Gerrit ReindersDirector, Sustainable Energy Solutions

Johnson Controls, Inc.

Building Social Capital Building Social Capital in Developing Communitiesin Developing Communities

One Green Building at a timeOne Green Building at a time

Agenda

Goal: discuss what Johnson Controls is doing to build social capital in developing communities

Discuss the macro issues

Discuss two Green Building projects in which Johnson Controls was actively involved– The National Research Center in China and – CII-Sohrabji Godrej Green Business Center in India

Johnson Controls: Today

Ranked 71st in Fortune 500

$25.4 billion in sales

120,000 employees

Over 500 facilities

In 53 countries

Largest global supplier Automotive interiors

Lead acid batteries

Facility management and controls

Johnson Controls: Today

3

Community Involvement in Asia

India

China

$1 million tsunami relief to UNICEF

Community Involvement: India

Mobile Creches– Management discussions with mobile creches to

assist with development of organizational roadmap

– Corporate sponsorship supports the education of children of migrant construction workers

– Sponsorship and coordination of events for more than 300 children including painting competition, magic show, and birthday celebrations

– Employees plan and participate in all events

Community Involvement: China

Project Hope School: sponsorship of one school– Infrastructure retrofit

• including classroom, teachers office, washrooms, etc.• Playground retrofit • Sports facility donation

– Computer and network facility donation and education– Employee volunteers at school activities and special skills

teaching

Special Olympics China– Adopt-a-school program sponsorship– organize a Johnson Controls competition– employee volunteers attend events and visit the school on

a regular basis– employee fund raising activities

Let’s talk about some macro issues affecting

China, India …and many other

developing nations, related to construction and energy

consumption …

China Pollution

On a clear day

On a not so clear day

Water Pollution One of the worst problems facing Asia

– China has limited supply in 2/3 of all cities.

– Water quality in major rivers is said to be good, in urban areas is said to be getting worse

– Less then half the water is fit for human contact

• Rivers and marshes near cities being polluted with untreated household and industrial waste water

• Accumulation of copper, zinc, cadmium, mercury and other heavy metals in living organisms

Energy Use and Atmospheric Emissions

By 2025 IPCC estimates Asia increases over 1990:– Primary Energy Consumption = 3.2 times greater

– Coal = 2.8 times greater

– Natural = gas 4.3 times greater

– Oil = 1.8 times greaterOutlook for primary fuel consumption...Outlook for primary fuel consumption...

1012

14161820

Btoe

02

468

1860 1880 1900 19801940 20201920 20001960 2040 2060

Developing countriesCentral and Eastern EuropeIndustrialized Countries

82% of people82% of people

18% of people18% of people

Source: World Energy Council, World BankPeriod 2000 – 2060 shows future energy consumption based on current trends

40-50% of all materials and wood use

Forests declining in many Asian countries– Non traditional slash-and-burn agriculture

– Collection of firewood and charcoal

– Commercial logging

– Excessive grazing

Desertification – – 400 million people, topsoil loss due to wind erosion

35-40% of the municipal solid waste stream

Almost all of this waste could be

recycled and reused

In 1993 China had 20 million tons of industrial waste – 50% of it was discharged into rivers

700,000 hectares developed each year in China

Forests and farmland replaced by development

UN predicts Asia’s population will reach 4.9 billion by 2025 (vs 3.1 billion in 1990)– 50% of the growth (1.8 billion people) in China &

India

– 60% of Asia’s population will be urban residents by 2025

60% of world population lives in Asia-Pacific region

Environmental Impact of Buildings in China

For 20 years China’s top priority was economic growth …now environmental degradation threatens to undermine it

– SEPA estimates damage from pollution totals nearly 10% of GDP

Issue is recognized:

– $84 billion for environmental projects in current plan (2001-05)

– Beijing allocated ~$12 billion for environmental projects

– Shanghai budget is a healthy 3% of annual GDP

Energy used to manufacture and transport building materials, build homes, offices and HVAC ~45% of China’s energy use.

Electricity generation is mostly fossil fueled power plants

– Electricity generation = 34% of China’s air pollution

Green Buildings can reduce energy & water consumption 70%

and cut land use by 25% protecting the environment, agriculture and wildlands

World Bank estimates 50% of the world’s new building construction will take place in China

China’s Ministry of Construction (MOC) estimates 2 billion m2 (~22 billion ft2) in 2005 and double its building stock by 2020

– Most projects: large commercial office buildings (100K – 150K m2)

China’s entry into World Trade Organization

– Investment boom is spurring real estate development

– Beijing successful bid for the 2008 Olympics ($ billions in new construction)

Construction in China

Let’s bring it a little closer to to our core business where we manage, operate and maintain the indoor environment at optimal financial

and operating performance.

What is Johnson Controls doing to help developing nations in that

regard?

What is Johnson Controls doing?

Help the developed world learn from our mistakes

Opportunity to leapfrog infrastructure investments and get it right the first time

Educate people about the issues and potential solutions – then get them involved and engage their support to be change agents

Help build efficient buildings that are harmonized with the environment

Promote Green Buildings

Development of Standards / Metrics

– External physical environment

– Internal physical environment

Environmental Impacts

Worker Health and Productivity

– Indoor Environmental Quality

• Socioeconomic system

• Organizational dynamics

Economics

– Market Transformation

Policy

Push – Pull of Market Transformation

PUSH - Establish Regulatory Framework & setting mandatory minimum performance standards

– Codes & Standards are Prescriptive and performance based

– GOAL: reduce energy consumption 50% compared with buildings built in the 1980’s

PULL – promote demand from market based mechanisms

– Promote value of building green with developers

– Help generate demand from end-users

Green vs Conventional Buildings

Green buildings are far more efficient– Consume less electricity, gas, water– Preserve natural resources such as land and

materials– Protect human capital and provide indoor

environmental quality

How?– Architectural Design Features– Landscaping– Electrical and Mechanical Systems– Green Construction Materials

Metrics:

U.S. Green Building Council U.S. Green Building Council and the and the

LEEDLEED Green Building Rating SystemGreen Building Rating System®

Design and construction practices that significantly reduce or eliminate the negative impact of buildings on the environment and occupants that address:

– Sustainable site planning

– Safeguarding water and water efficiency

– Energy efficiency

– Conservation of materials and resources

– Indoor environmental quality

Design and construction practices that significantly reduce or eliminate the negative impact of buildings on the environment and occupants that address:

– Sustainable site planning

– Safeguarding water and water efficiency

– Energy efficiency

– Conservation of materials and resources

– Indoor environmental quality

Overview of LEED-NC® and EB®

(new construction) (existing buildings)

Whole-building approach encourages and guides a collaborative, integrated design and construction process

Optimizes environmental and economic factors

LEED-NC® LEED -EB®

Green Certified Level 26-32 points 28-35 points

Silver Certified Level 33-38 points 36-42 points

Gold Certified Level 39-51 points 43-56 points

Platinum Certified Level 52+ (69 possible)

57+(76 possible)

Emissions – 2%

Water – 1%

Waste – 0%

Reduced O&M – 16%

Productivity & Health – 70%

Energy – 11%

Breakdown of Green Building Financial Benefits (LEED Certified & Silver levels)

Source: Capital E Analysis

www.cap-e.com

Global Use of LEED®

World Interest– Australia – Canada*– China*– France

– Hong Kong

– India*

– Japan*

– Spain*

– Mexico*

– Italy*

– Guam**Registered Projects

China: Different Standards, Different Costs

Technology Scenarios: Skyway Oasis Hotel– Option A: Original Design Case

– Option B: New Shanghai energy code (public & commercial buildings)

– Option C: Budget model based on standards set by ASHRAE

– Option D: High Performance Green

Option Base Cost Savings

A $246 / m2 n/a

B $232 / m2 6%

C $204 / m2 17%

D $144 / m2 41%

Source: Environmental Market Solutions, Inc.

What are some cities doing?

Offer developers financial incentives for buildings that use energy efficient technologies

Send strong signal to developers that government is beginning to ‘throw its weight’ behind environmental protection

Developers are paying attention – responding to governmental priorities helps developers get land concessions, building approvals, uinterrupted electric power and other benefits

Let’s look in a little detail at what we did with two buildings …

– one in Hyderabad - India – the other in Beijing - China

Green Business Center (Hyderabad – India)

The first platinum rated facility outside US– Scored very high 56 credits

Confederation of Indian Industry Sohrabji Godrej Green Business Center– Goal: Promote sustainable practices in India and beyond.

– USAID funded $1.2 million

– 20,000 square foot exhibition spaces, seminar halls, offices, meeting rooms, cafeteria

What makes the facility green? Energy Efficiency –

– Lots of daylighting and active light management

– Impact: energy savings of 88% compared to conventionally lit building of the same size

North EntranceLarge Central Courtyard

Additional energy conservation

Jalis – lattice walls used to prevent glare and heat gain

Solar Photovoltaic cells– 24 kW (16% of building load)

Wind Towers = natural AC

Additional features

Sustainable sites– Erosion control

– Access to public transportation

• Bicycle parking, lockers and showers• Electric REWA vehicle

– Grey water system

– Site wastewater recycled by “root zone treatment”

Water conservation– 35% reduction in municipally supplied potable water

– Low flow toilets and waterless urinals

Sustainable Materials

60% (by cost) of materials sourced within 500 mile radius

100% of new wood was certified sustainably harvested

Reuse materials salvaged from otherconstruction sites– Toilet doors, pavement blocks, stone slabs, scrap steel,

scrap glazed tiles, shuttering material, cafeteria furniture

Waste management plan ensured 96% of all construction was was recycled

77% of building materials use recycled content– fly ash, broken glass, broken tiles, recycled paper recycled

aluminum, cinder from industrial furnaces, bagasse, mineral fibers, cellulose and quarry dust

Accord 21 Demonstration Building – Beijing China

All stakeholders were involved throughout design, build, operate and maintain– Ministry of Science & Technology of China

– Beijing Urban Planning & Design Institute

– Tsuhua University

– Department of Energy (DOE – US)

– Natural Resources Defense Council

– Lawrence Berkeley National Lab of Renewable Energy

– US Green Building Council

– Carnegie Mellon University and Pittsburgh University

– Johnson Controls – optimized system energy performance

Accord 21 Demonstration Building – Beijing China

National Research Center for Science & Technology Development

– 136,410 ft2 (12,959 m2)

– 10 stories (2 below and 8 above grade level)

Active involvement from all stakeholders

Ministry of Science & Technology of China

Beijing Urban Planning & Design Institute

Tsuhua University

Department of Energy (DOE – US)

Natural Resources Defense Council

Lawrence Berkeley National Lab of Renewable Energy

US Green Building Council

Carnegie Mellon University and Pittsburgh University

Johnson Controls – optimized system energy performance

Design includes: Extensive use of computers for real-time energy simulation

Light colored exterior

Active day-lighting (light shelves and interior clerestories)

Energy efficient lights (T5), ballasts and controls (0.5W/ft2)

Well insulated - wall and roof cavity injected with polyurethane foam

Energy efficient thermal break window frame with low-E glass

Very efficient screw chillers and variable flow air conditioners

Heat recycler on roof

Renewable Energy – PhotoVoltaic cells

Thermal storage system (150 tons of ice storage)

Energy efficient elevators

Variable flow water supply system

Heat recovery where possible

Water efficient fixtures

Rainwater capture for irrigation

Green roof

All systems are very tightly integrated and controlled

2nd floor (1K m2 ~12K ft2) a demonstration center of energy efficiency technology– Under-floor air distribution in demonstration center

Results

Design Case Comparison– Original Design Occupancy Assumptions:

• 750 Occupants--all with equipment• 2000 MWh/yr; 840 KW Cool Cap.

– Revised Occupancy Evaluation:

• 450 Occupants– 250 permanent with equipment– 200 daily visitors

• 550 MWh/yr.; 500 KW Cool Capacity

LEED Silver - shooting for Gold

Summary: Top Performing Buildings characteristics

Typically use ~40% less energy and cost much less to operate. – The slight premium paid to get the building built is paid

back 10 times over in reduced O&M expenses

There is no single thing, but a roadmap of various components including operational changes, technology and most importantly management commitment.

Typically include:– Good lighting– Technologies that control usage and capacity– Management of control technologies– Close attention to operations and performance

In summary

The Green Building industry is still in its infancy, but– The trend towards sustainable buildings is clear and

irreversible

– As China and India integrate into the world economy, momentum is building – evidenced by:

• Government programs• Municipal green building councils• Demonstration projects• Large commercial projects

– China staging “Green” Olympic Games of 2008 in Beijing and the “Green” World Expo 2010 in Shanghai

So in summary, Johnson Controls Community Involvement Blue Sky program is having an impact

Improve car fuel efficiency– How? Through advanced battery technology and

environmentally friendly interior components.

Making buildings greener – How? Through technologies and services that consume

less energy, cause less pollution and use resources efficiently.

Recognizing the unique development needs of each of our 123,000 diverse employees.

Help employees grow and improve as leaders – How? Through support of programs inside the workplace

and within our communities.

Starbucks in the Forbidden City

Gerrit ReindersDirector, Sustainable Energy Solutions

(414) 524-7331Johnson Controls, Inc.

Thank You!Thank You!QUESTIONS?QUESTIONS?