Sustainable design in the retail environment.
By Dustin Watson
Although green design has become relatively commonplace in residential and office developments — and has even become a necessity in some communities — it has remained a relative oddity in the retail space.
This is understandable when you consider the basic dynamics of retail. Retail, after all, is reliant, for the most part, on the automobile, which immediately runs counter to the ethos of sustainability.
From a design standpoint, much has been said about the advantages sustainable developments provide in lowering operating costs with respect to energy, water and waste, as well as their ability to produce healthier indoor environments and reduce greenhouse gas emissions. Because of retail’s unique requirements (such as equipment that can yield higher process energy loads), though, it has been difficult to use the same tools and techniques as office and residential development to evaluate the impact of sustainability measures.
Combine all of that with the smaller profit margins under which most retailers operate and the short term financial deals developers typically use in structuring retail projects, and it is easy to understand why retail sustainability has been challenging at best.
Over the past decade, though, retail sustainability gradually has begun to be more accepted as corporate sustainability programs have become more developed and the benefits to the business in terms of economic, social and environmental impacts more obvious.
There has always been a feeling that retail projects need to be well-designed and attractive in order to entice more consumers to stay and, implicitly, spend more money. But now, there is a greater recognition that retail developments deliver a cultural impact on their surrounding neighborhoods. As a result, shopping has become less about buying goods and more about creating experiences. And an increasingly important part of that experience for many consumers is an understanding that by choosing to shop in a sustainable retail development, they are giving their tacit endorsement to that environmentally friendly environment.
That change in mindset has helped to clear the way for additional corporate funding and resources to be directed to retail sustainability programs which, if well-executed, will ultimately lower operating expenses, decrease risks, broaden consumer loyalty and increase the bottom line.
To be sure, designing these principles into a retail center continues to offer unique challenges, but these challenges are much easily met in new construction. Unfortunately, existing retail facilities will always represent a significantly larger share of our building stock. By some estimates, new construction represents only about 2% of our total building stock.
According to government estimates, retail facilities account for 20% of commercial buildings’ on-site energy use and are a significant contributor to greenhouse gas emissions. Given that, how we operate a property sustainably must become an essential component of any sustainable retail development and design. Effective operational performance can have a significant impact on a retail center’s sustainable footprint.
Energy represents perhaps the biggest and clearest opportunity to improve property efficiency and reduce a center’s carbon footprint. It is also the most straightforward characteristic to present the business case for sustainability.
There are numerous techniques to reduce energy consumption, including renewable energy use, reducing energy demand with energy-efficient lighting, and recycling waste heat. And because energy use is the largest direct expense for most retail centers, energy reduction has one of the largest environmental impacts and represents the largest potential reduction in costs.
Water represents another major conservation issue. In no uncertain terms, retail centers use a lot of water. There is certainly a cost benefit to reducing municipal and treatment costs, but in some regions of the U.S. it is becoming paramount because of increased regulation imposed to protect this finite resource. On the operations side, reducing potable water use can be achieved by using water conserving plumbing fixtures or native plantings that reduce irrigation needs, and by installing tenant sub-metering to track water consumption.
Waste reduction is yet another key aspect of any sustainability program. Tenants and landlords should look for ways to divert waste from landfills and incinerators. Operators, meanwhile, should consider dividing their waste streams into those items that can be recycled or reused and those that will go to a landfill. Decreasing those items that end up in a landfill could decrease a center’s landfill tipping fees, as well as provide an environmental benefit that resonates with customers who see the direct correlation to their own recycling efforts.
Finally, how the center operates from a site and maintenance perspective should be addressed. A sustainable operations plan should deal with snow removal, cleaning of external facades, sidewalks and common areas, and detail what paints and solvents are acceptable. The choices in each case should clearly reflect environmentally sensitive practices. For renovations, operators should consider installing light or reflective roofing materials that reduce the urban heat island effect and reduce energy consumption.
All of these techniques can help a retail center operate more sustainably, but how does an operator know whether progress is being made? The recent announcement by the International Council of Shopping Centers’ (ICSC) Property Efficiency Scorecard could offer a solution. There are many benchmarking tools available to an operator, but none have truly addressed the unique characteristics of a multi-tenant retail facility accurately. With sustainability becoming a major focus and increasing demand from investors and owners, ICSC’s benchmarking tool has the potential to become an industry standard.
The scorecard assesses how a shopping center or a collection of shopping centers stand with respect to energy use, water consumption, waste disposal and green operations. This assessment can be benchmarked against other centers in its own portfolio or against industry peers regionally or nationally.
The evaluation metrics used by the scorecard are based on shopping center specific criteria. The scorecard asserts that it will provide prescriptive guidance for future improvements, providing operators with actionable intelligence about how to make their centers more sustainable. This benchmarking tool will also output information on performance data that can be reported to stakeholders through a number of corporate sustainability reporting systems, including directly outputting data in a format required by the Carbon Disclosure Project and the Global Real Estate Sustainability Benchmark.
As is often said, “We can’t improve what’s not being measured.” In the typical retail development, landlords do not control the operational practices of tenants so having a tool that caters to the specific needs of multi-tenant retail projects will help improve operational efficiencies. These efficiencies could lead to the reduction of CAM charges, lower total costs, and reinforce a shopping center’s environmental credibility.
Though it can be difficult to measure a center’s social impacts, we absolutely can measure its economic impact and, more and more, we are able to measure its environmental impacts. At the end of the day, those operational activities that generate economic advantage, advance our natural environment, and provide considerable payback to society are the ones that ultimately should be pursued.
The ideal retail project is one that meets the needs of owners, retailers and consumers, where sustainability is not just an add-on but an integral part of the design. Investors, developers, tenants and operators are at last seeing the significance of sustainability’s multiple benefits. Sustainable design is and will play a much larger role in retail development.
— Dustin Watson is a partner and the director of sustainability at the Baltimore-based design firm DDG. Watson is also on the International Council of Shopping Center’s Retail Green Planning Committee, the Urban Land Institute’s Sustainable Development Product Council, and the AIA Baltimore’s Committee on the Environment. The author may be reached at [email protected].