Sara Neff, Head of Sustainability at Lendlease
Sara Neff is Head of Sustainability in the Americas for Lendlease, a global real estate and investment group with headquarters in Sydney, Australia. Before joining Lendlease, Sara was Senior Vice President of Sustainability at Kilroy Realty Corporation. She currently serves on the board of directors of Green Business Certification Inc. and Grid Alternatives. Sara is also an advisory board member of the Dynamo Energy Hub and a technical committee member of FIBRA Macquarie.
Watch the interview, followed by an edited transcript:
Can you tell us about the Lendlease portfolio in the Americas and how it breaks down across residential property, commercial property and other categories?
Yes, we have a number of business units. We have a pure construction business unit, about half of which is multi-family and the other half is a variety of asset types including life science, conference centers, the 9/11 Memorial – some very big and important projects. So that’s the construction side.
We have an investment management and development group, which is almost 100% multi-family. There’s one site that has an office asset on it in addition to the multi-family. And there’s a separate life science business within investment management and development as well.
And then we have a large 50 million square foot development with a partner in Silicon Valley which is primarily residential and retail. And then we operate a lot of military housing: We have 40,000 military homes across 18 military communities all over the United States including Alaska and Hawaii.
As the Head of Sustainability, what are your responsibilities and who do work with most closely?
I work with a lot of people! My main responsibility is ensuring that Lendlease Americas meets its targets for sustainability and for social value that have been set.
Lendlease has committed to, by 2025, being Scope 1 and Scope 2 carbon-neutral. Which is to say: All of the natural gas that we control and all the electricity we control, as well as things like refrigerants, that needs to be net-neutral by 2025.
We’ve also committed to creating $250 million of social value by 2025. And then we’ve committed to being absolute zero-carbon across every scope by 2040 with no offsets.
So it’s really my job to shepherd us through that process and ensure that we meet that through things like: Designing our buildings not to use natural gas in the first place; through procuring renewables both on-site and off-site; through energy efficiency; through embodied carbon reduction work and so on. And that takes a different flavor depending on what business unit it is, but that’s overall what my responsibilities are.
What is your strategy for existing assets in your portfolio, how will you get them to net-zero?
We are lucky in this sense: The way Lendlease’s business works, all of the assets that are existing are assets that Lendlease designed ourselves, LEED Gold and Platinum buildings. So their path to carbon-neutrality is quite clear.
Where I see definite challenges ahead is with existing military homes. Eventually, we’ll have to work with the Department of Defense to make those all-electric homes, unless we can somehow get enough renewable natural gas for some of them. But that seems unlikely given where the gas grid is going. So that to me is really the challenge.
We’re building new military homes to be all-electric, [zero carbon]-energy ready, ENERGY STAR and all the rest. It’s the existing military homes that I’m concerned about.
What technologies do you find most useful to put sustainability goals into action and measure your progress?
There are a number. We have a global platform for data called Footprint. So there’s one of me [i.e. a regional Head of Sustainability] in Singapore, in London and in Sydney. All of those folks are putting all of their building data into Footprint. That allows us to really understand the carbon emissions and the overall energy, water and waste consumption of the whole portfolio.
That is a really powerful tool that allows us to figure out what our scope targets should be in what year, and what the carbon budgets or mandates should be. So having a global system for understanding data is critically important.
On the building side, we do have some smart energy monitoring software. There needs to be some real-time or close to real-time visualization of energy. We work with a company called Enertiv that does a lot of that.
Other technologies that I’m excited about are things around renewables that a more efficient: Bifacial solar panels, for example. Geothermal systems are something we’re exploring. Vertical solar panels are something we are exploring. Those technologies that really help you maximize on-site renewables in buildings.
In your experience, have you seen sustainability measures that are good for the environment also reduce operational costs?
Absolutely. A great example is solar. We have 40 installed megawatts of solar in our military portfolio that save significant taxpayer dollars on energy costs. It’s one of the great partnerships we have with the Department of Defense, understanding that these technologies are a really great way to save operational carbon and energy and costs. And they support sustainability goals as well.
Looking across the real estate sector, how would you explain the rapid increase in setting sustainability goals, including net-zero carbon commitments?
I think the world has woken up to the fact that real estate – buildings – represent 40% of carbon emissions in the U.S. That is a lot, and so there needs to be a major focus on decarbonizing the built environment if any country, state or city is going to achieve its carbon targets.
There has been increasing pressure from many, many stakeholders as a result of that. And the results of climate change are becoming more real: I’m beaming in from California where we deal with a lot of wildfire and drought, exacerbated and increasing because of climate change.
So the investment community has realized they need to decarbonize the built environment. Ratings agencies, especially around things like climate resilience, have realized that decarbonizing the built environment is important. Cities are understanding the contribution of buildings to their overall carbon emissions and are legislating accordingly.
So there are a lot of different pressures all coming from the need for real estate to decarbonize. And then there’s also the fact that there is a possible pathway. Real estate companies are achieving already net zero for Scope 1 and 2. It is possible right now. So I think also because there’s a path to achievement, there’s not an excuse for staying on the sidelines.
How did you first get involved with sustainability?
I went to business school with a vague goal of connecting finance and the environment. I definitely thought I was going to end up in renewable energy project finance. But then I was lucky enough to interview my former CEO [John Kilroy] during a class and we hit it off. He hired me to be Kilroy’s Director of Sustainability at the time. This was back in 2010, so he was fairly visionary on this subject.
I started at Kilroy and built their sustainability program, including getting to net zero for Scope 1 and 2, by 2020 initially. One of the things I have learned along the way is that if I wanted to learn about something that was really, really forward-thinking, I needed to go to conferences and listen for an Australian accent. Because the Australian green-building community is very, very advanced for a variety of reasons.
That is how I ended up going to Sydney back in 2016, to meet a bunch of people and tour buildings and hear about what was happening – and that was when I was first introduced to Lendlease.
I toured Barangaroo South, which was the first carbon-neutral precinct, not just building, in Australia. It’s fantastic. So when it came time for a job transition, I was very happy to move over to Lendlease.
Who do you most admire in the world of real estate sustainability?
There are so many. Ben Myers at Boston Properties is fantastic and he just has a really thoughtful approach to sustainability. Really knows how to tell a story with numbers in a great way.
I have a lot of respect for Dan Egan at Vornado, who’s in a tough spot in New York because of the way that renewables procurement works there. It’s a lot more challenging. And then you have Local Law 97 there, which now our buildings are subject to, but it’s something that was new to me since Kilroy’s operations were entirely on the West Coast. Dan does absolutely fantastic work.
I know it doesn’t seem like real estate, but I really appreciate leaders like Salesforce, for example, who really showed real estate companies how to achieve major wins in off-site renewables procurement – and have always been really, really great at sharing knowledge for how they did their deals and how to structure them.
And Katie Ross, who runs Microsoft real estate, was pushing the envelope really early on embodied carbon. We really appreciate her leadership. So lots and lots of people I respect in the world of real estate.