:40:20 – Achieved in 4 of 5 managerial and professional levels – KPI for all employees (linked to short-term incentive compensation outcomes) – Founding Partner in Male Champions of Change
  51. 51. Benchmark results 53 Top 2% Global Benchmark ICPF IOF 50 60 70 80 90 100 2013 2014 2015 2016 2017 GRESB Score (/100)IOF ICPF
  52. 52. Benchmark results GRESB Strategy Future focus on Performance Indicators; • Renewable energy • Data coverage • Carbon offsets • Continued emissions reductions
  53. 53. ESG Creating Financial Opportunity 55 Green Bond issuance, performance and assurance • First Australian property company to issue certified $AU Green Bonds • ICPF: $100M 10yr, 4.25% • IOF: $150M 7yr, 4.26% IOF CO2 intensity +/- Weighted CBI Threshold 69.83 Weighted Fund Intensity 58.97 -16% ICPF CO2 intensity +/- Weighted CBI Threshold 72.29 Weighted Fund Intensity 58.36 -19%
  54. 54. ESG Creating Financial Opportunity 56 Clean Energy Finance Corporation mandate Market first investment partnership with the CEFC, committing to; • Set a Science Based target • Knowledge Sharing Platform • Data Related Opportunities • Early Stage Collaboration • Research and Networking • Future Responsible Investment This partnership has changed the way we engage with investors
  55. 55. Our Strategic Focus 57 Our Responsible Investment Focus for FY18 • Carbon Reduction Target, Getting to Zero- Net Zero by 2040 • Science Based Target Australian Sectoral Solution • Tenant and Investor Engagement Programme • Social impact and supply chain risk mitigation with Modern Slavery Act • Respond to TCFD Recommendations
  56. 56. Our Carbon Strategy- Net Zero 2040 58 Review ESG Strategy & Policy • Reflect Net Zero Emissions target by 2040 • Reflect CEFC Cooperation Agreement • Review NABERS targets >4.5 Stars Net Zero Plan • Optimise Operational Efficiency • Building Materiality • Energy Procurement + Production • Change the conversation 0 20 40 60 80 100 120 140 160 180 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Carbon Emissions Intensity (kg.CO2/sqm/year) Carbon Neutral by 2040
  57. 57. Addressing Resilience
  58. 58. Addressing Resilience 60 Australian Business Roundtable Advocacy Founding member of the Australian Business Roundtable for Disaster Resilience and Safer Communities; – Coalition of leading Australian businesses – Commissioning research into the business case for investment into resilience – Advocating to Government for governance and data sharing structures – Engaging industry in education and raising awareness
  59. 59. Addressing Resilience 61 Asset level Resilience Action In 2014 Investa conducted asset level resilience assessments for natural hazzards – Identification of material risk – Identification of exposure to climate change risk – Development of asset level risk mitigation plan – Portfolio level analysis – Acquisition and Disposal Strategy at Fund level
  60. 60. FY18 TCFD Recommendations 62 Task Force on Climate Related Financial Disclosure • Aim: Remain an attractive Responsible Investment Option • Objective: Embed the TCFD Recommendations into Fund reporting and risk management protocols • Approach: Staged to articulate current material risk, them moving to climate scenarios Scenario Planning/ Analysis • Gap analysis / data • Transitional Risk • Physical Risk Establishment of Reporting Framework • Unit holder engagement programme • Disclosure of recommendations • Assign oversight to Board Committees
  61. 61. TCFD Analysis 1. In what ways will climate change risk impact the organisation? 2. What are the material risks and opportunities for the organisation resulting from the transition and physical risks? 3. What could the financial impacts of climate risks be under a business-as-usual and a two-degree scenario? 4. What are your governance and risk management processes for monitoring and managing the transition and physical risks? 5. How does the organisation ensure consistency of the disclosures made across the corporate communication mediums? 63
  62. 62. In Conclusion 64 • ESG performance delivers value creation and attracts investment • Addressing Resilience is just good business risk mitigation • TCFD Recommendations will bring resilience to the forefront of investment decisions
  63. 63. S E S S I O N 2 How does resilience translate into opportunity and risk for real asset investors and managers? M o d e r a t o r : E m m a H e r d C h i e f E x e c u t i v e O f f i c e r I G C C P a u l i n e V a m o s C h i e f E x e c u t i v e O f f i c e r R e g n a n A d a m K i r k m a n H e a d o f E S G A M P C a p i t a l N i n a J a m e s G e n e r a l M a n a g e r , C o r p o r a t e S u s t a i n a b i l i t y I n v e s t a O f f i c e M a n a g e m e n t R o r y L o n e r g a n D i r e c t o r , C o r p o r a t e a n d P r o j e c t F i n a n c e C E F C
  64. 64. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  65. 65. C h r i s P y k e R e s e a r c h O f f i c e r U . S . G r e e n B u i l d i n g C o u n c i l Resilience & GRESB
  66. 66. Resilience
  67. 67. 69 Motivation for Action Resilience Investor demand for information about the resilience of property and infrastructure companies and funds; and On-the-ground action to promote resilience by leading companies and funds.
  68. 68. 70 Motivation for Action Losses Today
  69. 69. 71 Motivation for Action Future Risks
  70. 70. 72 Motivation for Action Guidance for Reporting
  71. 71. 73 Motivation for Action Industry Leadership Examples from GRESB leaders: ● Risk assessment and planning: Verdani Partners ● Scenario-based design: Forest City Realty Trust ● Value creation: Boston Properties
  72. 72. Pier 70 in San Francisco
  73. 73. 77 2100 2050 Historic 2100 2050 Historic
  74. 74. Source: NASA/NOAA Satellite Image, Bomb Cyclone, January 4, 2018 78
  75. 75. Source: Nancy Lane 79
  76. 76. Flood Hazard Assessment 80 500 East Street Capital Gallery Market Square North
  77. 77. 81 Recommendation: Acquisitions and Development Integrate climate preparedness consideration into all new development and acquisition decisions, including: • Site selection • Elevation of ground floor above BFE, now and future • Elevation of critical equipment above BFE, now and future • Emergency power generation • Grid resilience and alternative power generation • Floodable first floors • Passive survivability
  78. 78. Marketing Resilience 82
  79. 79. 83 Transparency GRESB Assessment 2013 2011 2012 2014 2015 2016 2017 GRESB provides transparency for ESG management and performance.
  80. 80. 84 Transparency GRESB Assessment 2013 2011 2012 2014 2015 2016 2017 What is the capacity of organizations to survive and thrive in the face of shocks and stressors?
  81. 81. 85 Resilient Organizations Qualities • Qualified and empowered leadership • Integrated, coordinated team • Strong, tested, equitable external partnerships • High level of situational awareness • Ability to perceive threats and opportunities • Ability to mitigate and prepare for disruptive change • Ability to respond quickly and effectively • Ability to learn from experience
  82. 82. 86 Resilience Module Structure A supplement for GRESB Real Estate and Infrastructure with new indicators addressing: ● Leadership and accountability ● Risk assessment ● Goals and management strategies ● Experience and learning
  83. 83. 87 Resilience Module Early Observations • Absent or fragmented leadership and lines of accountability • New capabilities for hazard assessment • Different legal perspectives on risk communication • Innovative business strategies • Reliance on historic climatic data • Absent or immature systems for evaluation and learning
  84. 84. 88 Resilience Module Development Plan 2018-2020 Year 1 Year 2 Year 3 Raise awareness Establish an industry baseline using a global snapshot of practice for property and infrastructure companies Raise expectations for practice and performance Establish a global benchmark for property and infrastructure companies Track changes in practice and performance Align with emerging industry standards, guidelines, and rating systems
  85. 85. 89 Resilience Module 2018 Milestones April-June: Resilience Module open for participation July-August: data validation September-October: release of year 1 results and report November-December: review and improvement
  86. 86. Learn more on GRESB.com Participate in the Resilience Module Q&A
  87. 87. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  88. 88. S E S S I O N 3 Case studies showcasing resilience leadership. M o d e r a t o r : L a u r e n K a j e w s k i S e n i o r M a n a g e r , S u s t a i n a b i l i t y a n d H o u s i n g O u t c o m e s L a n d c o m A r t i P r a s a d S e n i o r I n v e s t m e n t S t r a t e g i s t , R e s p o n s i b l e I n v e s t m e n t N Z S u p e r a n n u a t i o n F u n d T h o m a s S c h r o d e r D i r e c t o r M a r k e t i n g a n d C o m m u n i c a t i o n s S o u t h P o l e J e r e m y M a n s f i e l d N o n - E x e c u t i v e D i r e c t o r , D e p u t y C h a i r G r e e n C r o s s N a t a l i a M o u d r a k D i r e c t o r , I n f r a s t r u c t u r e A d a p t a t i o n P r o g r a m , I n t a c t C e n t r e o n C l i m a t e A d a p t a t i o n U n i v e r s i t y o f W a t e r l o o A z h e e m H a s e e b G e n e r a l M a n a g e r , B u i l d i n g P e r f o r m a n c e & S u s t a i n a b i l i t y S i e m e n s L t d
  89. 89. TITLE: AUTHOR: EVENT | PRESENTATION: Incorporating climate change risk into asset valuations Arti Prasad, Senior Investment Strategist GRESB-Siemens Sydney - June 2018
  90. 90. C3 – PRIVATE AND CONFIDENTIAL DOC #2333575 PG 94C3 – PRIVATE AND CONFIDENTIAL DOC #2333575 PG 94  Click the View tab  Click the Slide Master button  Select the top slide in the navigation pane  Edit or delete the text as required NZSF climate change strategy WORKSTREAM DESCRIPTION REDUCE Reduce exposure to fossil fuel reserves & carbon emissions Includes targeted divestment and reweighting our equity portfolio away from the highest risk companies ANALYSE Incorporate climate change into our analysis and decisions making For example, our valuation models, risk allocation, and manager selection ENGAGE Manage climate risks by being an active owner Includes our engagement with companies, our voting policy and our direct investments SEARCH Execution ability and our target operating model Searching for new investments suitable for long horizon investors, including in the areas of alternative energy, energy efficiency, and transformational infrastructure “To deliver a framework to assist the investment professional in integrating climate change considerations into valuations of active equity positions”
  91. 91. C3 – PRIVATE AND CONFIDENTIAL DOC #2333575 PG 95C3 – PRIVATE AND CONFIDENTIAL DOC #2333575 PG 95 The framework overview Risks Opportunities Financial impacts Income statement Demand & Supply (P) Policy (T) Technology Revenue Costs Balance sheet Assets Liabilities Capital Liability Mitigation Cash flow statementCapex Funding Filter: Qualify / Quantify AssessIntegrateFilter Sources: Blackrock (2016), Cambridge (2015), Cambridge (2016), FSB (2016), HSBC (2016), KPMG International (2012), *Mercer (2015), TFCD (2017), UK Carbon Trust (2008) (R) Resource Availability (I) Impact of Physical Damages T.R.I.P.* Other
  92. 92. C3 – PRIVATE AND CONFIDENTIAL DOC #2333575 PG 96C3 – PRIVATE AND CONFIDENTIAL DOC #2333575 PG 96 Framework steps • Broadly categorise key products / services • Classify key revenue and cost streams • Identify key geographies 1. Identify Identify the company’s key value drivers • Identify relevant sources of risk and opportunity for the company • Identify existing or potential sources of mitigation • Relate findings to key value drivers and strategies 2. Assess Assess sources of climate change risk and opportunity • Qualify sources of climate change impact in terms of materiality, likelihood of the expected impacts, etc • Consider whether the material impacts can be quantified into financial metrics • Consider available evidence, apply judgment, use industry benchmarking if practicable • Consider any inter-relationship between risks / opportunities • Seek to include some qualitative commentary if impact can’t be quantified 3. Filter: Qualify / Quantify Filter the assessed sources of climate change risk and opportunity • Preferred approach is to adjust cash flow forecasts where meaningful. Alternatively, use scenario analysis • Be aware that discount rate adjustments have a CF equivalent • Could any VP-gap be closed by a change in strategy? • Discuss and calibrate. Include CC notes in investment papers 4. Integrate Where appropriate, adjust asset valuation • Engage – encourage investee companies and Boards to report on climate change factors / strategy / performance (e.g. reporting against TFCD guidelines) • Vote – shareholder engagement • Revisit climate change assessment for investments annually as part of the portfolio review process 5. Own Actively Engage and monitor
  93. 93. C3 – PRIVATE AND CONFIDENTIAL DOC #2333575 PG 97 Definition Things to consider Examples (R) Resource Availability: Physical – Chronic Slow onset shifts in everyday environmental factors • Temperature rises, sea level rises, changes in precipitation patterns and soil quality • Changing or disturbance of ecological systems • Changing operating environment • Altered agricultural productivity • Changing socio- political environment & health risks • Scarcity of resources such as clean water and food sources Mega themes • Changing environmental factors will impact on society and the economy via multiple channels • Complex and potentially dramatic shifts in ecosystems are expected • Uncertainty over the timing of, and speed at which changes will occur, although we are seeing changes already. General consensus is that changes will be increasingly apparent over the next 10 – 30 years Exposure Business operations may be exposed to the changing physical environment via: • Availability and / or cost of production inputs (raw materials, labour, energy, etc.) • Changes in availability of productive land • Supply and distribution chains • Changes in demand A changing physical environment could impact the business directly, or indirectly through the impact on key suppliers, competitors or end users: • Are business operations dependent on physical environment factors that may change (water, weather patterns, arable land, etc.)? • Does the company have heavy dependency on natural resources that are likely to be impacted by CC? Would this impact on the level of production, the cost or both? • How is the company positioned relative to competitors, domestic and global? • Does the company offer a product that can address or help mitigate the impact of a changing physical environment? Management • Is management thinking about how likely changes in the environment may impact its business? • Does the business have climate resilient infrastructure in place? • Is management engaging in R&D aimed at reducing business exposure to the changing physical environment? Risks • Sea level rises limit port availability, increasing transport costs and interfering with market linkages making it more difficult to get product to market, reducing revenue • Population health issues reduces fiscal capacity and government demand for goods and services Opportunities • Warmer temperatures cause faster forests growth, increasing forestry production • Business lines linked to environmental services, environmental rehabilitation, or population health services Mitigation • Agricultural R&D investment creates crop strains that will thrive in warmer / wetter / more challenging climate conditions • Climate resilient infrastructure (both greenfield and enhanced value on existing) Example: Assessing physical risk
  94. 94. S E S S I O N 3 Case studies showcasing resilience leadership. M o d e r a t o r : L a u r e n K a j e w s k i S e n i o r M a n a g e r , S u s t a i n a b i l i t y a n d H o u s i n g O u t c o m e s L a n d c o m A r t i P r a s a d S e n i o r I n v e s t m e n t S t r a t e g i s t , R e s p o n s i b l e I n v e s t m e n t N Z S u p e r a n n u a t i o n F u n d T h o m a s S c h r o d e r D i r e c t o r M a r k e t i n g a n d C o m m u n i c a t i o n s S o u t h P o l e J e r e m y M a n s f i e l d N o n - E x e c u t i v e D i r e c t o r , D e p u t y C h a i r G r e e n C r o s s N a t a l i a M o u d r a k D i r e c t o r , I n f r a s t r u c t u r e A d a p t a t i o n P r o g r a m , I n t a c t C e n t r e o n C l i m a t e A d a p t a t i o n U n i v e r s i t y o f W a t e r l o o A z h e e m H a s e e b G e n e r a l M a n a g e r , B u i l d i n g P e r f o r m a n c e & S u s t a i n a b i l i t y
  95. 95. South Pole Page 99 City-level Climate Resilience: Approach & Examples GRESB Sydney June 26 Tom Schroder Director Marketing & Communications
  96. 96. Page 100South Pole Key clients and partners Working with leading organisations in Australia & beyond
  97. 97. Page 101South Pole Resilience is crucial for urban areas, as population and economic hubs multiply The physical risk of real assets in cities could be evaluated through the following factors X X Exposure to risk Vulnerability Mitigation efforts
  98. 98. Page 102South Pole Building retrofitting is a key driver of both climate change mitigation and adaptation efforts However current retrofitting rates are extremely low
  99. 99. Page 103South Pole The Climate-KIC Smart and Sustainable District program takes a holistic approach to resilience The case of the Alfama SSD (Lisbon, Portugal)
  100. 100. Benefits of communicating your resilience Page 104South Pole Demon- strating your commitment to resilience Stakeholder and employee engagement Brand building by capitalising on the benefits building up resilience External validation to make claims around resilience credible
  101. 101. Identify geographical distribution of portfolio risk and geographical hotspots of risk exposure Page 105South Pole The shading shows the proportion [%] of each portfolio countries’ contribution to the overall climate risk of the whole portfolio. Countries contributing more than 0.5% in weight to the whole portfolio are marked with a black dot, the size of the dot representing the portfolio weight. Countries shown in dark grey are not covered by the portfolio. Quantitative, qualitative and visual outputs help in decision-making, reporting and communication Benchmark your portfolio’s risk exposure Compare risk exposure across sectors
  102. 102. Communicate the key results to stakeholders Page 106South Pole
  103. 103. Thank you Page 107South Pole
  104. 104. S E S S I O N 3 Case studies showcasing resilience leadership. M o d e r a t o r : L a u r e n K a j e w s k i S e n i o r M a n a g e r , S u s t a i n a b i l i t y a n d H o u s i n g O u t c o m e s L a n d c o m A r t i P r a s a d S e n i o r I n v e s t m e n t S t r a t e g i s t , R e s p o n s i b l e I n v e s t m e n t N Z S u p e r a n n u a t i o n F u n d T h o m a s S c h r o d e r D i r e c t o r M a r k e t i n g a n d C o m m u n i c a t i o n s S o u t h P o l e J e r e m y M a n s f i e l d N o n - E x e c u t i v e D i r e c t o r , D e p u t y C h a i r G r e e n C r o s s N a t a l i a M o u d r a k D i r e c t o r , I n f r a s t r u c t u r e A d a p t a t i o n P r o g r a m , I n t a c t C e n t r e o n C l i m a t e A d a p t a t i o n U n i v e r s i t y o f W a t e r l o o A z h e e m H a s e e b G e n e r a l M a n a g e r , B u i l d i n g P e r f o r m a n c e & S u s t a i n a b i l i t y
  105. 105. Empowering a resilient Australia think + act + share = change
  106. 106. Green Cross Australia Leading resilience dialogue Green Cross Australia is an independent, non-politically linked member association focussing on grassroots change to empower a resilient Australia. • Partnerships • Networks • Joined Up Facilitation / Engagement • Digital tools – Peer to Peer & Community Participation • Affiliate of Green Cross International & Global Green USA, fostering a global value shift toward a sustainable and secure future
  107. 107. Business Adaptation Network SharingAdaptation Leadership  Workshops that inspire thought leadership and industry collaboration  Creative engagement that enables capacity building & cross-sector opportunities  Networking opportunities to create connections and partnerships  Hypotheticals / joined up engagement on climate risk and adaptation scenarios  Digital platform (Under Construction) to feature strategies, measures and resources, namely: 1. Physical risk(s) 2. Governance / oversight of climate-related risks and opportunities 3. People and teams leading this work within organisations
  108. 108. Challenges around resilience Designing for future impact or past lived experience? • Planning decisions will have lasting impact • Building codes look backwards, minimum practice, does not address heat stress • Energy modelling files (TMY) are more than 35 years out of date • Exposure doesn’t stop at the asset boundary, they sit within urban catchments • Understanding of hazards, assessment of vulnerability (now and in the future) • Insurable & uninsurable consequences
  109. 109. Challenges around resilience Designing for what hazard / issue / future? “Current design standards for buildings and infrastructure focus on individual structures subjected to extreme events of a specific hazard; e.g. AS/NZS 1170.2:2011 for wind actions and AS/NZS 1170.4–2007 for earthquake actions.” “…fail to consider adequately the actions of multiple hazards, neglect the interconnectedness and interdependencies of structures and infrastructure systems, and leave out post-disaster response and recovery.” Resilience and Robustness Chi-hsiang Wang and Lam Pham, CSIRO Ecosystem Sciences Design for robustness of assets against diverse futures vs optimal design for a single defined hazard?
  110. 110. Challenges around resilience There’s no resilience silver bullet: • Building and infrastructure design, planning, materials, construction, operation and maintenance all need to work together to maximise whole of life resilience • A single failure at any point in the process could render all the other resilience advantages of a building useless
  111. 111. Solutions: win-wins & industry challenges Case Study: Hervey Bay Cool Roof Study Multiparty business/research collaboration, initiated by BlueScope and Stockland with involvement from Lendlease and the University of Wollongong, calibrated measurable financial and environmental benefits of cool roof on a shopping centre. Industry simulation tools only account for 25–50% of the full energy benefit of cool roofs for larger roofs. “These findings are ground-breaking insofar as they prove second order financial benefits that in turn provide additional impetus and justification for further adoption of energy-efficient and climate resilient outcomes.” Greg Johnston, National Sustainability Manager, Commercial Property, Stockland AIRAH Peer Reviewed Technical Paper - Not So Cool Roofs (April 2018): Graham Carter, Lendlease & Buyung Kosasih, University of Wollongong http://www.airah.org.au/Content_Files/EcoLibrium/2018/04-18-Eco-005.pdf
  112. 112. Solutions: Precinct scale initiatives
  113. 113. • Reduce impacts of extreme heat • Reduce urban heat island effect • Flood alleviation / slow stormwater runoff • Improve health & wellbeing • Reduce pollution • Improve coastal protection • Improving ecosystems • Enhance property value Solutions: Green Infrastructure Valuing its benefits in resilience of assets and infrastructure Aerial view of Fitzroy Gardens, City of Melbourne
  114. 114. Built environment and infrastructure Industry-led Sector Adaptation Plan: • prioritise adaptation activities • identify emerging opportunities • share knowledge, and • encourage collaboration on complex issues. Solutions: Working with Industry & Government Queensland SectorAdaptation Plan
  115. 115. Final thoughts leading change The Fifth Estate Foresight encourages us to embrace uncertainty and to change the conversation. Experience is everything. The way we see the world, our world views dramatically shape the future scenarios we create Foresight cannot of course exist on its own and would urge the creation of a new estate. This fifth estate would be made up of networked individuals and organisations bound together for the sole purpose of creating better futures. Oliver Freeman & Richard Watson - Futurevision
  116. 116. Thank you Jeremy Mansfield Deputy Chair, Non-Executive Director projects@greencrossaustralia.org http://greencrossaustralia.org/
  117. 117. S E S S I O N 3 Case studies showcasing resilience leadership. M o d e r a t o r : L a u r e n K a j e w s k i S e n i o r M a n a g e r , S u s t a i n a b i l i t y a n d H o u s i n g O u t c o m e s L a n d c o m A r t i P r a s a d S e n i o r I n v e s t m e n t S t r a t e g i s t , R e s p o n s i b l e I n v e s t m e n t N Z S u p e r a n n u a t i o n F u n d T h o m a s S c h r o d e r D i r e c t o r M a r k e t i n g a n d C o m m u n i c a t i o n s S o u t h P o l e J e r e m y M a n s f i e l d N o n - E x e c u t i v e D i r e c t o r , D e p u t y C h a i r G r e e n C r o s s N a t a l i a M o u d r a k D i r e c t o r , I n f r a s t r u c t u r e A d a p t a t i o n P r o g r a m , I n t a c t C e n t r e o n C l i m a t e A d a p t a t i o n U n i v e r s i t y o f W a t e r l o o A z h e e m H a s e e b G e n e r a l M a n a g e r , B u i l d i n g P e r f o r m a n c e & S u s t a i n a b i l i t y
  118. 118. Generously supported by CLIMATE CHANGE, EXTREME WEATHER & FLOODING: CANADA’S ADAPTATION EXAMPLES June 26, 2018 Natalia Moudrak Intact Centre on Climate Adaptation nmoudrak@uwaterloo.ca
  119. 119. 124 1. Extreme Weather & Flooding in Canada • Rising costs of extreme weather and flooding • Elevated risk of mortgage arrears • Mental health impacts, time off work claims 2. Intact Centre’s Flood-Resiliency Work: • Home inspections • New residential community design • Existing community retrofits • Commercial real estate retrofits 3. Insurance Sector Incentives for Flood Resiliency (Example) 4. Conclusion AGENDA
  120. 120. 125 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Loss + Loss Adjustment Expenses Estimated Trend $Billion Source: IBC Facts Book, PCS, CatIQ, Swiss Re, Munich Re & Deloitte Values in 2017$ CAN, 2017 preliminary Uninsurable Housing Market Eastern Ice Storm Alberta and Toronto Floods Fort Mac Fire Wind and Rain Note: Cost to government, businesses and individuals 3-4X that of private insurers COSTS OF EXTREME WEATHER: P&C CATASTROPHIC INSURABLE LOSSES ($CAD) Water is the new Fire
  121. 121. 12 6 REPEATED FLOODING + LTD/NO FLOOD INSURANCE = RISK OF MORTGAGE ARREARS
  122. 122. 127 Average time off: 7 days following home flooding (Burlington, Canada) 2013 Alberta floods: 164% increase in anti-anxiety medication; 232% increase in sleeping aids (Sahni et al. 2016) 0% 10% 20% 30% 40% 50% 60% Non-Flooded Respondents (n=37) Flooded Respondents (n=48) % of Respondents Who Gave a 4 or 5 on a Scale of 1-5 (1= not worried, 5 = very worried) Burlington, ON 3 Years After The Flood: Responses to “How Worried Do You Get When it Rains?” MENTAL HEALTH IMPACTS OF FLOODING: TIME OFF WORK, PRESCRIPTION USE
  123. 123. 128  40,000 certified Home Inspectors in Canada  Home Inspectors currently receive virtually no training on home flood risk  Home flood risk assessment will be applied to nearly all homes during the “buy/sell cycle”  First training course launches in September/October 2018 HOME INSPECTOR TRAINING
  124. 124. 129 FLOOD RESILIENCY STANDARD FOR NEW COMMUNITIES Purpose: develop a standard for flood-resilient new community design for low-rise residential developments in Canada. Benefit: homes located in communities certified to be flood-resilient are subject to lower flood risk and thus, are predisposed to benefit from lower flood insurance premiums. Status: National Standard of Canada on flood- resilient new community design is under development by CSA Group. The seed document for the standard is based on Intact Centre report, Preventing Disaster Before It Strikes, which outlines 20 best practices for flood-resilient new community design: www.intactcentreclimateadaptation.ca/wp-content/uploads/2017/10/Preventing-Disaster-Before-it-Strikes.pdf
  125. 125. 130 FLOOD RESILIENCY GUIDELINE FOR EXISTING COMMUNITIES Purpose: develop a guideline for retrofitting existing communities in Canada to be more flood-resilient. Benefit: high-level flood risk screening framework will help prioritize flood-resiliency efforts, best practices will guide impactful flood risk reduction action. Status: under development by the Intact Centre (target publication September 2018; national guideline development Winter 2018).
  126. 126. 131 *NEW* COMMERCIAL REAL ESTATE RETROFITS FOR CLIMATE RESILIENCY In Scope Best Practices:  Physical building improvements  Select emergency preparedness activities Geography:  All 10 provinces in Canada Flood Hazards:  Riverine  Overland  Storm and sanitary sewer back up Property Types:  Office  Retail  Hotels  Multi-Unit Residential Buildings Purpose: develop a guideline for retrofitting existing CRE properties in Canada to be more climate-resilient – start with flood risk reduction. Benefit: short list of highly actionable best practices will guide flood risk reduction action by CRE property owners and managers, inform benchmarking activities. Status: under development by the Intact Centre (stakeholder consultation and data gathering). Note: much interest in Urban Heat Island reduction best practice development from CRE stakeholders
  127. 127. P&C INSURANCE INCENTIVES FOR FLOOD RISK REDUCTION 132 "Water damage is now the leading cause of personal property claims. Over the last 10 years, water losses for personal property claims have doubled to 40% (of $ paid in losses). There are a number of improvements that Canadians can take to better protect their homes and communities against water damage. By taking these steps, Canadians could lower their annual premiums - anywhere from 5 to 15%. Those who live in municipalities who make climate resilient infrastructure a priority could also benefit from more affordable premiums, higher coverage limits and enhanced insurance coverage.” Intact Financial Corporation, 2017
  128. 128. CONCLUSION 133 Transferrable lessons from Canada: • Practitioners appreciate highly-practical actions they can implement to reduce climate risk (“I get there is a problem, what should I do about it?”) • Codes, guidelines and standards produced by nationally/internationally recognized bodies are required to secure support and incentives from insurers, banks, credit rating agencies, etc. • Adaptation is the gift that keeps on giving (ROI improves every time disaster is avoided) Twitter: @ICCA_Canada Website: www.intactcentreclimateadaptation.ca
  129. 129. S E S S I O N 3 Case studies showcasing resilience leadership. M o d e r a t o r : L a u r e n K a j e w s k i S e n i o r M a n a g e r , S u s t a i n a b i l i t y a n d H o u s i n g O u t c o m e s L a n d c o m A r t i P r a s a d S e n i o r I n v e s t m e n t S t r a t e g i s t , R e s p o n s i b l e I n v e s t m e n t N Z S u p e r a n n u a t i o n F u n d T h o m a s S c h r o d e r D i r e c t o r M a r k e t i n g a n d C o m m u n i c a t i o n s S o u t h P o l e J e r e m y M a n s f i e l d N o n - E x e c u t i v e D i r e c t o r , D e p u t y C h a i r G r e e n C r o s s N a t a l i a M o u d r a k D i r e c t o r , I n f r a s t r u c t u r e A d a p t a t i o n P r o g r a m , I n t a c t C e n t r e o n C l i m a t e A d a p t a t i o n U n i v e r s i t y o f W a t e r l o o A z h e e m H a s e e b G e n e r a l M a n a g e r , B u i l d i n g P e r f o r m a n c e & S u s t a i n a b i l i t y
  130. 130. Building Resilience: RMIT Case Study Azheem Haseeb | Siemens Building Technologies siemens.com.auRestricted © Siemens Ltd 2018
  131. 131. Unrestricted © Siemens Ltd 2018 June 2018Page 136 Azheem Haseeb Aging infrastructure Sustainability Economic investment Population growth Digitalization Safety & security Resource constraints Cities challenges
  132. 132. Unrestricted © Siemens Ltd 2018 June 2018Page 137 Azheem Haseeb The enormous global impact of buildings 40%of all energy consumed globally 33%of all green-house gases emissions 25%of all water consumed globally Sources: CommScope/IDC Energy Insights, Business Strategy: Global Smart Building Technology Spending 2015-209 Forecast Intel, Smarter Building & Homes With the Internet of Things
  133. 133. Source: Ross, L. Arrow; K., Cialdini; R, Diamond-Smith N.; Diamond, J.; Murphy, C. (2016). The cliamte change challenge and barriers to the exercise of foresight intelligence. BioScience, 66(5), 363-370. Schneier, B. (2013). Carry on. Sound advice from Schneier on security: John Willey & Sons … our ability to perceive and manage risk still functions in the same way as when humankind first developed … when little knowledge about the probabilities and impact of risk exists (e.g. climate change), humans are tempted to ignore them
  134. 134. RMIT Sustainable Urban Precincts Program Resilience in action
  135. 135. Unrestricted © Siemens Ltd 2018 June 2018Page 140 Azheem Haseeb Royal Melbourne Institute of Technology 87,000 students around the world Ranked in the top 1% of global universities1 6% of Melbourne’s CBD is covered by RMIT’s city campus Sustainability goals: In 2007 RMIT committed to reducing emissions associated with campus operations by 25 percent by 2020. 1 2017 QS World University Rankings. 1
  136. 136. Unrestricted © Siemens Ltd 2018 June 2018Page 141 Azheem Haseeb ProgramWhat is the SUPP? A $128M commitment by RMIT to reduce energy and water use, significantly lowering greenhouse gas emissions associated with campus operations. Why is it special? It’s the largest program of its kind in the southern hemisphere. What was Siemens’ role? The SUPP was delivered across RMIT's three Melbourne campuses, with Siemens responsible for the City Campus What is the current status? The major project works are now complete and RMIT is realising the savings that flow from this investment – savings which will be guaranteed for eight years. What has been achieved? RMIT’s commitment to reduce emissions by 25% was achieved in 2016 - four years early. With the final completion of SUPP works, RMIT is forecast to save 39% in 2018.
  137. 137. Unrestricted © Siemens Ltd 2018 June 2018Page 142 Azheem Haseeb At the start of the journey: Three fundamental questions Where are you now? Requiring 100% honesty Where do you want to go? Must be defined as clearly as possible Are you ready to commit? Understand importance of resilience 1 2 3
  138. 138. Unrestricted © Siemens Ltd 2018 June 2018Page 143 Azheem Haseeb What is our exposure to …? The big question! Grid constraints1 Regulation2 Energy Bill hikes 5 Shifting consumer behaviours3 Obsolete Technology4 Cyber Security 6 Reputational Risk 7
  139. 139. Unrestricted © Siemens Ltd 2018 June 2018Page 144 Azheem Haseeb A holistic approach RMIT SUPP - City Campus • Intelligent water management system • Upgrade to high efficiency fittings • Rain and fire services water harvesting • Capital infrastructure program > precinct model • Chiller and boiler upgrades • Chilled and hot water network extension Green Air Green Energy Green WaterGreen Lighting Green Precinct Connect systems Analyse data Siemens Energy Performance Contract • Campus-wide Building Management System • Optimized operations of air handling units, pumps, and cooling towers • Rationalise lighting stock • Upgrade to smarter & more efficient lighting • High Voltage Ring Main to connect and integrate campus electrical network • Cogeneration system • Cloud-based monitoring platform Project Scope
  140. 140. Unrestricted © Siemens Ltd 2018 June 2018Page 145 Azheem Haseeb Enhancing building performance using the power of data RMIT SUPP - City Campus Green Air Green Energy Green WaterGreen Lighting Green Precinct 28,598 kLAnnual water savings 19,114 tonnesAnnual reduction in carbon emissions $1.7 millionTotal annual utility savings ~17,000Connected data points Siemens Energy Performance Contract Results
  141. 141. Unrestricted © Siemens Ltd 2018 June 2018Page 146 Azheem Haseeb Distributed Energy Systems RMIT City Campus as part of the smart energy system 2 x 1.5 MW co-generation gas engines Substation (from three down to one) RMIT City campus A DES solution allows for energy to be generated where it is consumed. This reduces reliance on the energy grid. Data analysis Smart building automation High Voltage Main Ring Through organic growth, the city campus had accumulated a number of disparate utility accounts and services that lacked integration. The High Voltage Main Ring connects and integrates the city campus electrical network.
  142. 142. Unrestricted © Siemens Ltd 2018 June 2018Page 147 Azheem Haseeb Did RMIT become more resilient? Grid constraints Regulation Energy Bill hikes Cyber Security Reputational Risk • Control of peak loads • Secure energy supply • Electrical networks upgraded to a more efficient and flexible structure • Multiple external commitments to reduce emissions met. • E.G. Green Building Council of Australia; City of Melbourne’s 1200 Buildings Program. • Use less, pay less • Less sensitive to energy price fluctuations • Cogeneration system saving approx. $1 million per year in utility costs. • Core target audience – students – are conscious of program, enhancing reputation of university. • Future-proofing core business: student engagement and enrolments • Upgraded Building Management system provides secure new standard of management • Runs on cloud along with the DR Obsolete Technology • Profitable refurbishment of technology (eg HVAC, chillers, and boilers) • New modern electrical infrastructure • Advanced Building Management System and powerful analytical and reporting platform Shifting consumer behaviors • Water & Lighting conservation plan encourages less wastage and is highly visible on city campus.
  143. 143. Unrestricted © Siemens Ltd 2018 June 2018Page 148 Azheem Haseeb Value generation other than resilience Improved efficiency Renewed asset life and maintenance savings Ownership Value of the asset increases Increased student engagement
  144. 144. Unrestricted © Siemens Ltd 2018 June 2018Page 149 Azheem Haseeb We have a vision to achieve something unique together Ability to simulate and demonstrate risks Found a business model to realize the objectives Have all the “ingredients” under one umbrella We have a vision to achieve something unique together Access to all relevant stakeholders in time Determination to limit exposure (Resilience) With the client rather than for the client
  145. 145. Unrestricted © Siemens Ltd 2018 June 2018Page 150 Azheem Haseeb It sounds simple, right? However … ~Only 7% of the surveyed audience engage in long term planning (>5 years) when it comes to risks and business impacts Centrica Survey BCI and Siemens Survey 1/3 of energy decision-makers say their organization is not prepared for a disruption to their energy supply from a temporary grid failure ~30% of organizations do not have any form of Energy Resilience strategy in place ~50% of energy decision-makers believe they will experience an energy-related failure within the next year
  146. 146. Unrestricted © Siemens Ltd 2018 June 2018Page 151 Azheem Haseeb Key Takeaways Business continuity risks represent a growing challenge Resilience is not a necessary evil. Resilience can be a great business model! Find the right partner/trusted advisor 1 2 3 4 Manage “unrealistic optimism”
  147. 147. Siemens Building Technologies Creating Perfect Places www.siemens.comUnrestricted © Siemens AG 2017
  148. 148. Unrestricted © Siemens Ltd 2018 June 2018Page 153 Azheem Haseeb Azheem Haseeb General Manager, Building Performance and Sustainability, Siemens Ltd. Questions? E-mail: Azheem.haseeb@siemens.com LinkedIn: https://www.linkedin.com/in/azheem-haseeb-a2550777 Contact Information
  149. 149. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  150. 150. S E S S I O N 4 What are key innovators working on? M o d e r a t o r : R e b e c c a M i l l e r P r i n c i p a l S u s t a i n a b i l i t y a n d R e s i l i e n c e S p e c i a l i s t A E C O M N a t h a n R o b e r t s o n - B a l l S o c i a l I n n o v a t i o n M a n a g e r , I n n o v a t i o n L a b s C o m m o n w e a l t h B a n k o f A u s t r a l i a R a c h a e l M c G i n l e y S e n i o r M a n a g e r , S t r a t e g y a n d D e v e l o p m e n t G B C A C a r o l a J o n a s C h i e f E x e c u t i v e O f f i c e r E v e r t y J o n a t h a n A v e r y I n t e r n a t i o n a l D e v e l o p m e n t M a n a g e r I S C A F r a n k F r e i t a s C h i e f D e v e l o p m e n t O f f i c e r F o u r T w e n t y S e v e n , I n c .
  151. 151. Smart cities Carola Jonas Everty carola@everty.com.au @evertyAU
  152. 152. EVs and the Built Environment ● Energy demand of EVs ● Plan for EV charging ● Slow vs fast charging ● Buildings generate energy ● Smart charging and BMS integration ○ Load management ○ Insights on charger use ○ Booking and billing for shared charging resources
  153. 153. Connected Autonomous Vehicles (CAVs) ● Wireless charging (dynamic vs static) ● Shared autonomous cars and robo- taxis will reduce the overall number of cars ● Less parking space required ● Integration of CAVs into intermodal transport services
  154. 154. S E S S I O N 4 What are key innovators working on? M o d e r a t o r : R e b e c c a M i l l e r P r i n c i p a l S u s t a i n a b i l i t y a n d R e s i l i e n c e S p e c i a l i s t A E C O M N a t h a n R o b e r t s o n - B a l l S o c i a l I n n o v a t i o n M a n a g e r , I n n o v a t i o n L a b s C o m m o n w e a l t h B a n k o f A u s t r a l i a R a c h a e l M c G i n l e y S e n i o r M a n a g e r , S t r a t e g y a n d D e v e l o p m e n t G B C A C a r o l a J o n a s C h i e f E x e c u t i v e O f f i c e r E v e r t y J o n a t h a n A v e r y I n t e r n a t i o n a l D e v e l o p m e n t M a n a g e r I S C A F r a n k F r e i t a s C h i e f D e v e l o p m e n t O f f i c e r F o u r T w e n t y S e v e n , I n c .
  155. 155. 160 Resilient Infrastructure and Innovation Jonathan Avery
  156. 156. 161 Capital value $97.9 billion 86 projects/ assets 144 registrations
  157. 157. 162 Resilient Infrastructure Maintains functionality Bounces back Bounces forward More than climate change adaptation Considers short term shocks Considers long term stresses
  158. 158. • 2011 Brisbane floods provided a catalyst for action • Improve infrastructure resilience across the network • Improving redundancy and supply self-sufficiency. • Energy network is a key area of interdependence • Exploring opportunities for onsite generation and storage • Supporting communities by investing in innovation 163 Case study: OPTUS
  159. 159. • An inspirational picture Resilience Category Resilience Strategy Infrastructure’s role in regional/ community resilience Interdependent assets and services Community consultation including the consideration of vulnerable communities Climate and Natural Hazards Climate and natural hazard risks Climate and natural hazards adaptation and treatment Community and stakeholder consultation
  160. 160. 165 www.isca.org.au
  161. 161. S E S S I O N 4 What are key innovators working on? M o d e r a t o r : R e b e c c a M i l l e r P r i n c i p a l S u s t a i n a b i l i t y a n d R e s i l i e n c e S p e c i a l i s t A E C O M N a t h a n R o b e r t s o n - B a l l S o c i a l I n n o v a t i o n M a n a g e r , I n n o v a t i o n L a b s C o m m o n w e a l t h B a n k o f A u s t r a l i a R a c h a e l M c G i n l e y S e n i o r M a n a g e r , S t r a t e g y a n d D e v e l o p m e n t G B C A C a r o l a J o n a s C h i e f E x e c u t i v e O f f i c e r E v e r t y J o n a t h a n A v e r y I n t e r n a t i o n a l D e v e l o p m e n t M a n a g e r I S C A F r a n k F r e i t a s C h i e f D e v e l o p m e n t O f f i c e r F o u r T w e n t y S e v e n , I n c .
  162. 162. © 2017 Four Twenty Seven – All rights reserved Risk & Resilience in Real Asset Portfolios Frank Freitas, Chief Development Officer, Four Twenty Seven GRESB – June 26, 2018
  163. 163. + A Rising Tide of Evidence © 2018 Four Twenty Seven – All rights reserved Source: National Geographic, CSIRO
  164. 164. + Impacts on Infrastructure © 2017 Four Twenty Seven – All rights reserved  Revenues  Expenditures  Assets  Capital expenditures  Tangible  Intangible  Financing
  165. 165. + Taking Action – Understanding your Risks © 2017 Four Twenty Seven – All rights reserved  Screening and scoring of all sites for key climate hazards
  166. 166. + Taking Action – Building Resilience Value: $92M Residential building, San Jose, CA © 2017 Four Twenty Seven – All rights reserved Rating: Low-Med Risk Hazards Real Estate Sensitivity Site Risk Adaptive Capacity Signal Heavy rainfall High High Medium Coastal Flooding/ SLR Medium- High Medium Medium Temperature Increases Low Low Unknown, building-specific Recommendations Inquire about on-site drainage
  167. 167. © 2017 Four Twenty Seven – All rights reserved FrankFreitas,Chief Development Officer– ffreitas@427mt.com Tel: 415.360.8001–www.427mt.com
  168. 168. S E S S I O N 4 What are key innovators working on? M o d e r a t o r : R e b e c c a M i l l e r P r i n c i p a l S u s t a i n a b i l i t y a n d R e s i l i e n c e S p e c i a l i s t A E C O M N a t h a n R o b e r t s o n - B a l l S o c i a l I n n o v a t i o n M a n a g e r , I n n o v a t i o n L a b s C o m m o n w e a l t h B a n k o f A u s t r a l i a R a c h a e l M c G i n l e y S e n i o r M a n a g e r , S t r a t e g y a n d D e v e l o p m e n t G B C A C a r o l a J o n a s C h i e f E x e c u t i v e O f f i c e r E v e r t y J o n a t h a n A v e r y I n t e r n a t i o n a l D e v e l o p m e n t M a n a g e r I S C A F r a n k F r e i t a s C h i e f D e v e l o p m e n t O f f i c e r F o u r T w e n t y S e v e n , I n c .
  169. 169. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE
  170. 170. Wrap Up The capacity to survive and thrive in the face of stressors and shocks
  171. 171. Communication & Collaboration Communities Investors Developers, Managers & Operators Service & Solution Providers Governments
  172. 172. Investment Principles Sustainable Real Assets
  173. 173. The Double Dividend Avoided damages when disasters occur Co-benefits that occur even in the absence of disasters Source: Australian Business Roundtable for Disaster Resilience & Safer Communities (2017)
  174. 174. What Gets Measured…
  175. 175. Resilience: the Art of Bouncing Back
  176. 176. SUSTAINABLE REAL ASSETS FORUM 2018 RESILIENCE THANK YOU

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