2018-09-18 15.00 Back by Popular Demand_ The Best of the ...



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Maria Vargas: Good afternoon. This is Maria Vargas at the Department of Energy, and I wanted to welcome everybody to today's webinar. We are excited. This looks like it's gonna be a pretty popular webinar, so we're delighted that everyone has joined us, especially 'cause we're trying something new with this webinar. This is the first webinar this season for the Better Buildings program, and we wanted to spend a little bit of time today, an hour to be exact, to recap and hear from a couple of the speakers that joined us at the summit in Cleveland last month, so we were excited that the summit this year was very popular. We had lots of good talks and presentations. There was great peer exchange, and there was lots of solution sharing, and so we are thrilled that we had as many of our Better Buildings partners at the summit as we did this year, so it was great, and we're still gathering feedback on speakers and sessions.

But the folks we've asked to join us today are among those that had the early buzz. These are folks from, as you will see or have seen – come from very different sectors and gave presentations on very different topics, but that were very popular among attendees and that we as DOE folks heard about in the hallways. So it's a pleasure to have with us Richie Stever from the University of Maryland Medical Center, Matt Pekar from UTC, and Brenna Walraven from Corporate Sustainability Solutions with us today. So with that, I think we're gonna go ahead and start. Megan, can you forward to the next slide, please?

So I just shared with you the folks who are gonna be talking on the webinar today, but here is their names again, a picture, and their organization. We've asked each speaker to talk for about 10 to 12 minutes and to recap and redo, if you will, the presentation that they gave at the summit this year, and we are leaving time in this webinar at the end for questions. So if you have questions, please feel free to use the webinar app and submit questions, and all of the speakers are excited to hear the questions you have and spend some time answering it. So without further ado, if we can, I'd like to just kick off. Megan, next speaker – next slide, if you would, please.

Yeah, so I'm gonna introduce and just spend a minute introducing Richie Stever from the University of Maryland Medical Center. Richie is the director of operations and maintenance for the medical center's downtown and midtown campuses, which is about 3.5 million square feet. And I think Richie's trajectory and career will give you a sense of why his talk was so well received, and he is gonna share with you some really interesting work that he's been doing. After working for several years as an HVAC technician, he accepted a series of positions at his organization, and now he is, as we mentioned, the director of operations and maintenance. And the great thing about Richie's presentation, not to preface it too much, but is that he is gonna talk about building the next generation of workers in the energy industry and helping deliver greater energy efficiency in our buildings and share some real stories of how we can really grow and excite the next generation of workers.

Before I turn it over to Richie, I asked each of the speakers to tell me a little bit about themselves outside their work, and Richie, it turns out, is an amateur large-mouth-bass fisherman who's ranked 12th in the State of Maryland. And he also volunteers with Heroes on the Water, an organization that helps veterans relax and regenerate – reintegrate – excuse me – through kayak fishing in the outdoors. So with that, Richie, we'd love it if you can kick us off. Megan, you can probably go to the next slide, and we'll get started on today's webinar. Richie, it's all yours.

Richie Stever: Maria, thank you for that wonderful introduction. Again, my name's Richie Stever. I'm the director of operations and maintenance at the University of Maryland Medical Center. Megan, next slide. So as Maria mentioned, we are a campus one mile apart, a 800-bed flagship teaching hospital and a 200-bed community hospital, representing 2.5 million square feet. Our mission is to deliver superior health care, train the next generation of health professionals, and discover ways to improve health outcomes worldwide. Next slide.

So as you can see, this is our current state of our organizational chart. I won't go into detail here, but there's a layer of management at the top, and then each of the subspecialties – electricians, plumbing, multi-trade specialists, as an example – represent each one of the various shops that we have. On the left side of the screen is the university campus or downtown campus, and then the right side of the screen is the midtown campus. Next slide.

All right, don't laugh at the picture, not a great picture. It just speaks to cell phone technology over the last three years, but the reason why I included this picture for this presentation is it shows the age, without even knowing numbers, without even knowing people, shows the average age of the department. You can see there's a few folks who've been around for a while, not too many younger folks here. Next slide.

So we couple that picture with some Department of Labor projections for the next eight years, 2016 through 2026. For general maintenance repair workers, the percentage is going to go up 7.9 percent, so not only are we potentially facing employees changing, actually getting out of their current careers due to age, health, and other reasons, but we also realize through these Department of Labor statistics that the number of workers, because of the complexity of our buildings, is going to increase. Next slide. So in addition to that previous slide, the U.S. labor force also is changing dramatically. You can see back in like 2005, the number of 55-and-over workers in the workforce vs. the 16 to 24s switched, so as we look towards the future, 2020 and beyond, you can see that there are more 55-and-older people in the workforce than our younger generation, 16 to 24s. Next slide.

So what we did is we evaluated our team. We didn't actually ask any questions. We just evaluated a team based on gut feel for who do we think's gonna be retiring in the next five to eight years, so all those who are retiring or we think are gonna retire in the next five to eight years are represented in red. Next slide, I'll give you some calculations on that, so we looked at each department, so we're gonna have potential vacancies in HVAC, plumbing, electrical, electronics, general mechanics, some stationary engineers. Even office personnel are gonna change, so out of a total of 60 people across the 2 campuses, 17 of them are potentially retiring in the next 5 to 8 years, which represents a 28 percent decrease in the number of folks in the department. Next slide.

So the state of the department is pretty scary, actually, so the average tenure in the department currently is 24 years, so people, once they accept a job at University of Maryland, they don't tend to leave. So 28 percent potentially even in the next 8 years results in an unprecedented increase in turnover, and unfortunately, most of the leaders will be departing soon with them. They'll take their institutional knowledge. We also recognized that we didn't have a succession plan or a formal career ladder, and we also recognized that highly-skilled candidates demand high wages. Next slide.

So back to the slide we were talking about before, with the 16 to 24 year olds, so how do we attract that segment of the workforce? That was the question we posed to ourselves. Next slide. One of the primary reasons why we're looking at that population is because of the rate at which they will accept positions, so most of you in the various building trades, I'm sure, have similar budgetary problems that we have, so how do we develop positions that people will accept based on wage? So that makes that, the high school diploma – younger folks with a high school diploma or less than a high school diploma are prime candidates for entering into our workforce. Next slide.

So we thought, well, we should develop an apprenticeship program. Next slide. So we did, so we actually created two different apprenticeship programs. We created a building automation apprentice program, which is a fully-funded, brand-new position, where we educate the people on our campus, and we provide the on-the-job training, and that is a department – Maryland Department of Labor and Licensing and Regulation position. We also created an HVAC – three different positions – HVAC, plumbing, and electronics positions. For the HVAC position and the plumbing position, we took a person, an HVAC technician, high-wage HVAC technician that retired, broke his wage into two apprentices for two positions.

And then the other one, we had a retired electronics position, where we created another apprentice, and we still had a couple bucks left. We modified some job descriptions. We partner with ABC, Association of Builders and Contractors, and we are providing on-the-job training for these apprentices. Next slide, so we modified the job description. Basically, we said to HR, "These – for the position, if a person doesn't have any experience, that's okay, as long as they're entering the skilled apprentices program," and we said, "Give us an apprentice with the right attitude and aptitude, and we can teach 'em the rest." Next slide.

So has it been successful? You be the judge. Next slide, so these are our four apprentices, from left to right. We have Josh, Darren, Jordan, and Chris. Next slide, so I'm gonna talk about each one briefly, so Chris was hired in 2015 for a building automation apprentice. He was our first one. We are the program sponsor. He was an employee of a fish store, so he understood basic mechanical systems. He played video games, which was perfect for us for understanding how one action over here in the building automation system impacts another item over there.

Over the past 2 1/2 years, Chris has grown professionally and personally. He moved out of his parents' house. He now rents his own apartment. He has exceled in every single class he's taken. He actually was flunking out of high school. You can see that on the third bullet, barely passing, but he's gotten all A+s in this building automation program, so we're pretty pleased with his performance. Actually, he's pretty pleased with his performance as well, and he's actually becoming a real asset regarding programming and maintenance of the building automation system. Next slide, which, by the way, we have 40,000 points in our one building, so it's a pretty big program.

Darren was hired in September 2016 as a plumbing apprentice. Again, we're partnered with ABC for that one. He was an employee with the receiving department, and he was a superstar. His manager came to me and said, "Hey, this guy's got a lot of ambition," and recommended him for the apprentice program. He had no mechanical experience, and we've taught him everything, so over the past 1 1/2 years, Darren's grown both personally and professionally. He moved out of his grandparents' house and now leases his own apartment. His aunt was so proud of him that she bought him a car, and his two preceptors, two master plumbers, have adopted him both inside their families, both inside and outside of work. They actually invited him over to Thanksgiving last year, which was pretty cool. Darren is learning about the facility and about the profession, and more importantly, about life. Next slide.

Josh was hired on the same day as Darren. Josh accepted the HVAC apprentice program. Similar to Darren, he's in the ABC program. Josh had a little bit of HVAC experience, but wanted to work for a slightly larger institution than what he was working for before. He didn't quite have enough experience to be hired into the HVAC position full blown as an HVAC position, so he gladly accepted the HVAC apprentice program. He's learning a lot about pneumatics, and he's learning about digital controls, so which makes him pretty valuable on the team, knowing both old technology and new technology. Next slide.

And Jordan is our latest apprentice, just hired in March of this year. He's in our electronics program, again, partnered with ABC. Jordan entered the workforce when he was 18 as a carpenter. We hired him on as a temporary employee through an agency to get a feel for his work ethic. We liked his work ethic, and we converted him to a permanent employee in March. He's now working on a pneumatic tube system, which is the third largest in the world, as I understand. He's also working on fire-alarm systems, suppression systems, and synchronized clocks. He tells me he's more responsible at home because he's paying his bills on time, and he attends functions on time. I can tell you there was an instance where, when he was a contractor, he was showing up late, and after a small conversation, he straightened that out, but I'm glad he did, because now he's a fully-functioning member of the department, and he's even had great success personally, because he purchased his own car. Next slide.

So here's what our organizational chart looks like today. The yellows represent the apprentices. The reds are still those who we anticipate to retire in the next 8 years, but as you can see, we're pushing the yellows, the apprentices, up the career ladder and organizational chart, so that they are the leaders of the department in the next probably 5 to 10 years. Next slide. So what's next? We're partnering with the Baltimore City mayor's office and Maryland DLLR and Baltimore City's community college to create a stationary engineer apprenticeship program. Some of the participating employers include Baltimore City Convention Center, Baltimore City Department of Public Works, Johns Hopkins University, both school and hospital campuses, Under Armour, the medical center and the medical school, and Veolia North America. Next slide. Okay, and up next, we have Matthew Pekar.

Maria Vargas: Wonderful. Richie, thank you so much. This is Maria Vargas again. This is not Matt Pekar quite yet. I'm gonna introduce Matt, but before I do that, Richie, I just wanted to say thank you, and I think I can see now why your presentation was such a hit at the summit. It not only demonstrates how you're really changing lives, and also how you're addressing a real need that many Better Buildings partners are seeing in the marketplace, and that is the retiring workforce and how to work with and find new talent to help address some of the energy issues, and then really, what your organization has done and what you've done with your team to take that on yourselves and to make it happen in a really exciting way for all of us to have seen, so thank you so much for sharing that.

So Matt Pekar's our next speaker. Matt is with – at UTC and is gonna talk a little bit about transition planning for energy managers. As you can see, workforce, between Richie and Matt's presentation, is really a theme that's running through a lot of what you all are thinking about today. Just a quick intro for Matt, he's been with UTC quite a while, started in the Carrier Air Conditioning division as a sales engineer and then has had a variety of careers and is currently the senior manager of energy and greenhouse gas programs within the environmental health and safety department, and he's responsible for UTC's energy and greenhouse gas reduction program. And I asked Matt what a fun fact would be about him, and like Richie, he is a fisherman as well, although a saltwater fisherman, so with that, Matt, if you could take us away, we'd love to hear about transition planning for energy managers.

Matthew Pekar: Well, thank you for that intro, Maria, and thank you to all those who enjoyed my presentation at the Better Buildings Energy Summit in Cleveland. The Department of Energy came to me and asked me if I'd do a presentation on transition planning, probably because 40 years ago, I was brought into this position with the understanding that my then-boss would be retiring at some point, and in 2017, he did retire, and I took over the position, so I guess it was a good fill. Next slide, please.

So getting right into it, I'm gonna get everyone up to speed on UTC, just to let you know a little bit about who we are and what we do, and then I'll talk about the energy manager requirements. Now, I know we're talking about transition planning for energy managers, but it's really – we're always looking for good people, so it's really the skillset that we're looking for that's important, and we train a lot of people so we can find that person who we can bring in and have replace the people as they retire and move on. Next slide, please.

So as you can see, UTC is a $60 billion revenue company. We're broken into four primary business units. There's two commercial. They include _____ elevators and escalators. There's the CCS division. You probably know them as Carrier Air Conditioning, Chubb and Kidde fire and security protection, and then two on the aerospace side. We have Pratt & Whitney engines, and we have UTC Aerospace. Globally, we have about 300 manufacturing sites, and that doesn't include our sales offices and our repair shops.

So somehow, we need someone who can kind of gather these different organizations together and have them coalesce around our sustainability goals, and you can see them on the slide. We do require a three percent year-over-year reduction in our greenhouse gas emissions. We require a 5 percent reduction in our water consumption year over year, and we require 100 percent implementation of the global water best practices. Now, this started in 2015, so those 3 percent, 5 percent, they all culminate into reductions of 15 and 25 percent for our 2020 goals, and right now, we're in the midst of setting our 2025 goals. Next slide, please.

So what do we look for for energy management? Well, there's some traditional topics, such as lighting, HVAC, compressed air. These are kind of the mathematical parts that any engineering firm, if they have an engineer, they can do this. They can do the calculations all day. We're looking for someone who could do a little more of the advanced topics, such as renewable energy, some greenhouse gas management and accounting, understanding virtual net metering and real-time data management, maybe working on some energy procurement. That's kind of a more financial need and not really something that every engineering firm would have someone to help us with, and then the people we're looking for today, they have to consider – we have to consider future concepts, such as the advanced manufacturing processes.

A lot of you may think 3D printing, utility-scale energy storage, so it's great if we have solar panels on our roof, but if we don't have that energy when we need it, in some kind of storage, it may not work for us in the long run, and then robots in manufacturing, so a lot of times, we do have a health and safety component. If a job is too dangerous or if someone shouldn't be doing it, we'll look at putting robots in. An employee will work with or through the robot, just not to get involved with the process as much and keep them safe, and then we have a big pushout towards digital factories, which is gonna be collection of data on a real-time basis and being able to make decisions based on that data. Next slide, please.

So where do we look for these people? Well, it turns out that the Department of Energy has a program with a bunch of universities and colleges around the United States, and these are the industrial assessment centers. We can see on here some of the colleges and universities that are identified. I've worked with several of them in the past at different locations throughout my career, and I've been very pleased with the successes that we've had with them. It's a great program because it does three things: One, it gives the professors an actual setting where they can show real-world situations, and it allows the students to have a real-world setting, go out and see things physically happening, and three, it gives us the opportunity to gauge these young employees, these young students, who we can then pick and choose who we think is gonna work for us. It helps us identify some. Next slide, please.

So we have these college students, and let's say some of 'em are in their junior, senior year. Well, we have internship opportunities available to bring them in, or if they're graduating, we have an EH & S leadership program, so the leadership program is basically an eight-month, three rotations where the candidate will spend eight months perhaps in an aerospace manufacturing division, a commercial manufacturing division, or they might be working up at the corporate office. They get an experience of everything that UTC has to offer, and they get to see where a good fit is for them, and they're placed after their, based on what they liked, placed after their rotations are done. And as you can see, some of our key facts: UTC plans to hire 35,000 people within all 50 states. They're gonna make a $15 billion investment for their innovation. That gets back to that digital factory, and 29,000 academic degrees have been given out to employees. I was a benefit of one of those, so when we get new people in, I push 'em into that program. It's a great opportunity. Next slide, please.

Okay, so you came out of college. You were lucky enough to get an internship or get on the ELP program. Now, we gotta start immersing you into the energy management system here at UTC. Fortunately, we have this energy management guidebook that was developed about a decade ago by a lot of energy managers throughout the company, and they pulled together their best thoughts, practices, and ideas and put 'em together in this collection. The 12 I'm showing here, we have as our best management practices. These are the ones that we put out to the sites and we say, "If you're doing these, you're operating at optimal performance," so we train the new people in this, get them inducted into it, and then we send 'em out to the different facilities and see what they can find and see if this is being implemented. Next slide, please.

As part of that energy management guidebook, we require that our facilities get an energy audit every three to five years, could be internal, could be external. As you can see from the slide, UTC, my department, conducts 10 to 15 percent of these energy audits every year. It's a good way of staying on our toes and identifying new processes and staying fresh. What we try to do is we bring the interns with us, or the ELPs, and we'll have them work the audits with us. We'll see how they interact with people, both people operating the machines, technicians, and even management. We interact with all of 'em to see how they do, if they get the concept, and this is really a hardcore audit. We're in there for about three days. We go in. We assess. We find energy projects, and then we give a report out by the time we're done. Next slide, please.

So the training doesn't end there, so you've come out of college. You've been inducted into the UTC methods of energy management, and you've gone out on some energy audits. What's next? We're gonna give you some advanced training. We are a challenge partner with the Department of Energy. We're very proud to be that. We have a good, long history with them, and we've conducted some training events at our different sites, such as the energy treasure hunt – you can see those two up there, a compressed air workshop out in California, and then we participated and brought the Department of Energy into our Springdale, Arkansas plant, where they did a motor energy audit. They went through to see what motors were in place to add to their new system to update it. _____ gonna roll out I think in about another year and a half or so, and people will be able to go in there and do motor selection. Next slide, please.

So the on-the-job training, we get the train the trainer, and it's fantastic. We learned some great things, but it doesn't just stop at the U.S. borders. We're an international company. We're in about 169 countries, so we take this training abroad. Now again, we'll have interns and ELPs in other countries. We'll train them over there. The energy treasure hunt training, we conducted training seminars in Canada, Mexico, and France, had about a dozen countries represented and about three dozen people who participated. A lot of them carried that into their facility. It was also a great way for us to view internationally who's out there and if there are any candidates who could be good fits as energy managers abroad or even brought back to the United States. Next slide, please.

So now, you've had all this training. You feel this is the route you wanna go. What's the next step? What can you do to set yourself apart? The Association of Energy Engineers, the Certified Energy Manager program. You take a three-day course, three-, four-day course, and you take a test at the end of it. Hopefully, you pass that course, and that just gives you the credentials and recognition among your peers that you know what you're talking about when you walk into that facility, or when you're talking to 'em on a level playing field. Next slide, please.

So this is just wrapping everything up, so the first thing you really need is you need to have an interest in energy. You probably don't need to know every step of the way, but you need to have – so you're curious. You're curious about how things work and operate and how they interact. You need to have a willingness to travel. Obviously, being a multinational corporation, this is really big. You're gonna have to wanna travel, and you're gonna have to be able to maybe not speak other languages, but understand other languages, take your time, and just be willing to listen closely, so you understand what they're asking you. Technical background, another big asset. There is a lot of math involved in the calculations that we do.

And then factory experience – factories are a dangerous place. There are opportunities. There's hot ovens. There's chemicals. There's moving equipment – easy to get hurt. That factory experience, you get trained in the health and safety ways, and then you're aware when you're going through the factory doing your audit what you should touch, what you shouldn't touch, what you should go near, what you shouldn't. Then degrees and diplomas, the degrees and diplomas give us the basis. They let us know that you have the basic understanding of what we ask of you, of what we expect, and then the certification, so once you've proven all that, you go out. You get this certification, and then you're considered a competent energy manager. Next slide, please, so that's it, 10, 12 minutes. I hope that was enough for everybody, and I'll turn it back over to Maria.

Maria Vargas: Perfect. Matt, thanks so much. We appreciate it. I think I can see part of the reason people really enjoyed your presentation, because thinking about the succession and planning for energy management and energy managers is really important. And so I think what you shared are some really good guidelines and things to think about and processes and how to make it an organization-wide commitment, so thank you again. I appreciate it. Before I introduce our last speaker, Brenna, I wanted to just remind folks on the webinar to please go ahead and ask questions, supply questions on the webinar chat on the GoToWebinar, so that – we've already got some of those, and I know that Richie, Matt, and Brenna are anxious to answer questions you all have about their presentations.

So last but not least, I wanna introduce Brenna Walraven, who is the CEO and founder of Corporate Sustainability Strategies. We've known Brenna for a while, and we're excited about her presentation, 'cause it's really very different than the presentations that have come before today. She's really gonna talk a little bit about some of the insights that she's getting as she works with her clients and businesses to sort of highlight the kinds of things that we should all be thinking about now, and maybe some of the trends that we don't need to be paying so much attention to.

So just a little bit about Brenna: As I mentioned, she's with Corporate Sustainability Strategies. The first client was really U.S.A. Real Estate Group, which was Brenna former employer of about 16 years, so Brenna has done a lot of work and has a lot of experience in helping partners really think through how to think through strategic leadership and direction for many multi-sector real estate owners of large portfolios. Brenna's done a lot of work and continues to be very involved with BOMA, Building Owners and Managers Association, as well as folks like the Real Estate Roundtable, so works with a lot of organizations, has a lot of experience. And in terms of a fun fact, Brenna tells me she's not a fisherman, fisher person, fisher woman, but she is a golfer, with a 9.4 handicap, so with that, Brenna, thanks so much for joining us. I'm gonna turn it over to you.

Brenna Walraven: Thank so much, Maria, and gosh, great job, Matt and Richie. I'm gonna try to not be as – try to be as upbeat as you are, at least when we finish. Really enjoyed this discussion and participating at the Better Building Summit and here today, so I'm gonna talk a little bit about investor-oriented sustainability insights. And with that, if you'd go to the next slide, we'll jump into what I would like to have people start thinking about, which is where resiliency fits into sustainability, which is a little broader perspective and is coming up more and more, as you saw with the storms in North Carolina and South Carolina. Next slide.

And in that same spirit, if you click again, you'll see a photo here, and really, what I wanted to make the point here is that according to Moody's last year, they actually explained how climate change is going to be increasingly incorporated into credit ratings for state and local bonds. And so if cities and states don't deal with risks from surging seas or intense storms, they're gonna be at greater risk to default, and in fact, Lenny Jones with Moody said, "We want people to realize that if you're exposed, we know that, and we are gonna ask questions about what you're doing to mitigate that exposure, and ultimately, that'll get taken into your credit ratings."

And in fact, Moody's lists a handful of indicators that it uses to assess the exposure and overall sensitivity to these cities and states to climate change risks or resiliency risks, and they include things like share of economic activity that comes from coastal areas, so when you think about the United States, that's a lot of parts of the country; the risk and exposure to hurricane and extreme weather damage as a share of the overall economy; and then the share of homes in the flood plain. And when you just take those three, and there are a couple of others, overall risks, Texas, Florida, Georgia, Mississippi, among several others, really become higher-risk areas and should impact how we think about and what we're doing with respect to resiliency. Next slide.

And I wanna put this in market context, 'cause I think this is how increasingly, investors are thinking about it, is that again, resiliency is part of sustainability, and it's really an emerging megatrend. How do we know that's true? Because global economic growth has intensified competition for natural resources, particularly oil. There's a geopolitical dimension and externalities associated with CO2 emissions and water use, and those are becoming more material, so what do I mean by material? It means that investors consider them central to how a company will perform, and in fact, the Securities and Exchange Commission, or SEC, ruled in 2011 that climate risk is material to investors, and thus, public companies need to disclose what they're doing to mitigate those risks. And we know that public concerns about pollution, food safety, natural resource depletion, and all of these types of issues on the rise. Next slide.

And so on this, I wanna say this comes up: "Well, what do you mean by resiliency, Brenna? What are we talking about here?" The definition in this context is preparing for and recovering from climate-related weather events, and why should it matter to us? Because climate change and weather-related risks are rising at an increasing rate, meaning it's not just that they're happening, but they're happening more and more frequently, and sea-level rise is also increasing at a fast rate, and the impact, not just to the environment or buildings, but to people, is very significant and pervasive.

A couple of interesting facts to give you an order of magnitude of this, of the importance, is that U.S. disasters have quadrupled since 1970, to an average of $100 billion a year, but in fact, in 2017, and the final numbers are still not in – is the worst year on record, where there was $300 billion in natural-disaster-related costs for cleanup and rebuilding, $300 billion, so very, very real money. And a lot of people say, "Well, Brenna, that's not – that doesn't impact me. I don't live in Florida. I don't live in Houston. I don't live in New Orleans, which is not in my backyard _____."

Unfortunately, one third of all U.S. counties declared a natural disaster in 2017, one third of U.S. counties, so it's pervasive throughout the U.S., and roughly half of all Americans live near a shoreline that is disappearing or being impacted by sea-level rise and storms, so streets are flooding. Drinking water is becoming unsafe. Homes and buildings near sea level are more vulnerable. So with all that good news, there is some positive way to think about this, which is that there are cost-effective ways to prepare for these events and be able to recover faster from these events, and there's even a business case, which I'll get into here shortly. Next slide.

So to drive the – oh, there's the next – sorry. The good news was on my notes, but finally got that the good news is there are cost-effective ways to prepare. The reason I wanted to show the New York financial district is obviously, this is the center of global finance, so again, it's not a small town in Mississippi or someplace that may not have a huge impact on our overall economy. And there was an analysis that looked at what would happen if, at the rate we're looking at for sea-level rise by 2100 – if you go to the next slide, you'll see that impact, and what you'll see is basically, New York City's financial district would be underwater, so these risks are real, and they're not just to a handful of communities. Next slide.

And so when we talk about sea-level rise in particular, why is it important? Because it's more important for our planning. Codes are gonna increasingly change to adapt to this, and that will often change the types of uses in real estate, and we're seeing more of that already, particularly in south Florida and other parts of the country, which what that also means is there's gonna be more capital improvements needed to invest in, again, preparing for and being able to recover from more quickly. And we also know that this is going to affect flood zones, so you may not be in a flood zone today, but because of the impacts we're already seeing, you could be in the hold period of your investment if you're a real estate owner.

During your hold period, you could become or come into a flood zone, so why is that important? It not only has a negative effect on insurance rates and cost, right, which is indicative of risk, but it also could mean that there's a complete inavailability of insurance in certain places, and we're seeing that in parts of the country today, where it's harder to get insurance depending on the type of real estate you have. So it's just something that we all need to be thinking about in our planning, and capital planning in particular. Next slide.

So let's talk about resilience and risk – sorry. Let me back up before we depart. This is kind of indicative of what I was touching on about the different zones that come into effect for insurance, and the really only point I wanted to make here is that what you'll see is the one house that's kind of a yellow house in the middle of the slide. It's improperly elevated, because when it was built, it was not in a flood zone, wasn't a real risk, and what you see next to it is one that has been elevated. Now, I get that most commercial buildings aren't gonna get jacked up on stilts, the point being though is insurance companies are gonna be looking for ways that property owners and operators prepare for the storm surge, the wave effect, and how to mitigate the risk of being not only just damaged, but being offline and unable to be used over a long term, and these risks are increasing for majority parts of the country. Next slide. Keep going, one more.

So we're gonna talk about defensive value protectors, and what we're really talking about is how can we reduce risk? So if you look on this slide, you're gonna see a lot of different types of risk, and most of these, in one way or another, are touched by resiliency. And I don't think most people are thinking about that on a day-to-day basis, but it does gotta be more a part of our vernacular and how we're thinking about things, so not gonna get into the details of all of these. What I'm trying to point out here is risk is the big four-letter word in real estate today, and resiliency is the strategy for how we deal with those. Next slide, please.

And specifically, risk is – and reducing risk is increasingly gonna get priced into real estate, and so real estate owners and operators are generally really used to asset and property management related risks, right? They have emergency preparedness plans. They're used to tenant risk, so does the tenant have insurance? They're even used to physical asset risk to some degree, right – are we making the capital investments in our property to maintain it properly and get the performance? I think resiliency risk is a new risk that many owners have not been thinking about as much as they need to be.

And what I mean by that is let's talk about even the physical asset risk. Your asset could be as resilient as it possibly could be, but if the roads are blocked and you can't get power to your building, then suddenly, you're not in business – same thing for a tenant. Just because they have business interruption insurance doesn't mean that they won't fail in a catastrophic event, so that requires engagement and talking about these issues, again, not just internally, but also with our tenants to address this. Again, the good news on all of this – and I do wanna point out some good news – is that we can really lower insurance costs to offset the investment that we need to make to prepare for or make our buildings more resilient, so there is a business case, which I'll touch on here in a couple seconds. Next slide.

So next really thing when I – to get into a little bit is what can we do about these risks, so there's a process. Just like we do in anything in business, we have a process to improve efficiency, reduce costs, and again, drive the right outcomes, so that starts with a basic vulnerability screening and looking at your portfolio and saying, "Where are my biggest risks? Where do I have real estate that is in the most risky area?" And it's not just looking at where you might have hurricanes, for example, but things like tornadoes, exposure to drought, flooding, even fire that comes from excessive drought are all tied to resiliency issues, and we have to do that screening.

And then we wanna look forward and say, "What material – where are the biggest risks, and how important are they to my business?" So I have clients that look at their FFO or funds from operations, and they say bigger assets in coastal locations, particularly at risk of potential, again, floods, tornadoes, et cetera, are the ones that they're focusing on first. And then what we wanna do is set a plan, identify and implement kind of best practices, and there are retrofits that can, again, offset your insurance premium cost. The key is you have to have discussions about what those need to be. And then lastly, achieve portfolio and risk mitigation, which is really about being able to document what you've done, so that you can not only share that with your insurance carrier and get that cost reduction, but also be able to have the right kinds of conversations with your tenants and your local community. Next slide.

I just wanted to share this, so stay on this clip, just gonna click through. This slide is just giving you some examples, and I thought it was compelling. This is off of Zillow. It shows you if the sea level rises six feet, how many homes would be affected, and as you can see, a big chunk of the east coast would be dramatically affected, over almost 2 million homes and almost $900 billion. Click it one more time, and we'll get _____, and so what we see is, hey, there's things that we need to think about.

It's not just sea level rise, but we need to look at is there excessive heat or cold spells. You guys all may remember the polar vortex and how that impacted us. Cyclones, wildfire, drought, all of these need to be put into our matrix of how we're thinking about our building, and then coming up with a plan out on the backside. Click it one more time, and what you'll see here is that there are some benefits that you may not have been thinking about, so not only lowering your insurance costs and reducing your risk and having a better relationship with your tenant, but also having enhanced public safety and also revitalizing neighborhoods.

All of this is a combined part of this, which if you go to the next slide is what the business case ultimately is, is that there will be winners and losers in this, and a sustainability program that includes resiliency is able to reduce risk, and that'll, again, increasingly be priced in the real estate, and if you reduce those risks, you ergo enhance value. And again, you can often save more than you spend by offsetting the investments through insurance reductions, and ultimately, we increasingly see these as proxies for good management. This is what good owners and operators do, is they're thinking about what's next and how to prepare for those.

And my last slide here, I just wanted to quickly touch that many cities today have programs. These are the commitments that New Orleans has publicly announced. The big one that I wanted to mention is that they increasingly are looking to incentivize property owners to invest in risk reduction, so it's important to reach out to your local community, where you have a portfolio, where you have real estate, and look to see what opportunities you can partner with your city to make your building more resilient. With that, I'll turn it back over for questions.

Maria Vargas: Awesome, Brenna. That was really great, if a bit sobering, but that was really wonderful, so thank you for sharing that. I appreciate it, so up on your screen now, you'll see that there are additional resources that you can use, that were submitted from the speakers for today's session, so next slide. Let's go ahead and do some questions and answers. I'm being very mindful of time. I promised folks this webinar will go till 4:00, but I think that gives us about 10 minutes to take questions that you all have asked. We're not gonna get to all of them, 'cause people have asked questions, but which is great, but we'll see if we can get to as many of 'em as possible.

So Richie, since you were the first speaker, I'm gonna toss the first question to you. Someone has asked a question and was hoping you could provide an estimate of the percentage of time it takes to get an apprentice up and running, as opposed to an entry-level technician. And then while you're there, if you wouldn't mind describing the relationship between – and maybe interactions or experience between older workers and apprentices, that would be great, so Richie, I'm turning the mic over to you.

Richie Stever: Thank you, Maria – two great questions. I'll start with the first question, with how much time do I – extra time do I think it takes for an apprentice to get up and running, so I would say approximately five percent additional time. "That number's awfully low," you're probably saying to yourselves, but if you think about – or as I think about the campus, 2.1 million square feet, 3 big plants inside, just for an entry-level technician to come into the building, understand where items are, how the three plants work with one another, there's a bit of a learning curve there.

So an entry-level technician, who might have some minor skills, might not have experience with a, quote/unquote, industrial situation, so they're gonna take a bit of time to get up and running. And then the apprentice will have their own challenges with, one, learning the building, learning the systems, particularly if they don't have any previous knowledge of systems, and then learning their trade. The positive for the apprentices are they're working shoulder to shoulder, elbow to elbow with the experienced technicians, so the experienced technicians can help them get up to speed much faster.

So that leads me to the second question, describe the relationships and interactions between the older workers and the apprentices, so I wasn't sure how the older employees were gonna accept the new apprentices. We basically forced it on 'em, and to my surprise, not one of the apprentices have experienced any negativity from the older employees. I think the older employees recognize what we're trying to do as an institution to develop our resiliency from the workforce, and they're all for it. Helping us as an institution take that institutional knowledge out of their brain and pass it on to somebody else, I think is fulfilling to them as the departing – potentially departing employee and the new apprentice employee, so I can't speak highly enough about that relationship. Like I explained with Darren, the older guys are – have invited him to Thanksgiving, as one example, so I just – I'm very pleased with the relationships and the interactions between the younger team members and the older team members.

Maria Vargas: That's great. Thanks, Richie. I appreciate it. Matt, I'm gonna pivot to you, and you've got a bunch of questions, so I'm just gonna pick one: When you hire college graduates, do you give any emphasis on having liberal arts coursework, or what in particular are you looking for? If you wanna address that, that'd be great.

Matthew Pekar: Sure. I highlighted the fact about a technical background. As I said, there's a lot of number crunching. There's a lot of understanding how physics works in the components that we use. There's a lot of chemistry, but there's also that you have to be able to interact and talk with people at different levels, so even though you're talking with maintenance technicians and engineers on one side, and process people, you may be turning around and talking to a facility manager or a site manager. You may even be talking to a vice president, trying to explain why that project that you're doing, even though the payback is less than two or three years, why that's important to do for public perception beyond the walls of the factory. These young students come with those abilities. If they can communicate beyond the technical speak, that's a very valuable asset, and having those liberal arts backgrounds just gives them another venue to kind of open up a dialogue or a conversation with different people throughout the organization.

Maria Vargas: That's great. Thank you so much. Brenna, I just – you have a couple questions too, and one of 'em is interesting to me, and that is lots of great information, lots of great things to think about as we look to manage businesses and buildings through the future, and I guess, do you have a suggestion of where you think people should start when they think about resiliency or sustainability and how to best move their organizations forward?

Brenna Walraven: Yeah, it's a great question, 'cause it can be overwhelming, and really, the first place is just assessing what you have, so if that's one building, assessing that one building. Where are the weak points? Where could the building go down if there is a flood, if there is a storm, if there is an earthquake, if there's a fire, right, walking through and trying to do an assessment of where there are weak points. And then secondly, I would encourage having discussions not only internally within your organization, like your risk manager, right – "How do insurance companies think about this? We've looked at our building. We think it's in pretty good shape, but I'd like to understand how our insurance carriers are thinking about that."

And then second is I think ultimately, it's what can we do to reduce that risk? Your city partners – that's why I wanted to show New Orleans. If you look online, most cities have some type of formal plan. Some are more sophisticated than others. Reach out to your city and say, "Hey, I'm watching the news and what's happening in North and South Carolina with the storm, and I'm thinking about how to get prepared, and I would love to have an open dialogue." Those things go a long way to helping identify where the weak links are and where there are opportunities, and you may be thinking, "Well, wait a minute. Does this really affect building maintenance, or is this really a design criteria?" And the answer is yes, it's both of those areas, so certainly, designs are changing, and I've seen that.

When I was at USAA, equipments were being – in the Hoboken area on a building we were gonna be investing in, the equipment went on the roof, so that if a storm came through, everything could still run and operate. But on the building maintenance side is, "Hey, do we have a situation where, hey, we've got pumps, but they're under the flood line, so those pumps won't work immediately into a heavy rainstorm? Ooh, maybe there's a way just to move where those pumps are, so they can get the benefit." So it starts by assessing what you have, reaching out to your local community, and discussing it internally and externally, and it definitely affects building maintenance, not just design.

Maria Vargas: Well said, great advice. Thank you so much, Brenna, so Megan, if you'll do the next slide, I wanna just spend the last two minutes we have together today, first and foremost, to thank Richie, Matt, and Brenna today for being on the webinar. I really appreciate it, and I can absolutely see now why you all were voted as some of the top speakers. Not only were your presentations thoughtful and based in real life and real experience, but really gave listeners and Better Buildings partners and stakeholders things to think about moving forward, not only thinking about larger issues like resiliency, but then the staff you have to work on those issues and work on driving greater efficiency in our buildings, so thank you again.

What you see on the slide right now, on the screen right now, is this is the first of the webinar series for this year for Better Buildings, and we – these are all available online. You can sign up. They're basically once a month, and we look forward to seeing all of you who've joined us today on future webinars for Better Buildings. The next slide tees up our next webinar, which is on thinking through water, as everybody knows energy and water are closely linked. There is really a nexus between our energy and water use, and there's all sorts of partners who are gonna be talking about really new approaches and opportunities to think about water and building, what's working, what's not, what data are they collecting, what's useful, et cetera.

So with that, the last slide – Megan, if you'll get us there – is on today's webinar, so just circling back, here are the e-mails and names again of the speakers on today's webinar, as well as mine and Megan and Kendall from RE Tech Advisors, so if you have questions for Richie or Matt or Brenna, please feel free to e-mail them or myself. Thank you again to everybody for participating on today's webinar, and we look forward to seeing everyone on a future Better Buildings webinar in the fall or winter. Thanks again to everybody for participating today.

Brenna Walraven: Thanks, everybody.

[End of Audio]

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