Skanska: Proving the Case for Green

Skanska Business Unit Perspective (Skanska UK)

Profile

  • Skanska is one of the world’s leading project development and construction groups
  • Headquartered in Stockholm, Sweden, with selected home markets in Europe and the U.S.
  • 58,000 employees; and 10,000 ongoing projects
  • Sales of SEK 145,029 - SEK 145 billion (2014)

Jennifer Clark - Senior Vice President Green and Corporate Community Investment

Skanska: Proving the Case for Green

Skanska Business Unit Perspective (Skanska UK)

 

Profile

  • Skanska is one of the world’s leading project development and construction groups
  • Headquartered in Stockholm, Sweden, with selected home markets in Europe, the U.S. and Latin America
  • 58,000 employees; and 10,000 ongoing projects
  • Sales of SEK 145,029


Jennifer Clark - Senior Vice President Sustainability


Vision

Vision

“We are determined to be the leading green project developer and contractor. The demand is in the market place. It is:

  A great business opportunity
  Right for the planet
  Attractive for our people

Johan Karlström, President and CEO, Skanska AB

Green is a focus area of Skanska’s business strategy and the company defines Green by using the Skanska Color Palette™. In 2010, all business units were required to define their baseline performance and 2015 targets according to the Skanska Color Palette™ (Vanilla, Green and Deep Green) – among other criteria, a Green project needs to be at least 25 percent better than code on energy performance and a Deep Green project needs to be Net Zero Primary Energy or better.

As a leading green constructor and developer, and the pioneer of many green initiatives including the Color Palette™ and the Journey to Deep Green™, Skanska is recognized as a company that takes sustainability seriously. The company’s own office developments and refurbishments provide a unique opportunity to gather useful data that proves the business and financial case for the Journey to Deep Green™. They provide compelling case studies, improve Skanska’s brand value and have significant potential for green market-making.

“For proof that green office development and refurbishment deliver commercial and financial benefits, you need look no further than many of Skanska’s own offices,”

Johan Karlström, President and CEO, Skanska AB

The Skanska energy vision originates from Skanska AB (parent company). Skanska AB also benchmarks the energy use of 45 of its selected office buildings, which is intended to stimulate action at Business Unit (BU) level


Write an Energy Policy

Skanska’s energy policy is part of its Environmental Policy, which BUs have integrated into their existing Environmental management systems. These commitments are also reflected in other corporate policies, rules, guidelines and shared best practices.


Skanska's Environmental Policy:

Based on the strong belief that project development and construction can make a major contribution to a more sustainable world, Skanska is committed to proactive environmental management at all levels from local to global. With this approach we can positively influence key stakeholders, especially customers and suppliers.

At Skanska we maintain organizational structures, management systems, procedures and training plans that, as a minimum, ensure compliance with all relevant laws, regulations and standards. Our Environmental Management System is certified to ISO 14001. Since line management is responsible for our environmental performance, it is integrated into core business processes and plans.

In a spirit of continual improvement, we involve our workforce in the process of environmental management including sub-contractors, partners and other interested parties with the potential to contribute as part of our ambition to be a world leader in our sector.

Our ambition is to continually improve the environmental credentials of our projects, products and services by actively looking for ways to reduce negative environmental impacts during their entire life cycle so that over time our stakeholders know us not just as a company capable of building environmentally sound projects but also as an environmentally responsible construction and development company.


Policy implementation is described in the “2011-2015 Environment Plan” and tracked by seven Green Strategic Indicators

Skanska workplaces within Energy Efficiency in Buildings (EEB) scope
  • Champion the efficient use of energy and reduce emissions of gasses associated with Climate Change. Where reduction is not possible, as a last resort we will balance our own direct emissions using reputable means.
  • Generate zero waste through reducing upfront demand, reusing materials whenever possible and recycling (or down-cycling) and where these options are not currently practicable, provide environmentally sound treatment or disposal.
  • Proactively select and use materials that are benign to people and the environment.
  • Mitigate the impact of our operations on flora, fauna and related ecosystems.
  • Reduce demand for, conserve and recycle water resources.
  • Reduce harmful emissions to the air from projects, road vehicles, mobile and stationary equipment and processes.
  • Minimize the negative impact of our operations on water, land and soil quality.

These commitments are also reflected in other corporate policies, rules, guidelines and shared best practices. Therefore, this Environmental Policy is to be read in conjunction with the “Skanska Code of Conduct” and related “Code of Conduct Compliance Guidelines”.


Planning

Skanska UK embraced Skanska AB’s green commitments and individual case studies from other business units such as the Empire State Building 32nd floor. See Skanska’s Mike Putnam (President and CEO, Skanska UK) being interviewed on CNN here.

The Business Unit undertook an initial review of its properties to identify retrofit opportunities. It looked for longer term lease agreements (5 years plus), upcoming lease renewals and locations where Skanska planned to have a long-term presence. The unit also assessed its landlords to identify those with energy management policies or commitments that may make engagement easier. Skanska UK identified three properties that fitted its criteria but also provided a range of energy retrofit projects to demonstrate Skanska’s green building capabilities and the business case for energy efficiency in buildings. A retrofit program was then implemented.


Collect Data and Conduct Preliminary Analysis


The above example graphs were produced using data from our sustainability reporting platform.

Energy Intensity of Skanska offices in the Czech Republic in 2014. In 2015, Skanska construction and Skanska Commercial Development will vacate their current premises in Prague and relocate to Corso Court, which is a new green and energy efficient office developed by Skanska

In 2013, Skanska AB began monitoring and benchmarking the energy consumption of 45 Skanska-occupied offices to inspire greater action within the business units. A reporting and benchmarking capability was developed in the company’s sustainability reporting platform and business units were surveyed on their metering strategies for all energy sources in preparation for the baseline year 2014.

The reporting platform gathers all consumption and production data. KPIs include Net Consumption in kWh, kWh/m2 (net floor space occupied) and kWh/FTE (Full Time Equivalents or effectively per person) and greenhouse gas emissions in tCO2e, tCO2e/m2 and tCO2e/FTE. The reporting frequency for most of the offices is monthly.

Feedback on progress was regularly provided to Skanska´s Green Leadership team. 2015 is a year of data reporting improvement (which in some cases proved more difficult than expected – e.g. obtaining information form landlords) with benchmarking for the identification of improvement opportunities.


In the case of Skanska UK, energy data was collected from utility suppliers, landlords, ARM meters where installed or from the building’s BMS. This process took time but had an added benefit of leading to wider improvements in energy procurement throughout the properties Skanska occupies. The BU aimed to collect data as granular as possible. Monthly data, which provides a good overview of seasonal drivers, was the minimum granularity and half hour data, which gives a good oversight of daily consumption, was considered ideal. If half hour data was not available for a targeted site ARM metering was installed.


Benchmark

Energy benchmarks are important and give the project team a good indication of the levels that should be targeted. Skanska UK used CIBSE TM46 Building Energy Benchmarks to compare and contrast existing performance and identify the possible improvements available.


Establish a baseline

Existing consumption data was used to establish a baseline. Skanska used a complete year of consumption data. Other building factors, such as age, internal layout, number of occupants, floor area, etc, were also identified to ensure that other changes did not dramatically effect predicted energy savings and the resultant pay backs.


Establish an Energy Team

Skanska UK defined project teams for each of its three recent green retrofit projects, and the unit aimed to ensure the right mix of skills using both internal and external resources. The three projects were very different, and so required different project teams. Senior management continued to encourage the teams with regular visits and update reports on progress against energy targets. Senior involvement was important to ensure the teams continued to strive for the most energy efficient solution.


Conduct audits

Detailed energy reviews were carried out early in each of the projects to assess and confirm the baseline consumption. Existing building systems, control strategies and the conditions of plant and equipment were reviewed to confirm performance and identify any issues. During these audits, simple energy savings were identified, including heating and cooling time controls, lighting switch-off or maintenance.


Write and Energy Strategy

A project brief was prepared that outlined the process of assessing the potential energy savings, setting targets, evaluating interventions, reporting and the decision timeline. Senior management signed off the project brief and progress was reviewed on a regular basis. Overall budget expectations were set at this stage, with the understanding that the detailed design may change. Project monitoring (measurement and verification) requirements were also set out here to ensure these measures were incorporated properly into the project.


Develop a Communications Strategy

A communications strategy is very important. 1) The project may involve external parties, such as the landlord and/or a FM Company and success or failure of some of the energy interventions may rely on external party buy in. A detailed plan may be required to address ongoing communication with external parties. 2) The project may result in changes to the existing facility that the occupants may see or feel and it is important to gain occupant buy-in to the changes to maximize success. 3) A behavior program will require a dedicated communications plan. Occupant behavior can be a big driver in the success of energy saving interventions so must not be under estimated. Workshops, newsletters, display screens, posters and competitions are examples which Skanska have implemented.


Define Program Objectives and Goals

Skanska UK’s portfolio approach to initially refurbish three of its offices not only aimed to reduce energy use and operational costs in these offices. Skanska also saw the work as an opportunity to develop its green building capacity and green market-making by offering green building and refurbishment services to clients interested in reducing their operational costs and environmental impact.


Implementation

Evaluate EEMs - Value, Cost & Complexity

A detailed analysis of energy interventions was conducted for each building individually. Specialist suppliers were brought in at this point. It is important to note that the performance of certain technologies is not necessarily transferable to different buildings, and interventions may overlap reducing the overall saving. For example, solar shading and control on HVAC systems can both act to reduce chilling loads.

Interventions were reviewed for practical installation, suitability with existing building systems, cost and energy saving potential. Although complex, this is done in a single spreadsheet to allow overall reductions and costs to be compared. It may be necessary to create an energy model of the building or consider the impact of seasonal variation on heating and cooling to fully analysis the potential. This is a specialist input.


The Business Case for an Energy Efficiency Program

In 2009, Skanska was among the first companies to sign the EEB Manifesto and the company introduced its definition of green – the Skanska Color Palette™ from Vanilla to Deep Green the same year. Building on the Color Palette in 2011, Skanska issued a set of 10 Color Palette Segment Cards – each explaining the trends and drivers of specific industry segments, benefits of green, examples of green solutions, and recent Skanska project examples. The segment cards were handed out to Skanska’s top 600+ managers at the company’s global management meeting in 2011 to support their Green market-making efforts. At the Skanska Management Meeting in 2012 two sessions on the business case for greening the company’s own offices were held, using Business Unit examples, which were supported by a set of 6 green snapshots. Two excerpts from the Skanska Snapshot on Skanska´s Own Offices can be found below:


The powerful business case at one of Skanska’s manufacturing facilities in the USA:

Reducing exposure to rising energy costs, while future-proofing the investment in premises, led Skanska Koch to install an 86,000sq. ft. (8,000sq. m) solar farm on their New Jersey manufacturing plant. Two years on, the move to renewable energy has cut the utility bill by 65% and generated almost 1GWh of electricity. The decision to move towards complete energy self-sufficiency was supported by strong financial benefits including Federal Government tax credits and the Solar Renewable Energy Credits (SREC) that apply to certain states. By taking advantage of these, we were able to sell our SRECs on the futures market, thereby hedging our $2m investment in the solar energy project; an excellent example of combining environmental responsibility with sound financial business decisions.

The benefits of Skanska’s Empire State Building Office Refurbishment:

The Empire State Building fit out is a landmark project for many reasons. In a country where carbon and climate change are not high on the agenda, providing customers with hard facts about commercial and competitive advantage is vital. The new office has saved 57% in electricity costs – USD 650,000 (SEK 4.3m) over 15 years. In the first two years of occupancy, Skanska reported a reduction of 15-18% in absenteeism. Monitoring and measuring everything from water consumption to recycling of materials and making data publicly available has ensured that the commercial and financial benefits of the Journey to Deep Green™ are more widely understood.i


Confirm the business case and gain management approval for selected EEMs

A detailed report is prepared for projects confirming energy saving targets, planned interventions, construction program, disruption control if the building remains occupied, and any associated costs. The report also considered ROI for the overall project and each intervention individually, and is used as the formal project appraisal / confirmation. In addition, measurement and verification reporting is confirmed at this stage.

Skanska’s Bentley Works regional manufacturing and servicing hub in Doncaster, UK, was redeveloped into a zero primary energy site that provides a good return on investment for the company through reduced energy costs. Skanska used lifecycle optioneering to identify the most optimal EEMs that provide the best long-term value for money and environmental efficiencies throughout the lifecycle of the buildings. The additional cost of the various EEMs incorporated into the project has a total payback period of 11 years. This includes a biomass boiler with an estimated 3.8 year payback period and the photovoltaic system with a 7.4 year payback, which were both supported by Government incentive schemes.


Apply sustainable procurement practices

Skanska UK encourages suppliers and subcontractors to fully exploit opportunities for resource and energy optimization and efficiency, as well as renewable and low energy sources, when possible. For example, sourcing products rated in accordance with EU Energy Label Class A + and ++, Energy Saving Recommended (ESR) endorsed, or those compliant with other recognized equivalent standards, such as PC monitors that meet the ‘Energy Star’ requirements. Chilling or cooling equipment containing substances with a global warming potential (GWP) of 150 or more in composition should be avoided where possible. Where relevant, materials will be expected to achieve an area weighted average rating of A or B, as defined in the Green Guide to Building Specification. Where the Green Guide is not relevant, or specifications are not included, suppliers and subcontractors must demonstrate how the embodied impacts of their products and services have been minimized.ii

Additionally, suppliers need to comply with Skanska’s Code of Conduct and Skanska UK’s Sustainable Procurement Policy. It is important to consider sustainable procurement practices on energy retrofit projects. The reputational enhancement from any scheme can be quickly undone by mistakes made at this stage.


Implement the project

Finance:

Skanska drew on the company’s vision and local expertise to refurbish their UK headquarters at Maple Cross in Rickmansworth into an energy efficient office. Skanska financed the capital works for this project itself, and used net present value to evaluate payback. The refurbished office reduced operational costs by 39 percent and carbon emissions by 48 percent, with a ROI of approximately 10 years. The project included the installation of a biomass boiler, a 340m2 PV system, LED lighting throughout, BMS modifications and improvements to the buildings ventilation system. The energy enhancements have been prioritized according to ROI and annual savings are monitored through an externally verified Measurement and Verification Plan.

Skanska can also confidently provide EPGs (Energy Performance Guarantees) and EPCs (Energy Performance Contracts) for the buildings it develops and constructs for customers. One example of such a project was a Department of Energy and Climate Change (DECC) refurbishment contract whereby Skanska was contracted to reduce energy use by at least 14.6 percent with a payback period of less than 12 years. The project was completed in 2014 and included Building Management System upgrade and LED lighting installation in two offices.

Skanska worked with its landlord to fund the refurbishment of Hollywood house in Woking. A wide of environmental improvements were agreed for the building, these were assessed and the funding apportioned between tenant and landlord according to which party realized the benefit. As tenant Skanska received the return on its investments through discounts or rebates on the building service charge and energy bills.

Continuous commissioning

Skanska aims to continuously improve the energy performance of its refurbished Hollywood House office in the UK. A Green Building Management System was installed on both Skanska’s floors, which is connected to the building’s BMS. The system is further improved energy efficiency by between 2 and 5 percent in the first 12 months of post-refurbishment occupation by fine-tuning the BMS.

Skanska implemented a ‘soft landing’ approach into the entire evaluation, design, construction, commissioning and handover phases of the Hollywood House project to raise awareness of the building’s efficiency features among the building’s owners and occupants. The approach is intended to promote more efficient occupant behavior and the effective operational management of sustainability-related technical solutions. The Green energy display is shown on both the Skanska floors in Hollywood House and is intended to raise awareness of resource usage and occupant behavior to make further energy savings in the future.

Stakeholders

Skanska UK was able to cooperate with its landlord to enter into a Green Lease for its offices in Hollywood House, Woking, UK. The lease incorporates a Memorandum of Understanding (MOU) that encourages all occupants to work in collaboration to improve the overall environmental performance of the building. This will be managed by a Building Management Committee made up of tenants and managing agents. The committee will meet on an annual basis to share energy, water consumption and waste data, and formulate objectives for an environmental management plan. (The MOU also includes specific green interventions, which were implemented during the retrofit, for example, PVs, connection to district CHP, heat metering on Skanska floors, etc).

In many cases, influencing a landlord’s green thinking is a challenge for tenants of multi-occupancy offices. With Skanska UK’s Mechanical and Electrical (M&E) division lease expiring, the landlord was approached with plans to maximize both the economic and environmental performance of Hollywood House. Radical ideas would help to dramatically improve the entire building’s energy efficiency, water use and waste performance.

The owner of Hollywood House realized the potential to attract new tenants and protect the future value of their asset. Recognizing the international letting potential of the offices, the green retrofit was conducted to LEED standard rather than the BREEAM certification, which is more widely used in the UK. As a result of the US$ 5.4 million (SEK 36 million) refurbishment, the previously energy inefficient vanilla (according to the Skanska Color Palette™) 1980s office building was awarded with the highest LEED Commercial Interiors (CI) Platinum score for a UK fit out at the time of completion – 96 points. The result for the building owner is a desirable property where its green credentials are now used as the main sales message to prospective tenants. Skanska since signed a new 10-year lease. The energy investments alone have an estimated payback of 12 years for the landlord, but experience suggests that this is likely to reduce as the occupants and owner become more familiar with the improvements. Hollywood House won Refurbishment Project of the Year (value up to £5m) at The Chartered Institution of Building Services Engineers (CIBSE) Building Performance Awards in February 2014.

Energy efficiency measures included the connection to the district combined heat and power network, ventilation system modification, real-time energy monitoring and control systems, CO2 monitoring, roof-mounted PV installation, efficient lighting, floor slab insulation, solar window shading, enhanced Building Management System (BMS) functionality and central power-off function for non-critical equipment. Decisions on energy efficiency measures were based on their business case and ROI, which was linked to the client’s aspirations and other available funding, such as government incentives.

After two years of occupation, the renovation has reduced the building’s energy demand by almost 50 percent, and resulted in annual energy cost savings of US$ 36,000 and a carbon emission reduction of 58 percent (as per the CIBSE award).


Evaluating and Measuring

Calculate energy savings

Consumption data has been continuously tracked before, during and after each energy efficiency project. The performance of specific interventions can be confirmed in different ways for example if it is a block saving from an isolated piece of technology, such as the lighting system where circuit consumption could be monitored to confirm reduced loads. More integrated interventions may require wider assessment.


Results and Feedback

Any revisions to the organization’s Vision, Policy or Strategy documents

Skanska’s recent own office refurbishment projects transformed the company’s approach to health, wellbeing and productivity as co-benefits to energy efficiency projects. This has involved the development of a wider strategy for health and productivity, which further strengthens the business case for green buildings.

Skanska has also produced a booklet on its own green offices, and has developed its own group monitoring reports.

Changes to objectives, targets and how they are tracked using performance indicators

Skanska uses a Measurement and Verification (M&V) plan in its energy efficiency projects to define how interventions are measured. Measurement and performance indicators are important for Skanska in demonstrating the benefits of energy efficiency in buildings projects, and in green market-making. Skanska’s Color Palette is a useful communications tool in this respect.

Review and allocation of program funding

In the UK, this was done on a project-by-project basis as the three projects mentioned in this toolkit were so different.

Approval of any changes to the Energy Management Program and of any key upcoming capital projects requiring top-level approval

The projects were managed through the existing environmental management framework.