13 July 2020

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Bouwinvest has partnered with the Dutch Green Building Council (DGBC) to reduce the energy consumption of its real estate portfolio and make it ‘Paris Proof’. In response to the Paris Climate Accord to combat climate change, the Dutch government is committed to curbing CO2 emissions in the Netherlands by 50% by 2030 compared with current levels and by as much as 95% by 2050. For us, this means our portfolios must become energy-neutral and no longer dependent on natural gas by that date.

The collaboration with the Dutch Green Building Council dates back to 2007 when Bouwinvest was one of DGBC's founding partners. Since then, the two have worked together to create a more sustainable built environment. Two years ago, Bouwinvest joined a new DGBC initiative: the Sustainable Renovation Delta Plan, a movement to speed up the process. The organisation has since developed a calculation method to measure whether assets are effectively ‘Paris Proof’. According to the DGBC’s definition, a ‘Paris Proof’ building has a maximum annual energy consumption per square metre (sqm). For offices, for example, the standard is 50 kilowatt (kW) per sqm. This complies with the target of keeping the rise in global temperatures to a maximum of 2 degrees Celsius. or lower, compared with pre-industrial levels, as agreed under the Paris climate accord in 2015.  

Sector needs to work together

Korenberg has a clear memory of the discussion he had two years ago with Van Doorn when she invited him to participate in the Sustainable Renovation Delta Plan. "What struck me was her insistence on the need for acceleration in the entire real estate chain and the need to work together." After some deliberation, members of the Delta Plan helped create a quantifiable standard for making a building ‘Paris Proof’. "This was possible because we're all in this together," he says. "It was also a logical step. By creating a standard, we have made our goal quantifiable and that is a prerequisite to make this initiative work and turn it into a success."

Practical experience provides invaluable input

Bouwinvest is a member of the ‘Paris Proof’ programme council and is also represented in working groups aiming to make offices and retail assets more sustainable. Martin Mooij is responsible for the implementation of the ‘Paris Proof’ programme on behalf of DGBC and, commenting on Bouwinvest's role, says: "Bouwinvest got to work on the methodology straightaway, which was invaluable because the input from practical experience is needed to further improve the procedures.” Van Doorn adds: "Bouwinvest is showing leadership and setting an example to other investors and other parties in the chain, such as tenants.”

Financial and sustainable returns go hand in hand

Bouwinvest is firmly committed to the Sustainable Renovation Delta Plan and the ‘Paris Proof’ calculation methodology as the initiatives are in line with the company's own philosophy and its integrated Environmental, Social and Governance (ESG) policy, which incorporates all elements of responsible entrepreneurship. Bouwinvest also has a responsible investment programme in which the ‘Paris Proof’ philosophy is embedded, Korenberg adds: "We are a real estate asset manager that invests for the long term and wants to generate sustainable returns, both financially and socially. Those two goals go hand in hand." Korenberg goes on to list the benefits of a sustainable real estate asset from an investment perspective. "The value of the building increases, it becomes more attractive to tenants and offers a greater chance of a long-term stable return which is what we promise our shareholders, mainly Dutch pension funds.”

Focus is on actual energy consumption rather than a label

The ‘Paris Proof’ method is in line with Korenberg's longstanding views on sustainability in the built environment. "The focus in this area is often very much on energy labels. Of course, energy labels give an excellent first indication of the value of a building in terms of its sustainability. But actual energy consumption provides a much more accurate picture of a building’s energy performance. ‘Paris Proof' focuses on how it is used in practice."

Success is being booked towards Paris climate targets

Korenberg is pleased with the steps that are being taken to make Bouwinvest's property portfolio more sustainable in line with the climate targets agreed under the Paris accord. But expectations must be tempered, he adds. "We need to realise that even buildings with the highest possible sustainability certificates will sometimes consume as much as three times more energy than they should by 2050. We’re not there yet by a long shot. The bar is really high, and all of us need to start feeling a sense of urgency.”

The way to inspire the rest of the sector is by joining forces and sharing interim successes, he adds. One of Bouwinvest's achievements is the comprehensive greening of the WTC office building in Rotterdam where energy consumption was reduced by 15% year-on-year. But at 113 kW/sqm, energy consumption is still far from being ‘Paris Proof’. Elsewhere, Bouwinvest is also working on making 550 residential units in Diemen energy efficient. And together with Dutch supermarket chain Albert Heijn, it is investing in solar panels on the roofs of its retail premises. Korenberg: "Last year we reduced energy consumption across our entire property portfolio by 7.7%. That shows the direction we are moving in.” He adds that although actual energy consumption in buildings is of overriding importance, all of Bouwinvest's buildings do, of course, have a green energy label.

Sustainable impact is rising up the agenda

Bouwinvest’s efforts are aimed at creating an energy-efficient, future-proof real estate portfolio, but the company is also concerned with the sustainable impact it can and should have as an investor acting on behalf of institutional clients such as pension funds. Investing in sustainable real estate is simply inescapable, Korenberg says: "Climate change is becoming increasingly visible and noticeable. Just look at the enormous bushfires we saw earlier this year in Australia. Closer to home, we’ve been struggling for months now with enormous droughts in the Netherlands. Fortunately, pension funds also see these developments and are increasingly focusing on sustainability and social impact.”

That touches on the very essence of creating a sustainable built environment which, according to Annemarie van Doorn from the DGBC, deserves far more attention than it is receiving now. "The big question we all must ask is: why do we need to work together? The answer is because we want to continue living on Earth. That may sound a bit vague, but that is how it is. As far as I'm concerned, that story can't be told often enough.”

Next step is to spread the message

Korenberg agrees the message needs to be spread and points out that is where an organisation like DGBC can play a crucial role. “The people there are passionate and enthusiastic about this cause and it is important that we now keep the right focus and devote our energy to this programme. We need to take it one step further." Bouwinvest may be a frontrunner in adopting the ‘Paris Proof’ targets, but Korenberg knows all too well that not all players in the chain are familiar yet with the ideology. Martin Mooij of DGBC concurs: "We have a challenge here: we want to work with many different partners in an integrated way on a range of sustainability issues.” Van Doorn adds: "For example, we need to collaborate with different government bodies. And internationally we need to join forces to ensure we all speak the same language in terms of our ambitions across national borders.”

Sacred cows must be sacrificed

Towards the end of the discussion, Korenberg does exactly what Annemarie van Doorn values so much about Bouwinvest: he holds up a metaphorical ‘mirror’ for players active in the built environment. "If we really want to see an acceleration in terms of sustainability, we will need to sacrifice a few holy cows,” he says, citing the so-called ‘split incentive’ – a mechanism that prevents both landlords and tenants from investing in sustainability because it is unclear which party stands to benefit. "An all-in rent which includes energy costs is a good solution to this problem. We are experimenting with this in our office portfolio.”

Like Korenberg, Van Doorn believes this type of initiative represents a new way of thinking and working together and can help accelerate the movement towards a more sustainable built environment. "It's not enough if just one party makes a move,” she says. “All parties need to start moving, by sharing insights and discussing individual sustainability goals. That is the starting point for cooperation and the much-need acceleration. We are happy to lead the discussion.”