An Interview with Kit Milnes
Setting a path for carbon reduction
In June 2020, KingSett Capital celebrated the certification of a landmark, 68-storey tower for performance under the Zero Carbon Building (ZCB) Standard v2. By doing so, Scotia Plaza’s 40 King St. W. became a leader – the largest building certified under the ZCB Standard and the first under the updated version. KingSett’s environmental, social and governance (ESG) commitments have set the company on a path to carbon reduction. Kit Milnes, KingSett’s Director of Sustainability, is helping lead the way – and hoping other property owners and operators will follow suit. We asked him how viewing assets through an ESG lens can drive value and innovation.
Tell us about your career and how you came to be involved in the sustainability field.
I studied environmental science at Dalhousie University and my first position was in consulting, working on sustainability programs in commercial real estate. I spent the past six years working with national and international property management firms to execute ESG initiatives.
KingSett has had a Director of Sustainability since 2014. Implementing and evolving a robust sustainability program has been an increasingly important focus for KingSett as it unlocks value for its assets, makes them more resilient and efficient and improves stakeholder satisfaction.
What is KingSett Capital’s overall approach to green building and sustainability through its ESG commitments?
KingSett believes that sustainable buildings are a key requirement in creating long-term value for its investors, customers and communities. Key Performance Indicators (KPIs) around ESG were initially set in 2014, for a three-year period, and were renewed in 2018 as the program continued to evolve and accelerate. These KPIs can be found in KingSett’s 2019 ESG Report. Green Buildings and by extension green building certification standards play a strong role within KingSett’s ESG program. Achieving third-party validation of sustainability initiatives provides the wider market with assurance that the achievements and performance improvements we announce have been independently benchmarked.
KingSett has reduced carbon emissions in its assets by eight per cent since 2016 and set a goal of reducing greenhouse gas (GHG) emissions – with specific targets in 2020 to achieve zero carbon for one asset and outline a path for two more. What drove these goals and how are you achieving them?
The current state of the environment and the future projections of where the world will be if we do nothing to curtail our carbon emissions was the initial spark. As demand for more sustainable buildings grew, KingSett began to understand its unique position as a landlord to drive positive climate action and make a significant impact. The Zero Carbon Building Standard pursuit started with the idea that if we can achieve a zero carbon balance with a single building then that process can be replicated to other assets and asset classes. It seems like an overwhelming task to decarbonize all of one’s assets and operations. But as you begin to break that task down into its singular pieces you realize that with the right planning and teams involved, it is achievable.
How do green certifications like the ZCB Standard and LEED factor into KingSett’s portfolio? What drove the decision to target third-party certifications as part of your ESG commitments?
Green certifications are a very important tool within our ESG program. They identify key focus areas, help management teams focus on and improve the most important environmental attributes of the building and they help communicate initiatives and achievements to the wider market. These certifications became an important part of our ESG commitments because they provide valuable benchmarking for our assets and third-party verification of the improvement measures that are undertaken. So many of the measures to improve the ESG performance of buildings are done behind the scenes, where the tenant or customer would never notice something has changed. Green certifications help bring those actions to the forefront and celebrate the efforts of the teams that have achieved them.
How do third-party certifications and your environmental ESG targets help you deliver investor value?
Our ESG targets and pursuit of third-party certifications help show our investors that we are actively combating climate change, improving the health of our tenants, and creating value in our communities. These things are high priorities for our investors and when we can achieve these goals and continue to raise the bar, we improve the value of our assets and deliver premium risk weighted returns.
You recently achieved a significant first with the ZCB-Performance v2 certification of Scotia Plaza’s 40 King St. W. How are you leveraging this achievement to help encourage the industry as a whole to address GHGs?
With a new standard like ZCB, adoption can be slow, and time unfortunately is not on our side to make significant reductions in carbon emissions. By achieving a ZCB-Performance certification of an asset of this size (1.5 million sq.ft. gross leasable area), we are hoping that others will see these larger assets as a further opportunity to eliminate GHG emissions instead of something that is too large to tackle. The ZCB Standard has given the Canadian real estate industry the needed guidance on how to start measuring and fully decarbonizing new developments and existing assets.