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Unlocking efficiency

The evolving role of ESG within Brookfield Properties

By Rhianne Menzies, Associate member
Ala Moana Center in Honolulu, Hawaii
Ala Moana Center in Honolulu, Hawaii

While the past year has made us confront multiple uncertainties, it has also reinforced the value of sustainable operations. Sustainable buildings are more resilient, able to react to short-term adversities (such as COVID-19), and ultimately provide longer-term value to investors.

As environmental, social, and governance (ESG) factors continue to grow in importance, operational efficiency—particularly energy efficiency—is often one of the first aspects considered, providing tangible metrics and demonstratable cost savings to gain buy-in from stakeholders. However, ESG can only be successful if considered within a holistic view across all three pillars equally, incorporating other aspects such as diversity and inclusion (D&I) initiatives, transparent disclosure, and a well-structured governance body.

Rethinking operational efficiency

Brookfield Properties is a fully integrated, global real estate services company that provides industry-leading portfolio management and development capabilities across the real estate investment strategies of Brookfield Asset Management, a global alternative asset manager with over $500 billion in assets under management. This article is specific to Brookfield Properties’ retail group, where operational efficiency already had been the focus of our sustainability program by the time it launched in 2013. The launch marked an important step in achieving our larger 2022 sustainability goals, which set ambitious targets for energy, greenhouse gases, water, and waste efficiency.

Beginning with “quick win” energy efficiency initiatives, we have since expanded our program to enhance multiple ESG initiatives across our retail portfolio. Some highlights include:

  • The installation of 69 solar projects at 55 properties, generating over 73 million kilowatt hours (kWh) of renewable electricity annually
  • The installation of over 400 electric vehicle charging stations, providing millions of free electric miles to our customers
  • The installation of smart irrigation systems at over 50 properties, ensuring that landscaped areas are only watered when necessary
  • The addition of Orbio, an on-site generation device that converts water, electricity, and salt into effective cleaners and disinfectants through ionization. This decreases the environmental and health hazards associated with chemical-based cleaning processes by reducing chemical runoff into water streams and lowering volatile organic compounds (VOCs) to improve air quality
  • The certification of 29 properties through IREM’s Certified Sustainable Property program, highlighting our commitment to sustainable property operations
  • The hiring of a director, diversity & inclusion, and the creation of an Employee Advisory Group on D&I to lead an enhanced D&I program throughout the organization

Do the right thing

We embrace sustainability as part of our core value, “Do the right thing,” which has kept ESG at the forefront of our business operations. Our program has evolved over time, initially focusing on utility efficiency and then expanding to include community partnerships, resiliency, green building certifications, and more.

Ala Moana Center continues to reduce its energy consumption through LED upgrades, chiller replacements, and thermoplastic polyolefin (TPO) white roofs.

While it may be easy to prioritize projects based on cost savings, a successful ESG program must consider a more well-rounded view of long-term value. This inherently requires a shift in mindset throughout an organization to understand and buy into the higher-value creation of ESG. Success is not just demonstrated through operational efficiency wins, but also when ESG is embedded throughout an organization. This allows ideas to be initiated at any level, whether from the ground up, with property managers putting forward asset-specific initiatives, or via high-level strategic guidance from executive leadership.

As our ESG program has developed, so have our disclosure practices. Disclosure is an essential way to communicate ESG indicators to stakeholders, informing them of longer-term goals and ambitions while being transparent about where our gaps remain. We regularly evaluate our stakeholders’ opinions on “material” ESG topics to ensure relevant metrics are reflected in our reporting. 

Increased pressure will be placed on organizations to disclose a wider range of ESG indicators. With disclosure often representing a lagging indicator of performance, it is important to get ahead and establish a robust reporting framework that can react and respond to additional indicators.

Ala Moana Center

Ala Moana Center, a large open-air shopping center located on the Hawaiian island of Oahu, embodies our holistic approach to ESG, with multiple measures implemented to enhance sustainable operations. This has included the installation of on-site solar generation, with the center producing over 5.8 million kWh of renewable energy in 2019. With this capacity, Ala Moana Center boasts one of the largest on-site solar arrays in the state of Hawaii.

Ala Moana Center continues to reduce its energy consumption through LED upgrades, chiller replacements, and thermoplastic polyolefin (TPO) white roofs. In addition to these efforts, a building automation system with integrated fault detection and analytics controls for lighting and HVAC was implemented at the center. The ability to see and correct anomalies in real time significantly increases operational efficiency. With all of these measures in place, Ala Moana Center reduced its common area grid consumption in 2019 by 17% year over year.

Christiana Mall in Newark, Delaware

The property also focuses on initiatives outside of energy efficiency, having undertaken a detailed climate risk assessment, organized multiple community events and charitable giving, and implemented an organics recycling program whereby food waste is captured and moved to a processing plant to be turned into animal feed for local farms.

COVID-19 and ESG

While the impact of COVID-19 has created numerous challenges throughout the industry, the focus on ESG has remained strong. In particular, this period has accelerated the importance of the “S” and “G” in ESG, with aspects such as indoor air quality (IAQ) being forced into the spotlight. With our established ESG program, our portfolio has been able to respond quickly and reopen our properties ahead of our peers, all with robust IAQ policies and measures in place.

More than ever, buildings are being called upon to support their local communities. By the end of 2020, we held over 380 events to support our communities during the COVID-19 pandemic. This included a wide range of event types, from drive-thru food donations and headshots for those seeking work, to blood drives, parking lot testing sites, and more.

With this trend of a greater emphasis on social and governance actions expected to continue, it is no longer enough for businesses to focus on one element of environmental efficiency; processes must consider the wider elements of ESG and their effects on all stakeholders.

At Christiana Mall in Newark, Delaware, a drive-thru food donation event was held to support the local community. This was done in partnership with the Food Bank of Delaware, distributing household essentials to over 2,000 vehicles moving through the parking lot donation line.

“The Lawn” at Oakbrook Center in Oak Brook, Illinois

At Oakbrook Center in Oak Brook, Illinois, our community space (aka The Lawn) was transformed to incorporate socially distanced “bubbles,” allowing the community to safely enjoy the outdoor space while observing social distancing requirements.

Looking forward

The link between value creation and ESG is clear, with reduced costs, optimized investments, and employee productivity being some of the commonly cited positive outcomes of ESG initiatives. While operational efficiency is a key cornerstone to this success, the “S” and the “G” will only increase in importance over time. An organization must ensure it isn’t losing sight of wider ESG considerations as it defines its values and creates a program.

A straightforward and transparent approach to disclosure is essential to reflect and respond to the stakeholder’s material issues, honestly reflecting any shortcomings and recognizing the potential path toward long-term growth. This process is a valuable tool to redefine and grow ESG within a business. Such a holistic view of ESG remains a priority for Brookfield Properties, and we will continue to prioritize ESG throughout our business operations to deliver value to all stakeholders.

the Journal of Property Management staff

Rhianne Menzies is the sustainability manager for Brookfield Properties, where she leads the environmental, social, and governance (ESG) strategy across Brookfield Properties’ U.S. retail portfolio.

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