Alex McKenna:never underestimate the potential of human beings over that of technology

FAVOURITES: Alex McKenna, one of the bright new stars of property sustainability, believes that farmers could teach the property industry a thing or two about a holistic approach to sustainable practices.

She should know. With farmers on both sides of the family and a background in agricultural science she has spent a lot of time looking at how farms operate. And she has brought that knowledge and way of thinking to her role as sustainability manager for DEXUS Property Group.

From an early age McKenna was attracted to the practical aspects of farming but was also drawn to becoming a vet. Agriculture won out and she went to the University of Sydney to study agricultural science.

Before moving onto a career in the built environment, McKenna worked with an agricultural fund within the Colonial Group, travelling thousands of kilometres to cattle stations to look at day to day operations. Key areas she was involved in included health and safety policy, environmental legislation and permits, vegetation mapping and environmental compliance issues.

She was struck by how in touch farmers were with sustainability and environmental concerns.

“It is something that most people greatly underestimate – that sustainability is an inherent part of agricultural operations. It is very visible on the land and if farmers don’t apply sustainable practices the effects are immediate. They never have the luxury of ignoring it.

“It is a lot more transparent in the natural environment than in the built environment,” says McKenna.

Following her time with the agricultural fund at Colonial, Mckenna moved into the property area at Colonial First State Global Funds Management, and soon was appointed as sustainability manager.

She took up the position of sustainability manager with DEXUS in 2008. In her current role she is responsible for the implementation of sustainability in DEXUS’ assets across retail, industrial and office sectors.

Ensuring that sustainability becomes an integral part of the property industry is one of the biggest challenges for both her and the property sector as a whole, says McKenna.

But it is imperative that it this does happen so that wider challenges can be addressed.

“I always say that sustainability is no more than good design, good engineering and efficient operations. Once we get those right then we will have the opportunity to push the envelope in other ways,” McKenna says.

One area where she believes the envelope really must be pushed is in greater development of the renewable energy sector, particularly solar energy.

“I would love to see a fully developed solar industry in this country. I think we can do so much more to push the transition from our dependence on fossil fuels.”

She would also like greater transparency from utility providers regarding resource and data provision. This is particularly important with the introduction of mandatory disclosure of energy efficiency for buildings.

Electronic provision of consumption data should be made available by all utility providers on a regular basis, she says. While electricity data is currently available, gas consumption is only provided as an estimate and water utility accounts in some jurisdictions are only available on a six month basis.

“The need for more transparency from utility providers, particularly in the context of mandatory disclosure of energy efficiency is an important issue.It could be very challenging when we have to provide detailed information. And unless there is a statutory requirement for utility providers to provide better data it won’t happen,” says McKenna.

“Property is one of the few sectors where environmental performance information is routinely provided in transactions with purchasers, tenants and government. It is also an increasing area of scrutiny amongst investment analysts,” says McKenna. Photo: Tasman Miller

Financial performance of sustainable buildings must be recognised

Another key area that would push the rate of change in Australia is improving recognition of the financial performance of sustainable buildings. Investment in sustainability by building owners requires quite a leap of faith at present because the capital cost precedes the performance data, often by a long time.

“We need to get away from sustainability being something we should do and recognise that it is actually a good return on investment. One project I have been involved in achieved a 29 per cent internal rate of return.

But the upfront cost can be very significant and the benefits of many measures pass to the tenant rather than the building owner.

“The industry needs to work out a way to amortise the costs to incentivise  building owners. This could be through some type of energy performance contract that builds the costs of the building’s sustainability into the lease,” says McKenna.

Government could also help by recognising that the property sector is a leader in sustainability and by providing more incentives to building owners, such as accelerated depreciation.

“Property is one of the few sectors where environmental performance information is routinely provided in transactions with purchasers, tenants and government. It is also an increasing area of scrutiny amongst investment analysts.”

While putting a price on carbon will help put a price on green buildings, there is a long way to go before sustainability is fully integrated into the pricing structure.

But it is at the coalface, when working with property management teams, that McKenna gets the biggest buzz in her job. It is here that immediate change can occur when people can see exactly how much difference they can make to building performance, even through small changes.

“Getting people to understand just how they can improve their building’s performance in relation to their peers is very satisfying. It is critical to look at things holistically – there are incredible opportunities through just looking at things like how the air conditioning works in relation to the air distribution system. Improvements in one area can lead to massive improvements in another.”

Humans can outperform technology

And never underestimate the potential of human beings over that of technology, says McKenna.

She cites the example of one building where the control system was outdated and working very badly. The building management team realised the building was performing poorly and used manual operations to increase its energy efficiency by 25 per cent.

“It is so important to recognise the capacity of people to make a difference. Human potential is so much more valuable than that of machines. Recently when developing a strategic plan for one of our assets I knew it was vital to get buy-in from the onsite engineering team as they are the ones who will be there if the building is not performing properly, not me.”

And as for her aspirations for the future, McKenna says she would like to make herself and other sustainable managers redundant.

That will happen, she says, the day that sustainability becomes a fully integrated aspect of property management and every building has a fully sub metered and alarmed building management system. Then building managers will know exactly where their resources are going and will have historical data to back it up.

“So that is my future aspiration– to do myself out of a job,” McKenna says. “When all of that happens sustainability managers won’t be needed any more.”

lblundell@thefifthestate.com.au