OUR RESPONSE TO THE SECURITIES AND EXCHANGE COMMISSION’S PROPOSED RULES ON CLIMATE CHANGE

In March of 2022, the Securities and Exchange Commission (SEC) – the federal agency created to protect investors, and maintain fair, orderly, and efficient markets – released a proposed rule for public comment that clarifies and sets expectations for how publicly traded companies report on climate change related issues.  The International Living Future Institute has submitted formal comments to the SEC expressing our support, and providing recommendations for strengthening the proposed rules. We’ve provided a link to our full comments here, and we encourage our community to submit your own comments.

Behind every Certified and Registered Living Building is an investor.  

Someone, or multiple people and organizations, investing their money and their time into demonstrating what good looks like.  Whether it’s a bank making a loan, a Real Estate Investment Trust (REIT), a corporate investment, or a university investing from an endowment, these investors know that what they are investing in is much bigger than the single building.  They are investing in the ideas and philosophies of a Living Future as much as they are investing in a physical asset.  But they are investing in the asset, and increasingly, investors are asking and being asked; what sustainability criteria do you use to determine where you invest?  Do you have carbon reduction targets?  Do you report out on your sustainability goals and progress?  How do you manage climate change risks to your company?

The financial sector is paying attention to climate change.

Aside from the obvious connection between this proposed rule and climate change impacts, ILFI is particularly interested in this development for multiple reasons.  First, there are already a number of publicly traded companies that have invested in Registered and Certified Living, Zero Energy, and Zero Carbon buildings including Google (GOOGL), Amazon (AMZN), Etsy (ETSY), PNC (PNC), Mohawk (MHK), Target (TGT), and many more.  These companies will be subject to the new proposed rules, and we are working to ensure that ILFI’s certifications remain aligned with other corporate reporting standards.  Second, because of ILFI’s experience with rule-making about reporting, and transparency, we have a unique perspective to add to the discussion of how the SEC can best position their reporting frameworks to be effective and meaningful.

For our community, this new rule marks a unique moment when “the money people” have started to ask the questions we’ve been answering for decades – how do we ensure companies are taking meaningful action on climate change?  What is the best way to provide transparency and accountability around those actions?  As our community engages with more and more companies, banks, investors, and REITs, we collectively have one more way to engage them in a discussion about why they should build a Zero Carbon, Zero Energy, or a Living Building; because ILFI certification provides third-party validation of their progress toward their corporate goals in alignment with SEC reporting standards.

ILFI’s comments and recommendations

You can read ILFI’s full response to the SEC Proposed Rule for the Enhancement of Climate-Related Disclosures for Investors here. In summary, we are pleased to see the SEC establish these rules, that they are aligned with existing industry adopted frameworks like the GHG Protocol, and that they are prioritizing measured actual reporting over predictive reporting.  In addition to our comments, you can read comments from other aligned organizations such as ULI, USGBC, CERES, and the WWF.

However, the rules are currently focused only on a single attribute of carbon and climate change related resilience risks, and do not currently address the holistic nature of these issues including human health, or social justice and equity.  ILFI has encouraged the SEC to expand their consideration of future rule-making to include a more holistic approach for reporting on the full range of sustainability measures and impacts that companies are achieving through ILFI Certifications.

Moving forward

The proposed rule from the SEC is a positive signal to large publicly traded companies that addressing climate change risks, and setting and tracking carbon reduction targets, are important for their businesses to address.  The attention that is being given to issues of sustainability reporting from the investor community is also a positive signal, and makes it clear that the green building movement’s approach of voluntary certification of leading organizations while advocating for increased minimum requirements from codes and regulations is working.  

As more and more companies and investors ask for clarity about company carbon targets, the ability of our community to deliver projects that not only align with corporate goals and eliminate carbon emissions, but that are also third-party validated in alignment with SEC reporting requirements will become a driving factor to achieving a Living Future.

The SEC is accepting additional public comment through June 17, 2022.

A crosswalk between LBC 4.0 and the UN SDGs: Validating progress with ILFI’s programs

INTRODUCTION

Thousands of businesses and organizations all over the world have been inspired by the United Nations Sustainable Development Goals (UN SDGs). These 17 global goals aim to end extreme poverty, fight inequality and injustice, and protect the planet. While there are significant public pledges of support for the UN SDGs, tracking and validating an individual project’s progress and contribution to the goals has been lacking. As we count down the decade to 2030, now is the time to deliver on our commitments.

This article is intended for organizations using the UN SDGs as a guide to their sustainability work at a broad scale. We will describe here a crosswalk developed by ILFI to provide a map showing how Core Green Building Certification or Living Building Challenge Certification can be used to validate achievements toward the UN SDGs across a real estate portfolio.

OVERVIEW OF THE UN SDGs

The United Nations Sustainable Development Goals (UN SDGs) were established in 2015 as a call to action by and for the nations of the world to promote prosperity for all while also protecting the health of the planet. There are 17 interrelated goals to eradicate poverty and hunger, improve human health, generate financial stability and employment, increase education, address climate change, protect environmental quality, and build strong institutions for equity, justice, and democracy.

Since 2015 thousands of organizations, businesses, and institutions around the world have adopted the UN SDGs as a guiding framework for their own sustainability efforts to align around the common goals.

ILFI’s ACTION TOWARD THE UN SDGs

In January of 2020, the International Living Future Institute (ILFI) was invited to be a participant in the United Nations Global Compact, a UN initiative of over 11,000 member organizations to mobilize the private sector to promote responsible business practices and to further engage with the UN SDGs. As part of this commitment, ILFI has pledged to support the Ten Principles focused on responsible business regarding human rights, labor, environment, and anti-corruption.  

Additionally, ILFI has pledged to leverage our suite of programs including the Living Building Challenge, Core Green Building Certification, Zero Carbon, Zero Energy, Living Community Challenge, Living Product Challenge, Declare, and JUST to further align the outcomes of our work with the 17 UN SDGs. Through this effort, we have created crosswalk documents to help project teams and organizations understand how the requirements of ILFI’s programs align with the objectives of the SDGs. We also outline how ILFI Certification can be used to validate a single project’s contribution toward achieving the UN SDGs.

SDG TARGETS AND INDICATORS

The SDGs are more than simply the 17 icons or the wheel. For each SDG, there are corresponding targets and indicators that the UN tracks in order to measure global progress toward achieving each goal. Many of the indicators relate to data points and metrics that ILFI’s programs also use for certification, while other indicators would be positively impacted directly by the work that is accomplished by teams pursuing ILFI programs. There are other goals that relate to government policies or other government level actions, which ILFI supports and aligns with as an organization.

Four SDGs are measured and tracked only at the government policy or government expenditure level: Goal 4 – Quality Education; Goal 13 – Climate Action; Goal 16 – Peace, Justice, and Strong Institutions; and Goal 17 – Partnerships for the Goals. ILFI is aligned as an organization with the objectives of each of these goals—supporting accessible and high-quality education for all, strong climate action from all levels of government, a commitment to uphold human and civil rights, and strong democracies that support those rights, and encourages the international community to collaborate together to address the needs of developing nations in addressing climate change and human health.

The remainder of the 13 SDGs are either directly or indirectly measured by the same metrics that the Living Building Challenge uses, and each of the Imperatives of the Living Building Challenge can be mapped directly to an Indicator associated with an SDG.

For example, Goal Number 1 is No Poverty. This SDG is tracked using seven specific targets, and 13 different Indicators. Indicator 1.2.1 is measured by the “proportion of the population living below the national poverty line.” While certifying a building to LBC does not directly rely on the same metric, the Equity Petal requirements for project teams to pursue inclusive contracting, and use of the JUST program, encourages payment of living wages to all workers involved, and would positively affect this metric. The result of more projects pursuing LBC, and paying living wages would result in a change in the national level statistics around poverty.

Another example of an even more direct correlation would be Goal Number 7 – Affordable and Clean Energy. This SDG is tracked across five targets, and six different indicators. Indicator 7.2.1 is measured by “Renewable energy share in the total final energy consumption” of a country. Indicator 7.3.1 measures “Energy intensity in terms of primary energy and GDP.” Both of these indicators would be directly impacted through the achievement of the Energy Petal by the renewable energy generated on site at each Living Building, and the energy reductions of Core Green Buildings and Living Buildings would also contribute to a lower nation-wide energy intensity.

Within this context, the following table represents the SDGs, with relevant sub-indicators listed, mapped to the ILFI programs and specific imperatives in LBC that would directly impact those same UN indicators. Using this crosswalk, project teams can confidently map the achievements of their LBC project to the global progress on the UN SDGs.

LBC 4.0 + UN SDG CROSSWALK (By LBC Imperative)

LBC 4.0 + UN SDG CROSSWALK (By UN SDGs)

The healthcare sector produces between 8-10% of total US carbon emissions, in turn contributing to the nearly 200,000 premature deaths due to poor air quality each year¹. As centers of healing, healthcare facilities from hospitals to medical office buildings represent key opportunities to demonstrate how the built environment can instead be a contributor to individual and community health.

To demonstrate this potential, the International Living Future Institute is embarking on a 2020 initiative to partner with leading healthcare institutions to pilot the application of our new Core Green Building Certification program. Through this initiative, ILFI aims to work directly with up to five healthcare institutions to apply Core to at least one capital project under development, and in the process, gather lessons learned, key opportunities, and unique healthcare sector challenges. Once gathered, these lessons will be documented through case studies and a healthcare-specific application guide for the Core Green Building Certification. The goal of the guide will be to make the program even more relevant and achievable for other healthcare systems to adopt while focusing on a patient-centered experience; certifying and communicating the aspects of a regenerative healthcare building that patients care about.

The timeline for the initiative will include in-person workshops and kick-off meetings throughout March, with an in-person gathering hosted at the American Society for Health Care Engineering’s Planning Design and Construction Summit (ASHE PDC) in San Antonio.  Throughout the year, additional round-table meetings will be held at the annual Living Future conference in Seattle, and at CleanMed, culminating with the release of the guidance document.

With only 10 years left until 2030, we have entered the “Decade to Deliver”.² Although ILFI has seen dramatic growth in adoption and success of the Living Building Challenge,  Zero Energy, and Zero Carbon programs–including projects in every climate zone, new construction, major renovations, interior renovations, the range from rural to urban settings, and growing in scale with multiple projects now well over 500,000 square feet–we have yet to see scalable adoption of these programs in the healthcare sector.  

Until now.

The Cleveland Clinic has pledged to participate as a founding partner in the healthcare initiative.  Jon Utech, Senior Director, Office for a Healthy Environment at Cleveland Clinic said, “Our green building strategy is an extension of our healthcare mission. We work to make the built environment healthier because a healthier environment makes healthier people.  

“Cleveland Clinic has a long-standing commitment to green building with more than 6 million square feet of facilities that have achieved a green certification over the last twelve years.  We seek to create a standard that speaks most directly to the health of our patients and caregivers. As healthcare increasingly moves toward population health, it’s time to create a standard that speaks directly to the health of our communities, the patients we heal, and the caregivers who serve,” Utech continued. 

There are numerous other healthcare systems considering the program, and ILFI is continuing to look for additional partners to join in this effort.  If you or a colleague is a representative of a healthcare system that would be interested in partnering with ILFI, reach out to shawn.hesse@living-future.org.

¹ The Commonwealth Fund; https://www.commonwealthfund.org/blog/2018/be-high-performing-us-health-system-will-need-adapt-climate-change?redirect_source=/publications/blog/2018/apr/health-system-and-climate-change

² UN Global Compact-Accenture Strategy 2019 CEO Study – The Decade to Deliver: A Call to Business Action; https://www.unglobalcompact.org/library/5715

As early as 1968, Whitney Young Jr. stood before the American Institute of Architects and admonished the profession for not taking on racial injustice, saying, “You are not a profession that has distinguished itself by your social and civic contributions to the cause of civil rights, and I am sure this has not come to you as any shock. You are most distinguished by your thunderous silence and your complete irrelevance. Now, you have a nice, normal escape hatch in your historical ethical code or something that says after all, you are the designers and not the builders; your role is to give the people what they want. Now, that’s a nice, easy way to cop out… It took a great deal of skill and creativity and imagination to build the situation of [segregated neighborhoods] we have, and it is going to take skill and imagination and creativity to change it. We are going to have to have people as committed to doing the right thing, to inclusiveness, as we have in the past to exclusiveness.”  

As architects, designers and planners, it is an uncomfortable realization to feel even the slightest responsibility for the social inequities in our communities. The disparities in quality of life indicators like income, wealth, educational attainment, incarceration rates, health outcomes, and life expectancy are all drastically skewed toward Americans who are white and against Americans of color.  What role could architects possibly play in this?

For the last decade I’ve been focused on the various ways the built environment, and architecture in particular, reinforces and contributes to social inequity. I’ve primarily done this through research, teaching, and exploration through practice. I began my career as an architect focused on sustainability, and, like everyone else in the sustainability movement, was taught the foundational definition of sustainable development from the Brundtland Commission: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Throughout the early part of my career—after working on dozens of LEED Platinum and Gold buildings, zero-energy buildings, zero-carbon plans for entire cities, sustainability strategies for Fortune 500 companies—I came to see that what we were doing was not living up to that definition. All around me, despite the amazingly high performance and sustainable projects we were creating, I saw people in my community who were struggling to obtain even the most basic needs of shelter, food, medical care, and education.

I revisited that definition and saw that what we had been doing was not meeting the needs of today. At best, we have been meeting the ‘wants’ of today for some, in a way that allows them, and others like them, to continue to pursue their ‘wants’ in the future. As a profession and a movement, we’ve become extremely good at delivering highly efficient, healthier and more comfortable buildings. But the sustainable design movement has been so focused on pursuing those aspects of sustainability, and perfecting our collective ability to deliver them, that the achievement of those aspects has become the de facto goal in and of itself. We have stopped asking ourselves, “What is it we are really trying to sustain?”  

A critical look at the successes we’ve collectively had in the sustainable design movement over the last decade would suggest that while we are making great strides toward a healthier, carbon-free built environment, those successes are not equally available to all. In fact, many of our greatest successes are quite elitist. Despite our Venn diagrams and three-legged stools of people, planet, and profit, we seem to have focused on the planet and profit portions of these through what I call a ‘trickle-down’ equity framework.

The logic of trickle-down equity is this: I’m working to solve climate change, which affects everyone, and affects the poorest and least advantaged the most. Therefore, my zero-energy building is very equitable. Meanwhile, every day in the very same communities where our greatest sustainable buildings exist, people are struggling with issues of poverty, racism, and other social injustices. Unless we begin to make equity our goal, all of our successes in the sustainable design movement will only serve to sustain inequity.

Instead of treating equity as an inevitable trickle-down benefit, or by-product of our work, we need to make it a focus. What if instead of treating “sustainability” as the goal of every project, we made solving issues of equity the goal of every project, and “sustainably” was merely the way that we solved the problems?

I often reference the racist bridges of Robert Moses to help illustrate both the potential for the built environment to contribute to these problems, and raise the question of what our role as architects, designers, and planners today can be.

Robert Moses, the infamous figure whose vision shaped the built environment of New York throughout the 1930s and into the 1970s and 80s, has been chronicled as ‘the most racist human being I had ever really encountered’ by his biographer Robert Caro.

In Caro’s Pulitzer-Prize winning biography of Moses, he relays a famous story about Jones Beach, and Moses’ intention to prevent poor people, particularly poor people of color, to be able to use the beach.  To achieve this, Moses lobbied for legislation and policies to make it uncomfortable, difficult or discouraging for people of color to access the beach. But he didn’t stop there. According to Caro, he built as many as 180 bridges over the main access drive that were too low for buses to pass under, because “Legislation can always be changed. It’s very hard to tear down a bridge once it’s up.”

Literal, structural racism is pervasive throughout our built environment. The racist ideologies of segregationists who were also the planners, architects and policymakers of the day shaped the fabric of every major urban center in the United States, from race-based zoning to red-lining practices to urban renewal projects. As Whitney Young Jr. said, architects “share the responsibility for the mess we are in, [in] terms of the white noose around the central city. It didn’t just happen. We didn’t just suddenly get this situation. It was carefully planned.”

The receptiveness to this kind of conversation has increased over the last few years, but we still have a long way to go. Healing the entrenched racism of decades past is a big ask for an architect, and even if we want to do something about it, we often feel helpless. In almost every conversation, I hear a similar response, “But it isn’t in my scope of work as an architect to address these things.”

Controlling scope creep is one of the culturally ingrained practices that architects have adopted—in part out of necessity to protect fees and time, but also in part, as our “nice, normal escape hatch”—to alleviate our responsibility in addressing the most complicated and entrenched problems of our time.

Still, it is true that our current definition of scope and purpose for architecture does not involve civil rights or social justice. Indeed, there are still echoes of our collective “thunderous silence and complete irrelevance” from 1968. Now, 50 years later, we could do more harm than good if we over-step and overestimate our ability to address some of these issues.  

What I propose is a massive change to our scope and mental framework of what it means to practice sustainable development. But how?

Just as my investigation of these issues began with sustainability, we can look to that movement and our success there for inspiration. In the 1990s—before LEED, before the Living Building Challenge, before the contemporary sustainability movement—addressing climate change was not a part of an architect’s scope of work.  Then we began to see ‘sustainable design services’ as additional services, the domain of specialty consultants, and Sustainable Design Leaders at large firms. Finally, just a few months ago, the AIA amended the professional code of ethics to require members to ‘consider the environmental effects of their project decisions.’

Solving climate change has gone from not in our scope to being a requirement in less than 30 years. We made this drastic shift once we realized the way that architecture contributes to the problem, and we adopted climate change as our cause. As a result, we changed the entire design process, we changed our specifications, we changed our contract language, we changed our fee structures, we collectively created a new type of consulting firm focused exclusively on sustainability services, we created new job descriptions and roles, new professional credentials, created new metrics, and invented green building rating systems. But that’s just within architecture. We’ve also changed what is taught in schools, the way we practice engineering, how buildings are constructed, how they are financed, the way they are operated and permitted, how we write zoning policy, the way energy is produced and billed, and even how products are manufactured. We changed things that are very much not in the scope or job description of an architect.

We changed all of those things not as an individual act of architecture, but by enrolling other advocates in their respective fields to help us. We talked about climate change and the way the built environment contributes to it, and together, we changed everything.

It is long past time for us to do the same with social justice. The built environment enables and contributes to the inequities we see in our communities, and we need to recruit sociologists, historians, community organizers, public health professionals, and many others to help us reinvent everything.

Drawing inspiration from Whitney Young Jr. yet again: “The decent people have to learn to speak up, and you shouldn’t have to be the victim to feel for other people… An ancient Greek Scholar [once said], ‘We shall achieve victory in Athens and justice in Athens when those who are not injured are as indignant as those who are.’  And so shall it be with this problem of human rights in this country.”

If you have colleagues in public health, community organizing, sociology, urban history, academia, or any others whom you think would be interested in joining this conversation, please email me at shawn.hesse@living-future.org.

Almost exactly one year ago, I was forwarded an RFP from the National Association for the Advancement of Colored People (NAACP). They sought a consultant to evaluate social equity measures in the Living Building Challenge as they began planning for their new headquarters in Baltimore.

The NAACP has put forth a vision to demonstrate–through their own project–how to center equity and social justice as the foundation of the green building movement.  Certainly, if equity is not at the center of our sustainability efforts, then all of our successes will only sustain inequity. We are thrilled to see the NAACP leading this conversation, and that they have convened the green building movement along with them.

We have been working to support the NAACP through their process by participating in summits, attending events together, and connecting them with resources to help move their project forward. Now, we are excited to help share the next step in their process–their launch of a design competition for their new Equitable Living Building! You can go here to see more about their vision, the program, and register for the design competition!