Sustainability highlights in 2022

Prologis Boulevard in Mississauga, Ontario was awarded the 2022 CREST Award for Innovative Excellence for demonstrating creative and effective approaches, strategies and technologies to achieve performance and sustainability objectives.

We hosted our 7th Annual LEAP Conference after having taken a two-year break due to the pandemic. The conference included a tour of our Vancouver Centre II redevelopment and The Amazing Brentwood.

The 720 King building in Toronto, Ontario achieved Fitwel certification, reflecting its commitment to promoting occupant health and wellness.

As part of our 11th annual LEAP Awards Ceremony, we introduced a new award to recognize sustainability leadership in our industrial portfolio.

Intercity Shopping Centre in Thunder Bay, Ontario was presented a 2022 Earth Award from BOMA Canada in recognition of its outstanding commitments to sustainable operations and environmental excellence.

Pillar Scorecard

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 areas where HOOPP can make an impact. Our scorecard performance remained relatively consistent in 2022. We are encouraged by a growing share of our properties investigating climate risks and pursuing community engagement activities. We will continue to monitor energy and greenhouse gas (GHG) emissions to track our performance against our target and HOOPP’s goal of net zero by 2050.

Pillar	Indicator	2021 value	2022 value
Sustainable investing	Sustainability in asset management (% of budgets including sustainability)	44%	40%
Climate action	Climate resilience* (% of properties managing risks)	46%	50%
	Greenhouse gas emissions** (’000s tCO2e)	255	214
	Greenhouse gas emission intensity*** (kgCO2e/square foot)	3.4	3.4
	Renewable energy (% of property-controlled electricity)	3%	5%
Great buildings	Building ratings (% gross floor area)	51%	52%
	Energy performance (% change in like-for-like consumption)	-1.4%	-5%
	Sustainable procurement policy (% of properties)	55%	53%
Stakeholder prosperity	Tenant engagement (% of properties)	73%	71%
	Community engagement (% of properties)	51%	58%

*Climate resilience figure for 2021 updated to align with change in methodology.

**tCO₂e: Tonnes of carbon dioxide equivalent. The greenhouse gas value includes emissions from all directly owned properties in HOOPP’s portfolio that are at least 25% owned by HOOPP. All buildings owned during 2022 are included. Where data is not available, emissions are estimated based on industry averages. We do this to provide a transparent and comprehensive view into total emissions associated with our directly owned properties, even in areas where we do not have operational control.

***Greenhouse gas emission intensity is reported for buildings where HOOPP has whole building data.

LEAP 2022 featuring the new Vancouver Centre II

In 2022, we hosted our 7^th annual LEAP Conference in Vancouver, British Columbia. This marked our return to an in-person conference after having paused this event for two years due to the pandemic. The conference theme was Turning Point: Building for a Brighter Future as it encapsulates the urgency of the climate crisis. Much of the content from the conference focused on technologies and tools to reduce emissions.

One of the highlights of the conference was a tour of the newly redeveloped Vancouver Centre II. The property officially reopened to the public in January 2023, but conference participants had a chance to glimpse the property as it was nearing completion and learn more about the building’s design and sustainability features, including its novel radiant heating and cooling system. This system uses heated or chilled water circulated through metal ceiling panels to deliver more efficient control over interior temperature. A number of additional benefits are derived from this new system versus forced air, including the use of less ceiling space, having lower maintenance requirements, minimizing hot and cold spots, and avoiding the spread of particulate matter.

This property was also the winner of our 2019 LEAP Forward pitch competition for the development of a tenant-facing app. The app was part of the redevelopment and has multiple features to both boost tenant engagement and help tenants improve their environmental footprint including tracking energy consumption, controlling HVAC and lighting settings, amenity booking and checking EV parking availability.

Finally, the building is also designed to achieve a suite of certifications including LEED^® Platinum, WELL Gold, and WiredScore Gold.

Waste heat capture at The Amazing Brentwood

As part of our LEAP 2022 event, we were pleased to hold our LEAP Award ceremony at The Amazing Brentwood. This community underwent a significant redevelopment and reopened in 2019 as one of the premier mixed-use developments in the Lower Mainland with residential, office and retail space.

The property includes a large mechanical plant to service both the commercial portion and three residential towers. In 2022, this property won our LEAP Forward competition to implement a waste heat recovery project in its mechanical plant. The project will use new heat recovery chillers as well as a waste heat recovery system from sewage to reduce natural gas use by an estimated 94%, resulting in significant greenhouse gas (GHG) emission reductions. The project will be partially funded through incentives from CleanBC through BC Hydro. The project is currently in the design phase with construction scheduled to begin in 2024.

This project is an excellent example of our goal with the LEAP Forward program, which is to partner with our managers to invest in and pilot innovative and impactful technologies that reduce GHG emissions and can be scaled across the portfolio.

Contributing to HOOPP’s net-zero target

HOOPP recently released its climate plan, Our climate strategy: good for the Plan and the planet. The strategy outlines the important role that HOOPP has in helping to address climate change as well as the key steps the Fund is planning to take in the near and medium term to achieve net-zero portfolio emissions by 2050.

The strategy incorporates interim targets for credible transition plans, green investments and emissions reduction including HOOPP Real Estate’s interim target of a 50% emissions reduction for properties under operational control by 2030 against a 2019 baseline. This is an ambitious target, and we are proud of the progress we have made to date through targeted engagement with our management partners and the deployment of carbon-reduction investments at properties across our portfolio.

Reducing greenhouse gas (GHG) emissions in our real estate portfolio represents our greatest opportunity to contribute to the low-carbon transition. There are several important areas where more work must be done, including:

Inconsistent regulatory landscape

Governmental efforts to strengthen building codes and other regulations to address emissions in the built environment are inconsistent across regions. Some regions are moving faster than others, potentially leading to inconsistent approaches and guidelines in different geographies. This can lead to differences in expertise and knowledge between stakeholders in these regions and make it more difficult to execute a portfolio-wide GHG reduction approach. We are encouraged by governmental efforts as it will help ensure a level playing field regionally and spur real estate actors across the value chain to action.

Projecting emissions from electricity

A major pillar of the low-carbon transition is decarbonizing electricity grids with most emission reduction plans dependent on grid decarbonization as a significant contributing factor. Many countries, including Canada have committed to delivering a net-zero electricity grid, but the pace of this transition differs between regions and may be subject to change based on future policy changes. That doesn’t mean we cannot make progress. We will continue to focus on energy efficiency projects, renewables and fuel-switching wherever feasible.

Access to data

Access to quality energy data is a challenge across many industries including real estate. Some jurisdictions, like Ontario, have implemented regulations to provide building owners with more data. However, in areas where this data is lacking, it can often be a challenge to procure energy data from tenant-controlled areas where we have limited visibility into or control over energy consumption. We continually work with our management partners and tenants to procure this data so that we can establish a more complete view of building performance.

Tenant behaviour

The emissions profile for a building is largely driven by the type of energy sources used on-site alongside tenant behaviour. As a landlord, HOOPP can and does help decarbonize buildings through investments in low-carbon energy sources, with awareness that tenant behaviour is one of the largest factors driving day-to-day energy use. As such, tenant engagement is a critical tool to driving down emissions, especially in areas that are typically under tenant control (e.g., residential units, industrial properties). We appreciate the work being done by our management partners to educate tenants on the importance of managing energy use and will continue to explore opportunities to work with tenants to reduce energy and emissions.

Novelty of low-carbon technology

The technology landscape in real estate is quickly changing with new, low-carbon technologies and systems being introduced at a rapid pace. This presents both tremendous opportunities to test and deploy innovative solutions as well as a challenge to understand which technologies are most effective and least at risk of obsolescence. Through our LEAP Forward program, we aim to test new solutions that we can scale at the portfolio level. We also rely on the expertise and knowledge of our management partners to bring solutions that could work well for their properties.

We will continue to work and collaborate with industry partners, peers, tenants and other stakeholders to resolve these challenges. Implementing this interim target of a 50% emissions reduction for properties under operational control by 2030 against a 2019 baseline will be difficult and we plan to continue to invest in tools, engagement and capacity building to collectively overcome these challenges.