Texas Takes the Lead

by Ellen Sinreich on August 1, 2014

Texas, the Lone Star State that many equate with oil and gas rather than renewable energy, has just completed one of the largest networks of high-voltage power lines to transmit wind energy in the country. Totaling 3,600 miles, this sprawling network will connect wind farms in the windy, low-density West Texas Panhandle to millions of households in the high-density metro areas of Dallas-Fort Worth, Austin and Houston. Built to handle 18,000 megawatts, 7,000 megawatts of wind turbine capacity is already under construction.

Contrary to the more typical scenario of building transmission infrastructure to accommodate demand, the Texas state legislature took a “build it and they will come” approach in 2005, when legislation was passed enabling the Texas Public Utility Commission to pass through the $7 billion cost to electricity consumers.

Investors & Regulators Drive Sustainability Performance Forward

As many of you know, there is a strong correlation between the financial performance of real estate investments and the environmental performance of the underlying assets. As a result, the investment community is increasingly evaluating real estate owners and managers based on the environmental performance of their properties.

In addition to investment community demand, federal, state and local regulatory imperatives for managing down the carbon footprint of the built environment continue to strengthen. It has even been suggested that real estate companies that fail to evaluate and disclose climate change risks face the same exposure as tobacco companies did for failing to disclose the negative effects of smoking.

Yet we encounter one real estate company after another that isn’t quite ready to bite the proverbial bullet and get their environmental house in order.

For those of you who are still on the fence about whether or not to measure, manage and disclose the energy, water and waste footprints of your real estate assets, consider this: over 50 institutional real estate investors representing $1.6 trillion of institutional capital and 49,000 real estate assets in 46 countries use the Global Real Estate Sustainability Benchmark (GRESB) results in various stages of the investment process. GRESB is just one of many industry-driven analytical tools designed to enable stakeholders to assess the sustainability performance of third parties.

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