1. 1. PARKWAY | Annual Sustainability Report 2014 | 1 PARKWAY 2014 PREPARED BY VERDANI PARTNERS | JUNE 2015 | PARKWAY PROPERTIES Sustainability at Work
2. 2. www.PKY.com Our sustainability mission is to make a positive and profitable contribution toward a sustainable future by integrating green building practices into all aspects of our business. CEO LETTER Annual Sustainability Report 2014 PARKWAY | Annual Sustainability Report 2014 | 3 Since Parkways current management team was assembled in early 2012, responsible corporate citizenship has been a cornerstone of our mission to be the leading owner and operator of best-in-class office real estate across the Sunbelt. As attention towards global climate change has grown in recent years, we have responded by increasing our focus on the environmental performance of our portfolio. Our commitment to sustainability is evident in both our acquisition strategy as well as our continued efforts to enhance building efficiencies across our existing assets. 2014 marked another impressive year for the Parkway portfolio. We completed 3.3 million square feet of total leasing, which was not only an increase of 36% from the previous year but was the strongest on record in company history. We also made further progress transforming the portfolio, driven by $858 million of acquisitions during the year, including the addition of almost 1.0 million square feet of high-quality, value-add office space located in the strongest submarket of Tampa, Florida. In addition to yielding strong operating returns in 2014, Parkway made great strides improving its environmental footprint and executing on a number of key sustainability initiatives, including: ENERGY EFFICIENCY: We achieved a 2.3% reduction in portfolio-wide energy use from 2013 to 2014 during one of the hottest years on record across many of our core Sunbelt markets. LEED CERTIFICATION: We enrolled 25 properties in the U.S. Green Building Councils LEED Volume Program. ENERGY STAR: We benchmarked 97% of our portfolio in the U.S. EPAs ENERGY STAR program, up from 75% in 2013. CORPORATE SUSTAINABILITY: We established 21 sustainability policies that apply to our entire portfolio. REPORTING INITIATIVES: We submitted Carbon Disclosure Project, Global Reporting Initiative, and Global Real Estate Sustainability Benchmark (GRESB) reports, ranking as a Green Star in the Top Quartile in all GRESB categories and taking eighth place in the GRESB U.S. Office Peer Group. PARTNERSHIPS: We committed to reduce our energy consumption by 20% over the next 10 years as part of the U.S. Department of Energys Better Buildings Challenge. As these results indicate, Parkway remains committed to being at the forefront of sustainability. Looking ahead, we intend to maintain our industry-leading market position and continue to execute our Parkway Green sustainability program. We have pledged to reduce our energy use and greenhouse gas emissions by 20%, reduce our water use by 30%, and increase our waste diversion rates to 75% across our portfolio by 2023. While we are well aware of the work that lies ahead in achieving these benchmarks, we believe the reduction of our environmental footprint is essential in our efforts to maximize the long-term value of the portfolio. James R. Heistand President and CEO
3. 3. www.PKY.com STAKEHOLDER ENGAGEMENT 38 Stakeholder Engagement 40 Tenant Events 41 Tenant Engagement 42 Community Engagement 44 Education and Outreach 45 Awards and Recognition 48 Partnerships Programs 50 Reporting and Disclosure 51 The Global Reporting Initiatives CEO Letter 03 Table of Contents 04 About this Report 05 RESPONSIBLE INVESTMENT 08 Company Profile 09 Financial Performance 10 Case Study: Courvoisier Centre 12 Sustainability Commitment 13 Sustainability Goals 14 LEED Certified Properties 16 Employee Relations 18 Sustainability Policies 19 Targets and Performance Goals SUSTAINABLE OPERATIONS Green Operations 22 Risk Management 23 Performance Indicators 24 2014 Performance Data 25 Sustainability Initiatives 26 Timeline of Accomplishments 30 Case Study: One Orlando Center 32 TABLE OF CONTENTS PARKWAY | Annual Sustainability Report 2014 | 5 STRUCTURE This report presents a picture of Parkways operations, programs, policies, and sustainability goals summarized in three main categories: Responsible Investment, Sustainable Operations, and Stakeholder Engagement. SCOPE This annual report represents our operations across Parkways portfolio of owned assets for the year ended December 31, 2014. To remain consistent with data we track and report in the U.S. EPAs ENERGY STAR Portfolio Manager website and the annual Global Real Estate Sustainability Benchmark (GRESB) survey, the performance indicators highlighted in this report are based on building count rather than property count and gross square footage rather than leasable square footage. We are currently reporting on the performance indicators only for assets that were owned by Parkway during the year ended December 31, 2014. Our stakeholders include our investors, tenants, clients, employees, industry partnerships, and the communities in which we operate. REPORTING STANDARDS This report has been compiled in accordance with the Global Reporting Initiative (GRI) G4 guidelinesa framework which fosters consistency, comparability, and transparency. Parkway Properties has identified GRI as one of the most trusted and recognized standards for reporting environmental, social, and governance performance. It falls directly in line with our commitment to promoting sustainability long-term. Please refer to the GRI Index at the back of this report for a complete list of GRI indicators covered. No representation or warranty is given in respect of the information contained herein and Parkway Properties, Inc. (Parkway) is under no obligation to (and expressly disclaims any obligation to) update any of the information provided in this report. Market and in- dustry information throughout the report have been provided by sources other than Park- way that are believed to be reliable. However, this information has not been independent- ly verified and no assurances can be given by Parkway regarding the accuracy or com- pleteness of this information. This report does not constitute an offer to sell or a solicita- tion of an offer to buy any securities and may not be used or relied upon in evaluating the merit of investing in Parkway. ABOUT THIS REPORT
4. 4. www.PKY.com Responsible INVESTMENT High performance buildings are more than just beneficial for the environment; they have a direct and positive impact on our investment returns and competitiveness in the marketplace. PARKWAY | Annual Sustainability Report 2014 | 7
5. 5. www.PKY.com ABOUT PARKWAY Parkway Properties, Inc. is a fully integrated, self-administered and self-managed real estate investment trust ("REIT") specializing in the acquisition, ownership, development and management of quality office properties in high-growth submarkets in the Sunbelt region of the United States. During the year ended December 31, 2014, Parkway owned or had an interest in a portfolio of 51 office and parking properties located in eight states with an aggregate of approximately 17.2 million square feet of leasable space at January 1, 2015. Parkway also offers fee-based real estate services through wholly owned subsidiaries, which in total managed and/or leased approximately 6.0 million square feet for third-party property owners at January 1, 2015. CUSTOMER VALUE Our focus is on delivering value for customers far beyond signing leases. We strive to make our customers more productive in their office space and in turn help them become more profitable. Our energy efficient and sustainable facilities reduce employee downtime and our proactive maintenance pro- grams allow customers to focus on their business rather than worry about re- pairs. In addition to worry-free office space, our customers enjoy broader amenities and conveniences, a staff committed to service excellence and attractive locations. We generally perform commercial real estate leasing, management and acqui- sition services on an in-house basis. As of December 31, 2014, we had 322 employees. Our principal executive office is located in Orlando, Florida. In addition, we have a regional office in Jacksonville, Florida. GOVERNANCE STRUCTURE Parkway Properties is led by a Presi- dent & CEO and a supporting manage- ment team. The company is governed by a Board of Directors that meets the independence and other requirements of the New York Stock Exchange. The Board meets regularly with the Chief Operating Officer who serves as a liai- son with the sustainability team to dis- cuss sustainability initiatives. Parkway is also served by several committees, including an audit, compensation, in- vestment, and corporate governance & nominating committee. COMPANY PROFILE Responsible Investment PARKWAY | Annual Sustainability Report 2014 | 9 51 OWNED PROPERTIES 322 EMPLOYEES 17.2M SF OF LEASABLE SPACE $6.2M INVESTED IN ENERGY AND WATER SAVINGS PROJECTS We use the following key financial performance indicators to measure the success of our sustainability strategy: Decreased operating expenses. Increased net operating income. Improved overall asset value. Soft values such as market differentiation and reputation, increased tenant demand and retention, and reduced obsolescence. For most of our efficiency upgrades, net present value (NPV) is used to measure our success instead of relying solely on simple payback time because NPV takes into account the time value of money over the life of the project. Driven by the long-term benefits of reduced operating expenses, we have undertaken green retrofits and energy efficiency projects at many of our buildings. We are following a multi-year game plan to perform technical audits for 13 of our buildings to identify opportunities for energy and water efficiency improvements, which we expect to result in lower operating expenses and increased asset value. As an example, the large efficiency investments we made in 2014 at one of our sustainably managed assets, One Orlando Centre, resulted in a projected water savings of over 1 million gallons per year and a projected 33% reduction in average annual energy use. In addition, numerous smaller energy efficiency investments have been made throughout the portfolio by local building management teams. For example, LED lobby lighting retrofit projects were implemented in late 2014 and early 2015 at Hearst Tower and NASCAR Plazatwo of our marquee assets in Charlotte, North Carolinawith projected simple paybacks of 1.5 years and 6 months respectively. Altogether, in 2014, Parkway invested almost $6.2 Million in energy- and water- saving projects portfolio-wide. These projects resulted in more than $425,000 of annual operating expense savings. If these operating expense savings flow directly to NOI, the savings would increase our buildings value by more than $6.5 million dollars using a 6.5% cap rate. INVESTMENT STRATEGY Our investment strategy is to pursue attractive returns by focusing primarily on owning high-quality office buildings and portfolios that are well-located and competitively positioned within central business district and urban infill locations within our core submarkets in the Sunbelt region of the United States. In these submarkets, we seek to maintain a portfolio that consists of core, core-plus, and value-add investment opportunities. FINANCIAL PERFORMANCE
6. 6. www.PKY.com COURVOISIER CENTRE Courvoisier Centre is a two-building office complex with an adjacent five-story parking garage, located on Brickell Key Island in Biscayne Bay, 400 feet off the coast of Downtown Miami. The seven-story Courvoisier Centre I was completed in 1986, and the 12-story Courvoisier Centre II, parking garage, and retail space were completed in 1990. The property totals 345,568 rentable square feet, including the adjacent five-story parking garage. Additional features include exceptional water views, several corner offices, exclusive balconies, banking facilities, a gourmet grocery store, an on-site dry cleaner, and other retail amenities. PROPERTY SPECS Type: Office Size: 345,568 RSF Year Built: 1986 (I) and 1990 (II) Manager: Elinne Dominguez OVERVIEW OF SUSTAINABILITY PROJECTS Throughout 2013 and 2014, both buildings at Courvoisier Centre were completely renovated and several major HVAC optimization projects were completed. Specific energy-saving projects included: Resealed all windows and installed insulating carpets in common area walkways to help reduce heat loads Modernized all elevators with variable frequency drives for a 60% improvement in elevator system efficiency Re-lamped all garage lighting and metal halide outdoor lamps with LED lamps Installed occupancy sensors in all mechanical rooms and bathrooms Replaced two aging AHUs in Building I and two aging chillers in Building II Connected the HVAC systems of both buildings so that Building II serves as a central plant for both buildings for all but the hottest months of the year SUSTAINABILITY RESULTS Building I ENERGY STAR Score increased from 83 to 90 (out of 100), while Building II ENERGY STAR Score remained at 87, making Courvoisier Centre the most energy-efficient owned asset in the Parkway portfolio Overall 9.9% energy reduction from 2013 to 2014 Measured energy savings of 491,000 kWh from 2013 to 2014 was enough power to run 45 average U.S. homes for a year Both buildings are targeted for LEED EB O&M Certification in 2015 Miami, FL 90/87 9.9% 45 ENERGY STAR Score Annual Energy Savings Homes Offset PARKWAY | Annual Sustainability Report 2014 | 11
7. 7. www.PKY.com COMMITMENT We strive to be a leader in sustainable building operations by developing relationships with sustainable partners and suppliers; implementing innovative energy conservation, water usage, and waste reduction initiatives; and measuring and reporting improved operational performance. Parkway has always been a leader in sustainable operations in the office building market, and we will continue our efforts to improve our company's status in the broader commercial real estate industry. To that end, Parkway continues to work with Verdani Partners, who were instrumental in developing our LEED Volume Program. Verdani Partners provides a full menu of sustainability services, including education, training, energy audits, and project management. CORE VALUES CREATING VALUE THROUGH SUSTAINABILITY We apply sustainability to all aspects of business including development, investments, leasing, and operations. INVESTING IN HEALTH AND PRODUCTIVITY We create healthy and productive environments for building occupants. DEMONSTRATING EFFICIENT OPERATIONS AND EFFECTIVE MANAGEMENT We seek real results in energy efficiency, water conservation, waste management, and greenhouse gas reductions. BUILDING AN EQUITABLE FUTURE FOR CUSTOMERS AND INVESTORS: We focus on making a profitable contribution through implementing smart sustainability strategies. Responsible Investment SUSTAINABILITY COMMITMENT PARKWAY | Annual Sustainability Report 2014 | 13 ENVIRONMENTAL MANAGEMENT SYSTEM Our centralized Environmental Management System (EMS) platform helps us effectively manage all key components of our sustainability programs, including: Goals & Targets Benchmarking & Performance Tracking EMS Platform Sustainability Policies Efficiency Investments & Green Building Certifications Stakeholder Engagement Program Partnerships Reporting & Disclosure REDUCE OPERATING EXPENSES IMPROVE OCCUPANT HEALTH AND PRODUCTIVITY ENHANCE MARKETABILITY IMPROVE TRIPLE-BOTTOM-LINE PERFORMANCE (ECONOMIC, SOCIAL, AND ENVIRONMENTAL) MINIMIZE ENVIRONMENTAL FOOTPRINT SUSTAINABILITY GOALS
8. 8. www.PKY.com Of Parkways portfolio, 15 buildings were LEED certified and 28 buildings were ENERGY STAR labeled properties in 2014. Additionally, Parkway developed a customized LEED Volume Certification Program in 2014, through which we are working toward certifying 25 LEED office buildings nationwide. LEED EB Gold 300 West Sixth Street* Austin, TX LEED EB Gold One Congress Plaza Austin, TX LEED EB Gold San Jacinto Center Austin, TX LEED EB Gold Frost Bank Tower* Austin, TX LEED EB Gold US Airways Tempe, AZ LEED EB Gold One American Center* Austin, TX *In November 2014, Parkway sold its interest in 300 West Sixth Street, Frost Bank Tower, and One American Center, and it continues to provide third party management services for these assets. LEED CERTIFIED PROPERTIES Responsible Investment PARKWAY | Annual Sustainability Report 2014 | 15 LEED EB Cert City West B4 Houston, TX LEED EB Gold Phoenix Tower Houston, TX LEED EB Gold San Felipe Plaza Houston, TX LEED EB Gold City West B3 Houston, TX LEED EB Silver City West B1 Houston, TX LEED CS Gold Corporate Center IV Tampa, FL LEED CS Silver NASCAR Plaza Charlotte, NC LEED EB Gold 3348 Peachtree Atlanta, GA LEED EB Gold 3344 Peachtree Atlanta, GA
9. 9. www.PKY.com We strive to locate our properties in walkable cities. GENERATION NEXT Parkways premier assets are perfect for Generation Next. Millennials are 2x as likely to use public transit as any other generation. Proximity to family, friends, shopping and entertainment is more important to this genera- tion than any other. Millennials will make up almost 35% of the work- force in 2015 and 50% by 2020. ALLEMPLOYEES MaleFemaleTotal Total Employees 193129322 Supervisors 543084 Supervised Workers 238 99 139 TOTAL WORKFORCE AS OF DECEMBER 31,2014 MaleFemaleTotal Arizona 9413 California 101 Florida 148 66 82 Georgia 32 10 22 Mississippi 5 2 3 North Carolina 24 9 15 Pennsylvania 3 2 1 Tennessee 4 2 2 Texas 92 34 58 TOTAL WORKFORCE BY STATE AS OF DECEMBER 31, 2014 EMPLOYEE RELATIONS Responsible Investment www.PKY.com All Parkway employees are encouraged to talk to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and, when in doubt, about the best course of action in a particular situation. Employees, officers and directors who are concerned that violations of Parkways Code of Conduct, or other illegal or unethical conduct by employees, officers or directors of Parkway, have occurred or may occur should either contact their supervisor, other superiors, or the HR Department. If any member of the Parkway organization does not believe it appropriate or is not comfortable approaching their supervisors, other superiors, or the HR Department about their concerns or complaints, then he or she is encouraged to submit those concerns or complaints using Parkways confidential toll-free Employee Hotline. Alternatively, any such concerns can be submitted online through a secure, confidential, third-party managed EMPLOYEE-MANAGEMENT DIALOG website. Through the Employee Hotline or the website, any member of the Parkway organization can make confidential, anonymous submissions to voice concerns about violations of this code, or other suspected illegal or unethical conduct by employees, officers or directors of Parkway. The Hotline is answered by an independent contractor, and any calls or online submissions made to the Hotline or the website will be referred to the Audit Committee of the Board of Directors on a confidential basis and not to senior management of Parkway. Parkway will not retaliate against anyone who makes good faith reports about suspected improprieties. If their concerns or complaints require confidentiality, including keeping their identity anonymous, then this confidentiality will be protected, subject to applicable law, regulation, or legal proceedings. PARKWAY | Annual Sustainability Report 2014 | 17 GOALS Reduce operating expenses Improve occupant health and productivity Enhance marketability Improve triple-bottom-line performance Minimize environmental footprint City West Place Campus Cafeteria Houston, TX
10. 10. www.PKY.com Parkway has implemented many sustainability policies portfolio-wide as part of our Corporate Sustainability Program. These policies have been integrated into our day- to-day operations at all of our properties. They help us maximize efficiencies, create healthier environments for our tenants, minimize the environmental impacts of our building operations, and reduce our operating expenses. Each policy includes clear targets, methods, and responsible parties to make it easier for our staff, tenants, and vendors to comply. PARKWAYS KEY GREEN POLICIES Climate Adaptation Policy Resilience Policy Building Exterior & Hardscape Management Plan Pest Management, Erosion Control, Landscape Plan Water Efficiency Program Cooling Tower Management Plan Refrigerant Management Policy Energy Policy Sustainable Purchasing Policy Solid Waste Management Policies Green Cleaning Policy Indoor Air Quality (IAQ) Management Plan IAQ Management Plan for Facilities Alterations High Performance Cleaning Program Low-Mercury Lamp Purchasing Program Parkway has also developed tools and resources to prepare for, confront, and manage risks associated with catastrophic weather and climate-related events. Assessing risk from a regional perspective, Parkway has a portfolio-wide strategy for disaster planning to protect the structural and financial integrity of our assets and ultimately ensure the safety and well-being of building occupants. Climate adaptation and building resilience planning will help Parkway anticipate future changes in climate conditions and incorporate these measures into all of our policies, plans, programs, and general building operations across the board. SUSTAINABILITY POLICIES Responsible Investment PARKWAY | Annual Sustainability Report 2014 | 19 The success of our sustainability program is built on key performance targets. As of December 31, 2014, we are on track to meet the following targets and performance goals: 20% 30% 30% 75% 20% 90% 90+ 20% 20% Encourage at least 20% of all building occupants to commute via alternative modes of transportation Have a minimum indoor plumbing efficiency rate of 30% or higher according to the LEED water efficiency calculator and a 30% reduction in overall water consumption from 2013 by 2023 Reduce sources of waste and increase waste diversion rates to 75% Increase native and drought-resistant vegetation by 20% Use 90% green cleaning products Have all facilities score 90 or higher on ENERGY STAR and decrease energy consumption by 20% across our portfolio from 2013 by 2023 Decrease our carbon emissions by 20% across our portfolio from 2013 by 2023 TARGETS & PERFORMANCE GOALS
11. 11. www.PKY.com Sustainable OPERATIONS High performance buildings help us reduce operating expenses, enhance marketability, improve occupant health and productivity, minimize our environmental footprint, and create enterprise value. PARKWAY | Annual Sustainability Report 2014 | 21
12. 12. www.PKY.com Industry best practices for building operations and maintenance are rapidly changing in light of regulatory requirements, investor demands, and a greater push for data transparency. At Parkway, we are ahead of the curve because we have successfully implemented many sustainability policies across our entire portfolio. The implementation of these policies has directly resulted in reduced risk, improved occupant health and productivity, measurable reductions in our environmental footprint, and the creation of enterprise value. We also take a proactive approach to promoting green operations by certifying our highest-performing buildings as LEED green buildings using Parkways customized LEED Volume Program. Finally, we promote green operations by reporting and benchmarking through ENERGY STAR Portfolio Manager, GRI, GRESB, and Greenprint. Verdani Partners, our full-time sustainability team, supports all of our corporate sustainability, LEED certification, and benchmarking initiatives. Our sustainability mission is to make a positive and profitable contribution toward a sustainable future by integrating green building practices into all aspects of our building operations. GREEN OPERATIONS Sustainable Operations City West Place Campus, Houston, TX PARKWAY | Annual Sustainability Report 2014 | 23 CLIMATE CHANGE RISKS Managing risk in light of climate change is imperative to the health and well being of our company. Parkway maintains an umbrella insurance policy that covers all assets within the portfolio. Our management teams perform risk assessments for weather- related exposures on a continuous basis, even during the acquisition stage in which we address energy and water efficiency, earth movement, and other insurable risks including flood, wind, other extreme weather conditions. As part of our due diligence process, we consult with insurance advisors who have deep industry experience. In 2014, we also implemented a Building Resilience Policy to plan and prepare for climate-related catastrophes. This policy specifies climate-related risk management practices that should recur on an annual basis while any asset is under Parkway management. The more significant climate-related exposures in our portfolio are hurricanes, droughts, and flooding in the southeast and gulf coast regions. CODE OF BUSINESS CONDUCT AND ETHICS Parkway has a code of business conduct and ethics in place with minimum requirements for its employees, as well as core values that guide our employees. All employees, officers and directors are expected to apply these principles in their daily job responsibilities. Parkway encourages prompt reporting of any illegal or unethical behavior. CORRUPTION POLICY Parkway has a strict anti-corruption policy in place. Our staff members may never accept or give any bribes, kickbacks, or any similar consideration for any reason whatsoever. SUSTAINABILITY DUE DILIGENCE We encourage all of our owned assets to comply with our corporate sustainability programs. A Phase I environmental study and a Property Condition Assessment report are always conducted prior to the acquisition of any asset. Likewise, in the years following an acquisition, a retro-commissioning study and/or an ASHRAE Energy Audit may be undertaken based on the refinancing of an asset, elapsed time from acquisition, or if further efficiencies are desired. The combination of these reports assist the entity by outlining any current deficiencies or efficiency improvements that might be available presently or in the future. If project improvements are identified or recommended, the entity teams can prioritize and budget for respective projects. This priority list can be used to mitigate selected risks related to the function and efficiency of the entitys sustainability efforts. BUILDING OPERATIONS Parkway management teams work closely with department heads and staff members to maintain property, environmental, and life safety procedures. Parkways Property Condition Assessment covers: Capital concerns and budget analysis Building site and infrastructure (topography, drainage, retaining walls, paving, curbing, lighting) Building envelope (windows and walls) Structural (foundation and framing) Interior elements (stairways, hallways, common areas) Roofing systems Mechanical systems Plumbing Electrical Vertical transportation Life safety, ADA, code comp. air quality (fire codes, handicapped accessibility, water/mold) Energy efficiency Water efficiency As part of our ongoing operations we address: Risk management Insurance and internal audit Environmental risk management: insurance requirements Specific training Internal audit of records Staff and management procedures Process for staying abreast of local laws and ordinances Disaster recovery plan Building efficiency RISK MANAGEMENT
13. 13. www.PKY.com We recognize that many real estate investment companies can gain a competitive advantage in the marketplace based on their performance across a wide range of sustainability metrics such as energy efficiency, climate change resilience, and workplace health and safety. We have also found that strong performance across key sustainability metrics now plays an increasingly important role in real estate investment and leasing decisions by prospective investors and tenants with strong environmental screening criteria. In 2014, Parkway benchmarked and registered 97% of our owned assets on the U.S. EPAs ENERGY STAR Portfolio Manager website, and we enrolled 25 buildings in our LEED Volume Program. We also ranked as a Green Star in the Top Quartile in all categories and took 8th place in the U.S. Office Peer Group for GRESB in 2014. To remain consistent with data we track in ENERGY STAR Portfolio Manager, this report is based on building count rather than property count (several properties have multiple buildings) and gross square footage rather than leasable square footage. In 2014, our 51 owned properties equated to 73 buildings totaling over 21.5 million gross square feet. * Scope 1: All direct GHG emissions from energy generated on-site * Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam 12.3% 2.3% 1.8% 12.3% reduction from 2013-2014 | Like-for-Like Total 2014 Water Consumption 1,490,017 kLiters (Absolute) 2.3% reduction from 2013-2014 | Like-for-Like Total 2014 Energy Consumption 411,378 MWh (Absolute) 1.8% reduction from 2013-2014 | Like-for-Like Total Direct GHG Emissions 924 MTCO2e (Scope1) Total Indirect GHG Emissions 222,107 MTCO2e (Scope 2) PERFORMANCE INDICATORS Sustainable Operations PARKWAY | Annual Sustainability Report 2014 | 25 51Properties 73Buildings 21.5Million GSF 97% 28/73 76/100 83/100 33% 25/73 13/73 2/73 SF of the Portfolio Benchmarked Buildings Labeled in 2014 Average ENERGY STAR Score for Benchmarked Buildings Average ENERGY STAR Score for Labeled Buildings LEED EBOM Certified LEED Certified Core & Shell SF of the Portfolio LEED Certified Registered LEED Volume Program 2014 PERFORMANCE DATA (CALENDAR YEAR)
14. 14. www.PKY.com SUSTAINABLE SITES Our primary goals for sustainable sites are to protect natural and agricultural areas, encourage sustainable landscape, reduce emissions associated with automobile use, eliminate light pollution, and protect and/or restore sites. The establishment of our design and operational objectives and policies related to sustainable sites make building location and sustainable features a metric for decision-making. This encourages development and preservation practices that limit the environmental impact of buildings on local ecosystems. WATER EFFICIENCY Our water efficiency goals are to monitor and reduce water consumption, save water and energy in treating the water, improve environmental well- being, and practice water-efficient landscaping. Installing high-efficiency water fixtures will lead to significant water, energy, and operating expense savings and will help protect each of our regions freshwater resources. We encourage base building and tenant upgrades to follow the best practices identified on our water efficiency program. We also provide a Green TI Guide for any water consuming fixtures that will be installed by tenants. Our best practices and strategies for water efficiency include logging weekly water meter readings, installing water-efficient landscaping and irrigation, specifying low-flow water fixtures for all future build-outs, and optimizing our cooling tower water management processes to minimize make-up water usage. MATERIALS & RESOURCES Our main goals for materials and resources are to select sustainable materials, practice waste reduction strategies, reduce source waste, reuse and recycle, and reduce mercury pollution. Parkway is committed to installing materials that minimize negative impacts to the local and global environment and provide a healthy indoor workspace. Several materials found in interior finishes such as wall paint, cleaning agents, etc. have been proven to cause adverse health impacts by releasing harmful gasses and volatile organic compounds into the air. Our sustainable purchase and waste management policies encourage our vendors and stakeholders to use sustainable materials. Additionally, Parkway has been committed to recycling throughout our portfolio since 2009. Presently, we recycle at more than 60% of our properties. We recycle light bulbs, computers, phones, batteries, and demolition material. In addition to our recycling policies, we also encourage our tenants to participate in our recycling programs through in-house training, seminars, newsletters, and events. . SUSTAINABILITY INITIATIVES Sustainable Operations PARKWAY | Annual Sustainability Report 2014 | 27 ENERGY EFFICIENCY Parkway has invested millions of dollars over the last several years in capital improvement projects by upgrading major HVAC equipment and central plants at several of our properties. In addition, we have undertaken major lighting retrofits and installed white reflective roofs, CO2 sensors, window tinting, and dimmable stairwell lighting as part of our overall energy efficiency programs. Our approach to energy conservation began with the completion of work considered "low-hanging fruit" and has grown into a program that constantly evaluates our operations, utility consumption, product choices, preventive maintenance, utility incentives, and tenant improvements. We track our monthly utility data and benchmark it with ENERGY STAR Portfolio Manager. We continually stress to our managers and engineers that 30%-40% of our energy conservation efforts are driven by effective building operations and 70% of energy usage is directly related to tenant behavior. We strive to ensure our preventive maintenance programs are consistent and effective and that our energy management systems are accurate and perform optimally. We also include energy saving design and construction procedures that produce sustainable results, and we communicate our sustainable program to our tenants to ensure they understand and participate in our conservation efforts. INDOOR AIR QUALITY Our indoor air quality goals are to im- prove ventilation and manage air con- taminants. Our properties are designed to provide a healthy indoor environ- ment for occupants by providing fresh air and an adequate exhaust of contami- nants to the outdoors. We have developed several indoor air quality, smoking, and green cleaning policies for our building operations; we also included similar measures on our Green TI Guide. These programs en- courage our tenants to introduce similar measures during their build-out in order to prevent indoor air quality problems resulting from construction projects and to maintain the well-being of all build- ing personnel. Studies have shown that healthy indoor environments have contributed to great- er employee retention and productivity and a more pleasurable experience for customers. We perform annual third party indoor air quality audits nation- wide and require our vendors to com- ply. We encourage our tenants to im- plement an indoor air quality manage- ment plan during their build-outs with the intent to protect the health of their employees.
15. 15. www.PKY.com BEST MANAGEMENT PRACTICES We have implemented best practices for each of the following: Maximizing energy performance Completing lighting upgrades and controls Maximizing heating and cooling efficiencies Improving building automation sys- tems in place Implementing ongoing commission- ing programs Implementing systems-level sub- metering programs Purchasing ENERGY STAR prod- ucts Establishing an energy optimization plan Retrofitting programs in place for main building systems (chillers, cooling towers, boilers, fan motors, and VFDs) Exploring new energy efficiency technologies for predictive energy use optimization Exploring renewable energy systems Reporting emissions reduction achievements ENERGY MANAGEMENT We strive to monitor and improve ener- gy performance, eliminate CFCs, utilize renewable energy, and reduce energy costs. We are working towards a goal of decreasing our energy consumption by 20% across our portfolio by 2023. To achieve these goals, Parkway has an energy team that is responsible for guiding the property teams with deci- sions affecting energy use. The team was created to help integrate energy efficiency best management practices and Parkways energy policy with our building operations staff. In addition to planning and implementing specific improvements, the team is responsible for measuring and tracking energy per- formance and communicating with management, employees, tenants, and vendors. Our energy policy provides the foundation for successful energy management and articulates our com- mitment to energy efficiency. We have also developed guidelines and resources for energy efficiency measures that can be adopted by our tenants during tenant improvement projects. Finally, our Green Office Guide helps to educate our tenants on plug load behavior and reduction strategies. In addition, Parkway has engaged Ecova, a utility and energy manage- ment company, to support our ongoing operations with multiple energy man- agement services. Ecova manages our utility bills across most buildings in our portfolio, and automatically reports monthly energy and water consumption data for our buildings on the ENERGY STAR Portfolio Manager website. In addition, we can use their web-based portal to review trends in our monthly energy consumption at both the asset- level and the portfolio level. ENERGY STAR PARTNER We use the U.S. EPAs web-based Portfolio Manager tool to manage ener- gy and water consumption, set energy investment priorities, and report green- house gas emissions for all of our buildings. Our average ENERGY STAR score for ENERGY STAR labeled buildings is 83 (out of 100). This indicates that our portfolio of properties is outperforming the national average by 33%. SUSTAINABILITY INITIATIVES Sustainable Operations 83 AVERAGE ENERGY STAR SCORE 33% ABOVE NATIONAL AVERAGE FOR PORTFOLIO-WIDE ENERGY USE PER SF PARKWAY | Annual Sustainability Report 2014 | 29 We are working toward a goal of decreasing our carbon emissions by 20 percent across our portfolio by 2030 with a long-term goal of achieving carbon neutrality. Our energy, water and waste reduction policies and best management practices support our carbon reduction goals. We have measured and publicly reported our carbon emissions with Energy Star and the ULI Greenprint Center for Building Perfor- mance. In addition, we have been implementing robust alternative transportation programs in support of our indirect emission reduction targets. We are currently tracking Scope 1 and 2 emissions. As our sustainability programs evolve, we are hoping to develop strategies to enable us to track Scope 3 indirect emissions as well. In 2014, Parkway became a member of the ULI Greenprint Center for Building Performance and its Advisory Board and Performance Com- mittee, and we are now reporting our CO2 emissions through Green- print. We are part of a worldwide alliance of real estate owners, investors, financial institutions and other industry stakeholders committed to re- ducing carbon emissions across the global property industry. Installing solar panels or other on-site renewable energy technologies has not been financially feasible at most of our buildings since most of our portfolio is made of existing high-rises with limited roof space and options for renewable energy on site. Therefore no investments in renewable energy sources where made in 2013. Despite these barri- ers, we continue to investigate innovative ways to support a clean fuel and energy economy by exploring renewable energy technologies. We routinely review renewable energy opportunities by location. As an example, one of the buildings we manage purchases 100% of its pow- er from renewable energy sources. Parkway is constantly looking at ways to reduce our carbon emissions through reductions in our energy and water consumption and by minimizing waste. Carbon Footprint NASCAR Plaza Charlotte, NC
16. 16. www.PKY.com JAN FEB MAR APR MAY JUN Developed New Sustainability Strategy NAREIT Leader in the Light Working Forum & Video Interview Updated Mission, Vision, Goals & Targets ENERGY STAR Surveys to Identify Candidates for LEED Volume Program Sustainability Intro & Program Webinar Updated 21 Sustainability Policies LEED Volume Program Initial Application EBIE Award Nominations Automated Utility Data on ENERGY STAR Portfolio Manager with Ecova Earth Day Tenant Events & Launched the Green Office Guide Launched Sustainability Website Updated & Launched New Sustainability SharePoint Site EBie Award Finalist (Frost Bank Tower*) LEED Volume Prototype Submitted Released 1st GRI Sustainability Annual Report *In November 2014, Parkway sold its interest in Frost Bank Tower, and it continues to provide third party management services for this asset. PARKWAYS 2014 TIMELINE OF ACCOMPLISHMENTS Sustainable Operations PARKWAY | Annual Sustainability Report 2014 | 31 JUL AUG SEP OCT NOV DEC Submitted GRESB Survey with Asset Level Data & 3rd Party Verification Created or Corrected 25+ ENERGY STAR Profiles CDP Application Launched LEED Recertification Program (11 buildings) Started LEED Initial Certification Program (14 Buildings) ULI Greenprint Report Educational Webinar Series LEED Volume Program Prototype Approved Launched Electronic Sustainability Newsletter Submitted 28 ENERGY STAR Label Applications Submitted First Batch of LEED Recertification Buildings Announced Internal Sustainability Awards Enrolled in the Federal Better Buildings Challenge
17. 17. www.PKY.com ONE ORLANDO CENTRE One Orlando Centre is a premier Class A business address located on the north end of Downtown Orlando. This 19-story building offers beautiful panoramic views in the heart of Downtown. Its location provides excellent access to the central business district, as well as to Winter Park and Maitland. The building provides distinctive exterior and interior architectural design and elegant office space along with unparalleled tenant services. The building provides on-site property management, 24 -hour security, the Natures Table Caf, and an on-site full-service bank with drive- thru tellers and a walk-up ATM. PROPERTY SPECS Type: Office Size: 355,783 RSF Year Built: 1987 Manager: Rhonda Veasey OVERVIEW OF SUSTAINABILITY PROJECTS Throughout 2013 and 2014, One Orlando Centre was heavily renovated, and several major HVAC optimization projects were completed. Specific energy- and water-saving projects included: Resealed the building envelope and added window glazing to help reduce heat loads Converted original base building lighting to modern T-8 lamps Replaced aging chillers with two state-of-the-art 375-ton Trane Series S CenTraVac chillers and one 300-ton Trane Stealth RTAE air-cooled chiller to handle peak and night loads Interconnected two on-site chiller plants and optimized the pumping strategy between them to reduce the total connected load by approximately 467 kW Installed new state-of-the-art cooling towers that incorporate a near zero bleed water treatment program Upgraded the building automation system to closely monitor and control HVAC, lighting, and other key systems SUSTAINABILITY RESULTS Projected annual water savings of over 1 million gallons per year Projected 33% reduction in average annual energy use based on the first three months of measured energy performance Building is targeted for LEED EB O&M Certification in 2015 Orlando, FL ENERGY STAR Score Projected Annual Water Savings Projected Annual Energy Savings 83 1M Gals 33% PARKWAY | Annual Sustainability Report 2014 | 33
18. 18. www.PKY.com WHERE IS OUR OLD CHILLER NOW? Parkways innovative contribution of a large heavy chiller plant to the gulf floor is simply the latest in a long list of artificial reef projects designed to enhance the coastal ecosystems of Floridas gulf waters. The chiller was sunk to a depth of 90 feet in the Gulf of Mexico on March 25, 2015, along with a granite plaque commemorating its origins from the roof of One Orlando Center, 19 stories above downtown Orlando, where it functioned well for over 25 years. Bruce Hall, Parkways Director of Engineering AN OLD CHILLER PLANT IS REPURPOSED AS A REEF In conjunction with the major HVAC system upgrades completed at One Orlando Centre in 2014, Parkway's Director of Engineering, Bruce Hall, spearheaded an innovative approach to the disposal of the buildings original chiller plant. Rather than sending the old chiller plant to the scrapyard, Bruce worked with David Walter of Reefmaker Artificial Reefs & Marine Ecosystems and TRANE representative Chris Saint John to safely decommission and dispose of the old chiller plant at the bottom of the Gulf of Mexico. There, it has begun its new purpose as the anchor for one of Floridas newest artificial reef habitats. Parkway would like to especially thank TRANE for sharing the cost of decommissioning our old chiller plant and transporting it to the new reef site. ONE ORLANDO CENTRE (CONTINUED) Sustainable Operations Chandeleur Sound Mobile Bay Pascagoula Tillmans Corner Dauphin Island Petit Bois Island Mobile Gulf of Mexico Gulf Shores Horn Island Oyster Bay 29 54.785N, 87 32.387W Parkway Reef Habitat 29 54.785N, 87 32.387W PARKWAY | Annual Sustainability Report 2014 | 35 ARTIFICIAL REEFS Artificial reefs have evolved dramatically over the years as marine scientists have learned which materials serve as effective anchors for new coral reefs and which materials do not. Their success rates for providing badly needed reef habitats have greatly improved as a result. Step 1: Establishment Today, artificial reefs are typically created by sinking large heavy metallic or concrete objects (such as old ships, planes, train cars, etc.) in relatively shallow coastal ocean waters. These large heavy objects provide critical anchor-points for thousands of tiny organisms that make up the base layer of any living reef. They also provide safe places for smaller fish to hide from larger predators and often make for interesting recreational dive sites for humans. Step 2: Growth & Evolution Once a base layer of living reef organisms are anchored to these large heavy objects, vibrant and complex living reef ecosystems can begin to develop. The end result after several years of continued growth is a beautiful and teaming underwater ecosystem that any fish or human diver would be delighted to visit. CONTRIBUTING TO FLORIDAS NEWEST ARTIFICIAL REEF HABITAT
19. 19. www.PKY.com Stakeholder ENGAGEMENT Partnerships with leading sustainability organizations and their programs are an integral part of achieving Parkways sustainability goals. PARKWAY | Annual Sustainability Report 2014 | 37
20. 20. www.PKY.com Listening and talking to employees, vendors, tenants, investors, and other community groups are key strengths of Parkways sustainability programs. We engage with our stakeholders to address sustainability issues on a regular basis through webinars, employee newsletters, and electronic tenant communications. We also host an extensive sustainability resource website, which is being continuously updated as new technologies, trends, and data arise. Our sustainability team also routinely presents to industry organizations, universities, national conference audiences, and policymakers on various sustainability issues each year. In 2014, we engaged with our local and national stakeholder communities on many occasions. GREENBUILD 2014 Parkways Director of Sustainability spoke about Parkways Volume Program at GreenBuild 2014 in New Orleans. During this informative workshop, he shared best practices on implementing a LEED volume program with the GreenBuild audience. He also spoke about and the efficiencies and financial benefits Parkway has seen since putting this program in place. All members of the sustainability team were in attendance to learn the latest trends in Green Building. NAREITS LEADER IN THE LIGHT WORKING FORUM Parkway was once again represented at the 2015 NAREIT Leader in the Light Working Forum in Virginia. During a video interview with Parkways Head of Sustainability, viewers learned the strategies Parkway took to rank as a Green Star in the top quartile in the office category for GRESB. Parkways strong stakeholder and tenant engagement programs were also highlighted. USGBCS MID-YEAR MEETING Parkways Head of Sustainability attended the USGBCs 2014 Mid-Year Meeting along with USGBC staff and other USGBC Regional Chapter volunteers to discuss upcoming changes to the LEED rating system, green market transformation, and the growing importance of transparency in building energy use. Parkway's Head of Sustainability also spoke about Parkway's Corporate Sustainability Programs at the 2015 Tri-State Symposium. STAKEHOLDER ENGAGEMENT Members of Parkways Sustainability Team at the Peoples Climate March 2014 PARKWAY | Annual Sustainability Report 2014 | 39
21. 21. www.PKY.com EARTH HOUR Parkway is a proud participant in Earth Hour, a global movement in which millions of people across the world, including thousands of businesses, governments, and organizations turn off their non-emergency lights between 8:30-9:30 pm (local time) in support of positive change toward a more sustainable planet. This global event takes place in March each year. EARTH DAY Earth Day is honored around the world each year on April 22. For many of our properties, it is a day which culminates a years worth of green building activities and celebrates what our property teams have done to reach our sustainability goals. Several properties extend their Earth Day celebration into a week-long event by holding e-waste drives, transportation fairs, and other tenant and community engagement events. ANNUAL E-WASTE DRIVES In 2014, we continued to track and benchmark our e-waste diversion rates across our entire portfolio. Education and awareness among tenants and staff bring us closer to our goal of diverting 100% of e-waste, which often contains hazardous materials that can be toxic to our health and our environment if not properly managed. We start by asking properties to hold e-waste drives annually during their Earth Day events and carry the practice throughout the year by providing recycling stations at the properties. According to the EPA, e-waste is still the fastest growing municipal waste stream in the U.S. accounting for 2% of our trash in landfills but 70% of our overall toxic waste. TENANT EVENTS Stakeholder Engagement PARKWAY | Annual Sustainability Report 2014 | 41 Tenants typically account for roughly 70% of any buildings energy consumption. As property owners and managers, we have an obligation to communicate with our tenants about the advantages of being more energy efficient and sustainable. Our Tenant Engagement Programs include useful tools and resources that help tenants understand the connection between their energy use and the associated costs that may be passed down by their landlord. GREEN OFFICE GUIDE Parkways Green Office Guide serves to educate tenants and provide several simple and low-cost strategies and resources that they can use to green their offices. This guide was developed to help Parkways property management teams work with their tenants in achieving sustainability across five key categories: Transportation, Energy and Atmosphere, Materials and Resources, Indoor Environmental Quality, and Innovation. Buying ENERGY STAR-rated computers, turning off lights at night, and designing space to take advantage of daylight are just a few of the strategies covered in the guide GREEN TENANT IMPROVEMENT GUIDE As part of our Tenant Engagement Program, we have developed a Green Tenant Improvement Guide (Green TI Guide) to educate and motivate tenants to green their interior spaces during initial design, construction, and operation. This guide includes technologies and best practices that can significantly reduce energy usage and water consumption, enhance recycling efforts, and minimize carbon footprint, resulting in a healthier, more productive workspace. Parkways Green TI Guide is a complementary resource to the Green Office Guide, which fosters better communication between the property management teams and the tenants. In addition, Parkway has put in place building-specific TI specifications to maximize efficiencies in tenants HVAC and electrical systems. These include recommended maximum lighting levels and installation of submeters. GREEN LEASES We understand that green leasing efforts are important for improving environmental performance and data reporting transparency, as well as aligning financial incentives for both tenants and owners when implementing sustainability measures. We also know that energy-aligned leases are one of the key financing mechanisms for energy retrofits. For these reasons, we have incorporated innovative green leasing provisions into our standard template for new leases that would allow us to share the costs and benefits of energy projects and other green investments with our tenants. TENANT ENGAGEMENT
22. 22. www.PKY.com SUPPORTING ART SCHOLARSHIPS Throughout 2014, Parkways Connie Knorp served as Vice Chair of the Board of Directors for the 28th Annual Lake Mary Heathrow Festival of the Arts in Seminole County, FL. 40,000 people attend this fine arts and crafts festival each year. Thanks to corporate and community sponsors, the festival is able to provide art scholarships to graduating Seminole County high school students as they move on to college to develop their artistic talents. To date, the festival has awarded more than 1,000 scholarships to community students since 1986, contributing over $1,000,000 to art education. More information about the festival is available here: www.lakemaryheathrowarts.com EV & HYBRID CAR DEMO DAY In September, 2014, the Parkway team in Charlotte, NC, partnered with Envision Charlotte to secure electric vehicles (EVs) and hybrid cars for tenants to test drive at NASCAR Plaza. Parkways Ashley Funderburk, was instrumental in organizing this event and continues to be an active participant in Envision Charlottes award-winning sustainable development activities in North Carolinas most sustainable city. More information about Envision Charlotte is available here: www.envisioncharlotte.com COMMUNITY ENGAGEMENT Stakeholder Engagement At Parkway, we take our tagline, Where business works to heart. Our work extends beyond the walls of our buildings. Through our actions, we can have a larger impact on the communities with which we serve. We provide one paid day per year for volun- teer activities and encourage our staff to become involved in their communities, join professional organizations, and engage in community service to make a positive difference. PARKWAY | Annual Sustainability Report 2014 | 43 FREE HOME REPAIRS In April 2015, The Parkway team in Houston, TX, volunteered with Rebuilding Together to help repair the home of an elderly couple in the Trinity/Houston Gardens neighborhood of Houston. City West Places Senior Property Manager, Patti Davis, and Chief Engineer, Mike Shreve, managed this project and organized the many donations for all the supplies that were needed to make the necessary home repairs. Rebuilding Together provides free repair and renovation programs for elderly low-income, disabled, and service-veteran homeowners in need. More information about this organization is available here: www.rebuildinghouston.org/about.htm FEEDING THE HOMELESS In June 2015, the Parkway team in Phoenix, AZ, volunteered at St. Vincent de Paul to help feed the homeless during their lunch hour. They ended up feeding 781 people. More information about St. Vincent de Paul is available here: www.stvincentdepaul.net/ programs/dining-rooms Pictured from left to right: (Back) Manny Vargas, William Milho, Matt Mooney, Billy Binger, Tim Thurlow, Erik Toupin, Tim Redding, (Front) Kaitlin Blaha, Yesenia Felix, Kelli Austin, Jessie Miller, Mark Sebastian.
23. 23. www.PKY.com In 2014, we provided plenty of opportunities for our staff and tenants to learn, connect, and take action to support our sustainability programs through various internal and external educational outreach initiatives. Our internal educational and outreach initiatives for 2014 included internal LEED webinars, an internal sustainability resource site, and regular e-mail and newsletter communications. We also launched our internal Annual Sustainability Awards program in 2014. Finally, we offered a voluntary internal staff training program in 2014 to help our employees earn their LEED Green Associate accreditations. Externally, Parkway continued to be a leading voice in the real estate industry in 2014 through our participation in numerous industry working groups, lectures at universities, participation in panel discussions at key green building conferences, and meetings with policy makers related to sustainability in the building industry. We are committed to continuously developing and improving our internal and external educational initiatives. These programs for our employees, tenants, vendors, and visitors relay vital information concerning Parkway's sustainability programs. INTERNAL COMMUNICATIONS Sustainability resource site Educational webinars Employee email communications Sustainability newsletters EXTERNAL COMMUNICATIONS Annual sustainability report Sustainability tab in electronic tenant handbooks Investor reports Green tenant improvement guide Green office guide Biannual occupant comfort surveys Sustainability signage programs Nationwide e-waste drives Earth Day tenant events Vendor and tenant memos Press releases & articles PKY-Green Twitter Account Educational presentations Case studies EDUCATION & OUTREACH Stakeholder Engagement Parkways Head of Sustainability speaking at the California Congress for the Living Building Challenge Parkways Head of Sustainability speaking at the 2014 VERGE Conference PARKWAY | Annual Sustainability Report 2014 | 45 PROPERTY LEVEL INDUSTRY AWARDS * FROST BANK TOWER EBie Award Winner, It takes a Village Category FROST BANK TOWER EBie Award Finalist FROST BANK TOWER TOBY Award - BOMA Austin ONE AMERICAN CENTER American Forest & Paper Association - Business Leadership Award for Recycling FROST BANK TOWER BOMA 360 Performance Award FROST BANK TOWER TOBY Award - BOMA Austin 300 WEST 6TH BOMA 360 Performance Award 300 WEST 6TH TOBY Award - BOMA Austin, BOMA Southwest region, plus International TOBY Award AWARDS & RECOGNITION 2015 2014 2012 2011 2010 2015 EBie AWARDS Parkways Frost Bank Tower in Houston, Texas, was the proud recipient of the 2015 EBie award in the It Takes a Village category. The buildings Property Manager, Sammie Baker, accepted the award on behalf of Parkway at the annual EBie Awards Gala in New York City. * In November 2014, Parkway sold its interest in 300 West Sixth Street, Frost Bank Tower, and One American Center, and it continues to provide third party management services for these assets. 2010 2012 2011
24. 24. www.PKY.com In 2014, we recognized the top properties that put our best practices and strategies in place to support Parkways sustainability goals. We are proud of all the award winners. AWARDS & RECOGNITION Stakeholder Engagement ENERGY EFFICIENCY AWARDS Sam Thornton, Property Manager Wayne Sutor, Senior Regional Chief Engineer MOST IMPROVED ENERGY EFFICIENCY 2nd Place PEACHTREE DUNWOODY PAVILLION* Atlanta, GA *Sold in May 2015 Alexandria Brown, Regional Property Manager Elinne Dominguez, Property Manager Joubert Duplessis, Chief Engineer MOST ENERGY EFFICIENT BUILDING 1st Place COURVOISIER CENTRE I Miami, FL Alexandria Brown, Regional Property Manager Elinne Dominguez, Property Manager Joubert Duplessis, Chief Engineer HIGHEST ENERGY STAR SCORE 2nd Place COURVOISIER CENTRE I & II Miami, FL Sheila Cannata, Property Manager Mike Shreve, Chief Engineer HIGHEST ENERGY STAR SCORE 1st Place CITY WEST PLACE B3 Houston, TX Kaitlin Blaha, Property Manager Tim Redding, Chief Engineer MOST IMPROVED ENERGY EFFICIENCY 1st Place HAYDEN FERRY II Tempe, AZ McKenzie Followwill, Senior Property Manager David Stauber, Regional Chief Engineer HIGHEST ENERGY STAR SCORE 3rd Place COMERICA BANK BUILDING Sugar Land, TX PARKWAY | Annual Sustainability Report 2014 | 47 Shane Cawood, Senior Property Manager Gayle Schaefer, Property Manager Rogelio Rodriguez, Chief Engineer MOST WATER EFFICIENT 1st Place SAN FELIPE PLAZA Houston, TX Patti Davis, Senior Property Manager David Stauber, Regional Chief Engineer MOST IMPROVED WATER EFFICIENCY 2nd Place 550 GREENS PARKWAY Address/City Sheila Cannata, Property Manager Mike Shreve, Chief Engineer MOST WATER EFFICIENT 2nd Place CITY WEST PLACE B1 Houston, TX Cathleen Clayton, Property Manager Wayne Sutor, Senior Regional Chief Engineer MOST IMPROVED WATER EFFICIENCY 1st Place TWO RAVINIA* Atlanta, GA *Sold in April 2015 Cassie Zingery, Regional Property Manager Jason McCrain, Regional Chief Engineer Regan Mills, Property Manager Catherine Woltz, Assistant Property Manager Dewey Moore, Chief Engineer HIGHEST RECYCLING RATE 2nd Place HEARST TOWER Charlotte, NC WATER EFFICIENCY AWARDS Sammie Baker, Senior Property Manager Ron Williams, Chief Engineer HIGHEST RECYCLING RATE 1st Place FROST BANK TOWER* Austin, TX *Sold in November 2014 WASTE MANAGEMENT AWARDS
25. 25. www.PKY.com Partnering with leading sustainability organizations on green program initiatives only makes our sustainability programs stronger. We continue to work closely with the EPAs ENERGY STAR for Buildings program, USGBC Local Chapters, BOMAs Sustainability Committee, the Greenprint Performance Committee, and the local and Federal Better Buildings Challenge Program. Parkway is frequently invited to participate in new industry initiatives and discussions. ENERGY STAR PARTNER Throughout the 2014 calendar year, 28 of Parkways owned buildings earned the 2014 ENERGY STAR label. This impressive feat qualified Parkway as a Premier Member of U.S. EPAs new Certification Nation, which was created in honor of ENERGY STARs 15th anniversary. For 2014, Parkways portfolio-wide average ENERGY STAR score for our ENERGY STAR labeled buildings was 83 (out of 100). Our average ENERGY STAR score shows that our portfolio of properties is outperforming the national average by 33%. BOMA Parkway is involved with many local BOMA chapters throughout the country. In addition, Parkways Sustainability Manager is a member of BOMA/GLA Sustainability Committee created to educate and inform BOMA/GLA members on techniques, trends, and methods related to energy efficiency, sustainable practices, and all aspects of green buildings. USGBC MEMBER Parkway enrolled 25 buildings in USGBCs LEED Volume Program. Through this customized self-certification program, at least eleven of our LEED certified buildings will pursue recertification and up to 14 of our uncertified buildings will pursue initial LEED certifications over the next three years (2015-2017). ULI GREENPRINT CENTER FOR BUILDING PERFORMANCE As a member of its Advisory Board and Performance Committee, Parkway is part of a worldwide alliance of real estate owners, investors, financial institutions, and other industry stakeholders committed to reducing carbon emissions across the global property industry. The ULI Greenprint Center for Building Performance is a dedicated center of research and programming at the Urban Land Institute. BETTER BUILDINGS CHALLENGE Parkway made the commitment in 2014 to decrease energy consumption by 20% across our portfolio from 2013 levels by 2023 as part of the Federal Better Buildings Challenge. PARTNERSHIP PROGRAMS Stakeholder Engagement PARKWAY | Annual Sustainability Report 2014 | 49 San Felipe Plaza, Houston , TX
26. 26. www.PKY.com At Parkway, we understand the importance of sustainability reporting and disclosure. We see this type of reporting and disclosure as a differentiator in competitive industries, and we believe it fosters investor confidence, trust, and employee loyalty. We see that more investors are looking to connect their capital with companies that run their portfolios more efficiently and sustainably, and with companies that have a strong track record of reporting their environmental performance along with their financial performance. Within that context, one of our goals is to benchmark all of our properties on ENERGY STAR Portfolio Manager to get an accurate baseline for energy usage. In 2014, we benchmarked 97% of our portfolio, an increase from 75% in 2013. REPORTING & DISCLOSURE In addition, we track our ongoing environmental performance through our use of ULIs Greenprint Environmental Management Platform and through our ongoing participation in the annual industry-wide GRESB survey. These tracking tools give us a yardstick against which we can measure our progress toward greening our portfolio. For 2014, we are reporting the results of our energy benchmarking and environmental management activities in this annual Sustainability Report. This Sustainability Report is written in accordance with the G4 version of the Global Reporting Initiative (GRI). PARKWAY | Annual Sustainability Report 2014 | 51 This report contains Standard Disclosures from the GRI Sustainability Reporting Guidelines. Below is the corresponding GRI Content Index based on the G4 indicators. For more information about this report, contact: Daniele Horton, Director of Sustainability Parkway Properties e-mail: dhorton@pkyadvisors.com GRI Disclosure Description Page 1 CEO Letter 03 2, EC2 Risk Management 23 3, 4, 5, 6, 7, 8, 9, 28, 29, 32 Company Profile 08 16, EC8 Partnership Programs 48 28, 29, 30 About this Report 05 31, 32, 33 The Global Reporting Initiative 51 34, 36 Governance Structure 08 56 Green Operations 22 58, HR3 , LA11, SO4 Employee Relations 16 EC8 Targets and Performance Goals 19 EC8 Community Engagement 42 EC8 Awards and Recognition 45, 46, 47 EC8 Tenant Events 40 EN3, EN5, EN6, EN19, EN8 Performance Indicators 24 HR3 Stakeholder Engagement 38 GRI INDEX
27. 27. www.PKY.com 390 N, ORANGE AVENUE SUITE 2400 ORLANDO, FL 32801