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RELi financing underwriting standards
THE RESILIENT ACTION
LIST
APRIL . 06. 2015
IDEAS + BUILDINGS /
That honor the broader goals of society
SDI // PORTLAND // MAY 21, 2014
RELi | THE RESILIENT ACTION LIST
MIKE ITALIANO
CAPITAL MARKETS PARTNERSHIP
DOUG PIERCE
PERKINS + WILL
For Educational Use Only
1
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THE RESILIENT ACTION LIST
IDEAS + BUILDINGS /
That honor the broader goals of society
Minnesota State Sponsored
Workshops
Minneapolis Pollution Control Agency Workshops
Funding for AREA Research
4 RELi Public Workshops / May + June 2015
RELi Workshop Co-Sponsors
Minnesota GreenStep Cities
MN Department of Labor + Industry
USGBC Minnesota
AIA Minnesota
8
Webinars / RELi Action List link from state website
For Educational Use Only
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WHAT IS RESILIENT
DESIGN?
IDEAS + BUILDINGS /
That honor the broader goals of society
Resilient Design pursues Buildings + Communities that are shock resistant,
healthy, adaptable and regenerative through a combination of diversity, foresight
and the capacity for self-organization and learning.
Perkins+Will | C3Living Design
Resiliency Dimensions:
Health & Wellbeing
Economy & Society
Infrastructure & Environment
Leadership & Strategy
Rockefeller Foundation | Community Resilience Framework
For Educational Use Only
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QUALITIES OF
RESILIENCY
IDEAS + BUILDINGS /
That honor the broader goals of society
Diverse
SDI // PORTLAND // +
MAYInclusive
21, 2014
Redundant + Resourceful
Adaptive + Flexible
Self-Organizing + Integrative
Cooperative + Nested
Foresight + Reflective
Healthy + Robust
Resiliency is an
“Emergent”
systems based
Attribute.
Must have all 7.
For Educational Use Only
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1945 Hiroshima
1962 DDT + Silent Spring
1965 Climate Change
IDEAS + BUILDINGS /
That honor the broader goals of society
SUSTAINABILITY
Our Future is at Risk, Mitigate + Adapt to Improve the future
RESILIENCY
That Future Is Arriving, Adapt + Mitigate the Worst Impacts
1973 + 1979 Oil Shocks
On-going Oil Wars
2008 Economic Shock
2012 Super Storm Sandy
For Educational Use Only
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1945 Hiroshima
1962 DDT + Silent Spring
1965 Climate Change
IDEAS + BUILDINGS /
That honor the broader goals of society
SUSTAINABILITY
Our Future is at Risk, Mitigate + Adapt to Improve the future
RESILIENCY
That Future Is Arriving, Adapt + Mitigate the Worst Impacts
1973 + 1979 Oil Shocks
On-going Oil Conflicts
2008 Economic Shock
2012 Super Storm Sandy
For Educational Use Only
6
WHAT ARE WE ADAPTING
TO?
The 5 Global (Interlocking) Megatrends:*
Demographic
+ Social Change
SDI // PORTLAND
// MAY 21, 2014
Population Growth: 8 Billion by 2025
Shifting Economic Power
In 2015, World’s Largest Real Economy: China
Rapid Urbanization
Weekly 1.5 Million People added to Urban Population
New York, Beijing, Shanghai, London: $8 Trillion in Future Infrastructure Needs
Climate Change + Resource Scarcity
Rising Seas, Heavy Weather, Water Crisis, Regulatory Constraints on Carbon
Technological Breakthroughs
“Business Strategy fit for the Digital Age”
*PWC: Price waterhouseCoopers Network Global Annual Review 2014 / Megatrends
For Educational Use Only
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WHAT ARE WE ADAPTING
TO?
IDEAS + BUILDINGS /
That honor the broader goals of society
The 5 Global (Interlocking) Megatrends:*
Demographic
+ Social Change
SDI // PORTLAND
// MAY 21, 2014
Population Growth: 8 Billion by 2025
Shifting Economic Power
In 2015, World’s Largest Real Economy: China
Rapid Urbanization
Weekly 1.5 Million People added to Urban Population
New York, Beijing, Shanghai, London: $8 Trillion in Future Infrastructure Needs
Climate Change + Resource Scarcity
Heavy Weather, Water Crisis, Food, Regulatory Constraints on Carbon
Technological Breakthroughs
“Business Strategy fit for the Digital Age”
*PWC: Price waterhouseCoopers Network Global Annual Review 2014 http://www.pwc.com/gx/en/issues/megatrends/index.jhtml
For Educational Use Only
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WHAT ARE THE RISKS?
The Global Risks Landscape 2015
SDI // PORTLAND // MAY 21, 2014
World Economic Forum
2015 Top 5 Risks for the Decade*
In Order of Impact:
IMPACT ►
1.
2.
3.
4.
5.
LIKELIHOOD ►
Water Crisis
Interstate Conflict
Failure of Climate Change Adaptation
Unemployment + Underemployment
Extreme Weather Events
*896 Global Leaders – Primarily from the Business Sector
WHAT ARE THE RISKS?
The Global Risks Landscape 2015
SDI // PORTLAND // MAY 21, 2014
World Economic Forum
2015 Top 5 Risks for the Decade*
In Order of Impact:
IMPACT ►
1.
2.
3.
4.
5.
LIKELIHOOD ►
Water Crisis
Interstate Conflict
Failure of Climate Change Adaptation
Unemployment + Underemployment
Extreme Weather Events
*896 Global Leaders – Primarily from the Business Sector
WHAT IS RESILIENT
DESIGN?
WATER
HOSTILITY
IDEAS + BUILDINGS /
honor the broader
1990That
- 2008
goals of society
Resilient
Design pursues Buildings + Communities that are Interactively:
SDI // PORTLAND // MAY 21, 2014
INFOGRAPHIC ON WATER - POPULAR SCIENCE
Data Visualization by Pitch Interactive; River locations courtesy
The Global Runoff Data Centre, 56068 Koblenz, Germany
1 Billion Face Water Scarcity Now
3.5 Billion Face Water Scarcity by 2025
For Educational Use Only
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CLIMATE ADAPTATION
SDI // PORTLAND // MAY 21, 2014
◄8.5° F
Business
As
Usual
◄2.5° F
Immediate
+
Rapid CO2
Reductions
YEAR
World Economic Forum
2015 Top 5 Risks for the Decade*
In Order of Impact:
1.
2.
3.
4.
5.
Water Crisis
Interstate Conflict
Failure of Climate Change Adaptation
Unemployment + Underemployment
Extreme Weather Events
2100
Multiple Model Average: CMIP3, CMIP5, NOAA NCDC
*896 Global Leaders – Primarily from the Business Sector
Sea Level Rise
SDI // PORTLAND // MAY 21, 2014
Many communities are experiencing
coastal flooding now from sea level rise,
especially South Florida & Chesapeake Bay
communities.
Sea Level Rise
Unique South Florida Challenge
Stopping South Florida ongoing climate damages from rising
seas
including
existing
“sunny day flooding” are many trillions
SDI // PORTLAND
// MAY 21,
2014
of dollars.
RELi cited map of expected 4’ mean South Florida sea level rise
(US Climate Assessment Program) shows extensive areas in red inundated
With property values of over $100m / acre http://ss2.climatecentral.org/#10/25.9043/-80.1508?show=property&level=4&pois=show
Sea walls alone won’t work due to porous bedrock (see photo).
Thus there must also be effective subsurface vertical and horizontal barriers. Based on
extensive leak detection experience, subsurface visual leak detection is required.
Otherwise, an inland retreat is needed stranding substantial assets / structures.
IDEAS + BUILDINGS /
Extreme Rain + Flooding
That honor the broader goals of society
SDI // PORTLAND // MAY 21, 2014
For Educational Use Only
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IDEAS + BUILDINGS /
Extreme Rain + Flooding
That honor the broader goals of society
January 30, 2015 Executive Order for Federal Property:
SDI // PORTLAND // MAY 21, 2014
“The Flood plain shall be the elevation and
flood hazard area that result from using a
climate-informed science approach"
Base Flood Elevation:
•
•
•
•
Add 2 feet - non-critical actions;
Add 3 feet - critical actions;
The area subject to flooding by the 0.2 percent annual
chance flood (500 Year Flood);
The elevation and flood hazard area that result from using
any other method identified in an update to the FFRMS
For Educational Use Only
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EXTREME WEATHER
SDI // PORTLAND // MAY 21, 2014
Joplin Mo. F5 / EF5 Tornado
Atlanta Icemageddon
Boston Snomageddon
Many Risks Are Regionally Specific
Some Regions carry more Risk for Specific Issues
Minnesota: Flood, Hail, Winter Weather, Tornado, Wildfire
Australia Record Heat
Standard & Poor’s
Planned Climate Credit
Rating Downgrades:
Many US communities
have risks similar
to Southeast Asia –
ranked # 1.
Standards + Poor Rating Service
SDI // PORTLAND // MAY 21, 2014
http://gain.org/
Solving Climate Credit Rating Downgrades
Challenge: Near Term Climate Bubble / Crash Can Be Triggered by
 Pending climate credit downgrades, and / or
 Imminent litigation over collapse of coastal property values from faster rising seas.
Accelerating Forces
• Lack of insurance for climate
damages / resilience
• Several trillion dollars must be
spent on near term solutions.
• JPMorgan predicts unmanageable
dangerous climate change is a
near
term high probability
Black Swan statistical event.
• Time is of the essence: triggers
can happen now.
Solution:
Rating Agencies Use
Consensus Criteria
like RELi Entities
Can Achieve to
Avoid Downgrades
BEFORE They
are Issued.
Accelerating Forces
• S&P criteria use can serve as underwriting for new
insurance products, brand improvement, 30 yr.
profitable
business models.
• Government action not required.
• Capital markets have more than enough investor funds
to pay for solution including through green + resilient
bonds.
• Green bond growth is explosive.
• Higher ratings for energy efficiency acknowledged
• Improves public health & environment.
• Rebuilds / protects built environment.
• Creates estimated $800B in new wages / 400,000 new
jobs.
• Consensus criteria rating agencies helped initiate are
available & similar to existing bond criteria.
Data From Capital Markets Partnership (CMP) Green Bond / Sustainable Investment Business Case & RELi Consensus Underwriting Standards Supported by U.S. Conference of Mayors (2008), Peer-reviewed & Released at NYSE (2009), Updated by
Leading Economists (2013), & Used by Former Republican Treasury Secretary Hank Paulson Announcing Climate Bubble (NYTimes, WSJ 2014). Slide Developed With US Senate Staff and CMP as a Result of US Senate Staff Briefing on Climate Credit
Rating Downgrades (Feb. 6, 2015).
WHAT ARE THE RISKS?
The Global Risks Landscape 2015
SDI // PORTLAND // MAY 21, 2014
World Economic Forum
2015 Top 5 Risks for the Decade*
In Order of Impact:
IMPACT ►
1.
2.
3.
4.
5.
LIKELIHOOD ►
Water Crisis
Interstate Conflict
Failure of Climate Change Adaptation
Unemployment + Underemployment
Extreme Weather Events
*896 Global Leaders – Primarily from the Business Sector
Unemployment
IDEAS + BUILDINGS /
That honor the broader goals of society
SDI // PORTLAND // MAY 21, 2014
50% of the World
Population lives on
Less than $2.50
New York Times:
French Banlieues 20% Joblessness
40% For the Young
50% No HS Diploma
Disenfranchised
Paris Attackers:
From Banlieues
For Educational Use Only
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RESILIENCY’S POTENTIAL:
A COOPERATIVE PERSPECTIVE
IDEAS + BUILDINGS /
That honor the broader goals of society
SDIMany
// PORTLAND
// MAY
2014
people
are 21,
looking
to governments for solutions, however in practice policy actions will remain
unpredictable, inconsistent and maybe reactive. So businesses must take the lead in mitigating
environmental damage and tackling climate + resource challenges.
Dennis Nally – Price waterhouse Coopers
Humanity is Maturing:
Adolescence to Adulthood
Rethink Our Social Contract w/ Each Other
Rethink Our Relationship w/ Rest of Nature
Rethink Our Perspective on Happiness
Necessity is the Mother of Invention
Plato
For Educational Use Only
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RESILIENCY’S FINANCING
POTENTIAL
IDEAS + BUILDINGS /
That honor the broader goals of society
Higher credit ratings acknowledged for energy efficiency due to
statistically, 32% fewer defaults for energy efficient properties.
WeSDI
must
build with
an21,eye
// PORTLAND
// MAY
2014toward prevention, and do so immediately to save money & lives in the long-term.
Shalini Vajihada – re:focus Partners
Investors with over $70 trillion in assets under management want to buy green bonds.
Vickie Tillman – President, Morningstar Global Ratings
Green bonds provide resilience
financing and were a $20b
market in 2013, $40b in 2014,
and expected to be $100b in
2015 with most if not all bonds
selling out thus providing
cheaper cost of capital.
To secure higher credit ratings for
These financial
cities and their bonds and
incentives are key so
elected officials have cheaper cost of capital to provide
the needed large-scale capital
voter support to pay
markets financing, the credit
now for prevention in
rating agencies require a uniform
order to avert future national consensus underwriting
disasters.
approach like RELi.
For Educational Use Only
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RESILIENT ACTION LIST
FOR THE BUILT
ENVIRONMENT
RELi Consensus Committee
Leaders
SDI // PORTLAND // MAY 21, 2014
PILOT DRAFT
Perkins+Will
University of Minnesota
State of California
Impact Infrastructure
Jones Lang Lasalle
Environmental Bankers Assoc.
GE
Eaton
Deloitte
Appraisal Institute
U.S. Conference of Mayors
For Educational Use Only
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Public Announcement
6,500 E-mails / 12-1-14 approval
BALLOTED +
READY FOR PILOTS
IDEAS + BUILDINGS /
That honor the broader goals of society
SDI // PORTLAND // MAY 21, 2014
For Educational Use Only
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RESILIENT ACTION LIST +
RESILIENT MORTGAGE
STANDARD
7 TOPICS
Panoramic Approach to Planning Design
Works Across Scales + Issues
Acute / Short-Term Conditions
Maintenance + Operations
Hazard Preparedness, Adaptation + Mitigation
Long-Term Opportunities
Community Social + Economic Capital
Health, Diversity + Productivity
Water, Energy + Food Production
Material + Resource Flows
For Educational Use Only
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RESILIENT ACTION LIST +
RESILIENT MORTGAGE
STANDARD
Builds From Existing Sustainability Knowledge
Compatible + Complimentary with:
LEED
Living Building Challenge
Green Property Underwriting Mortgage + Bond Standard
Ease of Uptake - Intentionally Similar to LEED
Uses Prerequisite Approach + Credits
Innovation Section (Expanded)
Unique Areas
Hazards, Extreme Events + Adaptation
More Regional Economics + Social Cohesion
For Educational Use Only
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RELi / REFERENCED
INDICATORS
Unique RELi Prerequisites / Credits
Hazard Preparedness, Social Cohesion, Regional Economics
ANSI Integrative Process Standard (MTS Developed)
Integrative Living Design Planning Process (University of Minnesota)
Red Cross Ready Rating Program for disaster preparedness
FEMA 141 Guide: Emergency Management Guide for Business + Industry
U.S. Small Business Administration + Prepare My Business.Org
Fortified for Safer Business Standard V1.0
Urban Green Building Resiliency Task Force, June 2013 Proposals (NYC)
EPA Vulnerable Zone Indicator System + EnviroFacts
Nuclear Regulatory Commission / Academy Of Sciences
Envision Sustainable Infrastructure Rating System V2.0
Center for Active Design
Sustainable Sites Rating System V2
LEED V4 and V2009 / NC, ND + Schools
Energy Star / 2030 Palette
For Educational Use Only
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RELi financing underwriting standards
THE RESILIENT ACTION
LIST
APRIL . 06. 2015
IDEAS + BUILDINGS /
That honor the broader goals of society
SDI // PORTLAND // MAY 21, 2014
RELi | THE RESILIENT ACTION LIST
MIKE ITALIANO
CAPITAL MARKETS PARTNERSHIP
DOUG PIERCE
PERKINS + WILL
For Educational Use Only
1
29
WHAT IS RESILIENT
DESIGN?
IDEAS + BUILDINGS /
That honor the broader goals of society
SDI // PORTLAND // MAY 21, 2014
Resilient Design pursues Buildings + Communities that are shock resistant,
healthy, adaptable and regenerative through a combination of diversity, foresight
and the capacity for self-organization and learning.
A Resilient Society can withstand shocks and rebuild itself when necessary.
It requires humans to embrace their capacity to anticipate, plan and adapt
for the future.
For Educational Use Only
30
INTEGRATIVE RESILIENCE
IDEAS + BUILDINGS /
That honor the broader goals of society
Areas of Resilience
<Structures + Communities>
Resilient
Sustainable
1. Engineering Resilience
2. Economic Resilience
3. Social Resilience
4. Resource Resilience
5. Ecological Resilience
For Educational Use Only
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IDEAS + BUILDINGS /
RESILIENCY PRINCIPLES
That honor the broader goals of society
Diversity
Adaptive Capacity
Nested Scales
Redundancy
Foresight
Self-Organization
SDI // PORTLAND // MAY 21, 2014
A WHOLE
SYSTEM:
Must Have All
Not Just 1 or 2
For Educational Use Only
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WHERE DOES
RESILIENCY FIT?
IDEAS + BUILDINGS /
That honor the broader goals of society
Prevailing Design Lenses
<Green Building Movement>
Resilient
Sustainable
Green
Healthy
Regenerative
Resilience
Restorative
Sustainable
<Alphabetical>
For Educational Use Only
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WHERE DOES RESILIENCY FIT?
IDEAS + BUILDINGS /
That honor the broader goals of society
Ecological Design
<Living Design>
Resilient
Sustainable
Green
Healthy
Regenerative
Resilient
Restorative
Sustainable
<Alphabetical>
For Educational Use Only
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SAFE + RESILIENT CHECKLIST
Areas of Clarity
<Current Knowledge>
Resilient
Sustainable
Green
Healthy
Regenerative
Resilient
Restorative
Sustainable
<Alphabetical>
COMPREHENSIVE + EMERGENT
IDEAS + BUILDINGS /
That honor the broader goals of society
Integrative Systems
<Emergence>
Resilient
Sustainable
Green
Healthy
Regenerative
Resilient
Restorative
Sustainable
<Alphabetical>
For Educational Use Only
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COMPREHENSIVE
IDEAS + BUILDINGS /
That honor the broader goals of society
<Structures + Communities>
<Operations + Design>
Covers (3) Major Areas
1. Integrative Process + Holistic Planning
2. Acute / Short-Term Conditions:
Hazard Preparedness, Mitigation + Adaptation
3. Chronic / Long-Term Conditions:
Adaptation + Resiliency
For Educational Use Only
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PRIMARY AREAS COVERED
IDEAS + BUILDINGS /
That honor the broader goals of society
Integrative Process + Holistic Planning
Prerequisites:
•
•
•
•
Study Short-Term Hazards + Preparedness
Integrative Planning Process
Commissioning / On-Going Commissioning
Energy & Water Performance Disclosure
Credits Covering:
•
•
Business + Community Case / Post-Development Analysis
Comprehensive Integrative Systems Planning
By-Product + Infrastructure Integration
Adaptability, Diversity + Redundancy
Robust Sustainability + Resiliency
Recognition of related 3rd Party Certifications
For Educational Use Only
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PRIMARY AREAS COVERED
IDEAS + BUILDINGS /
That honor the broader goals of society
Acute / Short-Term Hazard Preparedness, Mitigation
+ Adaptation
Prerequisites:
•
•
•
•
•
Extreme events: emergency planning
Back up power above flood level
Access to first aid, communications, food, supplies, potable
water
Sites of avoidance
Safe design for extreme weather, wildfire, seismic events
Credits Covering:
•
•
•
Adaptive design for flooding, sea rise, storm surge, extreme weather
Stormwater & flood management – conventional & natural systems
Transit & transportation connectivity & protection
For Educational Use Only
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PRIMARY AREAS COVERED
IDEAS + BUILDINGS /
That honor the broader goals of society
Chronic Long Term Resiliency + Adaptation
Credits Covering:
• Protect Wetlands + Avoid Steep Slopes and Adverse
Geology
• Resilient Food Production Access, Edible Landscaping,
Urban Agriculture
• Legally Logged Wood Certification
• No Pesticides, Herbicides
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