How ESG Reporting Benefits Lab Owners and Operators
Many companies are turning to ESG reporting to disclose information covering their operations and risks in three areas: environmental stewardship, social responsibility, and corporate governance. This report aids consumers looking for companies whose values align with theirs and investors who want qualitative and quantitative data to help them determine the investment opportunities they wish to pursue. ESG reports are an opportunity to tell an organization's story with data, develop a brand reputation, and provide necessary information for investors to make decisions.
In this article, Kathy Wardle, LEED Fellow, WELL AP, RELi AP, of Perkins&Will’s Vancouver office, and William Harris, AIA, LEED AP, of Perkins&Will’s Boston office, discuss the release of their firm’s first ESG report and what it means for the lab design industry.
The Life Sciences Building at the University of Washington is an example of an academic lab designed for energy efficiency. Solar power, passive ventilation, and space- and equipment-sharing strategies help reduce operational carbon by approximately 80 percent versus the typical lab baseline. Image: Kevin Scott
Here at Perkins&Will, we recently released our first ESG report, which voluntarily and publicly discloses our environmental, social, and governance initiatives and performance. ESG (environmental, social, and governance) reporting is an exceptionally relevant process for the science and technology industry.
Laboratory owners and operators, as large consumers of energy and resources, can proactively address environmental impacts and mitigate risk by tracking and formally reporting on their labs’ alignment with ESG principles. These reports can also boost capital investment and recruitment efforts by enabling environmentally and socially conscious investors and prospective employees to compare and evaluate labs and science and technology companies.
The process of ESG reporting is not easy, but we worked with experts to understand which standard was most appropriate for our business and our organizational identity. We embraced the challenge, and we urge our clients to do the same.
Why should labs report?
Reporting on ESG criteria offers a number of benefits. Reporting leads to transparency, which increases accountability and builds trust inside and outside the business. It can also drive innovation and efficiency. And it facilitates risk management efforts by helping firms proactively comply with evolving regulatory requirements and adopt best workplace practices.
Reporting can also bring labs and businesses into alignment with stakeholder expectations. ESG reporting reflects a company’s values and culture, and prospective employees are likely to consider the reports when determining where they want to work. Customers care, too, and for developers in a competitive market, a building that supports a high-scoring ESG report can be a true differentiator in seeking tenants, compared with buildings that do not have high ESG scores. That’s because leasing in a high-scoring building will improve the tenant company's own ESG reports, especially relative to energy. It can also help developers as they seek equity partners for new developments. Even colleges and universities are finding that donors want their dollars to go to firms that commit to ESG principles and demonstrate that commitment through reporting.
How ESG principles apply to the S&T industry
Labs have substantial and wide-ranging environmental impacts that can be difficult to quantify. As one example, environmental impacts can be classified as “operational carbon,” which refers to carbon emissions during a building's use, and “embodied carbon,” which refers to emissions associated with the production, transportation, and assembly of building materials.
Whole life carbon life cycle. Image: Perkins&Will
The use of chemicals, contaminants, and viral materials inside labs force an energy-intensive amount of fresh air and air exchange rates inside labs. Combined with lab equipment that generates heat and consumes significant power, a typical lab requires around 4.5 times more energy per square foot than typical office space. One goal in reporting operational carbon is to encourage reduced energy use and subsequent greenhouse gas emissions without jeopardizing work being undertaken in the labs. Operational changes play a crucial role in conserving energy, so we urge our clients to invest in an early and comprehensive feasibility assessment that considers human factors, engineering systems, and renewable energy opportunities. During the design process, such studies can align project goals and optimize scope, schedule, and budget to dramatically increase the chance of success for a net-zero emissions project.
Labs that are already up and running can take advantage of operational practice studies and analyses, as well as advanced analytical monitoring of systems to validate performance. A thorough Laboratory Ventilation Risk Assessment (LVRA), for instance, can slash project energy demand by as much as half with no upfront cost. A feasibility study of high-performance mechanical systems incorporating fully integrated whole-building design can substantially increase efficiency and conserve energy. Renewable systems analysis by qualified engineers is critical to understanding the real cost versus benefit of complex renewable energy systems and energy storage requirements.
Innolabs, a King Street Properties life science building in New York City’s Queens borough, is an adaptive reuse project with proximity to public transit. Breathing new life into an existing structure reduced the lab’s embodied carbon and, because the building is convenient to public transportation, helps tenants reduce operational carbon. Image: Chris Cooper
Embodied carbon comes into play when designing or occupying a new, repurposed, or renovated lab. It’s important to consider embodied carbon throughout a building’s life, not only during the operations phase, because labs typically stay operationally consistent for decades but undergo renovations more frequently to accommodate new technology or novel ways of working. Embodied carbon—and developers’ expenses related to re-leasing space—can be decreased through smart planning and design, which makes lab interiors more adaptable to changes in technology and processes over time. Material choices like low-carbon concrete, steel that is recycled or sourced as close to the site as possible, products from manufacturing plants that use clean energy sources, and insulation products that have low global warming potential can also reduce embodied energy. We try to use only materials that have environmental product declarations and are transparent about their global warming potential. By using a whole-building life cycle assessment process, we can model the total carbon profile of our buildings. See our “Low-Carbon Labs” research report to learn more about embodied carbon considerations.
Depending on how much energy a laboratory requires and how clean the energy grid is (“grid intensity”), operational emissions can outweigh embodied carbon emissions. In other words, a lab in a jurisdiction that has clean energy from an emissions standpoint, like hydropower, might have a larger embodied emission profile associated with the design and construction of the laboratory facility than in its daily emissions over the course of its life. Recent legislation like Local Law 97 in New York City and energy conservation laws in California are forcing long-overdue changes.
Social impacts are reported, too. These include healthy workplace considerations like access to daylight and fresh air, connections to the outdoors, and toxin-free material choices when compatible with work being performed in the labs. ESG also reflects a company’s efforts toward achieving JEDI (justice, equity, diversity, and inclusion), both within the business and with its external partners. For instance, our ESG-reporting clients are interested in how we partner with local, minority-owned, and diverse organizations for consulting services. They also want us to consider how their building projects can enhance the surrounding neighborhood by opening interior or exterior space for community events or educational purposes.
Designed in 2010, this lab has been occupied by three tenants in succession over nearly 15 years, with each tenant fitting up the existing lab for different science functions. This sustainable solution was enabled by a robust utility infrastructure distributed via ceiling panels, programmatic flexibility with a logical balance of open and closed labs, and visual transparency between labs and office spaces. Image: Perkins&Will
Finally, governance criteria show how a company’s policies reinforce its commitment to environmental and social goals. For instance, a lab might implement operational changes to formalize efforts to save energy and emissions. It might report on efforts to enlist more diverse perspectives in its board of directors and leadership.
Looking ahead
As we reflect on our own ESG reporting experience and help clients design more environmentally and socially responsible labs, we’ve found that the laboratory typology is lacking in benchmarking data for embodied carbon in commonly used materials. To help remedy the situation, we recently released internal guidance on embodied carbon, and we volunteer on the Technical Advisory Councils TACs for the International Institute for Sustainable Laboratories (I2SL) and their Laboratory Benchmarking Tool (LBT).
We urge lab owners, operators, and developers to commit to being transparent about business operations and begin producing ESG reports in the coming year. It’s a considerable investment of time and effort, but the process itself can lead to better governance, healthier environments, and energy reductions by identifying where a firm is doing well and where it needs to improve.
The important thing is simply to begin.
Kathy Wardle, LEED Fellow, WELL AP, RELi AP, is a Vancouver-based principal at Perkins&Will and a regional director of regenerative design. William Harris, AIA, LEED AP, a contributor to this article, is a principal and regional director based in Perkins&Will’s Boston studio.
