Sustainable Building Certifications
We provide our customers with modern, efficient facilities to help them meet their business needs. Our progress in expanding sustainable design features—such as efficient lighting, solar installations and cool roofing material, as well as increasing our number of sustainable building certifications—underscores this commitment. In 2014, Prologis became the first warehouse developer to participate in the LEED Volume Program which streamlines certification, creating a competitive advantage for Prologis because we can secure certifications quickly and efficiently. Certifying under Prologis’ LEED Volume program has saved Prologis approximately $15 million since 2013 (compared to non-volume certification). Our standard spec, strategic business partnerships, and scale have contributed to this savings. Prologis' standard spec is designed to LEED standards, with help from our strategic partnership with an engineering firm, allowing Prologis to participate in the LEED Volume program without incurring exorbitant additional incremental development costs. Our scale and development allows us to utilize the Volume program, which provides benefit when certifying many properties. As of year-end 2018, we had 139 million square feet of sustainably certified spaces across 374 projects in 18 countries.
Lighting is a primary source of electricity consumption in distribution centers. In recent years, lighting technology has evolved rapidly, first with efficient fluorescent bulbs and then with light-emitting diodes (LEDs). Installing LEDs can reduce electricity consumption and associated costs by more than 35 percent compared to traditional warehouse lighting, yielding a rapid investment payback. In addition, the long lifespan of LED fixtures reduces lighting-related maintenance needs, thereby simplifying operations and producing savings we can pass on to our customers.
By the end of 2018, 88 percent of our global operating portfolio had efficient lighting, up from 82 percent at the end of 2017. Further, 27 percent of our portfolio had LED lighting. One of the major drivers behind our accelerating transition to LEDs across our portfolio is our LightSmart program. LightSmart is another example of the unprecedented service we deliver to our customers. Through LightSmart, Prologis upgrades existing fixtures in a building and covers all upfront costs and aspects of implementation. The customer realizes immediate energy expense savings from the more efficient fixtures, while paying a nominal amount to share the costs of installation.
Shining a New Light
Prologis’ LightSmart program is accelerating the transition of our portfolio to more efficient LED lighting fixtures. Not only did LED lights create brighter working conditions at Prologis Park San Jose 3 in San Jose, California (as demonstrated in the before and after photos), they reduce annual energy use in the building by 84 percent.
Installing white or reflective roofing materials, known as cool roofs, is a proven way to reduce customer energy consumption inside buildings in certain climates. The white surface of a cool roof reflects more sunlight and absorbs less heat than a standard roof. Cool roofs produce a range of benefits: energy savings for customers, lower temperatures and greater comfort in the building for customer employees, reduced cost of roof maintenance and replacement for building owners, and a reduction in the urban heat island effect—the warming of the air that occurs as the sun’s heat is absorbed by roads, buildings and rooftops.
In 2017, we set a goal to install cool roofing at 100 percent of new developments and property improvements, where appropriate considering local climate factors. At the end of 2018, 42 percent of our global portfolio had cool or reflective roofing, up from 40 percent in 2017.
Cool Roofs, Cooler Temperatures
Cool roofs have the ability to reduce the inside temperature of a building significantly. For example, at Prologis Park Pharr Bridge #7 in Reynosa, Mexico, a cool roof reduced internal temperatures by 20 degrees Fahrenheit.
Cool Roofs Deliver Cost Savings
In our Atlanta market, based on expected roof replacements and new construction that is planning to use cool roofs over the next 10 years, it is projected that Prologis will save $1.4 million compared to other roofing materials. Being able to upgrade to cool roofs without incurring higher costs is important because some cities are creating green roof ordinances that mandate cool roofs.
Prologis has long been a leader in rooftop solar installations, often viewed as a brand differentiator by our stakeholders. In 2018, Prologis added 11 megawatts (MW) of solar, bringing the total to 186 MW of generating capacity in nine countries. Together, these installations produce enough emissions-free energy to power approximately 27,500 average U.S. homes each year. Our efforts have put us on track to surpass our goal of 200 MW of solar capacity across our portfolio by 2020. Most recently, we were ranked third in the U.S. for corporate solar installed capacity by the Solar Energy Industries Association (SEIA).
Enough for a Large Neighborhood
Prologis has long been a leader in promoting the growing solar energy industry. An example of the significance of our solar program can be found in New Jersey, where a solar installation on our roof produces enough energy to power the equivalent of more than 770 average homes (>9 million kilowatt hours) in the New Jersey area.
Energy Consumption Monitoring and Electric Vehicles
Tools to monitor and manage energy consumption are essential for customers seeking to become more energy efficient. Given that the majority of our assets are triple-net leased and our customers have direct control of utility bills, we pursue numerous customer engagement strategies to obtain whole-building energy data for benchmarking, building performance monitoring and ESG reporting. Our engagement strategy includes energy-sharing parameters in our lease agreements. This earned us Gold-level Green Lease Leader recognition, the first in the logistics real estate industry. Where we are able to obtain access to whole-building data, we enter and track energy, GHG emissions, and water and waste data through the Urban Land Institute’s Greenprint Center for Building Performance environmental management platform: Measurabl.
We also monitor energy consumption in our corporate offices to better understand our own energy-related GHG emissions and work toward our goal of minimizing our impacts on climate change. Learn more about our Science Based Targets.
In addition to improving building efficiency and energy monitoring, we are also providing our customers with other means to reduce their own carbon footprint, such as charging stations for electric vehicles (EVs) and trucks. As more customers are considering the integration of EVs in their fleets and for their employees, we are proactively ensuring our buildings are capable of supplying them with sufficient electricity. While we are still in the very early stages of this program, we already have nearly 100 properties that are outfitted with EV and electric truck charging stations across our global operations.
Electrifying Growth in China
Our electric vehicle charging stations at our facilities in China have delivered a total of 331,540 kilowatt hours of electricity for vehicles. This equates to avoiding more than 834,000 pounds of carbon dioxide emissions per year, the equivalent of removing 80 passenger cars from the road.
Gradually across our global operations, existing gas, electric and water meters are being replaced with smart meters, which increase visibility into patterns of use and create opportunities to boost efficiencies for Prologis and our customers. Building on a successful pilot in Central and Eastern Europe, Prologis has begun to introduce smart meters in Prologis parks across the world while partnering with software developers to increase the relevance and viability of emerging technologies that provide greater access to transparent data for the customer. Beyond enhancing the ability to analyze energy consumption, smart meters improve customer service by simplifying year-end reconciliation payments.
Logistics facilities generally do not consume much water compared to other types of buildings. Even so, we recognize the environmental and business gains that can be realized for our customers by adopting an integrated approach for how we use and manage resources. Where possible, we design landscaping that captures and recycles runoff or doesn't require high volumes of water. Many of our buildings are equipped with water-saving features, such as low-flow toilets, motion-activated faucets and systems to capture rainwater for irrigation. We also continue to explore sustainable technologies, including a water-saving technology that improves the efficiency of water systems in the building, resulting in lower utility bills for our customers.
Rain is Our Gain in the UK
In the UK, rainwater harvesting systems have been standard for all new developments since 2009. These systems store rainwater for non-potable uses onsite. For example, Prologis Marston Gate DC4 in Dunstable has demonstrated significant water savings with the rainwater system providing an average of 1,600 liters of rainwater per week in 2018. This cut water use in half in the building, resulting in an annual savings of 83,200 liters.
Waste Management and Recycling
Minimizing our use of materials and maximizing the quantity of materials we recycle is critical to the efficiency of our buildings and construction practices. During the construction phase of every development project, we set up dedicated areas for collection and storage of recyclable materials to divert waste from landfills. When possible, we use materials that are either recycled or contain a high level of recycled content. In addition, 25 to 30 percent of building material is locally sourced and manufactured for new development projects. This produces buildings with a minimal impact on the environment that are suited to meet our customers' needs.
Waste Not, Want Not
In the New York market, we have realized significant cost savings by recycling old asphalt onsite, thereby eliminating the GHG emissions that would be created from trucking the material offsite. A recent project saved 40 percent on the cost of new asphalt and reduced downtime for the facility.
Effectively identifying and managing risk is critical to maintaining continuity for our customers and our business. We recognize the potential impact of extreme weather events and natural disasters, including seismic activity, on our facilities. To protect our customers’ operations from natural disasters and adapt to climate change across the globe, we invest in the latest innovations designed to ensure the resilience of our buildings. Resilient buildings provide value for our stakeholders because they withstand extreme weather and natural disasters more effectively, and they reduce the cost and waste associated with damage and reconstruction. We maintain detailed emergency response and communications plans for each building in our global portfolio, and we have construction crews and supplies on standby in areas where natural disasters are more likely. In earthquake-prone areas, such as Japan, our buildings have seismic isolation systems that function as shock absorbers during earthquakes. In addition, many of our buildings in Japan include early warning systems and backup energy and water supplies. In potential flood-prone areas, Prologis buildings benefit from being located in higher-elevated areas, as well as flood mitigating designs, such as increased floor heights and water diversion-systems.
Mitigating Environmental Impact with Urban Core Development
The strategic location of our properties is essential to meeting our customers’ needs. As our customers look to reduce transit times and associated carbon emissions to meet their own customers' expectations for next-day and same-day delivery, we stay ahead of their needs by investing in the development of infill sites close to urban cores.
Today, more than one-third of our global portfolio comprises infill assets, many of which are positioned to enable Last Touch® delivery to consumers. These projects often shorten delivery routes and spur local economic development. We target buildings and development opportunities in locations close to major transportation hubs, such as ports, airports, railways and highways, and seek sites in busy centers of commerce and consumption. From an ESG perspective, infill locations shorten the distance goods travel to reach consumers, thereby reducing supply chain-related carbon emissions.
As necessary, we remediate environmental contamination, put abandoned or brownfield land to higher and better use, and enhance or build new infrastructure. Globally, Prologis has enhanced communities with nearly 20 million square feet of brownfield industrial redevelopment to high-quality, Class-A real estate and infrastructure since 2007.
Brownfield Development—A Community Collaboration
Prologis partnered with neighborhood mural artists to paint the exterior wall for one of our properties in the Bronx, New York, which celebrates local culture, reduces vandalization and minimizes repainting costs. Since 2007, Prologis has redeveloped nearly 20 million square feet of brownfield industrial area into Class-A real estate and infrastructure.
Infill Strategy Adding Value
Location Ideals for Our Customers, Consumers and the Environment
Our location strategy, focused at the core of urban consumption, not only addresses our customers’ need for speedier delivery times, but also positively impacts communities and the surrounding environment. Locations closer to the end consumer reduce drive times and thereby reduce resulting emissions. According to the Environmental Defense Fund, if every 1,000 customer trucks reduces their journey by 10 miles, we can avoid more than 37,000 pounds of carbon dioxide emissions.
* 171 Buildings in the Los Angeles basin market
* 76% are within .05 miles of public transportation stops
* Nearly 90% of the LA population is within a 20 minute drive time of Prologis properties
We strive to ensure that our building designs are sustainable and provide a healthy place for people to work. Similarly, promoting biodiversity and ensuring the health of plants and wildlife in and around the built environment is integral to sustainability. Acting as a good neighbor in the way we maintain our properties makes us welcome to do business in communities around the world. Furthermore, by focusing on infill redevelopment, often with legacy contamination issues, we promote biodiversity in two key ways: (1) we clean up potentially harmful ecosystem contaminants; and (2) we recycle land.
All of our new developments are subject to rigorous environmental permitting processes, including evaluation of sensitive habitats and protected species and implementation of projects to protect them. In our development processes, we adhere to local codes and guidelines, including those governing biodiversity. Where possible, we incorporate landscaping and bioswales to protect flora and fauna and decrease contaminants in stormwater runoff.
We continuously seek innovative ways to promote biodiversity globally. For example, Prologis mitigates 110 percent of the whole-life carbon emissions for our new properties in the United Kingdom through avoided deforestation by supporting Cool Earth’s community-led rainforest protection projects, saving over 1.4 million trees since 2010.
Additionally, our Park Marly just outside of Paris has gone so far as to receive the BiodiverCity® label for its efforts to establish a vibrant ecosystem around our property, making it the first logistics facility to obtain the excellent level. The site provides a healthy habitat for numerous wildlife species, while also providing for the human neighbors through a walking path that tenants can use to promote their own health and well-being.
There’s a clear business case for promoting biodiversity because it aligns with the interests of all of our stakeholders. Being a good and sensitive neighbor gives us the social license to develop and operate in communities around the world.
Prologis recently developed a carbon-neutral logistics facility for a customer in Muggensturm, Germany. Overall emissions had to first be reduced before applying offsets to achieve carbon neutrality. To reduce emissions, the building is equipped with reinforced insulation, LED lighting and low-emission building materials. It uses green energy from wind turbines and has a 1.8-megawatt photovoltaic system. The renewable electricity produced is fed back into the local utility grid. Both the embedded footprint of the construction and the operations of the logistics facility are carbon neutral. The overall difference between emissions and carbon offsets equal zero.
Green bonds are used to fund projects that increase sustainability and reduce environmental impacts. The strength of our sustainable building program allows us to tap into green financing and attract environmentally conscious investors. In 2018, Prologis became the first logistics real estate company to issue a green bond globally. Prologs affiliates issued green bonds in Europe (in March and November) and Japan (in August). Use and management of the bond proceeds, the process for project evaluation and selection, and reporting are guided by the Prologis Green Bond Framework. Additionally, when Prologis recast its global line of credit, it included an ESG-related mechanism that reduces the borrowing spread if and when certain sustainability benchmarks are achieved.
Prologis was named a Gold-level 2018 Green Lease Leader by the Institute for Market Transformation and the U.S. Department of Energy’s Better Buildings Alliance. Working across a range of real estate owners, tenants, brokers and other stakeholders, green leasing sets terms and provides a framework for landlords and tenants to ensure operating practices and capital investments are environmentally beneficial. These collaborative relationships, which also includes our engagement with customers through our Customer Sustainability Advisory Council, help to unlock value for both our customers and our business.
Prologis Labs, our 13,000 square foot innovation center located in the heart of the San Francisco Bay Area, focuses on five categories of projects that benefit Prologis, our customers and the logistics sector:
- Digital supply chain/digital warehouse
- Labor and well-being
- Next-generation warehouse
- Urban fulfillment
Core product development takes place at our home lab in Northern California, and at interim pop-up labs around the globe. At these sites, we are working with key customers to explore options that could help them improve operations. The team is conducting a number of experiments that support worker safety and well-being, energy efficiency and sustainability.
Employee Health and Well-Being
A top concern for Prologis customers is sourcing and retaining employees. Prologis Labs is exploring design features, such as modular smart living walls to create a visually inviting space that also provides air purification, humidity, and color into the warehouse. Creating an inviting environment inside our buildings can improve employee retention for our customers.
Worker safety is another top concern for Prologis customers. Prologis Labs is experimenting with flexible barriers and bumper systems. The systems provide safety for personnel as they enter the active areas of the warehouse and are designed to flex and absorb the impact of a fork truck or other material handling equipment, protecting the operator, equipment, workers and the building from damage.
Prologis Labs also focuses on energy use. The team is experimenting with several circuit-level electricity monitoring solutions. Circuit-level monitoring provides a detailed picture of how electricity is being used in a building and can identify opportunities to conserve energy. The data collected through these energy monitoring platforms gives customers visibility into energy consumption, cost, and building occupancy patterns.
At the end of 2018, there were 63 experiments in the pipeline at Prologis Labs. All Prologis Labs experiments are analyzed for potential revenue generation, customer benefits, risks management gains and cost savings that can be passed on to customers, investors, partners and communities.
Everything that Prologis Labs is doing is related to ESG in some way.
- Gary Bruns, VP, IT Architecture & Emerging Technologies
Real-Time Energy and Health Data
At one of our newest properties in Tilburg in the Netherlands we employ "Internet of Things" (IoT) sensors to collect, analyze and enrich data to help visualize the state of the building on an interactive smart wall and additional displays throughout the facility. Monitoring and sharing real-time data helps keep customers informed about the climate and air quality of their working environment. This gives our tenants a better understanding on the health and well-being benefits from our building, as well as helping them conserve energy and reduce their operational energy costs.
Electric Battery Storage
The 116,000 square foot state-of-the-art, rail-accessed logistics building at DIRFT in the UK will help customers realize energy and cost savings through a combination of 15% roof lights and a rooftop solar installation, paired with three 15kWH Tesla Powerwall battery storage units.
Reduced Joint Slab
Our efforts to deploy Reduced Joint Slab concrete improve building resilience, structural integrity, and human well-being. This concrete reduces the number of joints to repair and maintain. It creates a smoother work surface for forklift operators and workers in the building, and ensures a surface ideal for increased automation.
In Chicago, Prologis partnered with technology providers to analyze pavement conditions with autonomous drone missions for Prologis sites. In addition to the data-gathering benefits of drone-enabled pavement inspections, drones reduce inspection costs by 30 percent compared to traditional in-person inspections, while enhancing site resilience and safety through this technology. Thanks to our scale and market density, Prologis is able to bundle work for cost efficiency.
Dwell Time Reduction
Prologis is partnering with technology providers to gain insights into reducing “dwell time,” the duration a truck or carrier spends waiting to load or unload goods at a facility. A longer dwell time translates to more fuel consumption, greater emissions and higher transportation costs in our customers’ supply chain operations. The tools we generate will help increase our customers’ operational efficiency and reduce GHG emissions.