HOOPP's 2021 Real Estate Sustainability Report
We integrate sustainability principles in our management practices and across our real estate portfolio, which encompasses over 75 million square feet of office, retail, residential and industrial space across Canada, the United States and Europe. Our real estate portfolio includes over 215 properties as well as indirect investments, such as funds. As of December 31, 2021, real estate assets were valued at $20.1 billion, up from $15.5 billion in 2020. This represents 17.5% of the HOOPP Fund’s total net assets.
In this report, learn about the sustainability highlights from 2021 within HOOPP's real estate portfolio, our Pillar Scorecard, which is our primary tool for tracking and reporting portfolio-level sustainability performance, what we're doing to support HOOPP’s net-zero goal and case studies that demonstrate excellence and leadership in sustainability.
A special thank you to our members
Throughout 2021, HOOPP members and employers continued to navigate an incredibly difficult healthcare environment. We are grateful for their courage, leadership and commitment in these challenging times. The HOOPP Real Estate team wants to thank our members and employers for everything they have done and continue to do for our communities. We are inspired by their dedication as we remain committed to delivering on our pension promise and continuing to embed environmental and social factors in our investment process to create positive outcomes and minimize risks.
Sustainability Highlights in 2021
Pillar Scoreboard
The Pillar Scorecard is our primary tool for tracking and reporting portfolio-level sustainability performance. Indicators included in the scorecard reflect the most material sustainability topics where HOOPP can make an impact. Our performance remained steady in 2021 as the square footage of our direct investments grew by about 15%. We are encouraged by reductions in energy and GHG intensity and will aim to continue to improve performance as we integrate more properties and managers into our sustainability program.
HOOPP Real Estate sets greenhouse gas emission reduction targetClimate change poses one of the most urgent and pressing systemic challenges of our time. While the issue of climate change is complicated and constantly evolving, it can no longer be approached solely as a long-term issue.
As a Fund, we are committed to achieving net-zero carbon emissions in our portfolio by 2050. To support HOOPP’s net-zero goal, HOOPP Real Estate has set its own medium-term greenhouse gas reduction target.
As our inaugural set of energy and greenhouse gas (GHG) reduction targets expired in 2020, we made it our top sustainability priority to commit to a science-aligned* GHG reduction target for 2030 that was both ambitious and realistic. At the end of 2021, HOOPP Real Estate committed to reducing GHG emissions 50% by 2030 compared to a 2019 baseline, for assets under operational control. We determined that the scope would be assets where HOOPP has operational control as that is where we have the greatest ability to influence building performance.
We identified three key factors that we believe will help us achieve this target:
1. Medium-term, science-aligned* time horizon
We selected 2030 as our end-year because it is a medium-term time horizon that provides the right balance of urgency with sufficient time to plan and invest in energy reduction and decarbonization. Setting interim targets is necessary to ensure we are on pace to achieve the Fund’s long-term goal of net-zero carbon emissions by 2050.
2. Effective engagement strategy
Because we rely on independent property managers, our journey to setting this target involved building knowledge, capacity and securing buy-in from multiple stakeholders. In 2021, we engaged managers through our quarterly sustainability newsletter The Green Update as well as through Sustainability Committee Calls to gain insight into how to best collaborate to achieve our proposed target. This helped generate support for both the target and understanding of property-level GHG reduction levers among our management partners.
3. Emissions-planning tool
We knew the target would only succeed through focused, asset-specific planning. To support this challenging work, we developed a custom emissions planning tool for each property team. The tool included property baseline emissions and allowed managers to forecast future GHG reductions based on grid decarbonization and planned investments such as energy efficiency projects, on-site solar installations, or purchases of renewable energy credits.
The outputs of our emissions planning tool provided insight into which properties were on-track or could demonstrate a credible plan to achieve a 50% GHG reduction by 2030, and which assets required further engagement to overcome decarbonization challenges. The tool also enabled us to monitor which investments each property was pursuing and identify candidates for specific follow-up or intervention. The results provided a clear pathway to achieving GHG reductions and gave us and our managers confidence that our portfolio could achieve the proposed target.
To continue driving progress, our focus areas for 2022 include implementing systems to monitor the execution of property-level GHG reduction plans, integrating emission reduction opportunities into capital planning, and establishing a GHG reduction strategy for new developments and acquisitions.
*Science-aligned means that the target is consistent with emission reduction pathways required to limit global warming to well below 2°C above pre-industrial levels.2021 Case Studies
For 2021, we are highlighting case studies from our portfolio that demonstrate excellence and leadership in sustainability. These case studies showcase some of the most impressive and impactful environmental and social achievements from our portfolio in 2021. By sharing them we aim to recognize the achievements of the teams involved and help promote sustainability across the real estate industry.
Devonshire Mall hosts mass vaccination site
In June 2021, Devonshire Mall in Windsor, Ontario, as part of the HOOPP Real Estate portfolio, began operating as a mass COVID-19 vaccination site. Devonshire Mall replaced two local vaccination sites operating out of the University of Windsor and the St. Clair College SportsPlex, which both closed to prepare for the fall 2021 academic semester. After vaccinating thousands of individuals, the clinic ceased operations in April 2022. This mall has since shifted ownership, but we want to thank property staff and management involved in coordinating this important initiative. As the pension plan for Ontario’s healthcare workers, HOOPP is pleased to support the healthcare system while also contributing to the health of our communities.
1875 Lawrence wins inaugural Sustainable Fund award
In 2021, HOOPP introduced the Sustainable Fund LEAP Award to recognize extraordinary sustainability practices among our indirect fund investments. The inaugural winner was 1875 Lawrence, a 15-story carbon neutral office tower in Denver, Colorado managed by Unico Properties.
Since Unico Properties purchased the building in 2016, they have focused on improving operational performance to achieve carbon neutrality. The property has undergone several upgrades, including to the building automation system, which resulted in annual energy savings equivalent to the power required for 55 homes. Other upgrades included the energy information system as well as installation of electric vehicle chargers on-site. The building is also LEED Gold certified, and Fitwel Viral Response certified. These efforts have improved operational performance, as well as increased tenant comfort and safety during the pandemic.
To achieve carbon neutrality, the property purchases solar electricity from Unico Solar’s 40-acre solar farm in nearby Aurora, Colorado, owned in a joint venture with Unico Solar Investors and Excelsior Energy Capital. This solar energy agreement allows the property to procure clean energy while hedging against volatile and rising electricity prices. The property’s procurement of solar power offsets over 2,000 metric tonnes of CO2 annually.
HOOPP is proud to invest in real estate funds that integrate environmental and social considerations in their management approach and that demonstrate innovative practices to significantly reduce greenhouse gas emissions to transition to a low-carbon future.
25 York achieves highest BOMA BEST Platinum score globally
As part of its recertification process for BOMA BEST Platinum, our 25 York Street office tower in Toronto achieved a 99.2%, the highest score globally for this certification. This same property was also awarded the 2021 National Green Building Excellence Award for an Existing Building by the Canada Green Building Council. This award recognizes continuous improvement in building operation, performance and occupant satisfaction.
This property is no stranger to winning awards and setting records, having achieved the highest ever BOMA BEST score for an office tower in 2015, becoming Canada’s first Fitwel certified office tower in 2018 and winning The Outstanding Building of the Year (TOBY) Award in 2019. The building is also certified LEED® Platinum: Existing Building Operations & Maintenance, LEED® Core & Shell Gold and LEED® Commercial Interiors Gold.
25 York’s remarkable accolades are a testament to consistent operational excellence and continuous improvement of sustainability performance. HOOPP applauds the property team for their hard work in achieving these outstanding accomplishments.
Student residences bring mental health resources to students’ doorsteps
The Resident Mental Health Awareness Week has been run at our Parkside Student Residence and CampusONE TO residence in Toronto since 2018, and at Campus1 MTL student residence in Montreal since 2019.
The Mental Health Awareness Program is a multi-tiered mental health awareness and wellness campaign held in October and January of each year. While all academic institutions offer mental health resources, this initiative is unique in bringing those resources to student’s doorsteps and hosting curated virtual experiences.
The program began with Thrive Week: a week-long mental health campaign taking place in October. The program was overhauled and expanded in 2020 to meet increased mental health needs created by the social isolation of the COVID-19 pandemic. This included expanding the program to include use of the Aspiria Student Assistance Program which provided free mental health support and counselling services 24/7 to residents via phone or internet. The resource gave residents instant access to mental health support in times of crisis and increased accessibility to counselling. It also provided financial and legal consultation and life and wellness coaching.
The program expansion also included the creation of the Hi How Are You: Healthy Habit-a-Thon which takes place in January. This is a resident-driven video series highlighting ways people practice daily habits to improve mental health and resilience.
Building staff at all levels participate through event attendance, execution and marketing to foster a supportive environment for students with mental health challenges while demonstrating solidarity between residents and staff. Tenant health and wellbeing is a key component of sustainable real estate and we are inspired by the property teams’ efforts to create a healthy environment for students.
HOOPP's 2021 Real Estate Sustainability Report builds on their 2020 Real Estate Sustainability Report which is available here. It is worth highlighting here because it is an important part of the organization's commitment to sustainable investing.
I would urge my readers to read more on how HOOPP addresses sustainable investing here.
You should also learn more about the organization's Sustainable Investing Policy and about HOOPP’s climate change initiatives.
When HOOPP evaluates new investment opportunities, their investment teams integrate ESG factors into their analysis and decision making. This integration helps broaden the investment teams’ view of the risks and opportunities inherent in each investment.
This is the case across public and private markets:
ESG considerations are embedded into asset management activities for private investments. For example, our real estate team has developed an industry-leading sustainability program that is a core part of its portfolio management activities. The team works closely with its partners to advance sustainability across its portfolio.
HOOPP's real estate sustainability program has also received multiple awards, including three 2020 Investment and Pensions Europe (IPE) Real Estate Global Awards in the categories of Portfolio Construction, Direct Strategy and Sustainable Strategy. Learn more about our real estate portfolio and read our latest Real Estate Sustainability Report.
In terms of multiple awards, again this year, ten HOOPP property managers were recognized for their sustainability, innovation and leadership:
From creating urban gardens with beehives to developing an app that optimizes HVAC efficiency, the property managers of the buildings within HOOPP’s real estate portfolio once again demonstrated a commitment to innovation and sustainability in 2021. Since 2012, HOOPP has honoured over 110 property managers for their property initiatives and sustainability solutions at the LEAP Awards, all in the spirit of advancing sustainability across our real estate portfolio.
At this year’s LEAP Awards, 10 HOOPP property managers were recognized for their work in the areas of sustainability, innovation, and leadership. In addition to the existing categories, a new award was introduced this year: the Industrial Leader Award, to recognize that all types of properties play a role in the health and vibrancy of communities. The full list of categories is below.
“HOOPP’s real estate management partners continue to surpass our expectations,” said Eric Plesman, Head of Global Real Estate. “Year after year, they continue to help us deliver on the goal of responsible stewardship, which is a key component of both our real estate strategy and HOOPP’s overall Sustainable Investing approach.”
He added: “Being able to engage our partners in this way allows HOOPP to make a positive difference in our global portfolio footprint while also driving positive change in the industry at large.”
Accompanying this year’s awards was the release of HOOPP’s 2021 Real Estate Sustainability Report. HOOPP reports each year on progress in areas such as energy, waste, water and carbon emissions, as well as engagement with our tenants and the communities where our properties are located.
HOOPP is a global leader in sustainable real estate practices and we aim to make a positive difference through our global portfolio footprint – more than 75 million square feet of office, retail, residential and industrial space at more than 215 locations across Canada, the United States and Europe. At the same time, HOOPP’s real estate portfolio continues to outperform its financial benchmarks.
Plesman said: “Sustainable investing and maximizing returns for our members go hand in hand. Being able to fulfil the pension promise to our more than 400,000 members is a driving factor in our decision to prioritize sustainable real estate investing across the portfolio.”
Learn more about HOOPP’s sustainability efforts.
The winners of this year’s LEAP Awards are:
Tenant Collaboration Award
Winner: The Amazing Brentwood (SHAPE Properties)
Burnaby, British Columbia
For installing a novel kind of ventilation technology in their food court to reduce odour and volatile organic compounds, an initiative that has additional sustainability impacts including reducing over 200 tons of emissions.
Community Impact Award
Winner: Hyatt Regency Bethesda (The Meridian Group)
Bethesda, Maryland
For participating in an initiative called Operation Allies Welcome, a coordinated effort by the United States Federal Government to support and resettle vulnerable Afghan refugees.Winner: Portfolio Initiative (Knightstone Capital Management Inc.)
Toronto, Ontario
For creating a virtual educational campaign focused on the celebration of National Indigenous People’s Day.
Technology Innovator Award
Winner: 1,2,8 Prologis (Triovest Realty Advisors Inc.)
Mississauga, Ontario
For implementing innovative technology to fine tune their HVAC and building system performance through real-time analytics, which saved nearly $50,000 and reduced emissions by 200 tons of CO2 equivalent.Climate Leader Award
Winner: Portfolio Initiative (GWL Realty Advisors, Inc.)
Toronto, Ontario
For working with a third party to complete a detailed physical climate risk assessment of their entire HOOPP-owned portfolio, allowing the manager to prioritize assets for planning and determine best practice mitigation measures.Sustainability Achiever Award
Winner: 25 York Street (Menkes Property Management Services Ltd.)
Toronto, Ontario
For having the best overall Pillar Scorecard performance, the highest BOMA Best score in the world, as well as the National Green Building Excellence Award for an Existing Building by the Canada Green Building Council.Industrial Leader Award
Winner: Glenwood Industrial Estates (Triovest Realty Advisors Inc.)
Burnaby, British Columbia
For implementing battery-powered landscaping equipment manufactured by their tenant, leading to fuel savings and a reduction in emissions.Stakeholder Engagement Innovator Award
Winner: 2001 Robert Bourassa (GWL Realty Advisors)
Montreal, Quebec
For partnering with a tenant to co-finance the transformation of an unoccupied rooftop into an urban garden and beehive, offering tenants contact with nature while reducing rainwater runoff and the heat island effect common in urban areas.Sustainable Operator Award
Winner: 4711 Yonge St. (Menkes Property Management Services Ltd.)
Toronto, Ontario
For contributing to the development of an app to help building operators optimize HVAC efficiency, and for implementing energy saving initiatives that saved enough electricity annually to power 77 homes.Sustainable Fund Award
Winner: Anthem Row (The Meridian Group)
Bethesda, Maryland
For the creation of numerous policies to promote peace of mind for tenants and ensure a healthy environment during the pandemic, including the creation of a Contagious Disease Outbreak Prevention Preparedness Plan to safeguard against future pandemics.
Eric Plesman, Head of Global Real Estate at HOOPP and his team are doing a great job diversifying the Real Estate portfolio by sector and geography and delivering outstanding long-term results:
They are also making sure HOOPP remains a global leader in sustainable real estate practices, taking a science based, collaborative approach to lower their greenhouse gas emissions, engaging their stakeholders in the process.
As discussed above, they have developed a custom emissions planning tool for each property team:
The tool included property baseline emissions and allowed managers to forecast future GHG reductions based on grid decarbonization and planned investments such as energy efficiency projects, on-site solar installations, or purchases of renewable energy credits.
The outputs of our emissions planning tool provided insight into which properties were on-track or could demonstrate a credible plan to achieve a 50% GHG reduction by 2030, and which assets required further engagement to overcome decarbonization challenges. The tool also enabled us to monitor which investments each property was pursuing and identify candidates for specific follow-up or intervention. The results provided a clear pathway to achieving GHG reductions and gave us and our managers confidence that our portfolio could achieve the proposed target.
This is taking a proactive approach to sustainable real estate practices and it requires strong collaboration from HOOPP's property managers.
Lastly, I realize HOOPP doesn't have an organization-wide sustainability report but it is important to note the organization is recognized by its international peers on sustainability, scoring high in the Responsible Asset Allocator Initiative (RAAI) along with other large Canadian pensions.
I'm not sure why HOOPP hasn't come out yet with a responsible investing report covering all its activities but I'm pretty sure it is something they are working on and their Real Estate Sustainability Report can be used as a model to expand to other areas they'd like to cover.
One thing I can assure you of is HOOPP's commitment to net zero and its efforts in addressing climate change are real and meaningful:
Climate change poses one of the most urgent and pressing systemic challenges of our time. It presents a unique risk that requires coordinated action from governments, corporations, individuals and institutional investors like HOOPP. While the issue of climate change is complicated and constantly evolving, HOOPP recognizes it can no longer be approached solely as a long-term issue.
We are proud to share that HOOPP has committed to achieving net-zero carbon emissions in our portfolio by 2050. Addressing climate change is a priority for our Board of Trustees and our executive management team. This commitment to net zero is a critical part of our ongoing focus on climate change and while our work to meet this goal is well underway, there is more to come. Some of our recent work includes:
- Becoming a founding member of Climate Engagement Canada, a collaborative engagement initiative focused on driving climate action at Canadian companies that leads to real-world emission reductions, decarbonization, and improved resiliency.
- Implementing a $1 billion portfolio allocation to climate change equities, focused on carbon-efficient companies, clean energy, and other climate solutions. We will look to expand this allocation over time.
- Continuing to invest in green bonds, which fund projects such as clean transportation, energy efficiency and conservation, clean energy and technology, among others.
- Continuing to expand on our climate-related disclosures by following the Task Force on Climate-related Financial Disclosures (TCFD) framework for the reporting of climate-related financial information and calling on companies to do the same.
Throughout 2022, we will be releasing additional information about HOOPP’s efforts to address climate change. We encourage our members to visit hoopp.com/climatechange for the latest news and information about our work.
As I stated, HOOPP takes responsible and sustainable investing very seriously and it is part of its commitment to deliver sustainable pensions to its members over the long run.
Below, Sustainable Development Goals have become a framework for sustainable investors. To apply the SDGs to Real Estate investments and to generate impact, the SDG-alignment needs to be intentional and measurable. Alexandros Gratsias of J. Safra Sarasin Group discusses how they align real estate with these UN SDG goals.
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