The Construction Insiders: Episode 4
Jason: Welcome to the latest episode of the Construction Insiders podcast, where our host, Jessica Busch, talks with industry experts about new trends, best practices, and how to successfully deliver construction projects in today’s market. Whatever your role on a project, we think you’ll find these discussions interesting and worth your time.
Jessica: Alright, thank you, Jason. So, for today’s episode we are going to switch gears from talking about themed entertainment and we are going to talk about sustainability and the intersection of construction and how we move forward in today’s market, with today’s expectations, how it all fits, and we couldn’t think of anyone better to bring in than our very own Christine Marez to talk about this topic. So without further ado, I’d like to welcome you, Christine, to the show and we’re really excited to have you here and talk about all things sustainability. So welcome.
Christine: Thank you, Jess, I’m excited to be here.
Jessica: Okay so without wasting any time, I’d just like to jump in because we have a limited amount of time with you. So when you look at sustainability and you look at construction and design in today’s environment, today’s world, what does that look like? I’m sure it’s changed dramatically over the last couple years, last decade, but what are you seeing now?
Christine: Well that’s a great question and since we’re starting a new decade, I think it’s important to look at the past 10 years, specifically at the building industry and how it’s evolved. What I’ve seen is the incorporation of sustainability elements into the design and construction process. Of course, we’re all familiar with the green certification of LEED for LEED buildings, and that certainly was a driver 10 years ago and 20 years ago and is today. The other big shift that we’ve seen in the industry is the increase in regulatory requirements, usually in states and then in large metropolitan cities. It has really changed the building environment for new construction, for renovations, for large buildings, campuses. States have taken on increased energy codes and that certainly has impacted how designers design buildings and how we operate them today. And then I guess the other thing is really a recognition that sustainability now is not a one-off value-add, but really the result of it is lower cost savings for the owners. We’re able to operate our buildings more efficiently. You know, the building and construction environment and the whole process accounts for about 36% of global energy use worldwide. So, we’re using a lot of power and also, as we relate it to climate change, 39% of all carbon emissions come from building. So, it’s really important –
Jessica: From the actual construction process?
Christine: Both from the construction and the building operation of the building itself. It emits that much green house gas emissions into the air through the whole process of the building operation.
Jessica: And that’s a significant number that I’ve never heard, and it seems when you see it that black and white, that’s a very large percentage.
Christine: Absolutely. Just think if we actually got all of our buildings to be energy efficient or reduced our reliability on fossil fuels, that’s almost 40% of the emissions that we can impact worldwide.
Jessica: Wow, ok. And not to go back too far, but you were talking about the regulatory aspect of all this, and the states… is it also cities that are jumping on this or is it state-driven most times or does that — do you see a big difference?
Christine: It has started with, I would say, 20 years ago with the kind of first climate report is when states really got on board with their commitment to reducing state emissions and largely this was directed at transportation, vehicle use, really trying to understand how greenhouse gas emissions were impacting how we function. How our society functions. And then certainly with the passing of the Paris Accords, we’ve seen a huge shift in climate change awareness and education that has now gotten to companies starting to take responsibility for their part in what they build in their build portfolio, how they operate, and also how they are looking forward to the next generation in who they hire and how they hire and all of their policies. So they’re not only looking at it from the standpoint of where the states started regulatory requirements, they trickle down to the cities and then now trickles down to large agencies and they tend to roll up to try to meet the goals of the highest standing, which is usually the states.
Jessica: Ok, interesting. And so today what are some of these things that you’re seeing that are being incorporated into the building design or operation, and how has that changed recently?
Christine: Sure, I would say that I mentioned LEED earlier. There are a number of green certifications — I think LEED is the most well-known — in fact when people think about sustainability –
Jessica: That’s what you think.
Christine: That’s what you think.
Christine: And that’s great because it’s a great starting place. We want people to have their buildings be LEED, but we also want them to not do LEED just for LEED. And the new consumers in the next generation are pretty savvy about this, but we can talk about that in a minute. There are also other certifications. BREEAM is a certification that’s used more globally and we’re seeing that a lot in the UK and in Europe and it’s very similar to LEED as well. The other area that is really come to fruition in the last five to 10 years is building commissioning, whereas back in the day building commissioning was simply, “Let’s just test the systems to see if they work.” It was a test and start process, it wasn’t really regulated. And then the operation and performance of the building became much more critical as energy costs increased and water costs increased through the years, and we realized that by commissioning a building you are really making sure that its operating as it was designed. Owners now have come to recognize that their capital investments in their projects or in their facilities are only going to be realized if they have someone making sure that the building is performing as it was intended. And so now we’re seeing more regulatory requirements for building commissioning and really it’s for the advantage of the building operators that they are able to then maintain their buildings for much less cost because of the commissioning process.
Jessica: So, these commissionings that you’re talking about, these kind of monthly, quarterly, are just checking up on the building, making sure that everything is as it should be?
Christine: Yes, and where commissioning used to start at the tail-end of the building and was the last thing on the checklist before you open a building —
Jessica: Yeah, it was just a box to check.
Christine: Now commissioning starts in the design phase. The commissioning agent actually works very closely with the designers to make sure that the specifications are correct and to make sure that throughout the buildings, as they’re installing it, that they’re installing it correctly, so it’s much better oversight.
Jessica: Well, now it seems like the knowledge is there — how important it is, is there.
Christine: Absolutely, and it really goes to create more of an integrated team between the designer and the constructor and the owner as we move through the process.
Jessica: Interesting. Ok. Well it all sounds good and so, speaking of all things good, what shifts have you seen? I’m assuming there’ve been major shifts in sustainability and how it impacted design and construction, do you kind of have like a top three that you’ve seen? What do you – what are you seeing on the ground level here?
Christine: I think what I’ve seen primarily over the last couple years is an increased level of corporate responsibility. What does that mean? You’ve heard of various definitions of corporate social responsibility. Sustainability has really had an increased awareness to the point where corporations are now looking at their own responsibility. Basically, they’re walking the talk. Anything from setting a goal to build for net zero or build a carbon-neutral facility or simply just reducing our carbon footprint. They are also looking at the other side of sustainability, which is kind of the social justice side, are their labor policies fair, are they giving back to the community, how do they operate themselves? They may build a sustainable building, but are they using recycled paper, are they creating an environment within their employees that they are operating sustainably too? This will come into play as we talk about the future of sustainability. The other shift I see is really addressing the needs of the next gen consumer. They are predicted to be the new workforce and, as you know, a lot of our younger generation are really teaching us older people what sustainability really means and how it’s our job to be responsible for it.
Jessica: So do you see companies actually listening to that feedback now versus just saying “Uh huh, uh huh, uh huh,” you know, “Sure,” but now they’re actually cutting out the water bottles in the fridge and they’re working towards net zero — you really do see a shift towards listening to that next generation?
Christine: I absolutely see a shift. I have two daughters myself and over the last 10 years they have corrected me and really had my own thought process changed because of what they’re learning in school, what they’re learning in college, how they’re out there on the front lines being activists and really taking on climate change because climate change is here around them.
Jessica: Right, they’re seeing it daily.
Christine: They’re seeing it with fires, they’re seeing it with devastation, with storm surges and hurricanes. It’s just, it’s their way of responding and being responsible for their part.
Jessica: So, you know, talking about the next generation and how they’re influencing sustainability — where do you see that going?
Christine: I think we have to put it into perspective. I mean, as you know, we live in a time where every Friday 1.4 million kids are leaving their classrooms in protest for climate change.
Jessica: That’s a big deal.
Christine: It’s a big deal.
Jessica: That’s a lot of people.
Christine: These are not “somewhere, sometime,” these are our kids that in another five to 10 years are going to have jobs, are going to be part of the marketplace, are going to be the biggest consumers, are going to attend sporting events, where they don’t expect to see waste. There is going to be a demand now and I think the shift is going to be that this is going to be the new normal for a way of life and we as planners and builders and designers have to prepare for that. We have to make sure that we are now thinking ahead of figuring out what they’re going to want before they do.
Jessica: Right. Right. And it’s become not just one person climbing into a tree, protesting, it’s millions. And that’s significant and that demands change and clearly them seeing the change on the build side.
Jessica: And so, with this kind of new normal, and the next generation, what market sectors are really being affected by this? Is it across the board or do you see pockets that are really being affected?
Christine: I think the most surprising to me, and I guess in even just the last 24 months, has been in the financial markets, and a lot of where we look for trends in the market tend to come from the money and how it’s being spent and how it’s being created, and how it’s being invested.
Jessica: Money is a huge driver.
Christine: Huge driver.
Jessica: Of everything, yeah.
Christine: One of our clients has — we have many financial investment provider clients — has created a whole new next-generation portfolio level for investors, because what has happened is our next generation investors are hugely cognizant of their responsibility and they want their dollars to go to something that contributes to [solving] global climate change, so what has happened is the financial market has shifted and now they’re adopting not only building standards for their own portfolio and operation, they’re adopting huge climate emissions goals for what they invest in, for what can be invested in the market. Climate change and climate action is going to be one of the biggest job creation drivers in the world over the next 10, 20 years. I think the financial sector is the first to recognize that because they’re seeing it now, they’re seeing it in what’s being invested today.
Jessica: When your money is being invested, you’re seeing the returns, you’re not seeing the returns, you’re going to make changes based on that.
Christine: Absolutely. And you’ll notice there are commercials out now, I won’t name any specific companies, but you’ll notice they’re catering to the next generation already.
Jessica: Right, interesting. And so, when we talk about sustainability, climate change, I kind of always put that in one hand and I put design and construction in the other. So, how are you connecting these two different worlds and what does that look like?
Christine: I think initially sustainability was always looked at as conservation — it was something good if you can do it, but it wasn’t integral. It was just, if you wanted to do something good, you know, politically correct, you did something sustainable. That is no longer the case. Sustainability and we’ll call it climate change and how you are resilient to climate change now go hand-in-hand.
Christine: We’re at a point where the new normal for our society is global fires, droughts, rising sea levels, and we have to — especially in the last 12 months and obviously in California and Australia — we need to make it relevant to specifically today.
Christine: There are just huge changes in the environment, and it has affected our build environment. It has led to remarkable new technology and some really intriguing and amazing responses to some of the most devastating disasters that we’ve seen in the last 12 months.
Jessica: It’s unfortunate these disasters have happened, but you would just hope that at least they can be lessons learned, we can move on from this, rebuild, figure out a better way, I know you’ve worked on a ton of projects across the country and internationally, what are some of these examples that you’ve seen, whether they’re states or private companies or cities, what have you seen that’s really kind of stood out in your mind?
Christine: A couple of things really stood out recently. In New York City, which was, as you know, hugely impacted and continues to be impacted by, first, Hurricane Sandy and then the recent flooding — you know, it’s a unique environment because it is home to millions of people in a very small footprint. And what has happened, though, is the actual building projects for critical facilities like hospitals that are literally on the edge of the East River now — in the design, it’s being incorporated to have automatic flood gates come up when there’s a storm surge, to be able to build the building so that the generation the back-up generation is now in a place where you can get to it. Where with Sandy, everything was underwater and they learned so many lessons. They’re building huge retaining walls around hospitals and critical facilities. These are the kind of things, and it’s not just New York, it’s Miami and other locations that have been impacted by storm surge and rising sea waters that you’re going to continue to see this.
Jessica: Causes and lessons learned from tragedy.
Christine: Absolutely, absolutely, and as an engineer it’s exciting to see this kind of technology, and designers and architects really getting on board to solve these problems.
Jessica: Well, and the creativity that goes into protecting these buildings, building them with those built-in protections — I feel like that’s a lot of times lost, that just the architects, the design people all coming together to figure out this problem and really solve it.
Christine: Absolutely, and it’s taken an integrated team. Another shift is really architects not just designing on their own. They need the engineers, they need the mechanical [experts] and engineers now as part of the team from the beginning to be able to solve some of these problems.
Jessica: You know, there’s the build side of things, then there’s also some of — I’m assuming — massive planning that goes in if you already have current facilities, a current campus. What have you seen on that side? Are there any examples that really stand out? I know we do a lot of work with different school districts and things like that across the country.
Christine: Right here at home we were involved in a project with Santa Monica Malibu School District last year, putting together their strategy for sustainability and climate resiliency. During the process of this, as we were holding town hall meetings with the residents of Malibu and Santa Monica, we were met with the Malibu fire, and in the process of us coming up with goals, people on our committee had had their homes burned. And students didn’t have a place to go home to. And so it really caused us to look at how we can build into long-term planning for campuses and schools and how they build, to look at these surrounding areas, to look at some of these threats, to pay attention to how they communicate even during the threats and how they plan for water. During the Thomas fire in Ventura, one of the lessons learned was that the hydrants dried up. They couldn’t actually put out the fire for the residents because there was no backup plan for that.
Jessica: So now you’re saying that not only is there a communications plan, there are also water plans — what do those look like? How does that even change, I mean, are you working then with the local water districts and the fire departments? Is that now part of, when you talk about the team coming together, are they now incorporated?
Christine: Absolutely. In fact, what we’re seeing is now service offerings for, you know, consultants to go in and help cities work with their regional water districts, work with the regional utilities, to create these partnerships and alliances, so it’s not just the city itself and the residents, it’s really the entire region coming together along with the transportation agency. Because it takes all of them to be able to know when there’s a disaster, and it doesn’t matter if you work for the city or the county, everyone comes together.
Jessica: Together to try to figure it out.
Christine: Exactly, and that’s great because that’s how some of these climate action plans are being developed.
Jessica: Interesting. And so, what are some of the misconceptions about sustainability? I know that you know there has to be a lot of false claims, statements, just misunderstandings, the “One little thing isn’t going to make a big difference” type of mentality — what are some of these misconceptions that you’re seeing, that you’re fighting against?
Christine: Sure, absolutely, I do still see it. You know, it’s great to live in a big city where people are more progressive about this, but we have to be able to reach everybody. I think one of the biggest misconceptions is that nobody knows, people think nobody knows what sustainability means. That is not true any longer and it’s pretty evident by our children, the next generation, by our corporations, by our financial markets who are now making decisions about making investments for capital, for increasing their portfolios, for how they operate, and they’re learning very quickly. So that’s a big misconception. Another one is that I think we’ve always thought of sustainability as a luxury item — something that, “Well it’d be great if we had more money to do, but maybe we’ll think about it in the future.” There’ve been numerous case studies that now tie sustainability to the function of the building, to the performance of the building, and, most importantly for owners and developers, how it’s going to completely decrease your cost in the long run, your life cycle payback of the building.
Jessica: What’s interesting about that comment to me is that when we talk about sustainability being a luxury item, and you think about, you know, what that upfront cost is going to be of my electric car or what’s the upfront cost of making my building net zero — getting past that mindset of the short-term and getting into the long-term mindset is what we struggle with right?
Jessica: So, you can see in the design construction, “What’s my short-term cost going to be, is it really worth it down the line if I’m just going to sell this building off?”
Christine: Absolutely. It’s interesting, there was recently a Dodge report that came out and it actually had research and found that for building owners, the building itself, if it’s built green, is actually seeing a 10% increase in the actual asset value of the building itself.
Jessica: So even if they were to resell it, just dump it off their portfolio, there’s still a value in doing it in a very –
Christine: Yeah, it’s just making economic sense now.
Jessica: Interesting, well that’s a good shift then.
Christine: Yes. I think that’s to the misconception that sustainability is too expensive. There’s a number of case studies that I’ve mentioned before where people have saved so much. You know, solar is a good example, where 20 years ago solar was just a hugely innovative thing that nobody could afford and now, with the changes that have gone through in the United States and with importing solar panels, we still haven’t really seen a shift in the market. And solar has a return on investment of five years or less.
Jessica: Interesting. Hm. And still, that upfront cost is such a scary thing to some people because they’re not thinking long-term.
Jessica: So that’s really the shift that I’ve been hearing you say, is just really shifting toward that long-term sustainability world view versus the short-term living in the moment.
Christine: Absolutely. Another interesting example — you mentioned your electric vehicles — we’ve had a recent shift in California with the utilities, and this is just one example where the utility companies became really savvy, because they’re actually seeing where energy is being generated, where it’s being used, and because everybody’s going home at night to plug in their cars, this shift in the usage of energy went to after 4:00. And so the utilities, you know, they made a big change and they shifted the actual increase on time of use and that was a huge response to something that wasn’t even around 15 ago.
Jessica: Yeah and I got that letter in the mail, so I noticed that shift in time of use. They’re savvy, I mean, I remember when they figured out what was going on. And so when we’re talking about kind of the shift in the long-term mindset, with sustainability, what are things that owners can do now, whether they have their building, whether they’re thinking about a build, what would you suggest? What are their first steps?
Christine: I think the first thing is to get educated, and by that I mean make yourself aware or hire someone who is going to represent your company and you as an owner who understands sustainability and then give them an in-house responsibility. They will then guide the company to setting goals and seeing what’s realistic and having a plan.
Jessica: Mm hm.
Christine: Secondly, having a plan. Having a plan of where they see themselves in the next five or 10 years in response to their region, their global community around them. And part of that is going to be setting some kinds of emission reduction goals. It’s got to be the foundation of your sustainable construction standards and you have to have something that helps your day-to-day operations be more efficient and sustainable as well.
Jessica: When you talk about setting those goals, standards, are there things that people that have existing buildings — are there your top three go-to, do-this-on-day-one kind of steps to get there? To start the process? Or does it really depend on the building itself?
Christine: I don’t think there’s a wrong place to start. A lot of building owners are kind of intimidated — they don’t know that we actually have a whole guide on how to start sustainability.
Jessica: Because it would be intimidating.
Jessica: You know, for me, if I was an owner, to be like, “Alright, we’re going to start doing this.” Well, where do I even start? Is there an easy start?
Christine: Yeah, I mean I think you just have to see what you’re doing now. How much energy you’re using.
Jessica: Be aware.
Christine: How much water you’re using. One of the interesting shifts that I actually heard from one of our financial clients was they’re changing the way that the people in their building live and breathe and the environment they’re creating. There are a couple certifications that don’t have as much to do with the building, but have more to do with the way people live in the building, like the WELL certification or Fitwel are the two that are globally recognized. But what they’re finding, as they’re recruiting the new talent to support the next workforce, is that the next generation is asking questions like, “What’s the healthy building requirement? What’s the air quality? How many breaks do I get? What’s your social equity, you know, responsiveness?” Companies are really having to look a little bit differently at what they’re providing to people within their building as well.
Jessica: It’s interesting that you brought that up and I love that you brought that up because I happen to sit across from our recruiting department here and the questions that I hear from possible candidates, for our own company at our own firm, about the air quality — “Well, I see you’re next to the freeway when I pull you up on Google Maps, what does that mean for your air quality? Is there a gym? What is your lighting?” Questions that when I first joined the company were not ever heard.
Christine: That’s right.
Jessica: And to see and hear that shift is really remarkable, because people are asking and making decisions in a very tight talent market based on that.
Christine: Yes, and people want to live and breathe, they don’t just want to go home and be sustainable, like conserve and recycle. They want to know that this is something they’re going to be doing, they want that work/life balance too and that same quality and they’re savvy enough to expect more.
Jessica: Yeah. Well it’s a very big shift and you see it across all elements of the business, construction, internal operations, it’s all happening and hopefully those that are not on board will get on board because it’s here.
Christine: Yes, and I’m learning every day too, along with everyone else.
Jessica: It’s like technology, I mean, how you stay on top of it is beyond me, but you’re doing it.
Christine: Well thank you. We have a great team.
Jessica: Well thank you! Is there anything else that you would like to touch on or did I get enough questions out of you today?
Christine: You know, I think this is a great starting point. I’d love to come back and we can talk about one aspect or something exciting that we’re doing, but thank you so much for having me.
Jessica: Well no, of course, it’s been a pleasure and I hope everyone learned a little bit or at least got you thinking about what you could do. Thank you.
Jason: If you enjoyed this episode of Construction Insiders, we encourage you to check out our website at www.ccorpusa.com, that’s ccorpusa.com. Where you can find our full knowledge library under the Insights tab. It’s all great stuff, we’re really passionate about it, and we hope you’ll check it out. Thanks for listening.