Goals
| Target Year | Target Objective | |
|---|---|---|
| Complete formal submission to SBTi | 2024 | Y/N |
| Improve CREIF energy performance | 2024 | 9% |
| Improve CREIF carbon performance | 2024 | 9% |
| Execute decarbonization strategy | 2027 | 35% |
| Increase CREIF’s third-party building certifications | 2024 | 90% |
Next Steps
- Expand decarbonization strategy to multi-res with secured financing
- Finalize decarbonization strategy for Bayshore Shopping Centre
- Begin decarbonization strategy of Atrium
- Achieve SBTi Certified targets for all assets under KingSett’s management (income and debt portfolios)
- Certify Valhalla Village to Zero Carbon Building – Design
Decarbonization
We are committed to a systematic, bottom-up approach to eliminate carbon emissions across our portfolio.
Climate change represents a huge challenge and opportunity for the real estate industry. With buildings accounting for almost a fifth of carbon emissions in Canada, the real estate sector has an important role to play in decarbonization and limiting the impacts of climate change.
At KingSett, we’ve committed to decarbonizing existing assets by setting targets and making prudent investment decisions that lead to significant reductions in carbon emissions across our properties, helping to accelerate the transition to a low-carbon economy and create value for our stakeholders.
The transition to a net-zero carbon portfolio is a significant opportunity and requires long-term strategic planning. We have a systematic, bottom-up approach to identify and execute asset-level decarbonization strategies that meets or exceeds the Paris Climate Agreement.
Science Based Targets Performance
2023 performance:
27%
reduction vs 2019
2027 target:
35%
reduction vs 2019
Our Decarbonization Strategy
We define a decarbonization strategy as a property-level roadmap for management teams to achieve carbon reductions of over 50% from baseline. Our approach includes identifying opportunities in our existing portfolio and working with management teams and mechanical and electrical design consultants to understand where we need to take action before developing property-level strategies.
The implementation of our decarbonization strategies is consistent across asset classes. Once a property’s decarbonization plan has been completed, carbon credits are purchased for the residual emissions. Each property-level strategy includes:
- Assessing the property’s current energy use makeup and capital budget plans
- Targeting at least 50% carbon reductions from baseline
- Scoping projects to decarbonize operations including fuel switching, electrification, deep energy retrofits and increased tenant awareness and communication
Prerequisites to Decarbonize:
- Major mechanical must be at or near end-of-life
- The property must have real-time data for all major systems for at least one heating and one cooling season
- The property must be able to manage the capital premium to fuel switch and electrify
- The property must be located in a region that supports electrification or is on a trajectory to do so
To achieve our decarbonization commitments, we quantify and forecast the potential financial impacts of decarbonizing our existing assets. This includes calculating a decarbonization premium which represents the level of decarbonization investment needed over and above normal capital spending to replace end of life equipment. In 2021, we developed a decarbonization tool that models financial metrics, utility performance and carbon emission reductions at both the asset and portfolio level. The tool helps us to identify strategic investments, inform our decision making and capture opportunities to reduce carbon emissions.
Offsetting Residual Emissions with Carbon Credits
We purchase carbon credits to offset any residual operational carbon that remains once the property’s decarbonization plan is complete. For emissions we cannot eliminate through energy efficiency initiatives, KingSett purchases carbon credits from reputable sources, such as Gold Standard, that verify the emissions reduction. The carbon credits we purchase relate to nature-based solutions like reforestation that save emissions from being released into the atmosphere.
KingSett has secured
$46M
in financing from CIB to decarbonize the Fairmont Royal York
KingSett has secured
$47M
in financing from CIB to decarbonize 7 properties by 2027
Our Decarbonization Roadmap
Real estate represents a major opportunity for KingSett, our partners, communities, and the industry to meet global net-zero commitments and accelerate climate action.
2020
Certified 40 King St W ZCB - Performance
Internal whitepaper published on decarbonization retrofits
Commenced carbon study of Fairmont Royal York
Decarbonized Arthur Erickson Place’s domestic hot water system with CO2 heat pumps
2021
Developed internal Decarbonization Modelling Tool
Set CREIF short- and long-term carbon reduction targets of a 35% reduction by 2027
Finalized Fairmont Royal York carbon study
Broke ground on Valhalla Village geothermal system
2022
Secured financing from Canadian Infrastructure Bank for Fairmont Royal York decarbonization
Decarbonized 100 Yonge using a market leading heat pump and heat recovery system for
cold climate markets
2023
Certified 100 Yonge to ZCB - Performance
Decarbonized Fairmont Royal York and certified to ZCB - Performance
Certified Arthur Erikson Place to ZCB - Performance
Publicly launched KingSett’s Building Decarbonization Modelling Tool
2024
Expand decarbonization strategy to multi-res with secured financing
Finalize decarbonization strategy for Bayshore Shopping Centre
Begin decarbonization of Atrium
Achieve ZCB - Design certification for Valhalla Village
2025-2027
Complete decarbonization of Arthur Erickson Place
Complete decarbonization of 2.9M sf of CREIF Toronto core office properties
Achieve 35% carbon emission reduction across CREIF
Case Study
Rising to the challenge
Scotia Plaza's
100 Yonge, Toronto, ON
In 2022, Scotia Plaza’s 100 Yonge, a 250k sf class ‘A’ office building in downtown Toronto, underwent decarbonization, eliminating all combustion energy sources and transitioning to full electrification. This marked a major milestone in KingSett’s decarbonization strategy and supports our goal of reducing carbon emissions by 35% across our CREIF portfolio by 2027.
One year after project completion and commissioning we are able to properly analyze the full impact of the decarbonization efforts.
These reductions exceed the Carbon Risk Real Estate Monitor pathway for Canadian office building emissions out to 2044, which is aligned with the goals set out in the Paris Climate Agreement and SBTi.
Over
50%
Energy consumption reduction
Over
80%
Carbon Emissions reduction
Over
40%
Utility Spend reduction
Case Study
Building a net-zero future
Arthur Erickson Place
1075 West Georgia, Vancouver, BC
Named after the renowned Canadian architect that designed the building, Arthur Erickson Place is a 26-storey, Class ‘A’ office building located in Downtown Vancouver. In late 2023, this iconic building became KingSett’s first asset outside Toronto to achieve the Zero Carbon Building – Performance certification. This three-year process involved an innovative retrofitting of the 350k sf building, including optimized HVAC controls, new electric boilers, heat pumps and air handling units. These new sustainable mechanical upgrades will lead to a 97% reduction in carbon emissions from the building by 2026, ensuring the building is reducing faster than the decarbonization pathway needed to meet the Paris Agreement’s goal of limiting the rise in global temperature to 1.5C.
40%
reduction
in energy consumption equivalent to removing 140 passenger vehicles off the road each year
97%
reduction
in carbon emissions by 2026
“This achievement for Arthur Erickson Place is an important milestone in KingSett’s decarbonization program. It strengthens a key asset in our portfolio and advances our value enhancement strategy. In collaboration with our partners, we continue to demonstrate that complex, deep carbon retrofits of iconic buildings can be done in a way that is economically viable and environmentally impactful.
Case Study
Welcoming a new era in hospitality
Fairmont Royal York Hotel
Toronto, ON
Opened in 1929, the iconic Royal York Hotel is located in the heart of Toronto, comprises over 1,300 rooms and includes a variety of food and beverage options, including the newly renovated Clockwork Bar, Reign Restaurant and the Library Bar.
In 2023, the hotel completed the largest heritage hotel retrofit in North American, achieving Zero Carbon Building – Performance Standard certification. This transformative project, which was completed after nearly five years of detailed planning and execution will reduce the building’s scope 1 and 2 carbon emissions by 7,000 tonnes annually.
The building’s path to certification was achieved by:
- Completing detailed studies and analysis of building energy load, seeking to identify meaningful efficiencies
- Converting heating and domestic hot water from steam to electric heat pumps that utilize heat recovery from Enwave’s district energy network
- Converting cooling from electrical chillers using refrigerants to Enwave’s Deep Lake Water Cooling system
- Significantly improving energy efficiency with a centralized building automation system and smart building technologies
Fairmont Royal York achieving zero carbon certification is another transformative step in repositioning this unique icon in Toronto's downtown core. Decarbonizing a 94-year-old heritage building and retrofitting the hotel's energy systems to be highly energy efficient was a complex challenge. We've proven that it can be done.
80%
reduction
reduction in carbon emissions, equivalent to removing 1,558 passenger vehicles from the road per year
70,000+
labour hours
labour hours contributed; generating essential employment and knowledge sharing
90%
or 475 tonnes
of construction waste successfully recycled
35%
reduction
in utility spend in the first year
Climate Risks and Resilience
We are committed to improving the resilience of our assets brought on by physical and transition climate-related risks.
By diversifying asset ownership, fund structure and strategy, we've built a product that not only unlocks value for our stakeholders but also ensures our assets are equipped to withstand various shocks and stressors. We exercise responsible capital allocation, manage operating costs, measure and reduce carbon emissions, and strive to create healthy, comfortable buildings.
This is done through:
- Extensive stakeholder engagement
- Adoption of decarbonization carbon targets and certifications
- Investments to improve physical and transition resilience
- Assessment of alternative low-carbon and reliable energy sources
Performance
Data collection and analytics is table stakes for managing commercial real estate. KingSett tracks its energy and water use, waste generation and corresponding carbon emissions to drive operational efficiency, identify opportunities for implementing efficiency measures, reduce negative environmental impacts and measure our progress against internal targets and external commitments. The progress we’ve made since 2016 is due to our innovative approach, hard work from our team and collaboration with our stakeholders.
Energy
Normalized Energy Intensity1,2
254
eGWh
of absolute energy consumed in 2023
2%
decrease
in energy intensity vs 2022
10%
decrease
in energy intensity vs 2019
9%
reduction
target by 2024 achieved
In 2023, we saw energy use stabilize across the CREIF portfolio as we fully came out of the pandemic. This was consistent across all asset classes, with the exception of multi-residential where net increases in energy use occurred from 2022 to 2023. The overall decrease in our normalized energy use was primarily driven from the office portfolio.
As we continue to decarbonize our portfolio, significant energy efficiency is also achieved. As a result of our decarbonization efforts, and the new normal of how commercial real estate operates compared to 2019, overall energy reductions have surpassed our 9% reduction target by 2024.
Carbon Emissions
Carbon Emissions Intensity3,4
31,864
tCO2e
emitted in 2023
9%
decrease
in carbon emission intensity vs 2022
27%
decrease
in carbon emission intensity vs 2019
9%
reduction
target by 2024 achieved
35%
reduction
target by 2027 on track
Similar to energy use in 2023, carbon emissions decreased for the CREIF portfolio as we saw a stabilization of occupancy across all asset classes.
As a result of continuing to execute our decarbonization strategy, we see a corresponding net reduction in our carbon emissions. We continue to expect portfolio carbon emissions to decrease slowly in the short term (2 years) and more rapidly in the medium term (3-5 years) as more properties across the portfolio are decarbonized. We are currently on track to reduce carbon emissions by 35% by 2027, our target derived from the science-based targets methodology and are on track to cut emissions by 67% by 2035.
Water
Water Intensity5
1,010,612
m 3 of water
consumed in 2023
0.4%
increase
in water intensity vs 2022
21%
decrease
in water intensity vs 2019
After experiencing a sharp decrease in water use across as a result of the pandemic, the CREIF portfolio has seen a leveling off in water reduction in the previous three years. This is an exceptional achievement, especially for 2023 as our properties have adjusted to the new operating conditions and remote working policies. The portfolio has been able to maintain a significant amount of the over 20% reductions since 2019 and is expected to do so going forward.
Water remains an important focus for our property teams, and as we continue to adjust operations and implement water conservation measures new targets will be set that will help create value for our tenants and partners.
Waste
Waste Intensity6
86%
waste
data coverage in 2023
7,970
tonnes
of waste, recycling and organics generated in 2023
6%
increase
in waste intensity vs 2022
24%
decrease
in waste intensity vs 2019
Waste generation, which still remains highly correlated to occupancy, continued to see a significant increase in 2023. Despite increasing 6% year-over-year, total waste generation still remains well below the pre-pandemic levels and is in line with expectations as more waste is created when people return to the office and visit retail centres and stores.
Waste is the most difficult utility to control and reduce as it is highly dependent on the vendors and suppliers that properties must engage with, government regulation and both public and private waste management bodies who receive, sort and dispose of all waste streams. Waste reduction also relies on individual occupants to make key decisions when faced with the disposal of used items. We continue to work with all our stakeholders to make progress towards a circular economy.
Building Certifications
Building certifications offer a trustworthy method of evaluating and expressing the environmental performance and effectiveness of buildings by using established and credible frameworks recognized by the market.
KingSett is committed to adopting third-party building certifications to validate our properties’ sustainability performance and show tenants the tangible positive impacts they provide. We believe that sustainability and profitability can coexist, and by investing in sustainable design, operation and building practices, we can create long-term value for our stakeholders and the communities where we operate.
64%
of properties
by GAV hold two or more building certifications
2.2M sf
achieved Zero Carbon Building – Performance Standard
78%
of office
properties by GAV are LEED O+M gold or higher
Sustainable Development
We are dedicated to incorporating sustainable practices into our real estate development and redevelopment projects to benefit both communities and the environment.
Developing new buildings in a sustainable, healthy, and resource-efficient manner is crucial for their impact on the environment and surrounding communities.
Our Sustainable Development Policy and Guide provide clear guidance for each development to maximize the benefits of technology, location, and surrounding community, beginning with acquisition and continuing through development to initial occupancy, and operation. We are committed to creating comfortable, efficient, and healthy buildings that meet or surpass the Zero Carbon Building Standard, not only because it is economically advantageous, but also because it is the responsible choice for our planet and communities.
To ensure that these commitments are met, we adhere to building standards with stringent performance guidelines and prioritize user experience when making development decisions.
Achievements
- Valhalla achieved Zero Carbon Building – Design certified by in March 2024