Benchmarking is essential to create a real estate strategy that ultimately can drive sustainability excellence…to get where you want to go, you have to know where you are starting from.
The primary purpose of benchmarking corporate real estate data is to discover areas of underperformance (both relative to relative to leased and owned assets within your portfolio as well as relative to industry standard by building type, industry, and geography), investigate the reasons for this, set goals, and develop improvement initiatives to achieve those goals.
Benchmarking is not usually a one-time exercise. Regular benchmarking on an annual basis is key to achieving goals and continuous improvement.
Throughout the benchmarking process you have to keep in mind the axiom, “you can’t manage what you can’t measure,” and that the purpose is not measurement for it’s own sake, but measurement to manage for greater sustainability.
In a monthly webinar by the Sustainability Roundtable, Inc. (SR Inc.) in October 2010 entitled, “KPIs and Benchmarking Portfolio-wide” we cited sustainability key performance indicators (KPIs) in the most common categories, include:
Operations (energy, water, waste, and space utilization)
Financial (capital investments, savings generated, operational investment of savings, return requirements/criteria)
Environment (indoor air quality, GHG emissions, and land use)
People (sustainability expertise, occupant engagement, alternative workplace options & utilization and occupant absenteeism)
The fundamental barrier to benchmarking is the difficulty to obtain reliable data, both for the assets to be benchmarked and for the benchmarks to be used. The critical steps to start an effective benchmarking program for real estate sustainability are:
Establish KPIs, or review them if these exist already, to evaluate whether or not you’re making progress across key impact areas. If not, select the appropriate common KPIs relevant to the company’s specific business model, product, and needs.
Determine whether the data for these KPIs exist within the enterprise, and if not, implement a longitudinal measurement and collection program to gather and track data.
Create a data repository (not spreadsheets) to collect and analyze the data, determine its completeness and reliability, and assure data quality.
Select the set(s) of external benchmarking data you will use, and ensure that these will be updated and available in the future.
Analyze the data and compare them to the benchmark set.
Publish the results to the teams responsible for data collection, and for facility and asset management. This establishes a baseline.
Set meaningful short, medium and long-term improvement goals, to position your assets and your portfolio where you want them to be.
Some of the more commonly used metrics are:
Energy use (all types, gigajoules per square foot per year)
Water use (gallons per square foot per year)
Waste to landfill (pounds per square foot per year)
Carbon dioxide equivalent, CO2e (pounds per square foot per year)
Air quality (particulates and other pollutants, parts per million)
Some available resources for benchmarking information can be found at:
BOMA’s Experience Exchange Report (EER) service – $279 Per Year
CoreNet Global Real Estate Benchmarking (REB) Portal – $175-275/Building
Climate Disclosure Project – Cost Varies by Level of Inquiry
Corporate Global Reporting Initiative (GRI) Reports – FREE
Michael Gresty, SR Inc.’s Executive Vice President of Research and Consulting, notes that, “each one of the benchmarking steps are essential to create a process that empowers executives and staff with actionable information to support decision-making. Doing this is difficult—if it were easy, everyone would have done it already—but essential to the effective management of real estate assets for greater sustainability. Benchmarking is not an end in itself, but without it, it is impossible for managers to set robust goals to measure progress.”
Corporate real estate professionals who are serious about creating sustainable enterprise value from real estate assets ensure that they have a meaningful benchmarking program in place, and are committed to it long-term because, “you can’t manage what you can’t measure.”
Executive Vice President
Sustainability Roundtable, Inc.
(The post was originally published in the Sustainability Roundtable’s blog found at http://www.sustainround.com/forum/SOR/ and was republished with permission by the author, Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc.)