Michelle Malanca Frey, the executive director of ULI San Francisco, welcomes attendees at a recent Tenant Energy Optimization Program event.

Greening the workplace beyond the existing building code requirements requires both tenants and owners to prioritize investing in and tracking sustainability. Two panels of experts, one composed of tenant representatives and the other of property owner representatives, discussed their challenges and solutions at “Beyond Code for a Greener Bay Area: Owner and Tenant Solutions for Sustainable Buildouts,” an event organized by ULI San Francisco and ULI’s Tenant Energy Optimization Program (TEOP).

TEOP, an initiative under ULI’s Greenprint Center for Building Performance, is a scalable 10-step process to help leased spaces achieve 30 to 50 percent energy savings during a fit-out. An understanding that tenant buildout, such as during a tenant improvement project or the start of a new lease, offers a tremendous opportunity to reduce energy use and improve sustainability is imperative to maximizing the overall efficiency of the space. The TEOP process includes steps such as selecting a team (ensuring that everyone involved in the project knows the energy goals), setting those goals, modeling energy reduction, and calculating projected financial returns. Both the landlord panel and tenant panel covered how each company integrates TEOP into their standard business practices.

Meghan Lewis, global supply chain sustainability program manager at WeWork, described her company’s operational carbon program for the buildings it leases. It has three major components—tracking energy use with utility bills and submetering; working with mechanical, electrical, and plumbing (MEP) and design teams to achieve energy efficiency; and aiming toward deriving all of WeWork’s electricity from renewable energy sources.

She also emphasized that tenants can play a significant role in reducing embodied carbon in the built environment. “Over the next 30 years, 49 percent of buildings’ climate impact is going to come from materials, not operational energy,” she said. Although much of a building’s embodied carbon is in the structure, the design of the MEP systems and the interior design can make a substantial difference over the life of the building, she noted. “You have a chance every time you renovate a space to have an impact.”

From right to left: Jay Sholl (moderator), senior vice president, CBRE; Amanda von Almen, head of sustainable built environment, Salesforce; Andreas Gyr, Real Estate Workplace Services (REWS) Sustainability Program Manager, Google; and Meghan Lewis, senior program manager, WeWork, speaking at a ULI San Francisco event.

Andreas Gyr, real estate workplace services sustainability program manager at Google, described his company’s commitment to carbon neutrality, using Google’s 6 Pancras Square office in London as a case study of how much tenants can achieve.

After new construction for a Google office was put on hold, the company leased space in a developer-built core and shell next door at 6 Pancras Square. “We had had really aspirational sustainability goals for the ground-up construction project, and we just brought those goals to the tenant improvements for this project,” Gyr said. “We made sure that whatever energy, indoor air quality, biophilia, and daylighting goals we had were laid out very clearly upfront for the project team.”

This allowed the design team to identify where the existing building did not meet Google’s criteria and what would have to be adjusted. Gyr emphasized that the first steps in the TEOP process—select a team and select a space—is, in fact, critical to ensuring that projects meet tenant’s goals. Ensuring that all members of the design and construction team are sensitive to the tenant’s energy goals and that the base building space is already somewhat efficient will make a buildout process go more smoothly.

Once the criteria were finalized, Google incorporated them into its owner’s project requirements, making them a contractual obligation for the project team. The building garnered not only certification under the Building Research Establishment Environmental Assessment Method (BREEAM) program, but also Platinum certification under the Leadership in Energy and Environmental Design (LEED) program. Google also plans to apply for the International Living Future Institute’s zero carbon certification for the building.

Salesforce quantifies the carbon impact of materials used in the buildings it leases in order to push suppliers to do better, said Amanda von Almen, head of sustainable built environment for the company. “Just a few years ago, after we made our 100 percent renewable energy commitment and our carbon neutrality commitment, we also committed to measuring and offsetting our embodied carbon by 2030, as well as building all of our spaces to the highest green building standards,” she said.

A slide from the presentation illustrating the path Salesforce is taking to 100 percent renewable energy.

To make sure that interior spaces are healthy for employees, Salesforce prioritizes natural light, indoor air quality, biophilia, and mindfulness. “We defined a set of six principles for everything that we want to know about our suppliers and the materials that come into our space,” von Almen said. “We turned those principles into our healthy-material scoring tool so we can take data from different manufacturers and rate them. And we set ourselves targets every year for increasing those scores. If a manufacturer wants to pitch us on their product, they have to do better than the current product that we already have.”

From left to right: Brenden McEneaney (moderator), principal, Integral; Ellen Owens, senior project manager, University of California, San Francico; Adam Slakman, global sustainability manager, Hines; and Dan Murtagh, vice president, engineering, Boston Properties, speaking at a ULI San Francisco event.

Sustainability-minded owners and developers have their own challenges in meeting their ambitious goals for reducing carbon emissions. “The University of California has an initiative to be carbon neutral by 2025 in terms of buildings and transportation,” said Ellen Owens, senior project manager of real estate campus design and construction at the University of California, San Francisco (UCSF). “With buildings, we’re on track to reach that goal—if we don’t build any more new buildings. But we need more space for research, and some of the UC campuses are quite old, so we have to build replacement buildings. We also have new campuses that still need to be built out.”

The university system has committed to no longer using fossil fuels for on-site space or water heating in new or renovated buildings. “That’s a challenge,” Owens said. “We have one new building at UCSF that’s completely electric. It’s housing. But for a research building, all electric is not feasible for some of our energy-intensive uses. Certain types of laboratories have very heavy energy use.”

She also noted that the university has a policy that all new buildings must beat the requirements of the California Energy Code, Title 24, by 20 percent or meet certain energy use intensity goals. “But Title 24 is about energy efficiency, and all-electric buildings don’t fare well under Title 24. So we have some built-in challenges.”

Replacing gas boilers with electric heating is even more challenging in existing buildings, added Dan Murtagh, vice president, engineering, for Boston Properties. “With existing buildings that have had gas boilers in them for many years, there is no economical way to replace that boiler with electric heat, and Title 24 doesn’t let you use electric heat,” he said. It makes more sense to install high-efficiency boilers in existing buildings and focus on making sure new buildings are designed to be capable of accommodating all-electric heating.

Title 24 was created in the late 1970s to encourage homebuilders and commercial developers to reduce electricity consumption, Adam Slakman,global sustainability manager for Hines, pointed out. “But Title 24—and LEED 4.1, as well—are based on the cost optimization of long-term energy costs.” Gas boilers reduce the peak electricity load compared to electric heating, and lower electricity consumption means utilities do not have to operate peaker plants, which run only at periods of peak demand.

“Now I think we’re getting to the point where all-electrification is becoming a more commonsense option because the grid is supplying greener energy than we can generate with on-site renewable energy in dense urban areas,” he said. “But it’s going to take a combination of advanced technologies and code changes to make it possible. Building codes and LEED requirements have to catch up to the fact that we’re talking about energy efficiency and not cost efficiency.”

All the owner representatives on the panel agreed that a variety of stakeholders can play a powerful role in pushing the built environment further and more quickly toward sustainability. “Investors as well as tenants can push us, because if you’re going to pick up 90 percent of a $1.3 billion building, you have a big say in what we’re about to do with that building,” Slakman said.

Murtagh agreed. “Not only do our clients and our brokers push us in a more sustainably minded direction, but our investors and shareholders are also on the phone all the time asking, Why aren’t we doing this? Why aren’t we doing more of that? Developers respond to people who move the needle on the value of the company.”

RON NYREN is a freelance architecture and urban design writer based in the San Francisco Bay area.

ULI’s Greenprint Center for Building Performance is a cohort of over 35 real estate owners and investors who have collectively committed to a 50 percent reduction in carbon emissions by 2030. To learn more about how to integrate TEOP into your practices, visit tenantenergy.uli.org, or email Emily McLaughlin, director of the ULI Center for Sustainability and Economic Performance, at emily.mclaughlin@uli.org.