2016 sustainability report - kingsett capital · kingsett capital is a private equity real estate...

2016 SUSTAINABILITY REPORTKINGSETT CANADIAN REAL ESTATE

INCOME FUND LP

ABOUT THIS REPORTThis 2016 report pertains to KingSett Capital’s sustainability program and the performance of our KingSett Canadian Real Estate Income Fund LP (CREIF) during the calendar year.

This year, our sustainability report was prepared using the reporting principles and disclosures from the Global Reporting Initiative (GRI) Standards. This material references GRI 102: General Disclosures, GRI 103: Management Approach, 302: Energy and 305: Emissions, all published in 2016. Specific disclosures used from these Standards are noted in the GRI Content Index. Using these disclosures, we report on environmental, social and governance issues that are relevant to our stakeholders. We manage our impact through regular performance monitoring, improvement initiatives, and employee and tenant engagement.

To develop this report, KingSett consulted with a broad range of stakeholders, including our internal corporate sustainability working group and representatives from different areas of our business. Feedback on our 2015 report was also taken into account.

TABLE OF CONTENTSOur Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Who We Are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Our Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Our Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Leading by Example in 2016 . . . . . . . . . . . . . . . . . . . 5

2016 Performance Highlights . . . . . . . . . . . . . . . . . . 6

2016 Scorecard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Performance in Depth . . . . . . . . . . . . . . . . . . . . . . . 10

Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

GRI Content Index . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Transparency

Accountability

Sustainability

Respect

HumilityIntegrity

Relationships

KingSett Capital / CREIF / 2016 Sustainability Report 1

The Importance of Sustainability Principles

We are pleased to present our 2016 Sustainability Report which details our progress in providing environmental, social and governance value for our investors and stakeholders. At KingSett Capital, our purpose is to deliver premium risk weighted returns to our clients supported by a sound sustainability strategy. The economic environment in recent years has reinforced the importance of consistently applying our sustainability principles to the way in which we manage our assets. Sustainability is a key part of our proactive strategy to increase value, maintain transparency and remain a trusted partner to our clients.

In 2016, we were honoured to be recognized once again with a GRESB Four Star Rating. Our annual participation in the GRESB Real Estate Assessment demonstrates our commitment to making responsible investment decisions an everyday part of the way we do business.

Other achievements in 2016 include: › Received a Clean 50 Leaders in Green Energy Award › Reduced our greenhouse gas (GHG) emissions intensity at CREIF

properties by 8% › Reduced our energy use intensity (-8%) and increased waste diversion

(+4%) for the CREIF portfolio › 90% of KingSett employees received professional training › 85% of our employees participated in KingSett community

outreach events › Added a Sustainability Manager to our Asset Management Team › Updated our Sustainability Policy › Achieved BOMA BEST Sustainable Workplaces recognition for our

Toronto Corporate Office

In recent years, our sustainability program underwent significant growth. In 2016, we chose to focus on optimizing the program through two main activities: firstly, we completed an extensive review to confirm that sustainability is properly embedded in every business unit. Secondly, we analyzed workplace trends, changing technologies and innovations, as well as new Federal and Provincial regulations, to ensure that we are well-positioned for the future.

We recognize that the continued support of our stakeholders is integral to our program’s success and are grateful for their ongoing contribution.

Regards,

Jon Love, Chief Executive Officer

OUR MESSAGE

(From left to right) Bill Logar, Anna Kennedy, Rob Kumer, Joe Mazzocco, Jon Love

2 KingSett Capital / CREIF / 2016 Sustainability Report

WHO WE ARE

KingSett Capital is a private equity real estate investment business headquartered in Toronto, serving investors in Canadian real estate .

KingSett’s core business is acquiring, investing in and actively managing real estate. Our cohesive approach ensures that our efforts address our key sustainability themes throughout our investment lifecycle.

› Risk Assessment & Mitigation Planning

› Energy Audits & Resiliency Assessment

› Responsible Investment Analysis

› Building Efficiency

› Utility Cost Management

› Tenant & Stakeholder Engagement

› Responsible Procurement

› Asset Lifecycle Assessment

› Expense Containment

› NOI Growth

› Asset Repositioning

› Value Creation

Efficient & Resilient ‹ Portfolio/Properties

Effective Investment ‹ Management

Effective Risk Weighted ‹ Returns

ACQUISITIONS

PORTFOLIO GROWTH

ASSET MANAGEMENT

VALUE PROPOSITION


OUR APPROACH

KingSett believes in active risk management through our environmental, social and governance activities .

KingSett has been tracking our progress using key performance indicators (KPIs) since 2014. This allows us to proactively manage our assets, identify opportunities for savings and rapidly rectify potential performance issues immediately.

STAKEHOLDER ENGAGEMENTWe engage our stakeholders on sustainability issues in several ways:

› Our Executive Committee receives bi-monthly Sustainability Updates that include portfolio case studies, portfolio progress, highlights of key sustainability issues and summaries of sustainability-related articles.

› The KingSett Employee Sustainability Team meets several times each year to discuss and plan green office initiatives and philanthropic campaigns.

› Investors and other stakeholders receive regular updates on progress. Every Quarterly Report to the Board of Directors includes a section dedicated to sustainability achievements. Our Annual Sustainability Report provides an in-depth update on sustainability throughout the CREIF portfolio.

KingSett actively participates in the following industry associations:

› CaGBC Charter Member

› CaGBC Toronto Chapter (Board of Directors)

› BOMA Toronto (Board of Directors)

› Downtown Yonge Business Improvement Area (Board of Directors)

› REALpac (Member)

› International Council of Shopping Centers (Member)

› Sustainable Investment Committee (Member)

› GRESB Real Estate (Respondent)

SUSTAINABILITY GOVERNANCEKingSett’s sustainability program is overseen by a multi-stakeholder group, including: our CEO and Executive Committee, a dedicated Sustainability Director and Manager, an internal Employee Sustainability Team, the Asset Management Team and an external property manager Employee Green Team.

CEO and Executive

Committee

Asset Management

Team

Property Management Green Team

Sustainability Director and

Manager

KingSett Employee

Sustainability Team

KINGSETT’S SUSTAINABILITY PROGRAM


OUR STRATEGY

Our approach is guided by our Sustainability Vision, Objectives and Corporate Values .

SUSTAINABILITY VISION › KingSett will invest responsibly in sustainability enhancements to provide

premium risk weighted returns. › We seek to make innovative investment decisions that have a positive impact on

the future. › Our experienced team will put progressive development and operations strategies

into practice every day. › Tenants can expect us to provide prudent, creative solutions that address

their needs.

OBJECTIVESThrough our sustainability policy and program, KingSett sets specific, measurable goals on key performance indicators. These enable us to integrate sustainability considerations into our business planning and decision-making processes. We identify, assess and manage environmental risks associated with our operations across the investment lifecycle. Throughout, we aim to build relationships with other stakeholders. Our activities comply with all applicable legal and regulatory requirements. In the interest of transparency, we prepare this report summarizing our sustainability activities.

CORPORATE VALUES › We respect all people

and value long-term relationships.

› We are accountable and operate with transparency.

› We conduct ourselves with humility and integrity.

› We strive for sustainability.

› Technical Innovation › Thought Leadership › Responsible

Investment › Resilient and

Adaptive Buildings and Spaces

› Skills and Leadership

› Health and Wellness

› Engaging Clients › Community

Connectedness

› Preparing for the Future › Flexibility, Productivity

and Growth › Optimizing Building

Environmental Performance and Resilience

› Energy, Carbon, Water and Waste Management

› Supply Chain Management

PEOPLE PROGRESSPORTFOLIO

SUSTAINABILITY STRATEGY


LEADING BY EXAMPLE IN 2016

2,470 MWH

$40,000+

40%

67%

90%

78%

76%

85%

participation in the Tenant Satisfaction Survey

of KingSett employees received professional or career training

of tenants are “Satisfied” or “Very Satisfied”*Average of office and retail performance.

of our employees attended industry conferences

of our employees participated in KingSett community outreach events

raised for the United Way Campaign

of employees participated in the Earth Day Commuting Challenge

Renewable Energy Certificates (RECs) purchased since 2007 for our Toronto office; equivalent to greening the energy consumed by 183 homes for one year

BOMA BEST Sustainable Workplaces Certification of our Toronto office

Clean 50 Leaders in Green Energy Award

KingSett Sustainability Excellence Awards

GRESB Four Star Rating

Presenting Sponsor of the 2016 Canada Green Building Council (CaGBC) Greater Toronto Chapter Gala and Awards Program

Michael Brooks, CEO, REALpac, toasting attendees at the 2016 CaGBC Greater Toronto Chapter Gala and Awards Program.

*


PEOPLE

PORTFOLIO

PROGRESS

69%of employees take public transit to work

59%of employees personally volunteered an average of 45 hours each for the year

89average Walk Score® at CREIF properties

of all KingSett employees received sustainability-specific training

11%

2016 PERFORMANCE HIGHLIGHTS

Green building certifications provide a credible means to recognize high-performance buildings. In 2016, 73% of KingSett’s CREIF portfolio by asset value was LEED or BOMA BEST certified, with certifications being pursued at an additional 18% of the portfolio.

8%reduction in energy use intensity (ekWh/sq.ft.)

4%increase in waste diversion (% waste recycled or composted)

8% reduction in GHG emissions intensity (kgCO2e/sq.ft.)

In Development

BOMA Certification Pending

LEED Certification Pending

BOMA BEST Certified

BOMA BEST Silver

LEED EB:O&M Gold

BOMA BEST Gold

% Portfolio by Asset Value

1%

1%

8%

10%

18%

24%

30%

12%of employees walk or bike to work

GREEN BUILDING CERTIFICATIONS

CREIF


2016 SCORECARD

1 Three-year targets established in 2015.2 Waste diversion is typically not calculated for residential properties.

TARGET ACHIEVED

KPI PROGRESS BAR (% COMPLETE) 2018 TARGET1

PEOPLE

ADMINISTERED TENANT SURVEYS 2016: 75%2015: 54% 70%

COMMUNITY ENGAGEMENT PROGRAMS

2016: 46%2015: 27% 75%

HEALTH AND SAFETY COMPLIANCE 2016: 100%2015: 100% | 100%

EMPLOYEES TRAINED 2016: 90%2015: 66% 100%

PORTFOLIO

ENERGY TARGET IN PLACE 2016: 96%2015: 58% 100%

WATER TARGET IN PLACE 2016: 96%2015: 62% 100%

WASTE DIVERSION TARGET IN PLACE 2016: 75%2015: 50% 70%

COMPLETED ASHRAE AUDIT 2016: 71%2015: 65% 100%

T12 LIGHTING ELIMINATED 2016: 63%2015: 62% 100%

COMPLETED RETRO-COMMISSIONING 2016: 33%2015: 27% 40%

COMPLETED WATER AUDIT 2016: 38%2015: 27% 75%

MEASURED WASTE DIVERSION2 2016: 89%2015: 37% 80%

PROGRESS

CONSTRUCTION WASTE MANAGEMENT POLICY 2016: 63%2015: 50% 75%

ENERGY SUB-METERING INSTALLED 2016: 50%2015: 50% | 80%

MANAGED LIGHT POLLUTION 2016: 19%2015: 19% | 70%

COMPLETED INDOOR AIR QUALITY AUDIT 2016: 58%2015: 35% 50%

CREIF


Option 1Sketched 1 colour

Calgary Place

Calgary, AB

Cherryhill London, ON

Silver Spear Mississauga, ON

Midtown Plaza in Saskatoon completed a recommissioning study in 2016. The study identified overridden and malfunctioning parkade fans, malfunctioning rooftop unit dampers, exposed or uninsulated steam pipes as well as several opportunities to improve building schedules and HVAC settings. Mitigating these issues has yielded annual complex-wide energy savings of 2% at minimal cost.


The Lex Vancouver, BC

Grid 5 Calgary, AB

Altius Centre Calgary, AB

Midtown Plaza

Saskatoon, SK

Cornwall Centre

Regina, SK

Burlington Mall Burlington, ON

Sheppard Centre

Toronto, ON

CASE STUDIES

MIDTOWN PLAZA, SASKATOON Retro-commissioning and building optimization at retail mall 2% energy

Aura Retail Toronto, ON

GRID 5, CALGARY Boiler optimization at a multi-residential building 12% energy

Grid 5 implemented a boiler optimization program in 2016 that involved a thorough review of set points and controls. Adjustments resulted in the building reducing natural gas consumption by over 14% compared to the previous year.

Plans for 2017 include replacing all felt and rollers on original tenant patio sliding doors, improving sealing and reducing air leaks and drafts. This initiative will further reduce natural gas consumption for building heating.

CREIF


700 Bay St . Toronto, ON

101 Bloor St . Toronto, ON




BrookdalePickering, ON

66 SlaterOttawa, ON

Bayshore Shopping Centre

Ottawa, ON

Kanata Lakes Ottawa, ON

130 Bloor St . Toronto, ON

Scotiabank Plaza

Toronto, ON

65 Times Thornhill, ON

CHERRYHILL, LONDON Implementing conservation measures at a multi-residential complex 6% energy

Cherryhill Multi-residential Complex undertook a significant LED lighting upgrade project involving the replacement of parking garage lighting, stairwell lighting and common area lighting with high-efficiency LED lamps. The project is expected to save over 475,000 kWh per year with a simple payback of 2 years.

Cherryhill also implemented a water retrofit program, installing low-flow faucet aerators throughout the complex, and piloting high-efficiency 3-litre toilets to replace existing 6-litre toilets in two buildings.

700 BAY STREET, TORONTO 6% electricity 19% steam 13% GHG emissions

› The 24-storey mixed use building at the corner of Bay & Gerrard completed a number of energy upgrades to both the office and residential areas in 2016.

› Office Upgrades: › New water source heat pumps installed in office spaces, with remote-

control capability. › Contactor light switches installed on each office floor, reducing after-hours lighting

that was previously manually controlled. › Residential Upgrades:

› Electricity sub-meters installed for each suite, requiring all new tenants to pay for their own electricity use, making them more accountable for their consumption.

› New direct digital control (DDC) heat pump units installed in residential spaces, which have remote monitoring capability, allowing for more control over specific building areas and increasing thermal comfort and tenant control.

CREIF


Target (%)

Satisfaction Rate (%)

20162015

80 80

7078

PERFORMANCE IN DEPTH

ENVIRONMENTAL3

Energy and water conservation continues to be a significant focus of our sustainability program. Through ongoing energy audits, retro-commissioning and other building best practices, we reduce our utility expenditures and carbon emissions. We continue to track our waste diversion rates and work with our property managers to improve each year.

SOCIALOur annual Tenant Satisfaction Survey helps us understand and meet our tenants’ needs, as well as identify drivers of tenant satisfaction. In 2016, we surveyed tenants in residential, retail and office asset classes. Results of the survey are helping us identify further opportunities to enhance sustainability performance and tenant satisfaction across the portfolio.

TENANT SATISFACTION

3 This data has been checked by Quinn & Partners. Performance information represents simple average performance of like-for-like properties for 2013, 2014, 2015 and 2016, and excludes those that underwent significant construction and/or redevelopment in 2016. Due to data collection and tracking updates, 2013, 2014 and 2015 energy, GHG, water and waste performance figures have been restated. Percentages represent year-over-year performance improvements from 2015 to 2016.

4 Includes electricity, natural gas and steam consumption. | 5 Includes CO2, CH4 and N2O. 6 Water performance information is less complete and comparable prior to 2015, and is reported for 2015 and 2016 only.

Energy Consumption (million ekWh)

2016201520142013

Energy Use Intensity (ekWh/sq.�.)

202168 171 158

3026 25

23

Water Consumption (m3)

20162015

Water Use Intensity L/sq.�.

612,000

93

610,000

92

GHG 2013 2014 2015 2016

BUILDING ASSET EMISSIONS (TCO2E) 47,328 46,877 45,392 41,945

WASTE GENERATED IN OPERATIONS EMISSIONS (TCO2E)

4,014 4,542 4,416 4,353

GHG INTENSITY (KGCO2E/SQ.FT.) 5.5 5.8 6.2 5 .7

ENGAGEMENT TYPE

STAKEHOLDER GROUPS FREQUENCY

EXECUTIVE UPDATE

CEO, Executive Committee, Asset Management Team Bi-Monthly

QUARTERLY REPORT CREIF Board of Directors Quarterly

ANNUAL SUSTAINABILITY REPORT

All Investors, KingSett Employees, Public Annually

PROPERTY DASHBOARDS

CREIF Property Managers, Asset Management Team Annually

Diversion Rate (%)

2016201520142013

51 52 5054

GOVERNANCEWe engage our stakeholders in a variety of ways throughout the year to raise awareness of our activities, solicit feedback and encourage new and innovative approaches to achieving our goals.

ENERGY USE4 GHG EMISSIONS INVENTORY5

FREQUENCY OF ENGAGEMENT AND TYPE BY STAKEHOLDER

WATER USE6 WASTE DIVERSION

CREIF


AWARDS

The KingSett Sustainability Excellence Awards (K-SEA) were launched in 2014 to recognize our property managers for their significant contributions to our sustainability program .

The K-SEA awards serve to motivate and encourage participation throughout the portfolio and to acknowledge property managers who have realized significant utility savings and waste management improvements. The K-SEA Innovation Award invites our property managers to propose a property-level project which satisfies one or all the following criteria: innovation/state-of-the-art, overall environmental or economic impact, project strategic alignment with governmental priorities and/or KingSett’s sustainability focus areas.

66 Slater | Ottawa, ON OFFICE ASSET CLASS

101 Bloor Street | Toronto, ON OFFICE ASSET CLASS

Calgary Place | Calgary, AB OFFICE ASSET CLASS

Cornwall Centre | Regina, SK RETAIL ASSET CLASS

Cornwall Centre | Regina, SK RETAIL ASSET CLASS

Yonge Sheppard Centre | Toronto, ON RETAIL ASSET CLASS

Grid 5 | Calgary, AB MULTI-RESIDENTIAL ASSET CLASS

The Lex | Vancouver, BC MULTI-RESIDENTIAL ASSET CLASS Midtown Plaza | Saskatoon, SK

101 Bloor Street

CALGARY PLACE

EXCELLENCE IN ENERGY REDUCTION

EXCELLENCE IN WATER REDUCTION

EXCELLENCE IN WASTE DIVERSION

INNOVATION IN SUSTAINABILITY

CREIF


GLOSSARY

ASHRAE Audit An energy audit of building systems that follows ASHRAE’s Procedures for Commercial Building Energy Audits

BOMA BEST® Building Owners and Managers Association Building Environmental Standards

CaGBC Canada Green Building Council

GHG Greenhouse gas

GRESB Global Real Estate Sustainability Benchmark

HVAC Heating, ventilation and air conditioning

KPI Key performance indicator

LED Lighting High-efficiency light-emitting diode lighting

LEED® Leadership in Energy and Environmental Design

LEED CI® LEED for Commercial Interiors

Walk Score A score designating the walkability of a neighbourhood based on distance to amenities and pedestrian friendliness


GRI CONTENT INDEX

DISCLOSURE LOCATION IN REPORT

102-1 Name of the organization Cover

102-2 Activities, brands, products and services Who We Are

102-3 Location of headquarters Who We Are

102-5 Ownership and legal form Who We Are

102-6 Markets served Who We Are

102-13 Membership of associations Our Approach

102-14 Statement from senior decision-maker Our Message

102-16 Values, principles, standards and norms of behaviour Our Strategy

102-18 Governance structure Our Approach

102-40 List of stakeholder groups Our Approach; Performance in Depth

102-43 Approach to stakeholder engagementAbout This Report; Our Approach; Performance in Depth

102-48 Restatements of information Performance in Depth

102-50 Reporting period About This Report

102-51 Date of most recent report About This Report

102-52 Reporting cycle Our Approach

102-53 Contact point for questions regarding the report Back Cover

102-54 Claims of reporting in accordance with the GRI Standards About This Report

102-55 GRI content index GRI Content Index; About This Report

103-1 Explanation of the material topic and its Boundary About This Report; Performance in Depth

103-2 The management approach and its componentsAbout This Report; Our Strategy; Performance in Depth

103-3 Evaluation of the management approach Performance in Depth

302-4 Reduction of energy consumption Performance in Depth

305-5 Reduction of GHG emissions Performance in Depth

For more information about sustainability at KingSett, please contact:Trevor GilbertManager, Sustainability 416.687.6740 / [email protected]

LOOKING TOWARDS THE FUTUREGoing forward, we will ensure that sustainability is deeply ingrained into the way we do business. We are focused on progress and ensuring changes are maintained for the continued success of our program. We will continue to monitor our performance and progress towards our 2018 targets, particularly in the areas of energy, water and waste. We will seek to sustain the integration of our program into all facets of our business, maintain awareness of industry trends and undertake initiatives that best reflect our corporate strategy.

2016 sustainability report - kingsett capital · kingsett capital is a private equity real estate...

Documents