Published in the July/August 2017 issue of REIT magazine.
Let’s all be honest with one another, who hasn’t noticed any changes to our natural surroundings, such as weather patterns, seasonal shifts, wild life, pollution or other factors? It is increasingly apparent that rapid population growth and industrialization are producing alterations to our planet’s ecosystems, and it is likely that these trends will continue, if not intensify.
Two key touchstones of this pernicious problem are that we all own it together and something needs to be done now, as opposed to later. As commercial real estate owners, we have an important role to play in contributing solutions to these environmental challenges. Buildings account for over one-third of total final energy use and 19 percent of global greenhouse gas emissions.
So we at Boston Properties (NYSE: BXP) are very focused on sustainability because of its positive environmental impacts and because we believe it makes business sense. Our company was founded in 1970 and builds, owns and manages high-quality office and residential assets in leading U.S. cities. Our success in this highly competitive business has depended on, among many other things, attracting creditworthy tenants (who often have their own sustainability goals and awareness), developing and managing best-in-class work environments (integrating green building features), exploiting advances in technology to maximize profitability in all aspects of our operations (including energy and water conservation), maintaining strong relationships with the communities we serve (who have their own sustainability emphasis and strategies), and attracting and retaining great employees (many of whom care deeply about our natural environment).
As sustainability has become more important to our tenants, shareholders, employees and community stakeholders, we have been in the fortunate position of having a good story to tell and are continuously focused on improving our performance. The foundation of our sustainability efforts has been environmental impact mitigation, where we have stated public goals. In our 2016 Sustainability Report, we announced the early achievement of our 2020 reduction targets for energy, water and greenhouse gas emissions. During the 2016 calendar year alone, we reduced like-for-like energy and water use 6.9 percent and 4.0 percent, respectively, saving approximately $10.7 million in annual recurring operating costs.
We increasingly use third-party validation tools to measure our performance, improve our transparency and reinforce the credibility of our sustainability accomplishments. We have steadily grown our LEED® Certified green building portfolio to over 17 million square feet and have certified 62 properties representing 68 percent of our eligible floor area under the ENERGY STAR® Commercial Buildings Program. Over the last five years, we have participated in the Global Real Estate Sustainability Benchmark (GRESB®) assessment and in 2016, we earned our fifth consecutive Green Star, ranking among the top 5 percent of 733 global participants.
Looking ahead, there is much more to do, and we will continue to implement policies, programs and projects that complement sustainable development and operations. Our experience demonstrates that through our activities as real estate owners, developers and managers, we can contribute to environmental solutions as a positive force while improving our financial performance and becoming a stronger, more purposeful organization in the process.