Use these metrics to measure your portfolio’s triple bottom line performance

Get this new research on metrics that helps you measure property triple bottom line performance.

We are pleased to share a new report titled, Metrics for Responsible Property Investing: Developing and Maintaining a High-Performance Portfolio.

You can download the report here.

This research was co-authored by Jean Rogers of Arup, David Wood of the Responsible Property Investing Center and myself. This is a working draft for comment that was presented today (4 November 2009) to a joint session of ULI’s Responsible Property Investing and Sustainable Development Councils.

Why do we need metrics for triple bottom line investing?

Our survey of the industry indicated that the spread of triple bottom line investing was being hampered by the fact that most currently available real estate sustainability reporting came from investors who would green a couple of showcase buildings in their portfolios.  This lack of transparency leaves the broader real estate industry and capital markets with several pressing problems:

• They cannot determine if sustainability performance on the portfolio is improving over time.
• They do not know how the portfolio’s green performance compares with the portfolio’s of other investors.
• There is no way to judge sustainability risks hidden within any portfolio.

Drafting and road-testing proposed metrics with the Bay Area Council and TIAA-CREF

After developing a set of metrics that would represent the ten RPI principles in action, we worked with the Bay Area Council Family of Funds and TIAA-CREF to road test them, to obtain real world feedback from actual investor users.

Bay Area Council Family of Funds tested the metrics on recent acquisitions to see how the metrics might be useful during the property acquisition process.

TIAA-CREF tested the metrics on a portfolio of properties they own, to determine how the metrics could possibly assist them with asset management activities.

Both investors were also at today’s ULI session and provided in depth comments on the use of the metrics and their recommendations.

Key takeaways

Here are a few of our findings based upon investor feedback about their use of the metrics:

• RPI metrics do provide a tangible link to asset and portfolio value by pointing to possible decreases in operating expenses and/or increases in rental revenue.
• The use of RPI metrics can assist with opportunity finding: a key objective of due diligence during  acquisition.
• The use of RPI metrics can help drive social responsibility within the portfolio, instead of just monitoring it after the fact.

We need your help!

This report is currently a working draft for comment. It was submitted to members of the Sustainable Development and Responsible Property Investing Councils for their review and comment. We would also appreciate hearing the comments and questions of real estate investors and practitioners within the Green Journey community.

Let us know your thoughts about these proposed metrics. Also feel free to forward this report to anyone in your network whose practice might benefit from the information.

We look forward to hearing from you and will keep you updated on this effort as it evolves.

You can download the report here.

Related reading:

• We’ve covered the emergence of responsible property investing many times before.
• You can also view a short presentation on the basics of responsible property investing here.

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Galley Eco Capital Joins the Business Council on Climate Change Business Partnership. Takes Action To Reduce Greenhouse Emissions.

Galley Eco Capital has a history of taking action to protect the environment. They now join a list over 82 BC3 member companies dedicated to taking action to address global climate change, while maintaining a competitive bottom line. “Participating in the BC3 is a natural step in our commitment to both grow our business and be environmentally responsible” says Lisa Michelle Galley. “We are excited to work with other members of the BC3 to develop innovative, profitable business approaches that also directly address the growing threat of climate change.”

The BC3, a collaborative partnership with the Bay Area Council, the San Francisco Department of the Environment and the United Nations Global Compact, is poised to make the San Francisco Bay Area a model of commercial climate stewardship by inspiring leadership on the pressing issue of climate change, and giving business leaders the tools to reduce their GHG emissions. The BC3 recognizes that the business community has the power to significantly impact climate change, and it functions as an avenue for communication between companies that have stepped up to the plate to address this challenge. The BC3 seeks to inspire others to do the same, and to build a business movement for climate stewardship.

“The Bay Area has always been an engine of business innovation and growth combined with social responsibility and companies like Galley Eco Capital are a reflection of that environment and culture” said Andrew Michael, Bay Area Council Vice President of Sustainable Development. “They and other visionary BC3 members are proving that the protection of the environment is clearly aligned with the protection of profits and market share.”

The BC3 is built around five “Principles on Climate Leadership” which relate to the areas of: Internal Implementation, Community Leadership, Advocacy & Dialogue, Collective Action, and Transparency & Disclosure. These principles are founded on the belief that private business can shift practices to realize economic growth while maintaining environmental sustainability.

“The addition of new members gives us a great opportunity to redefine how business is conducted in the Bay Area,” says Jared Blumenfeld, Director of the San Francisco Department of the Environment, “and to show that we can surpass the status quo.” For additional information on the Business Council on Climate Change, contact: bc3@sfgov.org or for information on Galley Eco Capital visit: www.galleyecocapital.com