Sustainability & 

Real Estate Investment 
...a plan for a greener future
Phil Gillin
Senior Managing Director, Real Estate
September 2, 2010
Sustainability 

Sustainability adopts a holistic perspective and 
considers strategy in a
broader context. 

Environment
Society Economy

2
A sustainable business combines economic, environmental, social and 
governance objectives into a strategy which is sustainable over the long term 

“…the meeting of needs of present generations without compromising the ability of
future generations to meet their needs.”

“…a process of change in which the exploitation of resources, the direction of 
investments, the orientation of technological development, and institutional change 
are all in harmony and enhance both current and future potential to meet human 
needs and aspirations.”

Source: 1987, Our Common Future, World Commission for Environment and Development (WCED)
A Sustainable Organization is Not Just Green……

Corporate Strategy Social Responsibility

& Standards
(Governance, transparency, (Charitable, cultural &
accountability, human rights, community involvement,
ethics, health & safety, diversity, employment practices,
supplier standards) customer relationships)

Sustainability

Environmental Policies &

Economic & Practices
Investment Policies
(Business processes & practices,
(Equator Principles, employee behavior, pollution &
ethical investing, etc.) environmental standards, building
operations)
Sustainability is Becoming a Key Driver in Corporate Strategy

“…the quest for sustainability is already starting to transform the competitive 
landscape, which will force companies to change the way they think about 
products, technologies, process and business models. By treating
sustainability as a goal today, early movers will develop competencies that 
rivals will be hard pressed to match”

Harvard Business Review, September 2009
Sustainability is Being Driven by Many External Forces
• Supra‐national Institutions:
• Consumers (companies and individuals)
• societal shift toward green products  ‐ United Nations, OECD, IMF, World Bank, 
/ suppliers International labour Organisation (ILO)
• Governments • Banks  and Insurance Companies 
• Legislation / possible legislation ‐ Responsible investment priorities 
• Regulators • Civil Society Groups/NGOs (well funded and vocal)
• Securities and Exchange Commission  ‐ Green Peace, WWF
(SEC), Ontario Securities Commission  • Organized Labour (unions)
(OSC)
‐ AFL‐CIO
• Investors
• Pension funds • The Press /New Agencies
• Activist investors ‐ 24 hr news cycle
• Investor Research firm, Ratings Agencies  • Think Tanks / Universities
and Indexes ‐ Suzuki Foundation, Pembina Institute
• JantziSustainalytics, Dow Jones  • Professional Societies
Sustainability Index (DJSI) 
,FTSE4Good ‐ Accountants, Lawyers, Architects, 
Engineers
What Are the Benefits of Sustainability?

• A sustainable company:
– Attracts investors and their capital 
– Reinforces corporate leadership 
– Enables employees and customers to enhance profitability  
– Creates competitive advantages 
– Builds shareholder value over the long term 

“…is about achieving commercial success in ways that honour ethical values and respect 
people, communities and the natural environment.”
Business for Social Responsibility 

“…is a business approach that creates long term shareholder value by embracing 
opportunities and managing risks deriving from economic, environmental and social 
developments.”
SustainAbility
Sun Life Financial Profile

• Sun Life Financial employs more than 14,000 people around the globe including 
over 600 in the Philippines and more than 400,000 licensed distributors sell our 
products. 

• Sun Life Financial is a leading international financial services organization 
providing a diverse range of protection and wealth accumulation products and 
services to individuals and corporate customers. Chartered in 1865, Sun Life 
Financial and its partners today have operation in key markets worldwide, 
including Canada, the United States, the United Kingdom, Ireland, Hong Kong, 
the Philippines, Japan, Indonesia, India, China and Bermuda. As of June 30, 
2010, the Sun Life Financial group of companies had total assets under 
management of $434 billion. For more information please visit 
www.sunlife.com. 

• Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and 
Philippines (PSE) stock exchanges under the ticker symbol SLF. 
Corporate Sustainability

Sun Life Financial has established itself as a leader in corporate
Sustainability and has a long history of effective management in social,
environmental and governance issues. 

• Significant philanthropic program supporting health, culture, social 
services and education programs around the world. 
• Comprehensive policies on board governance, risk management, 
compliance, privacy and code of business conduct. 
• Extensive environmental program covering business operations, 
facilities management, investments and real estate. 
Sun Life Financial Activity Supports Communities Around the World
Sun Life Financial Activity Supports Communities Around the World
In the Philippines, the Sun Life Financial Philanthropic Foundation supports a
variety of charities, social services organizations and environmental causes. 

• In 2009, the Foundation made a P9.7 million donation to support the 
historically important Pasig River through the development of the Sun Life 
Financial Legacy of Light Village at Calavan in Laguna province. 

• 580 Housing Units 
• Environmentally Friendly Design 
• Partnership with ABS‐CBN Foundation
At Sun Life Financial We Are Acting Today for a Brighter Tomorrow

“We believe in a future where individuals, families and children 
live healthier lives in clean sustainable communities, armed 
with the financial knowledge, skills and confidence they need 
to plan for a secure and bright future.”
Donald A. Stewart 
Chief Executive Officer 
Corporate Sustainability

Sun Life Financial’s commitment to sustainability has
been recognized: 
• Included in the FTSE 4 Good Index since its launch in 2001. The index 
identifies companies that meet globally recognized standards for
environmental sustainability, social betterment, stakeholder relations 
and human rights. 

• Selected a a member of the Dow Jones Sustainability Index for North 
America for the last three consecutive years. This index identifies 
“best‐in‐class” leaders in sustainability. 

• Named as one of the 2010 Global 100 Most Sustainable Corporations 
in the world for our performance in managing social, environmental 
and governance issues. 
Sun Life’s International Sustainability Council

• Sun Life’s sustainability initiatives are directed by our International 
Sustainability Council (ISC)

• The ISC is mandated to develop long‐term sustainability plans and identify and 
support initiatives that will result in shorter‐term benefits

• Composed of senior representatives from key, relevant functions – risk 
management, investments, finance, public affairs, and shared services 
(including procurement and global facilities management)

• Reports progress to top senior executives: Chief Executive Officer, Chief 
Operating Officer, Chief Financial Officer and presidents from each region
Early Priorities

• Initial priorities focused on environment and “quick‐win” initiatives:
– Reduced use of bottled water (eliminated entirely in some locations) 
– Carpool incentives
– Powersave Lighting 
– "Go Green" Building Certification 
– Expanded us of Forest Stewardship Council (FSC) Certified Paper 
– Carbon neutral corporate publications (annual report, public accountability 
statement)
– Network printer default set to double‐sided printing 
– Web‐based sustainability education and best practices initiative
– Expanded recycling programs – batteries, ink cartridges, personal e‐waste, 
construction materials
– New eco‐friendly monitors and printers selected
– Participation in commuter challenge events, Earth Hour, Earth Day 
activities
2010‐2011 Priorities for the ISC

• Greenhouse gas (GHG) management

• Sustainable procurement practices

• Product development assessment

• Policy revision and implementation

• Sustainable practice awareness and education
Investment Portfolio

• SLF has a $108 billion investment portfolio with diversified investments across 
the globe including bonds, mortgages, common stocks, cash and real estate. 

• As of June 30, 2010 $5 billion is invested in Real Estate primarily in North 
America
Portfolio Size 35 million s.f. 
Mix Office 42%
Industrial 24 %
Retail 21%
Multifamily 9%
Land 2%
Development 2%
Ltd. Partnerships 1%
How Does Sustainability Relate to Real Estate Investment?
Economic & Population Growth, Urbanization & Industrialization are Driving 
Significant Environmental Damage & Climate Change
Adverse Effects of Development are Becoming Increasingly Evident as CO2 
Emissions are on an Exponential Growth Path
The US National Oceanic & Atmospheric Administration in its 2009 State of the 
Climate Report has re‐confirmed key indicators of a warming world

Seven of these indicators would be expected to increase in a warming world and observations show that they are, in
fact increasing. Three would be expected to decrease and they are, in fact decreasing.
 North Americans are Amongst the Worst Offenders in Terms of CO2 Emissions 
and Consumption Pattern

22.5

20.0

17.5
CO2 Emissions per Capita

15.0 CAN
(Metric Tonnes)

U SA
12.5
FRA
10.0
GER
7.5 JPN
5.0 UK
AU S
2.5

0.0
1990 1992 1994 1996 1998 2000 2002 2004

Year
 …But Emerging Economics Are Catching Up

CO2 emissions in tons per person Total CO2 emissions in million tons

Source: U.S. Energy Information Administration (EIA)

Owners & Managers of Real Estate are Increasingly Subject to Scrutiny on the 
Sustainability of their Businesses

Green Listed Real Estate: A Growing Global Trend, INNOVEST Strategic Value Advisors, 
December 2007
While there is growing acknowledgement of the role buildings play in emitting 
greenhouse gases (GHG’s), particularly CO2, and most real estate companies are aware 
of the importance – both from a reputational and financial perspective – of managing 
environmental, social and governance (ESG) risks to their businesses.

Beneath this broad strategic awareness however, there is a pronounced gap in the 
degree to which real estate companies are systematically implementing actual ESG 
strategies. Furthermore, there is a strong geographic bias (correlating, in part, with local 
emissions regulations) towards high‐level performance in Europe and Australia, while, as 
a whole, North American and Asian firms lag far behind industry best practice.
We must change how we think about and manage our businesses...
The 3 Largest Emitters of GHG & CO2 

1. Buildings 
2. Transportation 
3. Industry  
Source: Energy Information Administration (2006). Emission of Greenhouse Gases in the United States 

• Buildings account for 39% of US GHG emissions in the United States 

• Increasing risk of regulatory controls  and some jurisdictions have introduced 
GHG regulations, carbon taxes, and green building codes 

• Increasing priority within tenant community, particularly within the large, 
multinational corporations.  
McKinsey & Company study has concluded there are many opportunities in the
commercial building sector to significantly reduce GHG. 

US Energy Efficiency Supply Curve ‐ 2020
Industry Has Responded With a Variety of Programs and Certifications to assist owners 
in managing and reducing GHG
• LEED 
– Leadership in Energy & Environmental Design for new and existing buildings 
– Sponsored by Green Building Councils in various countries 
• BOMAbest/Green Globes 
– Building Owners & Management Associations (Canada) and the Green Building Initiative (US) 
– Primary focus is certification for existing buildings 
• Energy Star
– Energy Star is a joint program of the US Environmental Protection Agency and the US 
Department of Energy to reduce energy consumption and protect the environment through 
energy saving products and practices
• BREEAM 
– Building Research Establishment Environmental Assessment Method
– UK based certification system for new and existing buildings
The LEED Program 

Dean Barone, IDSA, LEED®AP BD+C
Barone International
In the beginning….

1970’s - Oil Crisis Earth Day

Polluted Cities

1980’s – Sick Building

Syndrome

1990’s – Productivity
Issues
 US Green Building Council

1993

Promote the efficient design, construction and

operation of buildings
Non-Profit Organization funded by US Dept of Energy
 1995

Rating system to define the attributes of a “green building”

Internationally Recognized
Third-Party Certification
LEED® is a tool to help Design Teams and
Owners:
•Determine green project goals
•Identify green design strategies
•Measure and monitor progress
•Document success

LEED® is not a design specification or building code

 LEED is also a Process

• Integrated Design Process (IDP)

• Shift in thinking in how we design & build
• Building as an organism
Not to design building systems in isolation
Example
 Following the LEED Process

80% of the projects costs are established in the

conceptual design phase
The sooner environmental planning is incorporated into the
design, the better the results

Source: USGBC
Regional Sustainable Programs

United States of America

Philippines Philippines
British

Japan Korean
Taiwan

India

Vietnam
Australia
China
Singapore Hong Kong
 40+ 50+ 60+ 80-100
points points points points
Certified LEED Projects - Philippines
2006 LEED®NC SILVER Certified
Baguio

2010 LEED®CI SILVER Certified

Shell Shared Services - Makati
2010 LEED®NC GOLD Certified
Clark - Pampanga
Registered LEED Projects-Philippines
Zuellig Building - Makati Aegis People Support - Cebu

The Mind Museum - Taguig

Nuvali Evotech One Sun Life Centre - Taguig One Campus Plaza
- Laguna - Taguig
Registered LEED Projects-Philippines
ADB Hqtrs – LEED EB:OM Aria at Civic Center Centennial Hotel - Baguio

Arya Residential Towers - Makati Place - Makati Shangri-La at the Fort -

Taguig Taguig
 LEED Categories and Points

• Sustainable Site
• 26-30 Points possible
• Water Efficiency
• 10-11 Points possible
• Energy and Atmosphere
• 35-37 Points possible
• Materials & Resources
• 14 Points possible
• Indoor Environmental Quality
• 15-16 Points possible
• Innovation & Design Process
• 6 Points possible
LEED Credit Check List
 Prerequisites

• Reduce water by 20%

• Reduce energy consumption by 20%
• Include Commissioning Services for building systems
• Eliminate the use of all CFC refrigerants
• Set up a recycling program
• Improve the indoor air quality
• No smoking facility
 Sustainable Site

• Select a LEED Certified Building for 5 points

• Site selection – no farmland or wetlands
• Protect the existing habitat
• High density neighborhoods – urban, not suburban
• Promote use of alternative transportation – trains, bus,
bicycles and high efficiency vehicles
• Collect stormwater
• Reduce heat island effect – underground parking
• Reduce light pollution
• Green roofs
 Water Efficiency

• Increase water efficiency above 30% for 6-11 points

• Use low flow plumbing fixtures
 Atmosphere and Energy

• Reduce power for lighting

• Install motion sensor switches
• Utilize Green Star labeled computers and appliances
• Install energy monitoring devices and meters
• Purchase Green Power
• Renewable Energy Credits (REC)
 Materials and Resources

• Construction waste recycling

• Building materials reuse – ceilings, carpets, doors, etc
• Purchase products with recycled content
• Purchase items from renewable sources - bamboo
• Purchase items locally – within 500 miles
 Indoor Environmental Quality

• Increase fresh air quantities into the building

• Install CO2 monitors for more fresh air, as needed
• Flush out “off-gassing” materials before occupancy
• Install materials with low VOC – paint, carpet, furniture
• Increase daylight into the interior spaces
• Provide views to exterior windows for all occupants
 Innovation and Design Process

• Up to five points
- Innovative green solution(s)
- Implementation of green maintenance processes
- Promotion of Green Buildings in the community

• One point for hiring a LEED Accredited Professional

Certification
 Green Buildings are Healthy

Source: USGBC
Green Buildings Increase Productivity

Classrooms
Offices
20% better test performance 2-18% Productivity Increase

Factories

Hospitals
Increased productivity 2 ½ days earlier discharge

Retail

Source: USGBC
Increase in sales
 The Cost of Green
• Public perception:
• Green costs 17% more than typical buildings (2007)
• Actual average increase:
• only 1% - 6%
Energy savings compared to typical
buildings
45% 45%+

35%

25%

Source: New Building Institute Report

 The Value of Green
• Payback
• 100,000 sf LEED building that saves $1.50/sf in energy costs =
$ 150,000/year in savings
• Owner invested $400,000 in green to get the $1.50/sf energy
savings = $4.00/sf premium
• Payback of investment is approx 2.5 years

Sources: Return on investments for LEED / Green Buildings - Ed LeBard, 3 Design Consulting
 The Value of Green
• Return on Investment
• Commercial real estate properties are valued as a multiple of "net
operating income“ (dividing the income by the capitalization rate by roughly 6%)
• If the building reduced its annual energy costs by $150,000, the
capitalized rate of 6% would result in an incremental increase of
property value by $2.5 million
• The result of investing $400,000 in annual savings of $150,000
would be to yield a return on investment of 625 percent

Sources: Return on investments for LEED / Green Buildings - Ed LeBard, 3 Design Consulting
 The Value of Green
• Return on Investment
• With a 6% annual capitalization rate, the green investments add $2.5
million to the value of the building
($150,000 savings divided by 6% rate) - an increase of $25.00/sf with an investment of
$4.00/sf = net increase value of $21.00/sf)
• The value of the LEED project when completed would increase from
$27.5 million to $30 million
• If the building owner or developer decided to sell their LEED building,
it is the norm for green buildings to command 30% premium price
over similar non-LEED buildings

Sources: Return on investments for LEED / Green Buildings - Ed LeBard, 3 Design Consulting
 The Value of Green
• Davis Langdon & Seah (DLS) Study:
• Found no significant cost difference between LEED certified
buildings and other new buildings

“ Certification as a green building was not a

significant predictor of building costs ”

Sources: Ed LeBard, 3 Design Consulting and Davis Langdon & Seah

Back to Phil
Sun Life Financial’s commitment to sustainability is integrated into the management of
the real estate portfolio.

Sustainability Strategy 
To own a portfolio of real estate assets with a sustainable footprint achieved through
the pro‐active management of the impact of the properties on the environment

Implementation 
Sustainability is considered in all aspects of portfolio management:
1. The acquisition of assets 
2. The development of new assets
3. The ongoing management of assets
Acquisitions 

Assessing sustainability has become part of our due diligence process. 
– Physical Design 
– Operating Systems 
– Property Management Practices/History 
– Ability to Obtain Certification 

New Developments 
– Target to have all new developments designed to LEED NC Certification 
– Tenants will be encouraged to design their interiors to a LEED CI Level 
Progress to Date

Existing Assets
• Develop a Canadian Real Estate Sustainability Strategy Complete
• Engage asset managers and property managers Ongoing
• Select the appropriate GHG measurement methodology Complete
• Measurement of key resource consumption (gas, 
electricity, water) and waste generation/diversion Complete
• Establish GHG base year and profile Complete 
• Green Lease development and roll out In progress
• Review of property manager’s sustainability programs In progress
• Evaluate potential LEED EB targets In progress
Progress to Date

Existing Assets 
• BOMA Best is the Canadian Environmental certification program for existing 
buildings managed by the Building Owners & Managers’ Association 

Number of  BOMA Certificates % of 

Buildings Asset Class
Office 50 37 74%
Industrial 91 35 38%
Retail 23 14 61%
Residential 29 2 7%
Total 193 88 46%
Progress to Date

New Developments 
• 6 LEED NC Targeted Developments in Canada 482,000 s.f.                           
(2 Certified, 3 Silver, 1 Gold) 

• 2 LEED NC Targeted Developments in the USA 191,773 s.f.                            
(2 Silver) 

• 1 LEED NC Targeted Development in the Philippines 250,000 s.f. 
Business Benefits to Green

Preliminary studies of green buildings suggest: 
• Operating costs are lower 

• Building value increases 

• Occupancy levels increase 

• Return on investments improves 

*Source: McGraw‐Hill Construction, Key Trends in the European and US Construction Marketplace 
SmartMarket Report, 2008
**Source: McGraw‐Hill Construction, Greening of Corporate America SmartMarket Report, 2007+
3115 Harvester Road, Burlington, ON 
Target: LEED NC Silver

• Common areas powered by renewable 
energy sources
• Rainwater retained onsite and recycled 
into washroom fixtures
• White roof to reduce “heat island”
effect 
• Bike racks and showers to encourage 
non‐auto commuting
Airport Executive Park, Richmond, BC 
Target: LEED NC Gold

• Low flow plumbing reduces sanitary water 
consumption by 45%
• Drought resistant indigenous landscaping 
materials 
• Bioswales to retain stormwater and reduce run 
off; rainwater recycled for irrigation 
• Highly efficient HVAC system uses 32% less energy 
• Common areas powered from renewable sources 
• 98% of construction waste diverted from landfills
Commerce South Office Park, Edmonton, AB 
Target: LEED NC Certified & Silver

• Low E glazing to reduce solar gain 
• Preferred parking for fuel efficient vehicles 
• White roof
• Drought resistant landscaping 
• Low VOC paints, adhesives and sealants
• “Green” housekeeping system 
• Low flow plumbing system reduces water 
consumption by 35% 
Remington Square, Houston Texas 
Target: LEED NC Silver

• Renewable energy used for 70% of base building 
electricity 
• Elevator machine room heat recycled into 
exterior water feature to reduce heat load 
• White roof to reduce heat load on building 
cooling system 
• Low flow plumbing reduces water consumption 
by 40%
• Preferred parking for fuel efficient vehicles
First Meadowvale Corporate Centre, Mississauga, ON 
Target: LEED NC Silver
• Erosion and sediment control measures during 
construction 
• Improved indoor air quality through no smoking 
rules, low VOC materials and covering and 
protection of duct work
• Controlled site lighting to reduce spill over and light 
pollution; use of low mercury lighting 
• 90% of floor layout has access to exterior light and 
views 
• Regionally sourced materials with 20% from less 
than 800 kms. 
• Low flow plumbing reduces water consumption by 
40%
Cote‐de‐Liesse Business Park, Montreal, QC
Target: LEED NC Certified
• First industrial building in province of 
Quebec built to LEED standards
• Indigenous drought resistant landscaping
• Extensive re‐use of onsite materials in lieu of 
offsite disposal 
• Preferred parking for bicycles and car pools 
• White roof to reduce heat load 
• Use of FSC wood, low VOC paints and 
plastics 
• Motion activated lighting system 
150 King Street West, Toronto, ON 
Target: LEED EB Gold 
• Sustainable transportation location being in close proximity 
to subway and commuter trains system 
• Reduction in water consumption through landscaping 
requiring little irrigation and installation of water efficient 
plumbing fixtures 
• Improvement in energy use through re‐lamping, installation 
of occupancy sensors, reduced lighting in low traffic areas, 
insulation of areas where heat loss occurs and commitment 
to sourcing part of energy requirement through renewable 
resources i.e. wind 
• Recycling program that diverts maximum amount of waste 
material away from landfill and a purchasing program 
encouraging recycled products 
• Improvement in indoor air quality through better 
management of air distribution in the building and a 
commitment to green cleaning
Sun Life Centre, Bonifacio Global City
Target: LEED NC Gold

Sun Life Financial is demonstrating its 
commitment to sustainable real 
estate in the Philippines. 
Sun Life Centre, Bonifacio Global City
Sun Life Centre, Bonifacio Global City
Conclusions
• Sustainability is no longer an option, it is a requirement in corporate strategy. 
Companies must act today to preserve tomorrow

• We can no longer remain passive as an investor in real estate. We must actively 
manage the environmental impact of our assets

• Environmental management is not a pure cost decision as it will generate benefits 
and return in the longer term

• The LEED program is a key element of our sustainable real estate strategy
At Sun Life Financial, we are acting today for a brighter 
tomorrow 

……and we have a plan for a greener future
Life’s brighter....
(and greener....)
under the sun