2017 GRESB Siemens Spring Conference

2017 GRESB-Siemens Spring Conference
Leading Sustainability Innovations for Real Assets
#GSC17 @SiemensBT@GRESB

9:00 Welcome, Sander Paul van Tongeren, GRESB
9:10 Introduction & The Crystal, Mark Jenkinson, Siemens
9:30 Session 1: Climate Risk and Resilience – getting 2 degree ready
11:00 Coffee Break
11:30 Session 2: ESG Solutions in Real Estate – new methods of mitigation
13:00 Lunch
14:15 Session 3: The Impact of Digitalization – IoT for buildings
15:10 Coffee Break
15:25 Session 3: Panel
16:10 Closing, Sander Paul van Tongeren, GRESB
16:25 Drinks & Networking

We appreciate your participation
@GRESB
#GSC17
@SiemensBT
Answer our questions at kahoot.it
Siemens Building Technologies
@siemensbt
Siemens Building TechnologiesGRESB

GRESB&' Welcome
www.thecrystal.orgUnrestricted ©&Siemens& AG&2017

Unrestricted& ©&Siemens& AG&2017
04.05.2017Page, 2
The,only,building,awarded,with
LEED&Platinum
BREEAM&Outstanding
The&Crystal&
One,of,the,most,sustainable,buildings,in,the,world
43%
improved
energy
efficiency
71%
lower,greenA
house,gas,
emissions,
Certification
OUTSTANDING

04.05.2017Page, 3
The&Crystal&
An,allAelectric,building

04.05.2017Page, 4
Sustainability&–
Siemens&aims&to&be&net'carbon&neutral&by&2030
We&are&investing&over&€100&million&in&measures&to&reduce
our&carbon&footprint
Drive&energy&efficiency&program
Increase,energy,efficiency,in,factories,,employ, sustainable, technologies,
in,new,buildings
Leverage&distributed&energy&systems
Reduce,energy,costs,and,CO2 emissions
Reduce&fleet&emissions
Utilize, potential, of,lowAemission, cars,in,fleet,,
including, electro,mobility
Purchase& green&energy
Move,toward,a,significantly, cleaner,power,mix,with,a,strong
focus,on,renewable, energy,and,highly,efficient, gas
Independent&auditors&will&monitor&and&report&
on&progress&of&implementation.
Electricity
Heating,/,Process,heat
Fleet
Other
'50% '100%
2020 20302014
2.2&Mt
CO2

04.05.2017Page, 5
Sustainable&Cities&Exhibition

04.05.2017Page, 6
Sustainable&Events&Centre

04.05.2017Page, 7
We&are&an&integral&part&of&East&London
The&Crystal
Silvertown&Quays&&

04.05.2017Page, 8
Resilience:&1.3&million

04.05.2017Page, 9
Resilience:&9,500&per&annum

04.05.2017Page, 10
Digitalisation&in&2005

04.05.2017Page, 11
Digitalisation&in&2013

04.05.2017Page, 12
The&evolution&of&city&infrastructure

04.05.2017Page, 13
The&Journey&to&Autonomy

04.05.2017Page, 14
Mark,Jenkinson
Siemens,Global,Center,of,Competence,Cities
The,Crystal
1,Siemens,Brothers,Way
London,E16,1GB
EAmail:,mark.jenkinson@siemens.com
Tw:,@MarkGJenkinson

Climate Risk and Resilience – getting 2 degree ready
Session 1

THE$UK'S$LEADING$COMMERCIAL$PROPERTY$OWNERS$WORKING$TOGETHER$TO$
IMPROVE$THE$SUSTAINABILITY$OF$EXISTING$COMMERCIAL$BUILDING$STOCK

The$BBP$is
A$collaboration$of$the$UK’s$leading$property$owners$who$
work$together$to$improve$the$sustainability$of$the$UK’s$
existing$commercial$buildings.
Our$aim$is$to
Enable$market$transformation$through$sustainability$
leadership$and$knowledge$sharing$across$the$property$
industry.

Supporting$our$members$and$the$industry

“Climate Change Implications for Real Estate Portfolio Allocation:
Business as usual or game changer?”
GRESB SPRING CONFERENCE 2017 – Session 1 on Climate Risk and Resilience
4th May 2017Prof. Dr. Sven Bienert MRICS REV, Head of Departement

2GRESB'SPRING'CONFERENCE'– 4th'May'2017 Prof.'Dr.'Sven'Bienert'MRICS'REV'
More than one year after „Paris“
– on trackfor 2 degree plus?
12.12.2015:195 nationsagree atCOP21.// INDCs for all countrieswill be executed.// In NY in may 2016 175 signed.

Current status of national goals: Intended Nationally Determined Contributions (INDCs)
Source:(http://cait.wri.org/indc/,(2016
• All countrieshave already publishedtheir INDCs. Their share accountsfor 90% inglobal GHGemissions.
• The Potsdam Institute for Climate Impact Researchdoubtsthe sufficiency ofthe announcedINDCs to limitglobal warming to
3°C with respectto preindustrial levels(official goal:2°C).
Unfortunately we are on track for 3 degree plus (1/2)

Sources: www.wunderground.com/blog/JeffMasters/february-smashes-earths-alltime-global-heat-record-by-a-jawdropping, www.nytimes.com/interactive/2017/01/18/science/earth/2016-hottest-year-on-record.html
Global development 1980-2016
Unfortunately we are on track for 3 degree plus (2/2)
Monthly anomaly of global movingaverage temperature 1880 - 2016

Downside „Risk“
Upside „Risk“
Portfolio level
• diversification
• investment alternative with special risk-return profile
• Green Funds, SRI and RPI „en vogue“
Geiger, Cajias, Bienert (2013): The Asset Allocation of Sustainable Real
Estate: A Chance for a Green Contribution?
Intensive research with hedonic pricing (regression)
Positive impact
Corporate level
• Sustainability as productionfactor
• Positive Impact on Yields, Tobin´s Q, Asset Turnover and
risk measures
• CSR-strategy
Ansari, Cajias, Bienert (2015): The Value contribution of Sustainability
Reporting – an empirical evidence for real estate companies.
Property level
• Sustainability is impacting rents, vacancies and values
• Green Building certificates
Cajias, Fürst, Bienert (2016): Is energy efficiency priced in the German
housing market? – Large sample evidence from Germany.
Negative impact
More extreme weather events and „looser“ regions
• High impact on real estate and infrastructure
• Due to creeping climatechanges and extremes
• Adaptation and mitigation required
Bienert (2014): Extreme Weather Events and Property Values Assessing
New Investment Frameworks for the Decades Ahead.
Hirsch, Braun, Bienert (2015): Assessment of Climatic Risks for Real
Estate.
Bienert (2016): Climate change implications
for real estate portfolio allocation
Various ongoing research projects
Limited Real estate research. Extreme value statistics
and climate data
Adaption
Mitigation
vs.
Climate change = Climate risk?
Climate change triggers …
Upside-chances and Downside-risks

Climate data is getting more and more precise
Emergence of global climate model GCM: Global vs. Regional climate models:
GCM
RCM
(REMO-
CLM)
Source: www.southwestclimatechange.org (left), www.remo-rcm.de (right)
Only Trump might doubt that data is still not precise…

ULI Report: Extreme weather events and property values by Prof. Bienert
Business Case affectedby climate change
• There are many ways our business cases are
influencedby climate change, mitigation
policies, changes inconsumerbehaviour,
more investorsapplying ESG/PRI criteria
etc.
• One aspect is the potential loss caused by
extremeweather events on property level!

Extreme weather events affecting property values
• Real estate values are being increasingly threatened by extreme weather events, such as storms,
hail, flooding, droughts, tropical cyclones, and landslides.
• These extreme events have far greater relevance for real estate investors than the more
frequently discussed effects of creeping climate change, such as rising mean temperatures.
• The number of extreme weather events has doubled globally since the 1980s to an average of
over 800 events per year during the past decade.
• The occurrence of such events is therefore escalating and is likely to continue to do so until the
end of this century (and beyond), as climate change becomes more severe.

Extreme weather events affecting property values

An example of consequential and indirect losses…

An example of consequential and direct losses…

Best practice - The ImmoRisk-Tool: General Risk Approach
Risk = Hazard * Vulnerability * Value
In some regions already 8 % of GDPare lost on an annual basis.
Business Case affectedby climate change

Implications for Investors
How to react?
• Check your risk
• Question short and long term effectson values/pricing
• Check if riskis coveredby insurance
• Searchfor adaptationmeasures andwhat the regional
government does (foryou)
• E.g.: Germanys government does a lot onadaptation,
tools andincreasing transparency. ImmoRisk(left)
developedby Bienert et al. is just one example!

• Global Warming/Heatwaves and (illegal) deforestation led to delicate situations in Brazil.
• The town suffers from severe water shortage. Between August and September 2014, water supply for residential properties
was completely abandoned. Drinking water was available via public springs only (social escalation). Solution of the
situation: rainfall in November.
• Does history repeat itself in Sao Paulo?
• Sao Paulo is the largest city as well as the most important business
location in SouthAmerica; only about 10% of water reserves are still
available
• Since March 2015 additionally: (random) rationing of drinking water
• Political ignorance worsens the situation (Governor of Sao Paulo:
„There is no water shortage“, 30.09.2014)
• Public sector and policy unable to react properly due to corruption, economic downturn, missing financing
capabilities, lack of transparency and responsibilities.
• 40 % of residential properties are not regularly supplied with water any more
• People accumulate used water for second-hand use (risk: gastro-intestinal diseases, dengue fever)
Would you want to invest there –
in exchange for some BP more returns?
Example 1: Ecology, housing and quality of life in Sao Paulo

• „California will run out of water within one year“ (NASA)
• Four-years drought and temperature records make California‘s water reserves drain
• New water saving regulation provides for annual cutbacks of up to 36 %.
• Fines of up to $10,000 for local water companies are legally enforced from July on
• Exemplary saving targets
• Montecito / Beverly Hills minus 36 %
• PaloAlto minus 28 %
• Santa Barbara minus 16 % …
• Properties are considered as a significant
driver of water consumption
• While agricultural production must be ensured,
especially real estate (existing and new buildings)
as well as their outdoor facilities (watering, pools)
are captured by the authorities.
Would you want to invest there –
in exchange for some BP more returns?
Example 2: Ecology, housing and quality of life in California

• 50 senior executivesat leading real estate
investment and management firms with €428
billion AuM participated
• Main questions addressed:
1. What impact do real estate investors expect
climate change to have across regions, and on
their portfolios and business strategy?
2. How are real estate investors and asset
managers addressing climate change within their
portfolios, and how do they expect those practices
to change over time?
3. What barriers and opportunities are there to
more expanded action within the real estate
sector to addressclimate change?
Climate change implications
for real estate portfolio allocation

• Holding periods are long
• However CF modeling might be too short to capture climate risk
Challenge I.:
Short term tools vs. long term investment

• Level of Climate Change RiskAssessment
undertaken for respondents portfolios is not
sufficient
• Now major changes are planned in the future
Challenge II.:
Low intensity of awareness

Challenge III.:
How we try to capture climate risk
• Due Diligence is in place
• Complex tools to capture risk profile are
missing

Challenge IV.:
Climate science vs. perceptionof investors

Challenge V.:
How we try to capture climate risk
• Energy – yes !
• Resilience – No ?!

• Number of Full-Time equivalent staff dedicated to
sustainability issues is very low
• Same results could be identified with regard to
board attention
Challenge VI.:
Staffing and board attentionare limited

Challenge VII.:
Poor market reactionas a result?
• Market impacts of climate change
observed by respondents are still
limited
• That might change quickly?

Conclusionof respondents I.:
Identify of climate “winners/losers”

Conclusionof respondents II.:
Be more selective inthe future

Conclusionof respondents III.:
Industry needs to address market barriers
• Call for transparency
• Call for more subsidies

German Government Report (here BBSR): Decarbonization of cities
• International analysisof cities and their
respectiveactivities to cut down GHG
emissions
• Identification of best practises
• 250 pages analysis releasedinJanuary 2017
• Funded by BBSR/German Government
Crucial observations on the successful decarbonizationincities
and districts

Crucial observations on the successful decarbonizationincities
and districts
vision,
aims,
political
stability
Governance-structure,
city government and
-administration
Success Factors:
• sector coupling
• digitalization
• financial basis
• balance between market und regulation
• district approach & polycentric structures
• plurality of development trajectories & mix of instruments
Data basis / carbon inventory /
Dynamic data update / data migration from othersystems /
use of guidelines (GPC) and reportingplatforms (cCR, CDP)
Mobility Building Energy
Urban
planning
Economy/
garbage
disposal
City networks
• international positioning
• platform
• guidelines / tools
Citizen / Consumer:
• diversity of actors
• NGOs
• participation/dialogue
• change in behavior
information /
communication
needs /
participation
empowerment
support
active engagement
competence
through monitoring
and reporting
transparency &
understanding
dedication &
support

“Sustainable long term competitiveness is dominatingthe thinking within the business environment since its
existence.” (Collin and Porras 1994,Makower 1994 andGladwin et al. 1995)
Risk Control
Early Mover
Advantage
Long Term Business
Success
Long Term View on
Natural Resources
Which role does
sustainability play in
this respect?
Sustainability – property level
• Bienert Immovalue– IREBS (2011)
• Cajias and Piazolo – IREBS
(2012/2013)
• Chegut, Eichholtz andKok (2012)
• Fürst and McAllister (2011a)
Influence of sustainability on
• rents
• transaction prices
• vacancy rate
!Thoroughly researched both
quantitatively und qualitatively
Sustainability – company level
• Newell and Lee (2012)
• Falkenbach,Lindholm,Schleich
(2010)
• Newell (2009)
• Roberts et al. (2007)
Influence of sustainability on
• investment decision
• risk profile
!Rather descriptive, qualitative
approach
Sustainability – portfoliolevel
• Geiger, Cajias, Bienert (2013)
! Particularly within the multi-
asset-portfoliostill considered as
white spot
Profitability / Pay off on property level

Elements for the derivation of expected losses
Real Estate industry can address the risk

Approach to calculate the risk for real estate investments
Monetary)
Loss
I.e.)wind)velocity
Probability
Risk
Value
Vulnerability
Hazard
Median
Margin))of)error
Damage
Functional relationshipof the variables

Curriculum Vitae - Prof. Dr. Sven Bienert
IRE|BS InternationalReal Estate Business School
University of Regensburg
Prof. Dr. Sven Bienert MRICS
• MBA, Master in Real Estate
• MBA, Master in General Management
• General Court-Certified Valuer
• Trustee in Real Estate
Current activities:
• Head of IRE|BS
International Real Estate Business School
• Professor of Sustainable Real Estate at IRE|BS
• Various research projects
• Member of various associations and working groups
(DGNB Council,ARE Board member/Tegova, Immq
Board member, ICG Board member, DVFA commission
leader etc.)

Contact
Prof. Dr. Sven Bienert MRICS
IRE|BS Department of Real Estate
Head of Department
and Head of the
Competence Center of Sustainable Real Estate
University of Regensburg
Universitätsstraße 31
D-93040 Regensburg
Tel.: +49 (0)941 943-6011
Fax: +49 (0) 941 943-816013
Mail: sven.bienert@irebs.de
IRE|BS Competence Center of
Sustainable Real Estate

For professional investors only
Excellence. Responsibility. Innovation.
Climate risks, resilience and opportunities
GRESB Spring Forum
Tatiana Bosteels, Director for Responsibility
April 2017

2Responsible Property Investment 2015

WHY Climate resilience matters?
Investment at risks, insurance, opportunities
RISKs & Opportunities

Impact to investment performance
MSCI green rated office performance
MSCI findings 2015

ECONOMIC ADVANTAGE
Investor platform for climate action

6
Search: SUSTAINABLEREI
www.unepfi.org/work-streams/property/sustainablerei/

Climate engagement with G20 and G7
GIC, IIGCC, UNEP FI, etc.
7
Letters to G20

G20 FSB taskforce climate related
financial disclosure
8

G20 EE Investment Toolkit (2017)
G20 EE Investment Toolkit
Private Sector
Finance
Policy
Public Sector
Finance
Banks
Long Term
Investors
Insurance
Companies
1.We will embed in our decision‐making
environmental, social and governance issues
relevant to our insurance business.
2.We will work together with our clients and
business partners to raise aware ness of
environmental, social and governance issues,
manage risk and develop solutions.
3.We will work together with governments,
regulators and other key stakeholders to
promote widespread action across society on
environmental,social and governance issues.
4.We will demonstrate accountability and
transparency in regularly disclosing publicly
our progress in implementingthe Principles.
G20 Energy Ministers in
Istanbul in 2015 & attached
to the G20 Leaders’
Communique from Antalya
EEFTG Energy Efficiency
Investment Principles for
G20 Participating Countries
G20 Energy Efficiency
Leading Programme

Navigating low carbon pathways
Whole value chain approach to managing carbon risk and opportunities
10
We need to challenge the current economic and
financial models used by the investment industry if
we are to ensure the world does not breach the
scientifically-guided objectives we have set for
ourselves on climate change.

Exposure to natural hazard and climate risks and opportunities
From risks to positive impacts
HFM managed real estate and infrastructure
Kings Cross –
regeneration of inner
London

Climate Risk and Resilience:
An industry response
Miles Keeping, Hillbreak
Chairman, IPF Sustainability Interest Group
@Miles_Keeping @Hillbreak_Ltd

Implications
Examples include:
Sudden, extreme episodes of heat,
precipitation, and storm
Systemic shifts affecting the function of
buildings and the comfort and
productivity of the people and
businesses using them
Long-term environmental change
impacting on land use and availability
Shifts in natural resource availability and
quality
Physical Transitional
Examples include:
Increased investor engagement and
stronger disclosure expectations
Changes in occupier demand and public
awareness
Emergence of new financial and
investment products and technological
solutions
Stronger policies with higher minimum
standards, mandatory reporting, higher
carbon prices and added complexity
© 2017 Hillbreak Ltd. All Rights Reserved.

Roles & Influences
Investors
Managers & Owners
Vendors
Industry Bodies
• Smarter integration of climate risk within capital allocation strategies
• Clearly expressed decarbonisation and risk exposure goals
• More structured and sustained engagement
• Should not be relying upon Fund Managers’ involvement in benchmarking
exercises as indicator of adequate mitigation or risk management
• Better, explicit integration of climate objectives into product strategies
• Smarter, scenario-based assessment of potential financial impacts (TCFD)
• Setting clearer, longer-term goals (portfolio, fund, asset)
• More consistent integration and clearer ’issue ownership’ across lifecycle
• Positive engagement with clients/shareholders and with supply chain
• Must solve consequences of fractured and fragmented supply chain
• Smarter investment in capability (human and technology)
• Greater openness to wider array of performance-related KPIs
• More proactive in bringing innovation to clients
• There must be better coordination than there has been historically
• Nowhere is this more salient than on the subject of education & training
• Aim should be for a single, joint curriculum embedded into RICS CPD
requirements, with each organisation playing to its strengths

Thank you
@Miles_Keeping @Hillbreak_Ltd
This document has been prepared in general terms and does not constitute financial
or professional advice. No reliance may be placed on the content or completeness of
this document for any purpose whatsoever, and we accept no duty of care of liability
to any party for an loss, howsoever arising, as a result of any action or inaction taken
as a result of this document.
Hillbreak Ltd is registered in England & Wales with registered number 9619492 and
its registered office at 5A Ack Lane East, Bramhall, Cheshire, SK7 2BE

ESG Solutions in Real Estate – new methods of mitigation
Session 2

Land%Securities%. New%Carbon%
and%Energy%TargetsLand%Securities:%Setting%science%based%carbon%
reduction%targets
Caroline Hill – Head,of,Sustainability

! Largest,listed,real,estate,
company,in,the,UK,(by,market,
capitalisation)
! £14.6bn,portfolio
! Focus,on,London,offices,,and,
UK,retail,and,leisure
! Certified,to,ISO:50001,and,
ISO:14001
Gunwharf) Quays,)Portsmouth

Global,Megatrends
Climate
Change
Current,emissions,
trajectory,points,to,
4.7degrees,rise,,with,
catastrophic,
consequences
Resource%Depletion
One,third,of,the,
planets,resources,
are,consumed,by,
construction,
Environmental%
Degradation
Air,pollution,
contributes,to,9,500,
deaths,in,London,
annually
Demographic%Change
No.,of,over,65s,in,UK,
set,to,rise,by,60%,by,
2032

Global,Megatrends
Urbanisation
Over,1,million,people,
move,to,cities,every,
week
Wellness
The,global,wellness,
industry,is,worth,$3.4,
trillion,,3.4,times,the,
pharmaceutical,
industry
Technology
There,will,be,seven,
times,more,
connected,objects,
than,people,by,2020

Setting,our,scienceZbased,target
CO2
#
1
• We wanted a target which applied to our whole portfolio, not just
a few buildings. Setting an intensity target based on floor area
allowed us to do that
• Land Securities didn’t have a carbon target, it was thought both
internally and by external stakeholders that we would benefit
from setting a company wide carbon target
• Energy consumption remains a material issue for our company,
we therefore needed to set an additional, ambitious energy
target
• We were set the challenge of becoming sustainability leaders
within the real estate sector

Land, Securities, decarbonisati on, pathway
Decarbonisation,pathway,for,Land,Securities
This,decarbonisation,pathway,leads,to,the,following,reduction,requirements,by,2030,,2040,and,2050:
Land, Securities, Emission, Reduction, Targets, against, 2013/2014, baseline
Company%Target%Years 2030 2040 2050
Intensity%Reduction%Against%Baseline 40% 70% 80%
0
10
20
30
40
50
60
70
80
90
2010 2015 2020 2025 2030 2035 2040 2045 2050
Emissions,Intensity,kg,CO2
per,m2
Land,Securities,Pathway

Our,Targets
Reduce,carbon,intensity,(kgCO2/m2), by,40%,,for,properties,under,
Land,Securities,management,for,at,least,2,years,,by,2030,
compared,to,a,2013/14,baseline.
Reduce,energy,intensity,(kWh/m2), by,40%,,for,properties,under,
Land,Securities,management,for,at,least,2,years,,by,2030,
compared,to,a,2013/14,baseline.
Targets(to(include(all(energy(used(directly(by(Land(Securities((Scope(1(+(2(
emissions)(and(energy(sub;metered(to(tenants((Scope(3).
CO2

Hurdles,to,overcome
! Data,quality,and,confidence!
• Be,thorough,and,trust,the,numbers
! Internal,buyZin,,SBTs,are,generally,challenging
• Tell,the,story,and,engage,with,the,issues
! LongZterm,goals,in,a,shortZterm,world
• Set,shorter,term,interim,targets
! Complexity,and,breaking,down,the,science
• Keep,it,simple,and,empower,people CO2

Benefits,of,SBTs
" The,science,brings,meaning
Targets,are,no,longer,numbers,pulled,from,thin,air,,they,are,
goals,linked,to,a,real,issue
" They,help,set,longZterm,strategy
SBTs,are,longZterm,in,nature,,they,can,be,the,spine,of,a,
sustainability,strategy
" Integrity
Established,methodologies,and,third,party,verification,add,
weight
" Leadership
SBTs,commit,to,what,is,required,and,not,just,achievable.

New,Responsible,Property,Investment,Policy
Health,and,Wellbeing
Operational
energy,ratings
Renewables
Green,
infrastructure
and,spaces
Energy,Performance,
Certificates,(EPCs)
SocioZeconomic,
impact,evaluation
Flood,risk,
assessments

Sustainable,design,and,innovation
New,sustainable,development,brief,
including:
• Embodied,carbon,leadership
• Developing,for,wellbeing
• Engaging,local,communities
Biodiversity,partnership,with,The,
Wildlife,Trusts
Delivering,excellence,in,
developments
• Westgate
• Land,Securities,Head,office

Click&to&edit&Master&text&
styles
May&2017
Embodied&Carbon
Mitigation
Simon&Cox
FVP&Project&Management&
and&UK&Sustainability&Officer

2
Embodied&Carbon&Mitigation
Why&Act&on&Embodied&
Carbon?
How&to&Create&a
Meaningful&and&Effective
Mitigation&Programme
Tracking&and&Sharing
Results

7
Developing&a&Mitigation&Programme

8
UK&Education&– Eden&Project

2. Engage – Community programme
Fact & figures:
Prologis increasesits sustainability impact throughcommunity engagement. It does this by sponsoring
certificationtoThe Planet MarkTM andsustainability workshops inlocalprimary schools andcolleges through
The Planet MarkTM for NewDevelopmentsprogramme.
42
schools and
colleges
2,342
pupils in
workshops
5,603
pupils in
assemblies
35
PlanetMark
certifications
46
Eden Project
visits

16
Conclusions
Embodied&Carbon&
Provides&a
Reason&to&Act
Targeted&Mitigation&for
Unavoidable&Impacts
Cumulative
Environmental,&Social
and&Governance&
Benefits

Engaging occupiers
John Davies
Head of Sustainability, Derwent London
4th May 2017

• Largest central London specialist REIT
• 6m sq/ft valued at over £5bn (31st Dec 2016)
• 97% in central London – 71% of portfolio in West End and 26%
in City borders
• Design led philosophy for regenerating/refurbishing buildings, creating
unique, highly desirable, efficient and affordable spaces
• Property investor, developer and manager
• Concepts of sustainability underpinning our approach and ethos

Approach to design
……learning from the past

Approach to building design
……to create robust, efficient, long life, people-centric buildings

Working with tenants
……choice, control, comfort

Working with tenants
……digital dialogue

Leading Sustainability
Innovations for Real Estate
The new..and the old (we forget)
Niko Kavakiotis- Head of Building Performance &
Sustainability- Siemens Building Technologies GB&I
siemens.com/buildingtechnologiesRestricted © Siemens AG 2017

Unrestricted © Siemens AG 2017
04.05.2017Page 2 Siemens Building Technologies GB&I, Building Performance & Sustainability
Heracletus – 500 BC
“the only constant...
... is change”
IoT
Digitization
DES
Storage
electric
mobility
Standards&
Labelling
A.I.
prosumers

Agenda for today
Distributed Energy Systems Basics
+

The future energy market revolves around Distributed Generation,
Load Management and Storage
NG forecasts
>25 GW
will be
provided by
Distributed
Generation
by 2035
Battery
Storage
Will grow from
24MW to
>1.6 GW by
2020
Interconnection
Capacity will
increase from
4GW to
11.3 GW by
2020
50 mil.
smart
meters
by 2020
NG
expects
solar PV
25 GW by
2035
3.5 mil.
electric
vehicles
in the UK
by 2030
DSR to
grow x6
by 2035

From centralized, unidirectional grid to
distributed energy and bidirectional energy balancing
Gas Cooling / heating
Wind or PV
(private)
Storage
Diesel
generator
Microgrid
E-mobility
Smart buildings
Heat
storage
Onshore
wind
Large-scale PV
installation
Storage
(gas, liquids)
Biomass
Cogeneration
Gas distribution
Power to value
(gases, liquids,
chemicals,)
Gas transport
Offshore wind farm
Onshore wind farm
Gas supplier
Gas plant
District heating
(cooling)
Smart electricity meters
Grid control
center
Hydropower
plant
Buildings,
computer centers,
nanogrid
Transformer
Substation Substation
Fossil-fuel power plant
Conventional power gridElectricity

Distributed Energy Systems – Portfolio and system elements
Gas /
diesel motors Wind turbines Fuel cells Cogeneration
Power generation and cogeneration
Energy storage
Control systems Virtual power plants
Grid and building automation and microgrids
Demand reaction Protection systems Energy mgmt. Hydrogen Battery
Gas turbines Steam turbines
Transformers
Energy
monitoringSecurity systems
Switches
Substations
Electrification
Heat storageHeat pumpSolar
+ financing as an EPC

40
60
80
100
120
140
160
180
2015 2020 2025 2030 2035
Cost of Generated Electricity by Technology
Forecasts for 2015-35
Disruption via storage? - 40% (2015-20)
→ Primarily through scaling
Photovoltaic: - 45% → Even small roof-
top installations will be competitive
Offshore wind : - 43% → Industrialization of
production and simplification of value creation
Onshore wind: - 22% → Improvement
via more full-load hours and new locations
(weak-wind turbines)
Fossil fuels with increasing costs:
+ 32% coal, + 12% gas
Electricity generation costs worldwide (€ / MWh)
Gas PV Offshore windCoal Onshore wind
Price development of storage facilities worldwide (€ / kWh)
Storage (lithium ions)
200
400
600
0
New technologies making renewable power generation competitive
Source: HIS, Bloomberg

Page 8
Intelligent and efficient building as key component of
distributed energy system
Siemens headquarters, Munich
‒90% reduction in CO2 emissions1
‒Building management controls use of solar energy,
daylight, geothermal energy and rainwater
90%
reduction in
electricity
consumption1 (e.g.
through LED
lighting, efficient
drives)
~1/3
of electricity
requirements
covered by roof-top
PV system
>30,000
sensors monitor
building
1 Compared to previous headquarters building

Page 9
Modularity of Distributed Energy systems
well-suited to campus environments
Siemens Campus Erlangen
‒Multidimensional grid combines heating, cooling and
electricity
‒8-MW cogeneration plant with four gas motors, heat
pumps, 4-MWp PV system
‒Electrical control technology, energy management
3-4 MW
energy storage to balance
base and peak loads
Reduction of up to
30%
in CO2 emissions
through biogas
cogeneration plant
and PV
Note: Reference values; campus currently under step-by-step construction

How can commercial clients benefit from batteries?
Arbitrage
Reduce Connection
Costs
Improved
power quality
Improved power
factor
TRIAD avoidance
Access balancing
services
Maximise use of on
-site generation

Drinking our own medicine – Siemens committed to become
net-carbon-neutral by 2030
2020 20302014
million
tons CO2
We are investing over €100 million in measures
to reduce our carbon footprint
Drive energy-efficiency program
Increase energy efficiency in factories, employ sustainable
technologies in new buildings
Electricity
Heating /
Process heat
Fleet
Other
2.2 -50% -100%
Leverage distributed energy systems
Reduce energy costs and CO2 emissions
Reduce fleet emissions
Utilize potential of low-emission cars in fleet, including
electromobility
Purchase green energy
Move toward a significantly cleaner power mix with a
strong focus on renewable energy and highly efficient gas
Independent auditors will monitor and report
on progress of implementation.
1.7 million
tons CO2
2016

How about the “old” (the basics?)
“All that is gold does not glitter,
Not all those who wander are lost;
The old that is strong does not wither,
Deep roots are not reached by the frost.”
J.R.R. Tolkien, The Fellowship of the Ring
Image by Stephen Humphries

Are you honest in admitting (and quantifying) what you are after?
Carbon
neutrality?
ROI+ Cash
Flow?
Tenant
satisfaction?
Something
else?
All of the above?
And if all of the above, have you assigned weights?
Time?

Before you go after innovation...look in house first
Do you have a clear goal?
Have you quantified it?
Does everyone have the same
understanding & interpretation?
Do you have a method?
Do you have full data visibility?
Do you stay on top?

Thank you very much for your attention
Niko Kavakiotis
Head of Building Performance & Sustainability GB&I
Siemens Building Technologies GB&I
Sir William Siemens Square
Frimley, Camberley, UK
Mobile : +44 7808827137
E-mail:
niko.kavakiotis@siemens.com
siemens.com

The Impact of Digitalization – IoT for buildings
Session 3

Digitalization
Internet of things

MISSION
Enhance and protect shareholder
value by assessing and empowering
sustainability practices in the real
asset sector
Enhance protect
assessing
sustainability practices

Property
companies/
Funds
LeadersLaggards

Property
companies/
Funds
Regulation

Property
companies/
Funds

61
Institutional
Investors
Property companies/
Funds
Assets
759
66,000

Qualitative
Information
Environmental
Performance
Geo Spatial
DATA

Investment grade
quality
Automatic Reduction of
administrative burden
DATA

55
72
GRESB Average with less than
75% average data coverage
GRESB Average with more than
75% average data coverage

GRESB Score
GRESB
participants
(density)
2012
n=445
0 20 40 60 80 100

GRESB Score
GRESB
participants
(density)
0 20 40 60 80 100
n=543
2013

GRESB Score
GRESB
participants
(density)
0 20 40 60 80 100
2014
n=636

GRESB Score
GRESB
participants
(density)
0 20 40 60 80 100
2015
n=709

GRESB Score
GRESB
participants
(density)
0 20 40 60 80 100
2016
n=759

Digitalization*of*Real*Estate
New*ways*to*systematically* increase*
sustainable* real*estate* asset*value
Tobias*Huber*|*GRESB*|*May*04,*2017*|*London,*UK
siemens.com/buildingtechnologiesUnrestricted* ©*Siemens* Switzerland* Ltd*2016

CC"BT
“We"shape"our"buildings."
Thereafter, they"shape"us.“
Winston"Churchill
Pictures"strictly"for"internal"use"only

Restricted*©*Siemens* AG*2016
“I’m"convinced"that"most"of"the"
credit"for"my"work"goes"to"this"
comfortable"chair,"this"scratched
old"desk,"this"little"window"with
view"onto"the"field.”
Albert"Einstein

“I"spent"hours"every"day"in"that"
space."
Messing"around."Tinkering."Putting"
disparate"elements"together."Joining"
things"that"were"never"meant"to"be"
joined.
Without"that"place"I"would"have"
never"realized"it"was"possible"even"
to"try"to"do"what"I"did.”
Steve"Jobs

“Our workplace dictated our work."
Sparse."Functional."Clean."
Organized."
I"often think that the Honda"50"
was"simply the mobile"equivalent
of the place we worked every
day.”
Soichiro Honda
Pictures"strictly"for"internal"use"only

Five*Megatrends*shaping*our*world
Sources:" IDC," United" Nations," UNCTAD" Statistics," SCRIPPS" INSTITUTE" OF"OCEANOGRAPHY," “The" Keeling" Curve”," November" 11," 2015"
Globalization
The"volume* of*world*trade*
nearly"doubled* between"
2000*and*2014
Urbanization
By"2050," 70*percent* of*the*
world’s*population* will"live"
in"cities"(2014:" 54"percent)Demographic* change
The"earth‘s"population" will"increase"from"
7.3"billion" people" today"to"9.7*billion*in"
2050."Average"life"expectancy"will"then"
be"83"years
Climate* change
In"the"summer"of"2016," Earth's"
atmosphere" had"the"highest* CO2
concentration in"800,000" years
Digitalization*
By"2020," around" 55*billion*devices"
will"be"linked"online

50
23
9
20202012 2016
Trends*in*digitalization* effect*building*industry
By"2018"there"will" be"more"connected
devices*than"people" alived
Est."25*billion by"2020
Business IP*traffic*will" grow"at"a
Annual*Growth*rate*of*+20%*from"2014e2019
Mobile*computing*to"grow"by
+57%*Annual*Growth*rate*from"2014e2019
Costs*sinking*dramatically*
($500"per"1"million" transistors"in"1990d"
$0.05"per"1"million" transistors"in"2012)
Large*amounts*of*data*can*be*turned*into*value*for*Building*Owner*and*Tenants
Digital*transformation
Connected*devices5),* in*bn
2.8*ZB 40.0
ZBZB"="Zettabytes" ="109 Terabytes
Exponential"
growth"of"
connected"
devices"...
…"and
digital" data6)

Innovation*challenges*along*Digitalization@Buildings:
Changing"processes,"portfolio"and"business"models
Benefits
Emerging*Business*Models
Moving*automation
to*cloud*and
field*devices
(IoT)
Non*proprietary*
interfaces
Servicifib
cation
Industriab
lization of*
Services
Software*as*
a*Service*
(SaaS)
Demonstrate""
Compliance
Maximize"Asset"and"
Space"Utilization
Maximize"Energy"
Efficiency"and"
Sustainability
Improve"Building"
Operation
Safety"and"Security"
for"People,"Assets,"
IP,"and"Processes
Comfort/Productivity
of"People
80%of"customers
want"visualization*
of*data
69%of"customers"
expect"an"improved*
service*process
65%of"customers"demand"
locationbindependent*
access*to*their*data
50%of"customers
expect"new*digital
services*and*
business*models

Connect*– Collect*b Analyze*b Optimize
Utility*Data*&*
Invoices
Tenants*&*
Building*Owners
Existing*Databases*&
External*Data*Sources
Facility*Managers*&
Technical*Operators
Data*Points*&
Meter*Readings
Identify*Saving*or
Optimization*Potential
Communicate*
Achievements
Benchmark*
against*Peers
xx
Fulfill*Reporting
Requirements

! Reduce*utility*costs*through*
identifying*energy*optimization*
opportunities*based*on*data
! Reduce*repair* and*
maintenance*costs*through*
lowering*costs*related*to*
unplanned*maintenance*with*
predictive*services
! Increase*availability*of*your*
facilities*through*less*
downtimes
! Reduce*CO2*emissions
Increase"building"performance"through"
Databdriven,*Digital*Services*for*energy*and*infrastructure*management
• Rules"Based"
Analytics"&"FDD
• Predictive" &"Prescriptive"
Service"Delivery
• Tech."Asset""Mgmt.
• RealeTime" Reporting"
• Efficient" Workorder
Management
Structure*data*(BIM)
Asset*data
e Air"Handling"Units
e Chiller
e Lighting
e Heating
e Elevator
e ... Performance*data

! Solid*decision*basis
! Base*for**measures*
to*improve*RE*value
! Cost*Reductions
! Internal*and*external*
Benchmarking
! Risk*mitigation*and*
optimum*price*for*
transactions*
Interdisciplinary"Data"Transparency"will"become"the
Innovation*engine*within*the*Real*Estate*Business
! RE"cost"structure
! RE"revenue"structure
! RE"profit"structure"
(EBIT)
! Leasedein"obligations
Energy*and*
environment Infrastructure
! Energy"supply
! Energy"
consumption
! Consumption"
of"water
! CO2 emissions
! HVAC"(Comfort)
! Building"management"
system
! Lighting"management
! Power"Management
! Property"type
! Occupant"structure
! Vacancy"rate
! Ownership"ratio
Space Financial
Transparency
Portfolio/Property" Mgt."
Asset"Mgt.
Facility"Mgt.

Transparency*about*what*buildings*are*telling*us
It"starts"with"a"firm"understanding"of"your"buildings"and"the"entire"RE"portfolio
Reliability*
improvement
Energy*cost*savings
Maintenance*
improvement
Identify*Opportunities
! Alarms
Performance* data
Asset*data
Elevator
Air"Handling" Unit
Fire" System
Collect*the*Right*Data
Take*Action

Domain*expertise
Creating*perfect*places*through*building*data
…*you*can*create*
perfect*places
When*the*right*
building*data*…
…*is*properly*
applied*…
Technology*and*tools
Building*performance*portfolio
Safe
Productive
Efficient
Reliable

When*the*right*
building*data*…
Operating*cost*/*unit
Tenant*satisfaction
CO2*emissions
Employee*productivity
Define*Relevant*KPI Determine* Data*Sources
Physical* assets*data:
! HVAC" /"Lighting
! Fire"Safety"/"Security
! Building" Information" Modeling
Performance* data:
! Energy"Data"Mgmt.
! Building" Automation" Mgmt.
External* data:
! Weather"forecast
! Legislation" /"Compliance" data
! and$and and…
1 2 3
Develop*Analysis*Strategy
" Fault*Detection*and*Diagnostics
" Alarm*management
" Frequency*of*data
" Regular*onbsite*visits
" Frequency*of*reporting
" Access*to*data*control
…*you*can*create*
perfect*places
…*is*properly*
applied*…

When*the*right*
building*data*…
1
0
1
0
1
1
0
1
1
1
0
1 1
0
1
1
0
0
1
1
111 0 0 0 11 0 1 1 0 1 1 0 11
1 0 0 0 1 0 0 1 0 0 1 1 0 0 1 1
Analytics*Platform
Digital*Service* Center
Data"Scientists
Analytics"Software
Local*Service*Organization
Service"Managers
Digital" Tools"
Expert"Analysis
Analytic" Software
• Physical* Assets
• Building*Systems
• ….
Insights*&*Implementation
(maintenance," modernization," energy"efficiency," security)"
…*you*can*create*
perfect*places
…*is*properly*
applied*…

But*how to define a
„Perfect Place“?

1
Watson IoT - Cognitive Buildings
Dr Claire Penny @ClairePenny_Tay
Dr Joern Ploennigs

2
Learn Behaviour
Predictive control down to desk level
Understand energy flow and building occupancy
Consider comfort preferences of users
Collect context such as weather and meetings
Too many data points even for advanced
analytics
Building Management Evolution
Visualize KPI
Good for ratings
Allows identifying general issues
Bad for identifying energy waste
Automated Buildings
(1980 – 2000)
Analyze Energy Consumers
Understand consumption of rooms
and central assets
Only primary datapoints are
analyzed
Smart Buildings
(2000 – 2015)
Cognitive Buildings
(> 2015)

3
The Dark Side of Big Data
not analysis
tools setup
only analyzes
structured
data
Tools can’t
make sense
of data
90%
45%
sensor data
that is never
utilised
28%
17%
USED DATA
DARK DATA

4
Example – Tesco Ireland
Strong investment in montioring infrastructure of their stores to make them more energy
efficient
The collected amount of data was so big that they did not know what to do with it
IBM Research helped them to analyze their data and identify saving potential
160
Stores
110.956
Data Objects
678 TB
Data per annum
£20M savings pa
20%
reduced cooling

5
Cognitive Computing
Natural
Human
Interaction
Reason
with
Purpose
Self-learning
System
Cognitive
Computing

6
Self-Learning Energy Diagnosis
Bob, Energy Manager
TASKS
Monitors and identifies abnormal enery consumption
Develops and implements strategies and policies
to reduce energy consumption
Benchmarking energy consumptions against best
practice guidelines
CHALLENGE
Identifying energy waste and diagnosing its causes
ENABLER
Smart Meter, Weather Data, Machine Learning
SOLUTION
Bob has a easy to use tool that learns normal consumption
based on weather, occupancy and and that is able to
autonomously identify and diagnose abnormal consumption.
“The energy consumption
increased by 20%. If I only could
find out why.”

7
A large API stack is available to build Cognitive Buildings
Language
Vision
AnalyticsIntegration
dashDB with R
Security
Storage
Mobile
118 Development Services and API on Bluemix
Phase 1: Data Center Phase 2: Campus Phase 3: More Sites
STORE
INTEGRATE
INTERACT
REASON
INSTRUMENT
LEARN &

8
Questions
Claire Penny
Watson IoT
PennyCla@ie.ibm.com
Joern Ploennigs
IBM Research, Dublin
Joern.Ploennigs@ie.ibm.com

GRESB Spring Conference 2017
The Impact of Digitalisation – Achieving a 30% ROI
Keith Gunaratne, Founder & Product Architect, EP&T Global
London, 4th May 2017

How to achieve a minimum 30% ROI
Quantum of savings
Scalability across large portfolios
Use of data to change hearts and minds
Guaranteed ROI
Open data systems
Proprietary algorithms
What to look for:

Manchester Arndale Centre (Retail)
12,000 data packets per day
£1.1m gross savings achieved
33% reduction in energy consumption
38% achieved ROI
Quantum of savings

Manchester Arndale Centre
“...we are extremely proud of the energy
reductions achieved and thrilled that these have
won several highly acclaimed industry awards.”
David Allinson, Centre Director
Changing hearts and minds

Eureka Retail Assets (Hotels)
£1.2m gross savings achieved
05 IHG branded hotels
30%+ achieved ROI
Sectors

Stockland portfolio
2016 GRESB Global Sector Leader
24 office buildings
28 shopping centres
£25m gross savings and avoided costs
30%+ achieved ROI
Scalability

Conclusions
Embrace digitalisation.
There is a serious shortage of skills and resources at building level.
Don’t wait for regulation – you move and regulation will follow.
Seek track record.
Seek guaranteed outcomes.
30% ROI is real.
Demonstrate leadership

Thank you
Keith Gunaratne, Founder & Product Architect
keith.g@eptglobal.com www.eptglobal.com
Australia | UK & Europe | Middle East | Asia

Confidential & Proprietary
FROM KNOWN KNOWNS TO
THE SCIENCE OF INTERSTELLAR
- May 2017 -
Run Buildings Better

ENERGYDECK MISSION
Enable organisations to
reduce building operating costs,
increase efficiency, and enhance
occupant well-being & productivity
May 2017 www.energydeck.com 2

May 2017 www.energydeck.com
2000 2010 2020
COMMERCIAL BUILDINGS V. CONNECTED TOOTHBRUSHES
2017
Average building is
25 years behind the
technology curve
3
1990

BUILDING OPERATIONS TODAY (KNOWN KNOWNS)
Manual reads
Very few meters
Meters disconnected
Utility bills
Invoice validation
“Looks OK to me”
Manual alarms
Regression analysis
Manual only
“Let it roll” (BMS)
“Make it cold!” (aka
manual override)
4
SENSORS ANALYTICS CONTROLS
ANALYTICS OFTEN STILL SPREADSHEET AND REPORT/PDF BASED

THERE IS HOPE - THE FUTURE IS HAPPENING NOW
30,000+ sensors
Fully Internet of
Things (IoT) enabled
The Edge, Amsterdam
3 meters
Minimal
configuration
300 meters
Fully
sub-metered
5

CASE STUDY: LARGE OFFICE BLOCK
• Multi tenant, multi use
• Hundreds of data feeds,
mostly well documented
• Detailed asset & usage data
Too much data
for a human to
monitor by
hand (eye)

APPROACH: “CALENDAR CLUSTER HEAT MAP”
GOOD
OK
HIGH?
Shift?
Shift?
Difference?Difference?

CASE STUDY: LARGE AIRPORT
• Massively multi-use
• Extreme fluctuations in usage
• Thousands of meter feeds
• Metering mostly at aggregated
level (e.g. distribution boards)
• Hundreds of potential parameters
• Difficulty to justify retrofit ROIs
Impossible to
manage with
traditional
methods

NEED: MULTI-DIMENSIONAL & PROBABILISTIC VIEW
• Scientifically Proven
• Educated Guess
• Wild Speculation
SP
EG
WS
Credits: Paramount Pictures / Kip Thorne

APPROACH: PARTIAL DEP. OF CONSUMPTION VS. PARAMETERS
PARAMETERS (“FEATURES”)
CONSUMPTION“CLUSTERS”
HIGHLOW

Airport takes 3-6 hours
to respond to traffic &
external conditions
Relative humidity plays
crucial role in energy
consumption
Wind is blowing into
exhausts and influencing
HVAC performance
Use air traffic & weather
forecasts to control plant
Correctly commission and
maintain HVAC plant
Shield air intakes and
exhausts from wind
SP EG WS
INSIGHTS GAINED CAN DRIVE ACTIONABLE MEASURES / VERIFICATIONS

MISSION STATEMENT - UPDATED
EnergyDeck Ltd
35 Paul Street
London EC2A 4JY
www.energydeck.com
info@energydeck.com
Let’s DATA science the
sh*t out of this!
Credits: 20th Century Fox / EnergyDeck

2017 GRESB-Siemens Spring Conference
Thank you!

2017 GRESB Siemens Spring Conference

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