2019 ESG ReportDownload
A Letter to our Stakeholders
As we approach our 50th anniversary and close out a very successful decade for Boston Properties (BXP), our focus on environmental, social and governance issues continues to influence how we conduct our business. We are proud of our position and consistent recognition as an industry leader in sustainability and ESG. Sustainable development and responsible growth is inherent to our investment philosophy, which is shaped by our core strategy of long-term ownership. As stakeholder interest in issues like climate change continues to escalate, the important role of real estate companies and the opportunities for BXP have never been more evident. We are up for the challenge and will continue to demonstrate our commitment and capacity to conduct our business in a manner that contributes to positive economic, social and environmental outcomes for our customers, shareholders, employees and the communities we serve. We made progress on a number of initiatives in 2019, which are detailed here.
- We ranked among the top 4% of worldwide participants in the 2019 Global Real Estate Sustainability Benchmark (GRESB). For the eighth straight year, we earned a GRESB “Green Star” and achieved the highest GRESB 5-star Rating;
- We achieved our second carbon emissions reduction target six years early by reducing the emissions intensity of our operations 52% year-over-year and 70% since 2008; We aligned our emissions reduction goal with climate science completed the Science Based Targets Initiative (SBTi) approval process;
- We reduced like-for-like energy and water use 27% and 30% respectively below a 2008 base year, avoiding approximately $34 million in annual recurring operating costs; We were selected as a 2020 ENERGY STAR Partner of the Year winner by the U.S. Environmental Protection Agency;
- We issued $850 million of green bonds, growing our total green bond offerings to $1.85 billion since 2018. We provided impact reporting with details about the use of proceeds and the environmental metrics for our inaugural green bond offering;
- We commenced construction of six (6) megawatts (MW) of onsite solar power, increasing our onsite solar capacity over 400%;
- We completed our Fitwel Champion commitments, adding 12.4 million square feet of Fitwel certified buildings, and were named a 2020 Best in Building Health award winner.
- We completed the first Fitwel Design Certified project in the world and executed more Fitwel certifications by count and building area than any other company in 2019;
- We increased our total property area certified under the U.S. Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED) certification program to 24.3 million square feet, over half of our total actively managed office portfolio, 96% of which has been certified at the highest Gold and Platinum levels;
- We implemented several new family friendly programs to further assist employees balance work and personal life;
- We maintained our ongoing commitment to volunteerism and philanthropy by adding a paid volunteer day that employees can use at their discretion. Through the year we donated over 2,000 service hours to more than 150 community events and more than 200 organizations;
- We refreshed our 2016 ESG Materiality Assessment, collecting input from a significantly larger group of stakeholders including customers, employees, community members and investors;
- We were named one of America’s Most Responsible Companies by Newsweek magazine in 2019. BXP ranked 122nd on Newsweek’s 2020 list of America’s 300 Most Responsible Companies, the second highest ranking given to a public REIT and the highest ranking of any office company; and
- We nominated, and our shareholders elected, two new, independent board members to BXP’s Board of Directors and increased the number of women serving on our Board to four, or 36%.
Our experience demonstrates that through our activities as real estate owners, developers and managers, we can contribute to environmental solutions as a positive force while improving our financial performance and becoming a stronger, more purposeful organization in the process.
BXP is the largest publicly-held developer and owner of Class A office properties in the United States, concentrated in five markets – Boston, Los Angeles, New York, San Francisco and Washington, DC. The Company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates and owns a diverse portfolio of primarily Class A office space.
The Company is listed on the New York Stock Exchange under the symbol “BXP.” As of December 31, 2019, The Company’s portfolio totaled 52.0 million net rentable square feet, with 196 properties and a $3.1 billion active development pipeline (our share) including redevelopment and new construction totaling 5.5 million square feet. BXP’s 2019 total revenue was $3.0 billion and the net income attributable to BXP common shareholders was $511.0 million. BXP’s consolidated market capitalization was $35.8 billion, including $24.0 billion in equity value and $11.8 billion of consolidated debt. Additional financial information can be found in the Company’s most recent 10-K filing.
As the largest publicly-traded developer, owner and manager of Class A office properties in the United States, we actively work to promote our growth and operations in a sustainable and responsible manner across our five regions. The BXP sustainability strategy is to conduct our business, the development and operation of new and existing buildings, in a manner that contributes to positive economic, social and environmental outcomes for our customers, shareholders, employees and the communities we serve.
Our investment philosophy is shaped by our core strategy of long-term ownership and our commitment to our communities and the centers of commerce and civic life that make them thrive. We are focused on developing and maintaining healthy, high-performance buildings, while simultaneously mitigating operational costs and the potential external impacts of energy, water, waste, greenhouse gas emissions and climate change. To that end, we have publicly adopted long-term energy, emissions, water and waste goals that establish aggressive reduction targets that are aligned with the United Nations Sustainable Development Goals.
BXP and its employees make a positive social impact through charitable giving, volunteerism, public realm investments and diversity and inclusion. Through our climate action, resilience and social good initiatives, we demonstrate that operating and developing commercial real estate can be conducted with a conscious regard for the environment and wider society while mutually benefiting our stakeholders.
To download the complete 2019 ESG Report, please click here.
The intent of the 2019 ESG Report is to present information related to sustainability, including environmental, social and governance (ESG) performance indicators, in a format that is understandable and accessible to our stakeholders. BXP’s reporting has been aligned with the Global Reporting Initiative (GRI), United Nations Sustainable Development Goals (SDGs), and the Sustainability Accounting Standards (SASB). BXP continues to work towards alignment with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
The report is focused on the performance of our occupied and actively managed office building portfolio in our Boston, Los Angeles, New York, San Francisco and Washington, DC regions. Occupied office buildings are buildings with no more than 50% vacancy. Actively managed buildings are buildings where we have operational control of building system performance and investment decisions. By concentrating on similarly situated buildings, we are able to meaningfully benchmark performance and measure the efficacy of our sustainability measures. Unless otherwise noted, data presented in the report relate to these types of office buildings. Over time we will continue to assess available data and determine when to expand the report to address other property types and information.
The data contained within the report represents the like-for-like portfolio that has remained the same year-over-year. As of the end of 2019, BXP’s 102 occupied and actively managed office buildings totaling 40.9 million gross square feet (SF) accounted for 83% of the company’s total in-service portfolio by area.
We develop our understanding of the views and priorities of our stakeholders by engaging our supply chain, tenants, employees, communities, investors and partners throughout the lifecycle of our activities. BXP management identifies and seeks to understand the groups and organizations that may affect or be affected by a decision, activity or outcome of a project. During stakeholder engagement processes, we work closely with our tenants, vendors and service providers to gather knowledge, plan and implement design solutions, technologies and programs that drive key performance indicator improvement. We regularly participate in public forums during the development process to seek community input and apply green building standards to manage our supply chain. In our communities, we actively participate in business improvement districts (BIDs), associations, nonprofits and other civic engagement activities intended to strengthen public-private partnerships and advance sustainability at the neighborhood scale.
We are directly engaged with a number of third-party suppliers for the procurement of materials and services required for the construction of new development projects and the ongoing operation of our existing buildings. BXP requires all of its service providers and contractors to comply with applicable laws relating to payment of wages and benefits, worker health and safety, interacting with labor organizations and other workplace laws, such as non-discrimination, proper classification of employees and maintenance of insurance. Respecting the use of unionized labor, BXP is committed to a position of neutrality, guided by the interests of its partners, investors, clients and tenants.
The environmental impact of our in-service portfolio is heavily dependent on the behavior of our tenants. Effective engagement with our tenants is necessary for the successful execution of our sustainability strategy. We have integrated sustainability into our property management practices, regional annual goals, leasing and construction documents, tenant improvement guidelines and our routine meetings with existing and prospective tenants. In addition to tenant meetings, we survey regularly to collect feedback regarding tenant satisfaction. We believe that by developing green buildings we maximize the likelihood of sustainable performance, and that through effective stakeholder engagement we can align efforts towards positive economic, social and environmental outcomes.
We recognize and have taken steps to address the role of our tenants in supporting the execution of our sustainability strategy through our leasing activity. In order to align our sustainability efforts with our tenants, our Master Lease forms include:
- Cost recovery for capital expenditures made to reduce operating expenses;
- Cost recovery for green building certifications (including LEED and ENERGY STAR);
- Sub-metering of high intensity tenant equipment; and
- Required tenant energy disclosure (benchmarking).
Our internal legal counsel and leasing team actively negotiate our leases with the intent of preserving green lease clauses without alterations or exceptions.
BXP has been named a Green Lease Leader by the Institute for Market Transformation and the U.S. Department of Energy for exhibiting a strong commitment to high performance and sustainability in buildings and best practice leasing. 47% of our active leases (including leases inherited from buildings we have acquired) contain green lease language and all of our Master Lease forms for our ongoing leasing include the language.
BXP first conducted a materiality assessment in 2016 to identify the significant economic, social and environmental issues that impact our business and that are important to our stakeholders: tenants, investors, community members and BXP employees. We refreshed our materiality assessment in 2019 and collected more input from more stakeholders, including 74 customers, employees, community members and investors.
In defining material aspects, BXP has evaluated the main sustainability interests, topics and indicators raised by stakeholders. The results of the 2019 materiality assessment have been used to establish and confirm sustainability-related performance indicators for our organization, prioritize resources and to determine the contents of the 2010 ESG Report.
The purpose of the management approach is to control major risks and opportunities for all material financial and non-financial aspects of our business. Material topics identified in our materiality assessment are governed by BXP’s (i) executive management, (ii) Board of Directors, (iii) Vice President, Sustainability, (iv) Sustainability Committee, (v) regional management and (vi) its Property Management, Human Resources, Risk Management, Development, Construction and Information Services departments.
The 2019 ESG Report is complemented by a set of key policies with more detailed information about roles, responsibilities and commitments for the material topics:
- Corporate Governance Guidelines
- Code of Business Conduct and Ethics
- BXP Environmental Management System
- Policy on Political Spending
- Policy Against Discrimination
- Workplace Violence Policy
Targets and actions on our material aspects are included in the “Goals and Progress” and “Sustainable Development Goals” sections of the report. BXP continues to support the advancement of the industry on sustainability issues by sharing knowledge and learning from our peers. BXP actively participates in the following industry groups and organizations:
- National Association of Real Estate Investment Trusts® (Nareit®);
- Real Estate Roundtable (RER) Sustainability Policy Advisory Committee (SPAC);
- United States Green Building Council® (USGBC®);
- Global Real Estate Sustainability Benchmark (GRESB);
- Building Owners and Manager Association (BOMA); and
- Urban Land Institute (ULI)
BXP has been recognized as an international leader in sustainability and ESG. We maintain strong ESG ratings and focus on improving our performance where it matters for our business and our stakeholders. As new ESG assessments, ratings and frameworks emerge, we remain in dialogue with our stakeholders to determine the ESG ratings that matter most and have made an effort to provide high quality ESG data to third parties.
In 2019, BXP ranked among the top 4% of all real estate companies in the Global Real Estate Sustainability Benchmark (“GRESB”)
assessment. 2019 was the eighth consecutive year that BXP has ranked in the top quartile of GRESB assessment participants, earning another “Green Star” recognition and the highest GRESB 5-star Rating.
Goals & Progress
Our sustainability goals establish reduction targets for energy, greenhouse gas emissions, water consumption and waste. In 2016, we achieved our first round of energy, emissions and water goals three years early. By resetting company-wide goals, we raise stakeholder awareness and endeavor to drive continuous year-over-year, like-for-like key performance indicator improvement. We have adopted goals with the following specific time frames, metrics and targets below a 2008 baseline:
Sustainable Development Goals
We believe that our efforts can contribute to resolving the key issues that the global community faces. Our sustainability policies, practices and projects are aligned with the direction set by the United Nations Sustainable Development Goals (SDGs). The following table outlines our alignment with the UN SDG framework.
Key Performance Indicators
BXP is a corporate member of the U.S. Green Building Council® (USGBC) and has a long history of owning, developing, and operating properties that are certified under USGBC’s Leadership in Energy and Environmental Design™ (LEED®) rating system. The LEED Green Building Rating System is a voluntary, consensus-based national standard of design guidelines for high performance and sustainable buildings. Since 2008, BXP has certified over 24.3 million square feet of our actively managed office portfolio, of which 96% is certified at the highest Gold and Platinum levels.
LEED for Building Design and Construction (LEED-BD+C)
BXP has a proud history of delivering the greenest buildings in our markets. We target LEED Gold certification or better on all developments. Between 2008 and 2019, we completed 18 LEED certified new office development or redevelopment projects that we currently own and manage, totaling 8.1 million square feet. As of the end of 2019, over 5 million square feet of active construction and redevelopment is pursuing LEED certification.
LEED for Existing Buildings (LEED-EB)
Green building certification of our existing properties is an important component of our strategy to achieve operational sustainability. BXP continues to actively pursue LEED-EB certification across our portfolio and has a company-wide Sustainability Committee dedicated to sharing best practices. Using the LEED rating system and the Arc platform, we are using performance scoring to benchmark new LEED-EB projects across five performance areas: energy, water, waste, transportation and human experience. Currently, we have certified 24 of our actively managed properties under the LEED for Existing Buildings program totaling 18.2 million square feet.
As part of our commitment to developing LEED projects, sustainability criteria informs the building materials selection process. These criteria, aligned with the LEED rating system, support sustainable construction material procurement, green building delivery, conservation of natural resources, waste reduction and occupant health. Project teams review vendor disclosures and aim to cost-effectively procure building materials that are:
- Extracted, harvested, recovered, and manufactured within 500 miles of the project site;
- Composed of the maximum possible recycled content;
- Third-party validated sustainably harvested wood products; and
- Non-toxic and support healthy, productive indoor environments containing no volatile organic compounds (VOCs), urea-formaldehyde, and/or other chemicals of concern.
Green Building Education
Maintaining and strengthening BXP’s internal green design, construction, operations capabilities and knowledge base is a key aspect of the Company’s overall environmental strategy. Ongoing training and education of our employees is essential to sustainable operations and growth. We have made a concerted effort to train and accredit our managers and staff in green design, construction and operations. Over 150 employees across our development, construction and property management departments are LEED Accredited Professionals, Green Associates, or Green Professionals. 59 building engineers have received Green Professional (GPRO) Operations & Maintenance building skills training, a program which is endorsed by the USGBC. Our trained property management professionals are equipped to effectively engage tenants to promote more sustainable tenant behavior and discover opportunities.
BXP is a leading REIT in the issuance of green bonds. In 2018 and 2019, BXP marketed and issued $1.85 billion of green bonds in two separate bond offerings and subsequently provided impact reporting for the November 2018 offering in June 2019. Green bonds restrict the use of proceeds to Eligible Green Projects. Eligible Green Projects are defined as: (i) building developments or redevelopments; (ii) renovations in existing buildings; and (iii) tenant improvement projects, in each case, that have received, or are expected to receive, in the three years prior to the issuance of the notes or during the term of the notes, a LEED Silver, Gold or Platinum certification (or environmentally equivalent successor standards). The definition of Eligible Green Projects includes the Salesforce Tower development project, which has received LEED Platinum certification, and was the project to which BXP allocated the full net proceeds from its first green bond offering.
To download the June 30, 2019 BXP Green Bond Allocation Report, please click here.
BXP is committed to managing the avoidable, and avoiding the unmanageable impacts of climate change. Through our climate action efforts, we believe we can play a leading role in advancing the transition to a low carbon economy. The Company will continue to explore and implement creative and cost-effective measures that reduce greenhouse gas emissions from our operations. Greenhouse gas emissions sources include the generation of electricity and steam at offsite generation facilities and the onsite combustion of fuels (e.g. natural gas). Greenhouse gas emissions mitigation efforts include energy efficiency measure implementation at existing in-service assets, high performance new development, onsite renewable energy (e.g. solar photovoltaic systems), procurement of offsite renewable energy, public portfolio and asset-level greenhouse gas emissions short and long-term reduction targets, engagement of property engineers using real-time energy consumption data, sustainability education and tenant engagement.
BXP works closely with governments, policymakers, strategic partners and our tenants to decarbonize our operating activities with the long term objective of achieving carbon neutrality. The company monitors and benchmarks all primary sources of greenhouse gas emissions at the asset level in units of metric tons of carbon dioxide equivalent (MTCO2e) and greenhouse gas emissions intensity (MTCO2e per square foot per year). We established two carbon emissions targets and hit them early, in 2016 and in 2019 by achieving a 70% intensity reduction below a 2008 base year. BXP has met our 45% intensity reduction by 2025 six years early.
Science Based Target
BXP is a proud signatory of the We Are Still In pledge, and has aligned emissions reduction targets with the climate science. This year we established our first target aligned with the climate science, and are in the process of resetting a second, long-term greenhouse gas emissions target. A greenhouse gas emissions target is considered “science-based” if it is in line with the level of carbon emissions mitigation required to keep global temperature increase below 1.5°C compared to pre-industrial temperatures.
The SBTi Target Validation Team has classified BXP’s target ambition and has determined that it is in line with a 1.5°C trajectory, currently the most ambitious designation available.
BXP is committed to reducing combined scope 1 and 2 GHG emissions 39% per m2 by 2024 from a 2018 base year; and scope 3 GHG emissions 14% per m2 by 2025 from a 2018 base year.
The event driven (acute) and longer-term (chronic) physical risks resulting from climate change could have a material adverse effect on our properties, operations and business. To the extent climate change causes changes in weather patterns, our U.S. coastal markets of Boston, New York, San Francisco, Washington, DC and Los Angeles could experience increases in storm intensity, extreme temperatures, rising sea-levels and/or drought. Climate change may have indirect effects on our business, including financial implications. These effects may result in:
- Direct damage to properties;
- Supply chain disruption;
- Declining demand for office space in our buildings;
- Costs associated with infrastructure-related remediation projects;
- Increased the costs of (i) or making unavailable, property insurance on terms we find acceptable, (ii) energy and water, and (iii) snow removal; and
- Increased business continuity risk at our properties.
There can be no assurance that climate change will not have a material adverse effects on our properties, operations or business.
We are addressing climate risk with stakeholders across the organization that support climate preparedness and resilience efforts, including our Sustainability, Risk Management, Development, Construction and Property Management departments, as well as external consultants and executive leadership. BXP develops and operates a geographically diverse portfolio. Individual assets have unique risk profiles and insurance requirements. Properties are also at different stages of their lifecycle. Properties may be in service and not up for intensive capital investment, while other properties are under development. Resiliency activities are largely dependent on the unique attributes, physical location and risk profile of each individual property.
Through the processes of acquisition, development and operations of our in-service portfolio, our experienced real estate professionals are identifying risks, including business continuity risks and loss exposure related to severe storms and flooding. These efforts begin with training and implementation of Emergency Response Plans at the property-level.
At the portfolio-level, we carry all risk property insurance on our properties, including those under development, for natural catastrophes such as flood, fire, earthquake and wind events.
As a long-term owner and active manager of real estate assets in operation and under development, BXP demonstrates adaptive capacity by continuing to proactively implement measures and planning and decision-making processes to protect our investments by improving resilience. We are preparing for longterm climate risk by considering climate change scenarios. We will continue to assess climate change vulnerabilities by modeling and anticipating future climate scenario and sea-level rise.
We will continue to implement practical, cost effective resiliency measures and infrastructure enhancements, including:
- Business Continuity Plans
- Emergency Response and Life Safety Plans
- Emergency Evacuation Planning, Procedures and Drills
- Tenant Engagement and Coordination
- Life Safety Analysis
- Elevation of vault, switchgear and critical equipment during new development
- Waterproofing of subgrade infrastructure
- Floodable first floors
- Temporary flood barriers
- Backup generation, emergency lighting and fire pumps
- Onsite energy resources and distributed generation, storage and solar photovoltaic systems
Climate-related opportunities will vary depending on the region, market, and the industry in which an organization operates. Opportunities include resource efficiency and resulting operating cost reductions and/or escalation management, increased probability of maintaining business continuity through shocks and stressors, acceleration of distributed generation and storage systems, the development of new high performance resilient buildings and improved emergency preparedness at our properties. The adoption of resilience practices may become more of a competitive advantage as there is increasing consumer preference for climate-resilient real estate service.
Managing energy consumption and implementing energy conservation measures aligns with our objective to provide the greatest benefit to our stakeholders. We continually measure and manage the usage of electricity, gas and steam using Energy Intelligence Software (EIS), EPA’s ENERGY STAR Portfolio Manager® and energy audits. Our Regional Managers and Heads of Property Management have annual performance goals with energy, emissions, water and waste targets. These goals are formulated at the asset level and roll up to regional and company-wide targets.
Energy Intelligence Software
Since 2011, BXP has strategically partnered with EnerNOC to deploy EIS and real time energy monitoring infrastructure, including 265 commodity meters at 95 sites. As active managers, BXP leverages EIS, interval data, and increased energy use awareness to optimize facility operations and to control utility costs by adjusting Building Management System (BMS) programming, verifying nighttime shutdowns/setbacks, holiday scheduling, peak load shedding, optimizing equipment runtime and executing strategic demand response events. Across the portfolio, 245 active EIS users log in an average of 79 times per week. Using interval data to optimize energy performance, BXP implemented over 12.4 million kWh in automatically generated energy savings measures from 2015 through 2019, resulting in approximately $771,000 in savings. Interval data is also used to execute demand response events. Demand response program enrollments have generated demand response payments of $4.8 million over the last nine years.
Energy Conservation Measures (ECMs)
We are committed to identifying and implementing ECMs and capital improvements that reduce energy use. ECMs are reviewed and the projects that meet certain investment criteria are implemented. Since 2015, energy projects have cut annual use by over 50 million kWh, saving approximately $5.7 million per year. ECMs include lighting retrofits, HVAC upgrades, and the addition of building management system (BMS) programming and controls.
Implemented measures include the relamping and replacement of fixtures with high-efficiency LEDs and fluorescent lamps. Lighting system improvements also include the addition of occupancy and daylighting sensors and controls. Lighting improvements conserve resources, improve energy efficiency and provide improved lighting quality that supports healthy and productive indoor environments for our tenants.
Implemented measures include a variety of heating, ventilation, and air conditioning improvements. Upgrades have been made to heating and cooling systems, including boiler retrofits, compressor replacements, air handling unit replacements, addition of variable frequency drives, installation of heat exchangers, and improved filtration on cooling towers. HVAC equipment upgrades and replacement, central plant improvements, modernization, and reconstruction projects are helping drive energy savings, and optimize occupant comfort, health and wellness.
BMS Programming & Controls
Implemented measures include demand control ventilation, airflow stations and monitoring, occupancy sensors, and the addition of direct digital control points to building automation systems. Adjustment of ventilation rates to meet demand improves energy efficiency and air quality, particularly CO2 concentration.
Onsite Renewable Energy
In 2019, BXP generated more than 1 million kWh renewably onsite. At specific sites, distributed generation technologies, like solar photovoltaics, are capable of producing energy more cost-effectively than traditional technologies. We are pursuing renewable energy projects where these utility cost discounts are evident. We are actively researching and pursuing the adoption of alternative and renewable energy technology, including energy storage, at our existing buildings and new developments. At over half of our new development projects we are either studying or implementing alternative and renewable energy installations, including solar photovoltaics, solar thermal or cogeneration systems.
We recognize the growing importance of water conservation, particularly where water scarcity has been an issue. Over the past seven years, BXP has upgraded plumbing fixtures across more than one-third of our in-service portfolio and has continues to execute LEED certified new development projects that are designed to use 30% to 40% less water than code. Since 2008, BXP has reduced water use intensity (gallons/SF) by 30%, saving 160 million gallons of water on an annual basis.
We use ENERGY STAR Portfolio Manager® to monitor and benchmark water usage in buildings where we have access to water meter data. We prioritize the oldest, least efficient fixtures for improvement, and focus our efforts on some of our largest properties to ensure that we are maximizing our conservation efforts. Implemented improvements include smart controllers, low flow sprinkler heads, rain sensors, cooling tower retrofits and infrastructure improvements.
In partnership with our vendors and tenants, BXP has implemented best waste management practices, including single stream recycling, composting, and e-waste programs for tenant solid waste in all of our regions. As a result, 54.9% of office waste by weight is recycled, composted or donated across our portfolio, which is a 52% increase since 2008. We also work closely with our vendors and tenants to promote responsible waste management practices, including haul trip optimization and composting at cafés and restaurants.
We have worked across our portfolio with our tenants and waste haulers to transition to single-stream recycling programs. Single-stream simplifies recycling. Commingled materials are collected in one container and sorted offsite at a material recovery facility. The advantages of single-stream recycling include increased customer participation and potentially higher waste diversion rates.
Our integrated composting program diverts over 3,000 tons of organic material from landfills in 2019. We work with our tenants to ensure that they have signage and receptacles, and our buildings have designated central compost bins with frequently scheduled pickup. Composting produces valuable nutrient-rich soil, avoids potentially significant methane emissions and reduces the frequency of waste hauls required.
More than 77% of the square footage of our properties is located in central business districts with ready access to public transportation. Within 0.25 miles of our buildings, the customers and communities we serve have access to over 3,000 alternatives to non-single occupancy vehicle (SOV) transportation, including bike spaces, bike sharing stations, bus stops, subway stations, commuter rail stations, car share spaces, hybrid spaces, van pool spaces and electric car
BXP promotes the use of mass transit by its tenants through onsite events for tenant employees, newsletters, and one-on-one meetings with tenant contacts. Our employees support alternative transportation programs by working with local transportation management authorities and supporting the use of car pooling. We encourage our employees to use alternatives to single occupancy vehicles by subsidizing the purchase of transit passes and enabling employees to fund many of their additional commuting expenses, such as vanpools and parking at public transportation stations, by using pre-tax dollars through our Commuter Benefits program.
Electric Vehicle Charging Stations
Infrastructure for EVs is being installed across our portfolio as more customers perceive the ability to charge on the go as an amenity. With over 200 EV charging stations installed to date, and 258 additional EV charging stations under development, BXP is enabling mobility and the proliferation of sustainable transportation.
The provision of the bicycle storage at our properties is increasingly important in submarkets where bicycle commuting is on the rise. We work with our tenants to provide adequate safe, secure and convenient storage for bicycles. The bike valet service at 399 Park Avenue in New York is an example of efforts the company is making to accommodate cycling commuters who work in our buildings.
BXP makes efforts to protect and enhance biodiversity and ecosystems during the development of new buildings and operation of our existing buildings. Our regional teams maintain compliance with environmental laws and regulations. In 2019, BXP had no environmental violations. The vast majority of our new construction involves the redevelopment of existing sites, which conserves natural areas and habitats. In many cases, the redevelopment of sites involves the remediation of soil and water contamination caused by industrial activities by others. We are also committed to supporting biodiversity by maintaining tree canopy cover and vegetated areas. BXP has a number of green roofs and has been a leader in urban beekeeping with 6 onsite apiaries.
People are the assets and buildings are the equipment that drive our business.
Our success depends on human capital. We are focused on social performance and externalities, including the social and economic impact of our development pipeline, the delivery and operation of healthy buildings, diversity and inclusion in our workforce, the well-being of our employees, their training and professional development, and our positive contributions to the communities we serve.
The Social Impact of New Development
Development continues to be an important contributor to our growth and value creation for BXP. During 2019, we fully placed in-service two developments with an aggregate investment (our share) of $488 million:
- 145 Broadway – a 483,000 square foot Class A office tower that is leased to Akamai, representing their new headquarters, and located in Cambridge, Massachusetts; and
- The Hub on Causeway (Podium) – the first phase of The Hub on Causeway, our mixed-use transit-oriented development project in Boston, Massachusetts. This 382,000 square foot podium is the new entrance to TD Garden arena and includes multi-level retail amenities, restaurants, theaters and other exciting entertainment venues.
Additionally, we commenced three new development projects of our active development pipeline, with a total anticipated investment of $822 million:
- 325 Main Street – a 420,000 square foot Class A office development located in Cambridge, Massachusetts, the office component of which is 100% pre-leased to Google;
- 2100 Pennsylvania Avenue – a 469,000 square foot Class A office development located in Washington, DC, that is 66% pre-leased (office portion) to a global law firm; and
- 200 West Street – a 126,000 square foot redevelopment to convert office space to lab-ready space in Waltham, Massachusetts.
As of December 31, 2019, our new development pipeline totaled 5.5 million square feet and $3.1 billion in estimated investment (our share), projected to deliver over the next several years. The delivery of our new development pipeline includes significant community engagement, public consultation and community benefits and mitigation. There are a number of positive externalities associated with the delivery of our current pipeline.
As developers and managers of buildings, and occupiers of many of those buildings, we are keenly aware of the influence of buildings on human health. In light of recent events, our focus on healthy buildings has become much more important to our stakeholders. The health, safety and security of our customers, employees, vendors, partners and communities is our highest priority at BXP. While our buildings remain open and operational, we have convened a Health Security Task Force of subject matter experts from both inside and outside our organization to develop a comprehensive, state of the art plan in response to these unprecedented times. This plan will encompass evaluating all aspects of building operations, including cleaning, air and water quality, social distancing, screening and PPE, and effective health security communication, and will be guided by research and science to ensure the appropriate response. We will continue to implement operational best practices, following local, state and federal guidelines and in compliance with applicable laws.
In 2018 we announced a partnership with a leading healthy building certification system, Fitwel, to support healthy building design and operational practices across 6 million square feet of our portfolio, becoming a Fitwel Champion. We completed our Fitwel Champion commitments in 2019, adding 12.4 million square feet of Fitwel certified buildings.
BXP was named a 2020 Best in Building Health award winner. We completed the first Fitwel Design Certified project in the world and executed more Fitwel certifications by count and building area than any other company in 2019. BXP has 11 Fitwel Ambassadors among our Sustainability, Development and Property Management teams.
Indoor Environmental Quality
Thermal comfort and air quality are fundamental to healthy and productive workplaces. BXP assures thermal comfort by continuously monitoring space temperature set points across the portfolio with advanced building management systems. Air quality is routinely and proactively tested for volatile organic compounds (VOCs), mold and carbon dioxide concentration. We understand that the creation of great space requires careful consideration of the lives inside our buildings. We strive to create these great places by incorporating principles like biophilic design, connecting occupants with the natural environment, and developing supporting restaurant, retail and service amenities that nourish and delight our customers.
All regions have formalized a Green Cleaning requirement with our cleaning vendors to minimize the impact of cleaning products on the environment. Aspects of this requirement include using UL ECOLOGO® and Green Seal® certified cleaning products, High Efficiency Particulate Air (HEPA) vacuums, dry cleaning for carpets and restroom supply products made from recycled materials. Our Green Cleaning program benefits both the janitorial workers within our buildings and our tenants because the cleaning methods and products used do not include toxic chemicals that can cause respiratory and dermatological problems. Indoor air quality has also improved as a result of the use of HEPA vacuums.
Our employees are what sets BXP apart. Our operational and financial performance depends on their talents, energy, experience and well-being. Our continued success is attributable to having healthy and productive employees. BXP’s employee benefit programs are designed to meet the needs of our diverse workforce and support our employees and their families by offering comprehensive programs that provide flexibility and choice in coverage.
Employee Benefit Program
- Subsidized employee gym passes
- Biometric Screenings
- Volunteer Day Program
- Scholarship Program
- Adoption Assistance Program
- Paid Parental and Family Medical Leave Policies
- Work-Life Balance Employee Assistance Program, services include:
- Childcare and/or eldercare referrals
- Personal relationship information (Marriage/Family Issues)
- Health Information
- Legal consultations and licensed attorneys
- Financial planning assistance
- Stress management
- Mental illness
- Career development
- Alcohol/Drug dependency
- Wellness and Self-Help
- Subsidized Commuter benefit with WageWorks encourages public and alternative transportation
- Annual Flu Shot Program
- Automatic External Defibrillators
- Value Added Programs provided by our medical benefits provider:
- Telehealth – see licensed doctors using live video visits on your smart device.
- Healthy Baby – Ovia Fertility App and Ovia Pregnancy App
- Goal Getter – track exercising activity and/or calories to reach fitness goals
- Healthy Discount Programs – Fitness Reimbursement and Weight Loss Reimbursement
- Mail order pharmacy
Our Employee Wellness Program, established to encourage employees to improve their health and well-being, offers wellness activities facilitated through an engaging and personalized approach. Program participants receive a reduction in their health insurance deduction cost.
The BXP benefits program is designed to offer valuable resources to protect and enhance financial security and to help balance work and personal life. Some of the benefits that we offer our employees include health, dental and vision insurance, a 401(k) plan with a generous matching contribution, an employee stock purchase plan, health care and dependent care reimbursement accounts, income protection through our sick pay, salary continuation and long term disability policies, a scholarship program for the children of employees, a commuter subsidy to support the use of public transportation, tuition reimbursement, and paid vacation, holiday, personal and volunteer days to balance work and personal life.
At BXP, we believe that the success of our business is tied to the quality of our staff and we strive to maintain a corporate environment without losing the entrepreneurial spirit on which we were founded nearly 50 years ago. By providing a quality workplace and comprehensive benefit programs, we recognize the commitment of our employees to bring their talent, energy and experience to BXP, which allows us to lead the industry in every facet of our operations. Our continued success is attributable to their expertise and dedication. The success of our efforts in the workplace is demonstrated by the satisfaction and long tenure of our employees and union workers, 41% of whom have worked at BXP for more than ten years. In 2019, BXP assessed the satisfaction of all employees with an Employee Satisfaction Survey and had a 92% response rate.
There is no substantial portion of our work that is performed by workers who are legally recognized as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors.
We are not reporting on the work performed by third-party vendors and contractors in the construction and operation of our buildings. We have had no significant variations in employment numbers. As of the end of 2019, BXP had 12 part-time employees; all other 651 employees work full-time. 14% of our total employees are covered by collective bargaining agreements.
Diversity & Inclusion
It has been and will continue to be the policy of BXP to recruit, train and promote in all job titles without regard to race, color, gender, gender identity or expression, sexual orientation, religion, age, national origin, disability, marital status, protected veteran status, genetic information or any other legally protected characteristic.
In addition, BXP complies with applicable state and local laws prohibiting discrimination in employment in each jurisdiction in which it maintains facilities. Managers base all employment decisions on the principles of Equal Employment Opportunity, including, but not limited to decisions concerning recruiting, hiring, upgrading and downgrading, discharge, training, promotions (in all job titles), compensation, benefits, layoffs, returns from layoffs, and social and recreational programs.
By implementing this policy, BXP aims to ensure that all employees have the opportunity to make their maximum contribution to BXP and to their own career goals. The intention is to provide an equal employment opportunity program that will simultaneously serve the requirements of society, the law, sound business practices and individual dignity.
Performance & Career Development
All of our eligible employees receive an annual performance review. These evaluations are done in the same time frame as the review of annual incentive compensation. One of the general factors on the performance appraisal form requires the supervisor to address whether the employee has a fundamental understanding of our business and a demonstrated commitment to company policies.
Training & Education
In 2019, 100% of BXP employees received professional training in accordance with the following table.
Employee Absentee & Lost Day Rates
The total operating hours for BXP in 2019 was 1,555,015. The absentee and lost time injury rates are as follows.
Boston Properties is committed to embedding its responsibility to respect human rights. Because we encourage all persons to be treated with dignity and respect, we have adopted the following Human Rights Policy, which aligns with the United Nations’ Universal Declaration of Human Rights. BXP strives to respect and promote human rights within all aspects of the company. Its policies and directives are integrated within the company’s literature, such as employee handbooks and code of conduct and compliance trainings. It includes the following components:
- A respect for the rights of all persons impacted, both directly and indirectly, by our business.
- Compliance with applicable laws and regulations regarding the protection of human rights.
- Promote and prioritize diversity and inclusivity.
- Provide safe and healthy workplaces, compliant with all applicable health and safety laws, regulation and internal directives.
- Sustain and safeguard spaces free of violence, harassment, intimidation and other unsafe or disruptive conditions.
- Re-assess the needs of the Policy as the company grows appropriate to its size and circumstances.
- Carrying out human rights due diligence of adverse human rights impacts.
We are a leading property owner and developer. Our local teams are very engaged in their local communities, not only seeking entitlements, but also determining how our projects can enhance neighborhood amenities and quality of life. Our community involvement was strengthened in 2019 by our ongoing commitment to volunteerism and philanthropy. Throughout the year, BXP and our employees donated over 2,000 service hours to 150 community events.
United Way of Massachusetts Bay and Merrimack Valley
During six Community Care Days, 65 BXP employees worked a total of 352 hours. Engaged organizations include the Boys & Girls Clubs of Boston and Waltham, the American Red Cross Food Pantry and the Boston Living Center.
Winter Wonderland at Embarcadero Center
BXP partnered with the San Francisco Police Department, the San Francisco Police Activities League and CBF Electric to host the 4th annual Winter Wonderland at the Holiday Ice Rink at Embarcadero Center.
31 Nights of Light
Since 2009, 31 Nights of light has grown as an iconic event in the Boston-area nonprofit community. Every night of December, the top of Prudential Center shined a different color in support of that night’s nonprofit partner and their important work. The honored organizations host events in Center Court in conjunction with their lighting. Over the course of 11 years, 31 Nights of Light has attracted positive public attention to a multitude of important causes.
Reston Holiday Parade
This year marked the 29th annual Reston Holiday Parade. The one-of-a-kind, half-mile parade along Market Street welcomes the arrival of Santa and Mrs. Claus in a horsedrawn carriage. Since 1991, rain or shine, the parade has been an annual tradition on the day after Thanksgiving.
Holiday Toy Drives
The tradition of holiday toy drives continued in 2019. We partnered with For Kids Only Afterschool to collect 230 gifts, including Lego sets, sports equipment and games.
In addition to supporting charities and community groups across our regions, we are committed to enhancing our local, national and global communities through education and outreach, and volunteering our time with industry groups, such as: BOMA; local chambers of commerce; local tourism organizations and Nareit; on government committees including regional and city sustainability efforts and ‘green’ ribbon task forces; building innovation districts and sustainable neighborhood planning; on technical advisory teams and local engineering unions; and in-house to our neighborhoods by providing building tours, offering educational programs about our buildings and operations and hosting annual sustainability and healthy-living events.
Leadership & Oversight
The Board of Directors of BXP is currently comprised of eleven highly-accomplished individuals with diverse backgrounds who are dedicated to serving the best interests of our shareholders. Among other things, the Board is responsible for reviewing management’s strategy for the Company, ensuring that the Board has the desired mix of skills, experience, reputation and diversity relevant to our strategic direction and operating environment, overseeing management’s succession plan, approving and implementing governance policies, assessing its own performance and the performance of executive management, overseeing our sustainability efforts, monitoring our cybersecurity and risks, and providing oversight of financial reporting and legal compliance policies.
BXP is highly ranked for its governance principles among other real estate companies, including:
- Delaware domicile;
- Diverse Board of Directors;
- Annual election of all directors;
- Majority voting standard for director elections;
- Proxy access by-law right for nominating directors;
- No shareholder rights plan or “poison pill;”
- Independent Chairman;
- Policy on company political spending;
- Compensation clawback policy; and
- Policy against future tax “gross-ups”
The Board of Directors supports efforts to implement our sustainability strategy through our corporate sustainability program. Owen Thomas, our Chief Executive Officer, is the senior decision maker on issues related to sustainability. Throughout the year, the Company organizes meetings, presentations and regional Sustainability Summits to communicate the objectives and performance of our ESG initiatives. Additionally, the Company’s Chief Financial Officer, Senior Vice President of Finance & Planning, Vice President of Sustainability and Sustainability Analyst work together to oversee BXP’s Sustainability Committee, which includes over 35 representatives from all of our regions. This Committee helps inform the direction of our sustainability and ESG program, which is formally reviewed annually with our Board of Directors.
Sustainability Committee Goals
- Identify and execute new strategies for promoting sustainability in new construction, existing buildings and corporate operations;
- Enhance the Company’s processes for collecting sustainability performance information;
- Promote communication across the Company and share “best practices;”
- Assess the cost effectiveness of small and large scale projects and programs; and
- Follow new regulatory requirements and cooperate with the regulators to make new requirements meaningful.
2019 Executive Management ESG Goals
To support the achievement of the Company’s overarching sustainability and ESG goals, the performance of each member of our executive team is assessed annually against pre-established corporate, operational and management goals and factors such as individual contributions to overall Company results are considered. Annually, one of these pre-established goals focuses on sustainability and ESG accomplishments across our portfolio.
These goals are formulated by the Chief Financial Officer, Senior Vice President of Finance & Planning and the Vice President of Sustainability. For 2019, the ESG goals consisted of the six components in the table below.
Sustainability targets and objectives are also communicated to senior management in weekly and monthly meetings, with progress monitored through weekly and monthly reports. With a wide range of department representatives in attendance, sustainability objectives are effectively communicated to the Board, senior management and throughout the Company on a consistent basis.
Ethics & Integrity
For more than four decades, BXP and its employees have maintained the highest standards of integrity and ethics. We take pride in our traditions of responsibility and accountability. We also believe that transparent disclosure of our corporate governance policies is fundamentally important to maintaining our well-established reputation and preserving the trust of our investors. We believe this sets a “tone at the top” for good governance and includes the appropriate checks and balances that a formalized system of governance should have.
Code of Business Conduct and Ethics
BXP has established clear policies, administration, communication, training and enforcement of a set of strict rules and regulations, found in our Code of Business Conduct and Ethics, which is publicly available here. The Code of Ethics governs business decisions made and actions taken by our directors, officers and employees and is an expression of the Company’s fundamental and core values, which include: (i) integrity and honesty in the Company’s and its employees’ dealings with customers, suppliers, co-venturers, competitors, shareholders and the community; (ii) respect for individuality and personal experience and background; and (iii) support of the communities where the Company and its employees work.
Bribery and Corruption
BXP has a strong commitment to minimizing our exposure to bribery, corruption and conflicts of interest. The Company requires strict adherence to the U.S. Foreign Corrupt Practices Act, U.K. Bribery Act of 2010, and, where applicable, any similar anti-corruption and anti-bribery laws of the United States and other nations. Among other things, employees are prohibited from, directly or indirectly through a third-party (i) offering, authorizing, promising, directing, or providing anything of value to any government official for the purpose of influencing that person to assist the Company in obtaining or retaining business or securing an improper business advantage, or (ii) otherwise offering or giving anything to any person in connection with Company business that could be perceived as a bribe.
Employee Code of Business Conduct and Ethics Training and Whistleblower Mechanism
Across the Company, every employee receives online training regarding their obligations under the Code every year. Employees who deal specifically with the government receive in-person training regarding the requirements of the Code as it relates to the Federal Government every year. Additionally, all employees must certify in writing at the time they are hired that they will abide by the Code, and each employee must provide a re-certification every time they are trained. BXP requires employees to report any suspected violations of the Code, including using the EthicsPointTM Reporting System. Through EthicsPointTM, any employee is able to anonymously report any suspected or observed violations of the Code 24 hours per day, 365 days per year, either online or via telephone. In addition, BXP includes a provision highlighting the requirements of our Code in vendor contracts, including how to file a complaint on our hotline if they become aware of any inappropriate activity. We remain committed to adhering to these policies and principles and are confident that our employees will continue to conduct themselves in a manner consistent with these policies and ideals.
The Company has established a Policy on Political Spending, which requires the prior approval of our General Counsel in consultation with our Chief Executive Officer and President of any political contributions made by the Company. In the interest of transparent reporting of political contributions of the Company, BXP annually publishes on its website approved Company political spending amounts in accordance with its policy.
BXP continually invests in maintaining the security and integrity of its IT networks, systems and applications to mitigate the risk of a security compromise or breach. Like all organizations, we face the risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our IT networks and related systems.
The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. BXP’s IT networks and related systems are essential to the operation of our business, ability to perform day-to-day operations and manage our building systems. To this end, BXP maintains a robust set of security protections, expertise and programs centered on mitigating risk across its entire enterprise ranging from awareness training to advanced firewalls to layered monitoring programs.
Quality of Public Disclosures
The Company is committed to providing its shareholders with complete and accurate information, in all material respects, about the Company’s financial condition and results of operations in accordance with the securities laws. The Company strives to ensure that the reports and documents it files with or submits to the Securities and Exchange Commission, and other public communications made by the Company, include full, fair, accurate, timely and understandable disclosure. The Company’s Disclosure Committee is primarily responsible for monitoring such public disclosure and meets at least quarterly to review and discuss reports and documents prior to filing.