Sustainability Expectations Need To Be Managed, Kilroy Executive Says

Sara Neff,  vice president of sustainability at Kilroy Realty Corp. (NYSE: KRC), joined REIT.com for a video interview at NAREIT’s 2016 Leader in the Light Working Forum at the Ritz Carlton – Coconut Grove in Miami.

Kilroy owns and operates office properties in the coastal regions of greater Seattle, the San Francisco Bay area, Los Angeles, San Diego and California’s Orange County. Kilroy was a co-winner in the office sector of the 2015 NAREIT Leader in the Light Awards.

Neff touched on sustainability missteps that companies should look to avoid. One is capital projects, such as lighting retrofits and controls upgrades. Neff explained that it’s easy to get overly enthusiastic about these sorts of projects and forget that there is a commissioning process. Nothing works right on the first try, Neff said, making it important to manage expectations within the organization.

A second misstep is failing to understand how important it is to engage the organizations’ engineers and ensure they have the tools and motivation to make the building perform optimally, Neff added.

Neff also discussed the type of sustainability reporting that investors most wish to see. According to Neff, investors are eager to see more sustainability information in companies’ 10-K and 10-Q forms filed with the Securities and Exchange Commission.

While a corporate stand-alone sustainability report is important, high-level comparable metrics of the type included in the 10-K and 10-Q forms are especially useful, she said.

“It shows there’s enough executive buy-in that they are willing to put sustainability in SEC filings. That’s the direction we’re going at Kilroy,” Neff added.

Meanwhile, Neff said Kilroy’s Leader in the Light Award not only boosts internal morale, but helps attracts new “talent” with a particular interest in sustainability.