ICSC PROPERTY EFFICIENCY SCORECARD TO LAUNCH AT RETAILGREEN CONFERENCE IN DECEMBER
It’s November, and just around the corner is ICSC’s RetailGreen Conference. This year’s event will take place on Dec. 3 and 4 in Phoenix, and promises to be one of the best attended to date. In addition to a packed agenda filled with valuable speakers and networking sessions, the conference will be the global launch site of ICSC’s Property Efficiency Scorecard.
The Property Efficiency Scorecard has been several years in the making, and you might have already heard something about its development through industry publications or pre-launch publicity, such as this ICSC website. Kimco has been involved in the development of this new industry resource since early in the process -- initially as a member of ICSC’s Scorecard steering committee, and now as part of a small group of pilot companies that have contributed financial support and property data to build out a functioning prototype of the tool.
I wrote about the Scorecard and three key success criteria for this effort last year. The purpose of this blog post is to provide additional background on the Scorecard in advance of its impending launch. In particular, I’d like to focus on why this tool is necessary, how it has been developed, and what features it will contain when launched in a few weeks.
Why we need (yet) another tool to measure sustainability performance
As the old, somewhat overused saying goes -- “What gets measured gets managed.” Most owners who start down the path of improving property sustainability quickly recognize the necessity of collecting data on an entirely new set of performance measures, such as energy use, water use, and waste diversion, in order to understand how the actions they take are impacting environmental performance. The trouble is most of us aren’t accustomed to measuring property performance in this way since we’ve historically focused on financial, tenant, and other metrics in order to evaluate performance.
[caption id="attachment_2432" align="aligncenter" width="475"] Screen capture from a beta version of the web-based scorecard application. Based on user-submitted data, the tool will score the shopping center on its relative performance in four key areas: energy use, water use, waste, and green operations practices.[/caption]
For companies taking the first steps toward measuring sustainability performance, there is good news and bad news. The good news: much progress has already been made to define metrics, measurements, and reporting standards for tracking and sharing this type of information. The bad news: there are literally dozens of standards that have developed over the past few years and it is, at times, difficult to understand which, if any, are applicable to one’s own circumstances.
When ICSC set out to develop a new tool for measuring retail shopping center performance, it was with an understanding that this is a road that others have traveled before. In fact, this effort only came about as a result of member frustration at the failure of existing tools to meet the unique needs of the retail owner community.
At its core, the purpose of ICSC’s effort -- and the committee of companies that came together to advance its endeavor -- is to help shopping center owners measure and improve the performance of existing properties relative to their peers. In order to achieve this, the tool needed to overcome roadblocks that had prevented retail owners in the past from using other measurement and rating systems. A few of the roadblocks include:
- A focus on building design over building performance. In particular, the need for a tool that can help improve the performance of the over 100,000 existing shopping centers that have already been built to date in the U.S.
- A lack of tools that can isolate and account for key differences between various types of retail properties (e.g. enclosed mall versus open-air center) and the lack of whole-building performance data available within triple-net leased properties.
- An inability to benchmark retail properties against other similar properties, while simultaneously protecting the privacy of individual owners. In other words, a tool that establishes credible but “blind” benchmarks.
Developing a new tool for benchmarking retail properties
ICSC set about developing the tool in earnest in 2012, following board-level approval of this new strategic initiative. An executive chairman was named, and a steering committee of member companies was formed to guide the development process.
By the summer of 2012, the planning process was well on its way with initial steps taken to define the functions of the Property Efficiency Scorecard and to execute an RFP process to select key vendor partners to aid in its development. The RFP specifications were finalized in June, and in early July the document was released to twelve prospective vendor partners.
A sub-committee was appointed to review and score RFP responses, and responding vendors were invited to in-person presentations in October. The list of responding vendors was impressive, and included firms with a wealth of hands-on experience in both the qualitative and technical aspects of sustainability benchmarking.
In late 2012, the committee made a final selection and invited the consultancy Paladino and Company, together with its technology partner FrontRunner Apps, to serve as ICSC’s vendors for the development of the Property Efficiency Scorecard.
Completing the RFP process was an important milestone, but in actuality marked the beginning of a more significant undertaking to bring the Scorecard from the concept phase into reality. Over the past year, the steering committee has worked hand-in-hand with Paladino and FrontRunner to finalize requirements, supply representative shopping center data, develop and test the tool, and wrestle with a number of design challenges along the way.
Throughout the development process, I’ve been impressed by the determination of this group to remain focused on the end objective. As we’ve often said along the way, there are any number of reasons why others have been unable to develop such a tool in the past. The knowledge of this has kept the group focused on delivering a result that will move the industry forward, without necessarily shooting for perfection out of the gate. We all strongly believe that making incremental progress toward our end objective is more important than developing a tool that meets every possible need.
The Property Efficiency Scorecard will launch as a web-based software tool with several key functions, designed for ease-of-use and to serve the needs of smaller and larger property owners alike. In particular, the Scorecard will:
Assess and benchmark -- By uploading information about the type, size, and other key attributes of a shopping center, as well as key sustainability performance data, such as energy use, property owners will be able to compare the performance of one property against itself year-over-year, against other properties they own, and against a benchmark average for retail properties of a similar character owned by others.
Improve -- Through a set of tailored recommendations and best practices, owners will be able to learn some of the key measures they can pursue to improve the relative sustainability performance of their shopping center. For example, the Scorecard will provide the ability to view a library of measures used to improve the energy efficiency of common area building systems, such as parking lot lighting.
Report -- It’s natural that once a property owner uploads data and measures performance, they’ll want to share some of that valuable information with others. In particular, many owners like Kimco are now voluntarily disclosing key sustainability performance data to investor partners through forums such as the Global Real Estate Sustainability Benchmark (GRESB). The tool is designed to easily allow users to export data for both internal and external reporting purposes.
Beyond this initial set of features, the tool will continue to evolve over time. We hope that interest and participation among owners will drive further development of the Scorecard.
How property owners can get involved
We encourage all property owners, managers, as well as investors in retail shopping centers to learn more about the Property Efficiency Scorecard and help improve it moving into the future. Here are three ways to get more information:
- Attend ICSC’s RetailGreen Conference (register here)
- Sign up for updates via the Scorecard website
- Enroll properties and use the tool, beginning in January 2014