Strategic Audit Environmental management systems in Victorian Government 2012-13

Doing Sustainability Published by the Commissioner for Environmental Sustainability Melbourne, Victoria, January 2014 ©The State of Victoria, Commissioner for Environmental Sustainability 2014

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For further information contact the Office of the Commissioner for Environmental Sustainability, phone +61 3 9096 2424 or visit http://www.ces.vic.gov.au

Disclaimer This report may be of assistance to you and every effort has been made to ensure that the information provided is correct. It is based largely on data and information provided by the Victorian Government. The Commissioner for Environmental Sustainability does not guarantee that the report is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.

Design and publication notes This strategic audit report is specifically designed for on-line viewing and demonstrates my office’s move to reducing paper based publications and the need for printing. If you require a paper version please contact the office. Contents

From the Commissioner 4

Section 1 6 Environmental performance 7 Whole-of-government assessment 2012-13 7 Greenhouse gas emissions 8 Energy use in office buildings 9 Waste in office buildings 11 Water use in office buildings 12 Transport 13 Paper use 17

Section 2 18 Environmental management system case studies 19 Carbon neutrality at Zoos Victoria 20 Museum Victoria case study update 29 Victorian Electoral Commission moves into a new sustainable mode 32 Parks Victoria shining the light on the business case for environmental sustainability 36 Public Record Office Victoria environment strategy update 38 State Library of Victoria sustainability report update 43

Section 3 46 Sustainability in major projects 47 Sustainability Investment Guidelines 49 Overview – Statement of purpose 50 PART A – The Sustainability Investment Process 51 1 ] CONCEPTUALISE Sustainability opportunities 51 2 ] PROVE Sustainability and the business case 55 3 ] PROCURE 66 4 ] IMPLEMENT Delivery 68 5 ] REALISE Monitor and review 68 PART B – Sustainability Investment: The Fact Sheets 69 1 ] Energy reduction 70 2 ] Water efficiency 72 3 ] Climatic resilience 74 4 ] Materials resource efficiency 76 5 ] Transport and travel 78 6 ] Health, well-being and productivity 80 7 ] Community, amenity and built form 82 8 ] Emissions and environment protection 84 9 ] Ecosystem services 86 Source Material 88

Endnotes 90

3 From the Commissioner

From the Commissioner

Each year the Office of the Commissioner for Environmental Sustainability publishes an environmental management systems audit of mandated government departments and agencies pursuant to the Commissioner for Environmental Sustainability Act 2003 (section 8). This is the fifth and final audit prepared subject to my commission.

Sustainability reporting continues to evolve, develop in importance and provide significant insights about organisational efforts in respect of environmental best practice in both the public sector and private enterprise.

Very recently the Boston Consulting Group and MIT Sloan Management Review published a report on ‘leading companies’ and their sustainability commitments – Sustainability’s Next Frontier. Walking the talk on the sustainability issues that matter most.1 Using case studies which involved Avis Budget Group, Domtar, Hilton Worldwide, Dell, Kaiser Permanente and GM-Honda, the reporters concluded that five critical attributes typify best practice. These include – leadership and high level management commitment; developing strategic processes; formulating sustainability business cases; measuring progress and effecting change to promote better outcomes.

Whilst private enterprise responds to different stimuli than public administration, the desire for efficiencies, sustainable practices and the opportunistic advancement of environmental, economic and social co-benefits clearly underpins best practice.

As corporate social responsibility increasingly drives environmental reporting across sectors it is encouraging to observe commitment to this work in government agencies. This has occurred in Victoria as a direct consequence of the operation of the Department of Treasury and Finance Financial Reporting Directions (24-24C) and as a function of good leadership in agencies where environmental reporting is adopted without being mandated.

In the first section of this year’s audit the reader will find a comparative discussion of the environmental performance across the whole of government. Energy, waste, paper use, transportation, water consumption and greenhouse gas emissions are all considered and contrasted across portfolios. Comparative studies over time are made difficult by changes in departmental structures and by the different organisational requirements of agencies, but as measurement is a pivotal criteria for improved outcomes such studies remain both necessary and important.

Key findings from the first section of this audit include: • In 2012-13 we have recorded a 10% reduction in total office-based greenhouse gas emissions since 2009-10, with decreases in air travel, waste to landfill and vehicle use emissions.

• Office-building emissions increased by 1.5% over this most recent reporting period as a result of the reduction in the purchase of green power.

• Only 6% of electricity used in 2012-13 was purchased as green power, a 75% decrease since 2009-10.

• 84% of office waste was recycled in 2012-13.

• Executive fleet continues to make a negligible contribution to whole of government efforts to reduce emissions, as comparatively few executives, in leadership positions, have rejected the option of a six cylinder vehicle.

4 In this audit I continue the practice of augmenting the material required with case studies of the environmental management systems of non-mandated agencies. In this audit the

• attainment of carbon neutrality by Zoos Victoria, • materials use and lifecycle work of Museum Victoria, • organisational culture of the Victorian Electoral Commission, • renewable energy innovations of Parks Victoria, • strategic implementation of Public Record Office Victoria, • ongoing efforts by the State Library of Victoria are all considered for their illustrations of great leadership, team work, strategic planning and practical, committed and continuing implementation. Each provides a guide to better environmental practice in quite diverse and non-mandated organisational structures.

I commend the organisations, their leadership and their environmental management teams for this inspirational work

In this audit I also provide ‘Sustainability Investment Guidelines’ in respect of major projects where benefits of a project might be understood as both qualitative and quantifiable and where a cost benefit ratio is improved by the incorporation of sustainability approaches.

These guidelines correspond with the Department of Treasury and Finance’s Investment Lifecycle Guidance for High Value, High Risk projects. Green Star Education V1 is used as an example of the potential available through innovate approaches. Issues considered as sustainability investment streams include energy reduction; water efficiency; climatic resilience; materials resource efficiency; transport and travel; health, well-being and productivity; community, amenity and built form; emissions and environment protection; and ecosystem services. For an extended discussion of the way we conceive of the environment as ecosystem services see the Victorian State of the Environment Report 2013, published by my office in 2013, which is found at www.ces.vic.gov.au under publications.

Fact sheets on each of the Sustainability Investment streams provide clear illustration of the benefits attainable in terms of sustainability potential in clear form.

Professor Kate Auty PhD, MEnvSc, Dip Int Env Law (UNITAR), BA(Hons)LLB, GAICD Commissioner for Environmental Sustainability, Victoria

5 Environmental performance

SECTION 1

6 Section 1 Environmental performance

Since 2003, Victorian Government departments, the Environment Protection Authority (EPA) Victoria and Sustainability Victoria have been required to implement environmental management systems (EMS). This requirement was introduced with an office-based focus and was modelled on the ISO 14001 standard.2

The Financial Reporting Direction 24C enables the government to report on its office-based environmental impacts in a consistent manner. The direction states that every year by 31 January, the Commissioner for Environmental Sustainability will report to the Minister for Environment and Climate Change on progress of defined entities EMSs.3

This section presents environmental performance and analysis for the 2012-13 period in accordance with the reporting requirements of Financial Reporting Direction 24C.4 The whole-of-government performance is aggregated from data provided in the annual reports of Victorian Government departments, EPA Victoria and Sustainability Victoria.5

Whole-of-government assessment 2012-13 Reporting is a key component of any environmental management regime. It provides a way to evaluate actions and track progress towards the objectives identified in environmental strategies, plans, policies or programs.6

The Financial Reporting Direction 24C sets minimum reporting requirements for office-based activities including:

• energy use – stationary energy: building consumption such as electricity (including green power), natural gas, LPG, heating oil, diesel and solid fuel • waste production – which includes waste to landfill, waste sent for recycling and composted waste • paper use – paper used for printing, photocopying and similar processes • water consumption – including domestic water use, rainwater and reused water • transportation – vehicle fleet energy use, air travel and staff commuting • greenhouse gas emissions – those associated with building energy use, vehicle fleet use, air travel and waste production (any offsets purchased are also reported) • procurement – a discussion of whether and how procurement activities are environmentally responsible.

The Financial Reporting Direction 24C also requires departments and agencies to measure and report both relative resource use, such as energy consumption per floor area or per number of full time equivalent employees, or greenhouse gas emissions per kilometres travelled, as well as total resource use or ‘absolute’ consumption such as total energy use or total greenhouse gas emissions.

Both kinds of indicators are valuable. Relative resource use or ‘intensity’ indicators (often referred to as efficiency indicators or business activity indicators) are valuable because they track an organisation’s resource use independently of growth or organisational changes.7

Absolute indicators are important because they show how individual organisations are contributing to the protection of global environmental limits.

7 Environmental performance

GREENHOUSE GAS EMISSIONS The total reported greenhouse gas emissions from Victoria’s Government agencies decreased annually over the reporting period, falling by 10% between 2009-10 and 2012-13. The largest decreases were for emissions related to air travel (54%), office waste to landfill (32%) and vehicle use (16%).

Energy use is the largest source of greenhouse gas emissions by Victorian Government agencies accounting for 71% of emissions in 2012-13. Vehicle use and air travel accounted for 22% and 7% of total emissions respectively, with office-based waste only accounting for 0.3% of total emissions.

Office building energy emissions increased by 1.5% over the reporting period. This increase is mainly due to the reduced purchase of GreenPower which has negated gains made in energy efficiency over the period (see Energy use in office buildings).

Table 1: Greenhouse gas emissions from Victorian Government agencies 2009-10 to 2012-13

Annual emissions (tonnes CO2-e) % change 2009-10 to Emission sourceA 2009-10 2010-11 2011-12 2012-13 2012-13

Office building energy 66,823 62,987 68,875 67,807 +1.5%

Vehicle use 24,955 23,458 20,301 20,936 -16%

Air travelB 13,958 14,911 6,894 6,433 -54%

Office waste to landfill 394 342 305 268 -32%

Total tonnes CO2-e 106,130 101,698 96,375 95,443 -10%

A Data excludes emissions associated with water and paper use. B The multiplier used to calculate air travel emissions was revised in 2011-12. Consequently, emissions prior to 2011-12 appear to be over-estimated (see Air travel).

10% decrease in total office-based greenhouse gas emissions since 2009-10

8 Figure 1: Greenhouse gas emissions from Victorian Government agencies 2009-10 to 2012-13

120,000

100,000 -e 2 80,000

60,000

40,000 Tonnes CO 20,000

0 2009-10 2010-11 2011-12 2012-13

Office building energy Vehicle use Air travel Office waste to landfill

ENERGY USE IN OFFICE BUILDINGS Energy use in office buildings includes heating, ventilation and air conditioning, water heating, appliances, lighting and installed equipment such as computers.

Reducing energy consumption not only provides an opportunity to decrease office running costs, but is also important for the environment with energy use the largest source of greenhouse gas emissions by Victorian Government agencies (see Greenhouse gas emissions).

Total energy use by Victorian Government agencies decreased by 12% between 2009-10 to 2012-13. Energy intensity (measured as use per m2) also decreased by 5% over the same period.

Table 2: Energy use, intensity and GreenPower purchased for office buildings 2009-10 to 2012-2013

% change 2009-10 to Energy 2009-10 2010-11 2011-12 2012-13 2012-13

Total building energy (mj) 285,072,746 291,916,710 283,506,942 250,536,411 -12%

Building energy per m2 (mj) 419 430 420 399 -5%

Electricity purchased as 24% 26% 14% 6% -75% GreenPower %

Note: Includes the Department of Primary Industries (now Department of Environment and Primary Industries) large ongoing research component at many of its sites which accounts for a significant component of overall energy consumption.

9 Environmental performance

GreenPower A portion of electricity purchased by Victorian Government agencies includes renewable sources or GreenPower. Green power generates less pollution than power from fossil fuels and produces no net increase in greenhouse gas emissions.

Electricity purchased as GreenPower declined from 24% of the total electricity used in 2009-10 to only 6% in 2012-13, a reduction of 75% over the period. Several agencies ceased or significantly decreased the purchase of GreenPower in 2012-13, continuing the large decline in the Victorian Government’s use of GreenPower that began in 2011-12. The main reason for this decline is the removal of mandatory purchases of GreenPower for government agencies.

This has resulted in an increase in the greenhouse gas emissions associated with electricity use despite gains made in energy efficiency over the period (see Greenhouse gas emissions).

Figure 2: Energy use, intensity and GreenPower purchased for office buildings 2009-10 to 2012-2013

300,000,000 450

400 250,000,000 (mj) 350 2

200,000,000 300

250 150,000,000 200

100,000,000 150

Energy (megajoules) 100 24% 26%

50,000,000 Building energy per m 14% 50 0 6% 0 2009-10 2010-11 2011-12 2012-13

Non-GreenPower (mj) Electricity purchased as GreenPower (mj) Building energy per m2 (mj)

Note: Includes the Department of Primary Industries (now Department of Environment and Primary Industries) large ongoing research component at many of its sites which accounts for a significant component of overall energy consumption.

12% decrease in total energy use since 2009-10. 6% of electricity used in 2012-13 was purchased as GreenPower, a 75% decrease since 2009-10.

10 WASTE IN OFFICE BUILDINGS Waste is separated into different waste streams in Victorian Government offices including waste to landfill, waste (including paper) sent for recycling and composted organic waste. It should be noted that variations in data reported strongly reflect changes in waste audit methodology.

Between 2009-10 and 2012-13, total waste generated decreased by 33% leading to a decrease in waste to landfill by 41%. The recycling rate has remained mostly unchanged over the period, with 84% of total waste recycled in 2012-13.

With the exception of 2010-11, waste per full time equivalent employee (FTE) has also remained fairly constant over the period with each generating 93 kg of waste in 2012-13.

Table 3: Total waste generated, waste intensity and recycling rate 2009-10 to 2012-13

% change 2009-10 to Waste 2009-10 2010-11 2011-12 2012-13 2012-13

Total waste (kg) 1,945,566 1,531,606 1,626,564 1,296,823 -33%

Waste recycled (kg) 1,590,986 1,245,451 1,374,718 1,088,791 -32%

Waste to landfill (kg) 354,579 286,155 251,846 208,032 -41%

Recycling rate (%) 81.8 81.3 84.5 84.0 3%

Waste per FTE (kg) 94.8 76.1 98.6 92.8 -2%

Note: Excludes Sustainability Victoria data.

5,187 kg of waste produced in office buildings per working day in 2012-13. 84% of office waste was recycled in 2012-13.

11 Environmental performance

Figure 3: Total waste generated, waste intensity and recycling rate 2009-10 to 2012-13

2,000,000 110

1,800,000 100

1,600,000 90 82% 80 1,400,000 85% 70 1,200,000 81% 60 1,000,000 84% 50 800,000 40 600,000 30 Total waste (kg)

400,000 20 Waste per FTE (kg) 200,000 10 0 0 2009-10 2010-11 2011-12 2012-13

Waste recycled Waste to landfill Waste per FTE

WATER USE IN OFFICE BUILDINGS Office buildings account for as much as 10% of a capital city’s water use.8 Office-based water use data includes water consumption for drinking, washing, cleaning and toilet flushing, and base building requirements such as heating and cooling systems.

Departments and agencies have implemented a range of initiatives which have delivered reductions in potable water use in office-based accommodation. These range from installing dual flush toilets and flow restrictors on taps to harvesting and reusing water from roofs.

Total water use decreased by 17% between 2009-10 and 2012-13. Despite this, water use per FTE increased by 2% over the same period.

Table 4: Total water use and water intensity across government offices 2009-10 to 2012-13

% change 2009-10 to Water 2009-10 2010-11 2011-12 2012-13 2012-13

Total litres 204,117,690 191,455,220 186,066,090 168,986,313 -17%

Litres per FTE 9,997 9,604 9,627 10,201 2%

12 676,000 litres of water used in office buildings per working day in 2012-13. 41 litres of water used per full time equivalent employee per working day in 2012-13.

Figure 4: Total water use and water intensity across government offices 2009-10 to 2012-13

220,000,000 11,000 200,000,000 10,000 180,000,000 9,000 160,000,000 8,000 140,000,000 7,000 120,000,000 6,000 100,000,000 5,000

Total litres 80,000,000 4,000 Litres per FTE 60,000,000 3,000 40,000,000 2,000 20,000,000 1,000 0 0 2009-10 2010-11 2011-12 2012-13

Total litres Litres per FTE

TRANSPORT

Vehicle fleet Vehicle environmental performance Managing the environmental performance of the motor vehicle fleet primarily involves reducing greenhouse gas emissions associated with travel by for example, improving the efficiency of fleet operations and reducing the total number of kilometres travelled.

Victorian Government vehicle use efficiency has continued to improve with reductions in vehicle energy

(16%), kilometres travelled (13%) and CO2 emissions per 1,000 km (4%) between 2009-10 and 2012-13. Noting however, a 3% increase in vehicle energy use and emissions compared to the previous year.

Vehicle use is most easily reduced by switching to more sustainable transport (walking, cycling and public transport), as well as alternatives to travel, such as video and teleconferencing.

13 Environmental performance

Table 5: Motor vehicle use, intensity and emissions 2009-10 to 2012-13

% change 2009-10 to Vehicle use 2009-10 2010-11 2011-12 2012-13 2012-13

Vehicle energy (mj) 355,344,560 335,670,108 288,290,895 297,922,930 -16%

Vehicle kilometres 103,007,874 100,887,187 95,753,012 89,820,973 -13%

Vehicle kilometres per 412,031 403,549 383,012 359,284 -13% work day

Vehicle tonnes CO per 2 0.24 0.23 0.21 0.23 -4% 1,000 km

13% decrease in kilometres travelled in vehicles since 2009-10. 359,284 km vehicle travel per working day in 2012-13.

Figure 5: Motor vehicle use 2009-10 to 2012-13

110,000,000 450,000 100,000,000 400,000 90,000,000 350,000 80,000,000 300,000 70,000,000 60,000,000 250,000 50,000,000 200,000 40,000,000 150,000 30,000,000 100,000 20,000,000

Vehicle total kilometres 10,000,000 50,000 - - Vehicle kilometres per work day 2009-10 2010-11 2011-12 2012-13

Vehicle total kilometres Vehicle kilometres per work day

14 Victorian Government vehicle fleet mix The size of the government vehicle fleet decreased by 11% between 2009-10 and 2012-13. In addition, the overall composition continues to move to a lower intensity fleet with decreases in six-cylinder (13%) and four-cylinder (35%) petrol vehicles, and increases in hybrid vehicles (26%) over the period.

The shift to more fuel efficient passenger vehicles has resulted in a reduction of the average vehicle emission rate (based on manufacturer specifications) from 215 g CO2/km in 2009-10 to 182 g CO2/km in

2012-13, a decrease of 15%. The higher actual average emission intensity reported (230 g CO2/km) could be due to vehicle selection choices and/or the way a vehicle is driven.

The executive fleet, due to its consistent profile, specifically its high proportion of 6 cylinder vehicles, is making negligible contribution to this reduction.

Figure 6: Victorian Government motor vehicle fleet composition and average vehicle greenhouse intensity 2009-10 to 2012-13

4,000 220 3,500 210 3,000 200 2,500 /km 2,000 190 2 1,500

180 g CO 1,000 170

Number of vehicles 500 0 160 2009-10 2010-11 2011-12 2012-13

6 Cylinder 4 Cylinder LPG LPG dual fuel

Diesel Electric Hybrid Ave g CO2 /km

Figure 7: Victorian Government motor vehicle composition for operational and executive fleets 2012-13

1,400 39% 1,200

1,000 25% 800

600

400 11% 11% 8% Number of vehicles 200 5% <1% 0 Hybrid 6 Cylinder 4 Cylinder LPG Diesel LPG dual Electric fuel Operational Executive

15 Environmental performance

Air travel Air travel information is obtained from the whole-of-government travel services contract, and covers domestic and international flights.

Total government air travel distance decreased by 41% between 2009-10 and 2012-13.

Emissions related to air travel also decreased by 54% over the period. The calculation of emissions from air travel is complex and continually evolving. In addition to the reduction in total kilometres travelled, a change to the multiplier used for data 2011-12 onwards has contributed to the downward trend in emissions associated with air travel (see previous strategic audit report).9

Table 6: Air travel; total kilometres travelled and attributed emissions 2009-10 to 2012-13

% change 2009-10 to Air travel 2009-10 2010-11 2011-12 2012-13 2012-13

Total air travel kilometres 32,204,449 29,275,013 20,765,631 19,138,997 -41%

Air travel kilometres 128,818 117,100 83,063 76,556 -41% per work day

41% decrease in total air travel kilometres since 2009-10. 76,556 km travelled per working day in 2012-13.

Figure 8: Air travel; annual and per work day total kilometres travelled 2009-10 to 2012-13

35,000,000 130,000 120,000 30,000,000 110,000 100,000 25,000,000 90,000 80,000 20,000,000 70,000 60,000 15,000,000 50,000

10,000,000 40,000

Total air travel (kilometres) 30,000 5,000,000 20,000 Air travel per work day (kilometres) 10,000 - 0 2009-10 2010-11 2011-12 2012-13

Total air travel kilometres Air travel kilometres per work day

16 PAPER USE Data on the amount of paper purchased continues to be regarded as reliable, with stationery suppliers providing robust data to departments and agencies.

Total paper use declined by 19% between 2009-10 and 2012-13. However, the average paper used per full time equivalent employee has remained steady over the past few years at around 14 reams per annum.

As noted in the previous strategic audit, the increased use of electronic communication tools by government (online publishing and social media) is expected to reduce the amount of paper used (copy paper and paper for external publications). While not impact free, this decrease will produce a further decrease in the environmental impacts of paper use and a reduction in operational costs.

Table 7: Total paper use and use per full time equivalent employee 2009-10 to 2012-13

% change 2009-10 to Paper 2009-10 2010-11 2011-12 2012-13 2012-13

Total paper use (reams) 391,506 387,986 367,493 318,421 -19%

Paper use per FTE (reams) 14.3 14.1 14.2 13.6 -4%

Figure 9: Total paper use and use per full time equivalent employee 2009-10 to 2012-13

450,000 15 14 400,000 13 350,000 12 11 300,000 10 9 250,000 8 200,000 7 6 150,000 5 4 100,000 Total paper use (reams) 3

50,000 2 Paper use per FTE (reams) 1 0 0 2009-10 2010-11 2011-12 2012-13

Total paper use (reams) Paper use per FTE (reams)

159 million sheets of paper used in 2012-13. 27 sheets of paper used per full time equivalent employee per working day in 2012-13.

17 Environmental management system case studies

SECTION 2

18 Section 2 Environmental management system case studies

In the time I have been the Commissioner for Environmental Sustainability in Victoria my office has been reporting on the organisational environmental management of various agencies.

There are a great many agencies across Victoria which are not required to report pursuant to the Financial Reporting Direction 24C. They nevertheless do provide reports to the Victorian public about their efforts. They do this not only to showcase good practice and demonstrate economic and environmental co-benefits but also to provide examples of leadership within their organisational contexts and more broadly.

I have been pleased to celebrate some of these non-compulsory achievements.

In this strategic audit I have asked some agencies to again provide us with a report on their activities and to update the Victorian public on their progress in achieving better organisational environmental outcomes.

The organisations we report on here would regard themselves as leaders but they also see themselves as broadly representative of an ethic of care about environmental management systems. I commend their efforts.

I also thank their environmental management system coordinators and staff for their participation in this exercise.

In doing so it is important to acknowledge all the environmental management coordinators across the Victorian public service for the hard work they do in bringing the public sector into line with best practice as it is unfolding in the private sector (upon which we have also reported in the time I have been the Commissioner).

19 Environmental management system case studies

CARBON NEUTRALITY AT ZOOS VICTORIA

2011 Refreshing our memory – Zoos Victoria does: • proactive training and education – building capabilities and becoming adaptable • engage agents of change and give them authority to act • actively promote organisational commitment to a culture of environmental sustainability • align and integrate through ISO certification and a carbon neutrality target • source outside information and collaborate with external constituents

2013 Carbon Footprint and Carbon Neutral Certification The impacts of climate change, unprecedented population growth and dramatic loss of habitat have signalled the rapid rise of the environment as a priority in global affairs. Globally, organisations and individuals are changing their behaviour to reduce their impact on the environment.

Zoos Victoria has witnessed first-hand the devastating impacts of climate change.

Some of the species in the Zoos collection have been brought to edge of extinction as a result of human activity.

In 2012, Healesville Sanctuary initiated a captive-breeding program to prevent the extinction of the last lowland Leadbeater’s Possums at Yellingbo Nature Conservation Reserve. This population has declined by 62% during the past 10 years, and now only 40 individuals remain.

Leadbeater’s Possum was one of the species most severely impacted by the 2009 Black Saturday Bushfires. In the Central Highlands, 45% of the best montane habitats for the species was burnt. The survey results following the fire indicate the species is far more fire-sensitive than was previously recognised, with no possums persisting at sites burnt in 2009, regardless of fire severity. The Black Saturday fire wiped out a major population stronghold present on the Lake Mountain plateau.

20 For the Zoo to be able to protect these species and inspire its two million visitors to take action to save wildlife, it is imperative that its executive and staff do everything in their power to reduce their own environmental impact.

It is for this reason that the three Victorian zoos have embarked on becoming the world’s first certified carbon neutral zoos.

This goal was accomplished in March 2013 – on target.

Since 2008, Zoos Victoria has implemented an overarching Environmental Policy and Strategy to manage all environmental impacts associated with operating its three properties (Melbourne Zoo, Werribee Open Range Zoo and Healesville Sanctuary). It was this policy and a desire to reduce the overall environmental impact of the organisation that led to the Zoo to actively strive for carbon-neutrality. The policy and strategy, including the establishment of targets, resulted in a concerted effort across the three properties to avoid, reduce and offset carbon emissions.

Zoos Victoria’s emissions come from a variety of sources including:

• heating and cooling • lighting • waste • travel and transportation of animals and staff • water use • general equipment maintenance.

In 2012, it was calculated that the three zoos contributed 14,913.84 tonnes of greenhouse gas emissions for the financial year 2011-12. In 2013 the Zoo’s emissions reduced to 14,730.76 tonnes (1.23% reduction) of CO2-e.

This is the equivalent of over 5,000 cars on Australian roads.

An important part of Zoos Victoria’s carbon neutral achievement is to engage with the 2 million visitors the Zoo sees each year as well as other zoological institutions around the world to provide a working example of how they too can become more environmentally sustainable. Zoos Victoria also seeks to motivate visitors to consider how individual actions can make a difference.

Attaining the Australian Government’s National Carbon Offset standard (NCOS) In March 2013, Low Carbon Australia certified Zoos Victoria’s Melbourne Zoo, Werribee Open Range Zoo and Healesville Sanctuary as carbon neutral in compliance with the Australian Government’s National Carbon Offset Standard (NCOS).

This achievement is a world first for any zoo.

21 Environmental management system case studies

Beyond attainment of the carbon neutrality standard for Zoos Victoria the executive and staff hope to inspire others to take action to reduce their impact on the environment.

As part of Zoos Victoria’s commitment to becoming carbon neutral, the organisation was required to define its organisational boundary in accordance with NCOS specifications. The Zoos adopted an operational control consolidation approach to do this, including all corporate groups, on-site facilities and catering services.

Zoos’ emissions boundary definition included all scope 1 & 2 emissions and scope 3 emissions from business air travel, staff travel to and from work, waste to landfill, energy supply, paper use, reticulated water and the supply of animal foods. Scope 3 emissions were included on the basis of materiality and measurability. This is challenging work but necessary for the accreditation.10 Frequently Scope 3 emissions are discounted because of the degree of difficulty in tabulating them. Zoos Victoria assumed the responsibility of meeting that challenge and the accreditation affirms its commitment.

The diagram below identifies the Zoos’ key activities (applicable and measured at all sites) together with the breakdown of emission sources and the organisational boundary for emissions.

Figure 10: Zoos Victoria’s Carbon emissions

22 Table 8: Zoos Victoria’s emissions 2012-13

11 Scope Emission source t CO2-e12 1 Petrol for vehicles 100.20

1 Diesel for vehicles 233.83

1 B20 diesel for vehicles 4.63

1 LPG for vehicles 5.09

1 Refrigerant losses 78.88

1 Acetylene 0.01

1 Greases and lubricants for transport 15.20

1 Natural gas usage for buildings 669.49

1 LPG usage for buildings 18.36

2 Purchased electricity for buildings 8,359.98

3 Purchased electricity for buildings (fuel extraction, production & transport 1,078.40 and transmission & distribution losses)

3 Natural gas usage for buildings (extraction, production & transport) 50.87

3 LPG usage for buildings (extraction, production & transport) 1.53

3 Petrol for vehicles (extraction, production & transport) 7.94

3 Diesel for vehicles (extraction, production & transport) 17.75

3 B20 diesel for vehicles (extraction, production & transport) 0.34

3 LPG for vehicles (extraction, production & transport) 0.42

3 Municipal solid waste 1,084.39

3 Air travel 146.80

3 Purchased animal food 1,645.89

3 Purchased office paper 5.25

3 Employee travel to and from work 711.52

3 Reticulated water supply 502.96

3 Acetylene 0.001

3 Offset Flights (-9.00)

Total carbon footprint in tonnes CO2-e 14,730.76

23 Environmental management system case studies

Emission Reduction Zoos Victoria use an ISO 14001: 2004 Certified Environmental Management System (EMS) to manage and reduce carbon impacts. Through the EMS, environmental impacts were identified and improvement projects or programmes developed. Due to the nature of the work at the Zoo and the size of the carbon footprint, a number of measures were required to reduce emissions. These measures included: • waste management • energy efficiency • renewable energy • green procurement • staff campaigns • water efficiency. Adopting these measures helped Zoos Victoria reduce emissions by 2,292 tonnes each year.

Table 9: Measures adopted by Zoos Victoria included:

Emission reduction measures Emission quantity

(Tonnes CO2-e) Lighting efficiency 261

Heat pump hot water 168

VSD Pumps 133

Solar PV 9

Reflective Paints 3

HVAC upgrade 34

Computer switch off campaign 91

Butterfly House – double glazing 80

In-vessel composter 960

Greener fleet ‘car’ vehicle 12

Green Fuel 6

Water project 289

Other Waste Projects 236

Insulation 9

Total quantity of emissions reduced 2,292

This is the equivalent of removing almost 1,000 cars from the road. These measures also save Zoos Victoria $266,000 per year.13

24 Some details on the measures include:

Waste management At Zoos Victoria, the aim is to contribute zero waste to landfill by ensuring all recyclable materials are separated and reused, recycled or composted. The Zoo’s animals and visitors contribute to the daily waste. Some sites contribute considerably more than others – for instance keepers collect over 800 kilograms of Elephant dung every day.

At Melbourne Zoo, animal waste is collected and composted together with visitor and horticulture waste. The zoo has a third organics waste bin system near food outlets dedicated to collecting food scraps and compostable food packaging material. This material is composted on-site through an aerobic in-vessel composter called Hot Rot. This composter diverts approximately 800 tonnes of organics waste from landfill, potentially reducing the generation of up to 960 tonnes of CO2-e.

Melbourne Zoo’s composting system was a finalist in the 2012 Melbourne Awards for best practice in sustainability.

Energy efficiency Zoos Victoria has implemented a number of energy efficiency programs to reduce greenhouse gas emissions.

These include

• the introduction of energy efficient lighting retrofits using LEDs and T5 fluorescent lamps throughout the zoos, • energy efficient heating ventilation and air conditioning systems, • efficient infrared heating and, • IT improvements to further reduce carbon emissions.

Melbourne Zoo also upgraded the glass roof of the Butterfly House to insulated glazing units (double glazing) significantly reducing the amount of gas needed to keep the exhibit at a constant 28 degrees Celsius.

Renewable energy Hot water heat pumps are used extensively across the three Victorian zoos.

At Melbourne Zoo’s retail shop, a 4kW solar PV powers all the lighting in the shop.

At Healesville Sanctuary’s animal hospital, a 12 kW solar PV is installed to provide clean energy to the hospital.

A 70 kW solar PV system was foreshadowed for the Melbourne Zoo site. This has now been expanded to 107kW but with the upgrade came some connection issues. The project is now divided into four smaller projects under 30kW projects each but totalling 107 kW. This will come on line in early 2014. A 20kW system is also coming on line for Werribee Open Range Zoo. When all the Zoo’s systems are up and running the reduction in greenhouse gas emissions will be 260 tonnes CO2-e and the production of green power will be 203 MWh each year.

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Water management At Melbourne Zoo, rain water harvesting (covering 85% of the zoo grounds) is collected with water from animal cleaning/husbandry and pumped into the water treatment plant producing Class A recycled water.

Through 4.5 kilometres of reticulation pipes this recycled water is used for irrigation, flushing toilets, filling water bodies and animal wash downs. The plant currently recycles approximately 73ML of water per year.

Carbon and biodiversity offsets Zoos Victoria’s carbon footprint, after all emissions reduction measures, amounted to 14,730.76 tonnes

CO2-e in financial year 2012-13. As a leading conservation organisation, Zoos Victoria supports carbon offsets that have biodiversity and conservation outcomes. Four carbon/biodiversity offset projects in Tasmania, Borneo, Kenya and Peru (see below) have been selected and carefully chosen to align with the organisation’s conservation work. These offsets have achieved Verified Carbon Standard (VCS) which means that each project has been rigorously and independently audited to ensure they achieve real environmental benefits.

Tasmanian Native Forest Protection Project This is the first Australian project to be validated under the Verified Carbon Standard (VCS). It is located in the Central Highlands of Tasmania and protects privately owned land with native forest cover from logging.

Zoos Victoria purchased 5,972 tonnes of CO2-e offsets from this project. This purchase works to both improve forest management in the central Tasmanian highlands and secure Tasmanian Devil habitat.

This purchase offsets 40% of Zoos Victoria’s carbon footprint.

Borneo Rainforest Rehabilitation Project This project is situated in Sabah, Malaysia. It prevents 140,000 tonnes of greenhouse gas emissions each year and it also enables the restoration of once logged and harvested land.

Zoos Victoria purchase of 2,986 tonnes of CO2-e offsets supports the United Nations Reducing Emissions from Deforestation and Degradation (REDD) Rainforest Rehabilitation Program which operates across previously logged dipterocarp forest in eastern Sabah. The program generates measurable outcomes for orang-utans whilst the purchase offsets 20% of Zoos Victoria’s carbon footprint.

The Kasigau Corridor REDD Project – Phase II The Community Ranches This projects aims to protect 200,000 hectares of forest and wildlife in the area. It also protects the livelihood of the communities that live in the area by providing jobs, healthcare and education for the community. The protected area is home to a diverse population of mammal and birds with important populations of IUCN Red List species such as; Grevy’s Zebra, Cheetah, Lion and African Wild Dog.

A purchase of 2,986 tonnes of CO2-e offsets was made by Zoos Victoria representing 20% of Zoos Victoria’s carbon footprint.

26 Madre de Dio Amazon REDD project The project area is located less than 30 km from the new inter-oceanic road uniting Brazil with the Peruvian ports, in the Vilcabamba region. The project protects one of the most biodiverse areas in the world.

A purchase of 2,986 tonnes of CO2-e offsets was made by Zoos Victoria, supporting a REDD program which aims to conserve forest habitat in the Madre de Dios in the Peruvian Amazon. Species such as Jaguars, macaws and peccaries are protected by this program and contemporaneously this purchase offsets 20% of Zoos Victoria’s carbon footprint.

Summary To obtain carbon neutrality, Zoos Victoria underwent three years of intensive work to reduce its carbon footprint.

Zoos Victoria has achieved its goal through:

• resource efficiency programs • receiving third party certification from the National Carbon Offsetting Standard (NCOS) which is based on internationally accepted carbon accounting and neutrality standards.

In addition to the work already being conducted, Zoos Victoria is turning its attention to further reducing its carbon footprint by exploring:

• cogeneration • solar • further resource efficiencies.

The attainment of the certification milestone is part of Zoos Victoria’s commitment to inspire millions of visitors to:

• live more sustainably • protect wildlife and the environment for future generations.

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Awards Zoos Victoria’s Carbon Neutrality was a finalist in the UNAA World Environment Day Awards 2013 for Best Specific Environmental Initiative and received a Special Commendation for this achievement. Zoos Victoria’s Carbon Neutrality was also a finalist in the Banksia Awards 2013 in the Leading in Sustainability – Large Organisation category and the Melbourne Awards 2013 in the Contribution to Sustainability by a Corporation category.

The Zoo is also in the process of engaging other zoological institutions to encourage them to commit to reducing their overall environmental footprint to assist conservation efforts.

Zoos Victoria has been recognised by the Zoos and Aquarium Association (ZAA) and the World Association of Zoos and Aquarium (WAZA) for leading the way in its local sustainability and conservation strategy.

The CEO of Zoos Victoria, Jenny Gray, and all her remarkable team adhere to the following ethic:

“We are proud that we are the first zoo in the world to be certified carbon neutral and hope that this will inspire other zoos to take action. Throughout the world, zoos experience first-hand the devastating impacts of climate change and habitat destruction and should therefore be at the front line of the fight to reduce carbon emissions. We will continue to promote our sustainability message and keep looking at new ways to develop renewable energy options on site to provide green power and further energy efficiency savings for our zoos.”

28 MUSEUM VICTORIA CASE STUDY UPDATE

2011 Refreshing our memory – Museum Victoria does: • promote understanding of co-benefits and development of an organisational strategy • value organisational culture, cross-cutting committees and change agents • situate sustainability on rigorous foundations • implement and recognise • attain co-benefits from environmental action • value leadership and promote a healthy contagion of ideas and practice • build on success and share knowledge

Museum Victoria has been collecting, documenting and researching patterns of change in the natural and social environment for more than 150 years.

Contemporaneously with core business, the Museum’s exhibitions, programs and online initiatives provide a unique platform to increase awareness about the environment and sustainable practices. Beyond its core in office work Museum Victoria has conducted a number of environmental ‘blitzes’ across the state – on land and in the marine environment – in partnership with the community, Indigenous people on traditional country, scientists and Parks Victoria and Trust for Nature. Numerous instances of new species and ecological communities have been located by this work. In undertaking this work Museum Victoria exemplifies best practice in public exhibition work and this work has been highly commended in many settings.

Museum Victoria is also committed to implementing eco-sustainable practices within its venues, supported by a culture of continuous improvement.

Sustainable exhibition design initiative Museum Victoria’s sustainable exhibition design initiative commenced in 2008. Each new exhibition delivered since then has been used to trial new ideas and embed the lessons of previous projects.

The current long-term exhibition development project, opened at Scienceworks in December 2013, is Think Ahead. http://museumvictoria.com.au/scienceworks/whatson/current-exhibitions/think-ahead/ about-the-exhibition/

This project is implementing ‘life cycle thinking’ principles through the reuse of existing materials, the use of low-impact materials and the minimisation of waste.14

Wherever possible the exhibition design reuses existing showcases, rather than commissioning the fabrication of new ones. Of the 32 showcases required for Think Ahead, all but one will be constructed using existing showcases from a previous exhibition. This presents a significant environmental and cost saving – financial and environmental co-benefits.15

Where new materials are being incorporated, the Museum is working to minimise impacts.

The use of steel is being avoided in the exhibition, except where structurally necessary. Where MDF cannot be substituted, E0 Australian-made MDF is being specified in the construction of the built form. E0 means there is no harmful off-gassing associated with the material. Glass barriers are specified rather than acrylic, as glass is recyclable and more durable.

As the project proceeded into the development and documentation phases, design templates and layouts incorporated efficient production methods that minimised error and allowed material lengths to be specified in a way that reduced waste and off-cuts.

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Exhibition staff continue to invest time in the research and testing of new methods of production, such as sign-writing and the development of low-energy multimedia products.

House Secrets, the exhibition being de-installed to make way for Think Ahead, has been recycled. Various interactives from this exhibition were dismantled and reused as parts by the Scienceworks workshop. The remaining sections of the exhibition have been demolished in a way that separates and recycles materials wherever possible.

Other initiatives Greener Government Buildings Program – environmental performance contracting Museum Victoria has commenced working with the Greener Government Buildings Program to establish an Energy Performance Contract (EPC) for its property portfolio.

We explored the benefits of deploying contracts to change outcomes. The energy and water conservation scope of this program in the 2012 strategic audit cited benefits as:

‘Over the longer term, the Greener Government Buildings Program is projected to reduce government’s greenhouse gas emissions by at least 20% by 2020 and deliver over one billion dollars in accumulated cost savings.’ (p28)16

The Greener Government Buildings Program17 will be used to procure and install energy-efficient plant and equipment, enabling the Museum to deliver on its environmental targets. This Energy Performance Contract project was the first step in the Greening the Arts Portfolio Program initiated by Arts Victoria

Air temperature possibilities A review of environmental parameters in collection stores commenced in 2011–12.

The pilot program tested the effects of putting the HVAC system, which controls air temperature and relative humidity, into stand-by mode for prescribed periods of time in specific parts of Melbourne Museum’s collection stores.

The project explores possibilities which arise from the tension between the imperative to meet environmental parameters for the preservation of collections and the need to ensure the minimum investment of energy and cost in their preservation.

Fleet electrification Two electric vehicle charging stations were installed in the Melbourne Museum car park as part of the Victorian Electric Vehicle Trial18 in September 2011. The aim of the trial was to better understand the processes, timelines and barriers for the transition to electric vehicle technologies, with a view to positioning Victoria as an EV-friendly location.19

30 Museum Victoria is an active participant in the program and has received an electric vehicle on loan every year since commencement.

Environmental demonstration exhibitions Museum Victoria continues to present exhibitions and programs that engage the public in issues related to the environment and sustainability.

Recent programs include:

• Bugs for Brunch, presented as part of the 2012 Melbourne Food and Wine Festival, encouraged participants to challenge their preconceptions and think about insects as a high-protein and low-fat food source that leaves a small environmental footprint.

• Our Water20, exhibited at Scienceworks in early 2012, enabled visitors to explore water from urban, agricultural, industrial and environmental perspectives and delve into the different ways of using and preserving this vital resource.21

• The Australian premiere of Coral: Rekindling Venus22 took place at the Melbourne Planetarium on 5 June 2012, World Environment Day. This ground-breaking full-dome film captures underwater life and uncovers a complex community living in the oceans most threatened by climate change.23

Partnerships for public information and celebration of achievements Greening Australia24 has partnered with Melbourne Museum each year since 2010 to present the Toolbox for Environmental Change..

This is one of the largest and best-attended conferences for Victorian teachers and it aims to identify ways in which schools and their communities can act together.

The conference theme for 2013 was ‘Sustainable Learning Partnerships’.

As Commissioner I was pleased to provide the keynote to this conference. I regard recognition ceremonies such as this as pivotal to changing attitudes and promotion of best environmental practice.

3 Sustainable Learning Partnerships, 2013

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VICTORIAN ELECTORAL COMMISSION MOVES INTO A NEW SUSTAINABLE MODE

2011 Refreshing our memory – The Victorian Electoral Commission (VEC) does: • empower staff to make change • understand and promote co-benefits and flow-on effects from better environmental practices • sees its corporate plan as a driver of environmental sustainability in organisational culture • looks to new opportunities and collaboration with stakeholders

The VEC is an independent and impartial statutory authority established under Victoria’s Electoral Act 2002. Its main function is to conduct Victorian State elections, local council elections, certain statutory elections, and commercial and community elections.

The VEC has upgraded to more sustainable premises and reduced its energy use and its waste In May 2011, VEC moved to a 5 star NABERS25 building at 530 Collins St, near its previous headquarters in the Melbourne CBD. This location was highly desirable for the VEC for many reasons including its NABERS rating.

VEC has since discovered its retail power bills have dropped nearly 80% offset by the reduced cost of building ‘core’ power which is created in the co-generation equipment.

In addition, VEC enjoys a third more floor space than its previous tenancy with the added bonus of being on one level instead of being split across two levels, as in the past. This provides greater capacity for organisational coordination and streamlines environmental management efforts.

This new building also collects and processes:

• organic waste • comingled desk waste • a broad range of recyclables.

VEC was able to take advantage of this and reduce its landfill rubbish volume to under a tonne for a whole year for nearly 80 permanent staff. VEC has a new goal to reduce this figure by 50%, with its own waste audits indicating this is a reasonable goal.

New and additional collaborative opportunities for environmental best practice For some time the VEC has been effecting environmentally sustainable changes in its practices and these have both reflected operations in, and spread into, other jurisdictions.

As the Commissioner for Environmental Sustainability I have been able to refer other organisations to the VEC, to encourage them to gain insights from the work being done at the VEC. The team at the VEC have been generous with their time and ideas and I commend them for this collaboration, such a pivotal part of the process to getting better environmental outcomes.

32 Examples of continuing and proposed environmentally sustainable strategies which deliver co-benefits of efficiency and cost savings include the following:

• the use of new unbleached cardboard furniture and equipment for temporary election offices – as many as 23,000 units of cardboard furniture are already reused for up to eight years, after which they are recycled

• electronic device sharing arrangements with other states and territories in the conduct of elections – this includes up to 1000 laptops and other devices

• careful consideration and planning of a more environmentally sustainable use of transportation for election materials across the state to reduce 12 million logistic kg kms

• paper reduction strategies which include

- reducing the amount of paper sent to election offices for use during elections, - moving instruction manuals to an on-line format instead of printed copies and - providing electronic copies of reports where possible.

Empowering staff to make change The VEC values and promotes knowledge, learning and collaboration; it actively works to empower and engage staff and the community in decisions of importance to all of us.

The ResourceSmart group uses a GreenFlash logo to promote ideas to the organisation via email, as well as regularly changed ‘tips & tricks’ signage around the organisation and short humorous presentations at staff meetings.

Staff are also encouraged to record improvements centrally so that these are readily available and visible to all.

Table 10: Some examples include:

Local Making an accompanying CD to Government Saves around 150 pages of carry 9 booklets, list of candidates Activity printing for each copy. and copy of whole report. Report

Halved print run, enable single Annual Electronic book version. page printing and reduce need to Report z print when accessing online.

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1. Encouraging participants to view forms and other documents on-screen during training, rather than printing Election them, whenever practicable. Reduces paper per Senior Election official Official (SEO) per seminar. training 2. Re-use plastic name tag holders MANY times, rather than people taking them home after their seminar.

Very little use of paper, both Management Electronic send to Management Team the Minutes and Agenda can be Minutes for Minutes and Agenda. screened during the Meetings.

Saves using ATO forms (with 5 Payroll Electronic payslips and leave forms. pages per form) for 16,000 officials. Total of 80,000 sheets of paper.

Recognition by the leadership team The new Victorian Electoral Commissioner, Warwick Gately AM, was pleased to discover the VEC’s many sustainable initiatives when he commenced at the VEC on 29 April 2013.

The VEC ResourceSmart Committee formally reports to management and has recently gained an annual funding commitment for its various initiatives.

Comment from the Commissioner:

“Many VEC staff see their work as a social enterprise and so it is a natural extension that staff are also concerned about the environment. The ResourceSmart Committee is a recognised and supported forum within the Commission structure and the Committee has an ongoing member of senior management to facilitate change in the organisation. Elections are a very large logistic enterprise but they are also done efficiently and this means continual review of how resources are consumed and disposed of for economic reasons and for reduced environmental footprint. Paper products and transport are the main resources VEC consumes and developing new kinds of automation to reduce consumption remains under active consideration. In recognising the Commission’s work in sustainability, ResourceSmart has just received its gold certificate in waste management.

34 While proud of this achievement there is always more than can be done and Commission staff still look to ResourceSmart to deliver new ideas and campaigns in the sustainable use of resources.”

The corporate plan The VEC has extended its organisational, management and staff commitment to environmental sustainability by including explicit environmental sustainability objectives in its corporate plan 2013-2018, to make the plan the driver of these initiatives.

In addition, the ResourceSmart Committee has committed to an organisation-wide environmental management plan since 2010 and has met many of the goals set for the previous period.

Craig Burton, of the ResourceSmart Committee, explained that the corporate plan is driving many of the environmentally sustainable core and embedded activities at the VEC.

VEC has recently re-written its five-year strategic plan as well as its ‘environmental management plan’. All three plans align strongly with increased environmental sustainability.

The environmental management plan is broad and deep and includes no less than 27 activities or goals the VEC can implement to improve its overall sustainability. The VEC reports on these activities and their outcomes to the Metropolitan Waste Management Group resulting in the gold level award of Waste Wise status to the organisation.

New opportunities Some of the new initiatives underway at the VEC include:

• An electronic personnel management system is being developed to remove the need for paper documents in tracking and authorising all forms of staff leave and timesheets and allowing for electronic distribution of payslips.

• A trial of an e-filing system that will also remove the need to print and physically file all documents in important projects. Instead, emails and many other reports will be kept centrally and will become electronically searchable.

• Electronic roll mark-off has now been deployed and was used at Election Day voting centres at the 2012 local council attendance elections. The electronic roll mark-off has also been used at the last four State District by-elections. If this can be fully implemented at a State election, the production of over 9,500 printed voters rolls (approximately 20,000 reams of paper) used across the 1,800 voting centres will no longer be required. • The VEC regularly makes recommendations to government about other innovations that require legislative change, such as the expansion of electronic voting for specific groups of voters, which paves the way for largely paperless voting in the future, including electronic counting and reporting.

As an organisation with a focus on openness to novel and innovative ideas, the VEC continues to seek ways to achieve environmental sustainability and drive efficiency.

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PARKS VICTORIA SHINING THE LIGHT ON THE BUSINESS CASE FOR ENVIRONMENTAL SUSTAINABILITY

2011 Refreshing our memory – Parks Victoria does: • establish a sustainability team – encouraging staff driven initiatives, harnessing staff enthusiasm and knowledge • operates an environmental management system – collecting baseline information and establishing informal roles • recognises the importance of organisational culture and implemented a change in climate, structural change and ResourceSmart • emerge with a new focus and is committed to sustaining the effort • takes the time to communicate the messages

In line with our own interest in determining the co-benefits associated with environmental and economic initiatives26 Parks Victoria has asked itself: can the need for financial efficiencies act as an effective driver for environmental sustainability improvements?

Parks Victoria’s experience with the Greener Government Buildings program is instructive.

Participation in the Greener Government Buildings program requires a ‘business-like’ approach to environmental sustainability, as the program is governed by normal commercial metrics – this being return on investment.27

In Parks Victoria’s case, and in accordance with funding parameters, the entire Greener Government Buildings program must pay for itself within eight years. To achieve this, savings in budgets – through the reduction of energy costs – are reallocated to paying off the principal commitment. Once this is achieved these funds contribute to overall improvement of cost effectiveness for the organisation.

Parks Victoria commenced its Greener Government Buildings work with the development of a Strategic Implementation Plan.

This process required an extensive audit of Parks Victoria’s energy consumption practices at more than 75 facilities across the State. This information was then used to focus in on sites to be included in Parks Victoria’s Greener Government Buildings program.

It is clear that when an organisation understands its energy and water use profile more intimately, it is able to identify and act on opportunities which reduce consumption, and improve operating efficiency and financial sustainability.

Lighthouse refurbishment and redesign To highlight just one of these opportunities, Parks Victoria’s energy audit identified the numerous hidden costs associated with the operation of remote lighthouse stations.

As a consequence there are now plans to install renewable energy systems (solar panels with existing generator back up) at both Wilsons Promontory and Gabo Island Lighthouses as part of the Greener Government Buildings program.

As a result, Parks Victoria will vastly reduce diesel consumption and the need to transport fuel to these remote sites.

36 Diesel financial cost savings at Gabo/Wilsons Promontory lighthouses have been assessed as:

Gabo Island28 Currently the diesel generators at Gabo island consume approximately 6,000 litres p.a. at a cost of approximately $1.50 per litre = $9,000

Boat fuel cost for fuel transport is approximately $800 p.a.

Reduction in generator maintenance and servicing costs approximately $ 2,500 p.a.

Reduction in generator depreciation costs approximately $3,000 p.a.

Total annualised savings (not including Parks Victoria labour costs) following solar panel installation estimated to be approximately $15,300.

Wilsons Promontory Light House Annual financial savings as a consequence of solar panel installation at the Wilsons Promontory lighthouse is conservatively estimated to $6,000 p.a.

This includes direct fuel cost plus an allowance for reduced aircraft hire and generator maintenance. If depreciation and labour were included the figure would be much higher but these savings could not be recovered for Greener Government Buildings program purposes.

In total, installation of solar panels at both Gabo Island and Wilson Promontory lighthouses are expected to save Parks Victoria approximately $24,300 per year.

This not only saves money in fuel – which is the basis of the relevant return on investment calculations – but it will also significantly reduce the need for expensive aircraft and boat based transport and maintenance inputs, and it will free up staff to focus on higher priority park management issues. These co-benefits all come from a project which will reduce costs, fossil fuel consumption and greenhouse gas emissions.

Furthermore, the extensive planning and consultation which has been undertaken as part of the Greener Government Buildings program has acted as a valuable engagement and profiling tool which has led to renewed interest in environmental sustainability generally across the agency and the identification of new ideas to enhance environmental sustainability across the organisation.

The proposed implementation of Parks Victoria’s Greener Government Buildings program in 2013-14 will be used to showcase energy and water efficiency technologies to park visitors and staff and in doing so help encourage the change required to tackle environmental sustainability issues on a broader scale.

Being able to realise projects which deliver good environmental outcomes and cost savings has strengthened interest in the business case behind sustainability programs (in this case energy and water efficiency projects) and the role such programs can play in balancing Parks Victoria’s triple bottom line (economic, social and environmental) objectives.

Finally, the Greener Government Buildings program has been a vast learning experience which has enhanced Parks Victoria’s intellectual property in the area of energy and water efficiency with all the associated risks and benefits. This knowledge combined with a detailed understanding the Greener Government Buildings related process is in itself a valuable asset both internally and externally and this will be capitalised upon in the future.

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PUBLIC RECORD OFFICE VICTORIA ENVIRONMENT STRATEGY UPDATE

2011 Refreshing our memory – Public Record Office Victoria (PROV) produced better outcomes by: • two simple, effective projects that spawned a strategy • appreciating the environmental management strategy benefits • ensuring the immediacy of environmental and efficiency benefits where possible • promoting organisational commitment and embedding KPIs • demonstrating commitment at the highest organisational level • showing that sustainability is an ongoing process

Achievements of the previous Strategy 2011-12 to 2012-13 PROV launched a new two-year environment strategy in 2011. This strategy built on the foundations of the program commenced in 2008. It aimed to ensure that the previous successes continued to be embedded in the organisational culture (e.g. executive monitoring of and reporting on the action plan), and that new initiatives would be identified and progressed.

During the two-year implementation period of the 2011-12 to 2012-13 environment strategy PROV achieved the following:

3 Improved facility management capability PROV implemented a new building management system. Once the new system was fully operational it became possible to fine tune certain operational parameters of its facility which resulted in an immediate saving of 10% in gas usage.

3 Continued commitment to offset carbon emissions PROV continues to purchase a minimum of 15% green power29 in order to further offset its carbon footprint.

38 3 Further recycling of rooftop water This initiative commenced in 2009 with the installation of four 25,000 litre water tanks to capture rainwater from the very large roof of the Victorian Archives Centre (VAC). This water is used in the VAC and by Melbourne City Council (who provided a grant for their installation) to water trees in the inner city area. A fifth tank has since been added and was commissioned in early 2012. The water tanks at the Victorian Archives Centre.

3 Commitment to supporting alternative forms of commute PROV has constructed a secure and weather proof bicycle shed to encourage staff to use cycling as an environmentally friendly means of transport to and from the premises. The new secure bicycle shed at the Victorian Archives Centre.

3 Creation of a self-sustaining garden A self-sustaining garden has been constructed using only native plants. As it becomes more established the amount of water being used is being reduced. Eventually all watering will cease. Planting the new sustainable garden at the Victorian Archives Centre.

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Continued focus on staff awareness As part of its commitment to influence staff behaviour, PROV established the STEPS committee in its previous plan. The aim of this committee is provide practical examples to colleagues and tenants on how to take individual steps to reduce their carbon footprint.

The STEPS committee continued its work throughout the two-year period to promote awareness of sustainability within the organisation via newsletters, breakfasts and specific campaigns. These latter initiatives targeted such topics as the energy used by computers and monitors, and the importance of turning off lights in rooms when not attended.

Reflecting on PROV achievements – the feedback loop While achieving a great deal to date, PROV has also experienced some reversal of previous achievements, in particular with energy and water consumption.

Energy A trial was undertaken in 2008 that utilised the thermal mass of the Victorian Archives Centre repository environment.

The results of that trial led to the switching off of several pieces of plant that controlled the environment in the repository areas, on the basis of the data that was gathered at the time.

Subsequent to this exercise, with the introduction of a new Building Management System it was found that key environmental readings were not within range. Interval readings are taken every 15 minutes and are of particular interest to conservators as they show micro variances that can cause problems with collection items. These readings showed unacceptable variations in environmental conditions.

Based on this information the repository was returned to full plant operation during the 2011-2012 financial year and it continues to be in full operation. This has had a considerable impact on energy costs and subsequent greenhouse gas emissions.

Water The statistics for the 2012-2013 year have been considerably skewed by a major water leak that could not be traced for some time. The estimated amount of water lost during this incident was over 1 million litres.

This has now been identified and rectified, and the latest water consumption figures indicate that usage has returned to its previous low level.

The new strategy includes an investigation of options to improve water leak detection and prevention.

A new strategy In March 2013 PROV achieved its goal of a 4½ Star Sustainability Rating with Sustainability Victoria. This is a significant milestone for PROV in its 5-year journey since the introduction of their first tentative steps in sustainable practices in 2008.

40 A danger with the achievement of a ‘headline’ goal such as a 4½ Star Sustainability Rating is that it can lead to an assumption that the destination has been reached, and the journey has ended. For an environment strategy, the opposite is the case: such a goal brings with it the threat of ‘sustainability fatigue’ setting in and with it a gradual decline in adherence to the principles of sustainability.

The new two-year strategy therefore looks at both the large and small areas of opportunity at PROV and brings with it a new focus on opportunities to leverage new technologies and re-energise staff awareness to ensure that we can avoid that decline.

In particular, PROV will:

• Undertake new projects to introduce more energy- and maintenance-efficient plant at PROV (for example adopt variable speed drives). • Undertake investigations into new and emerging technologies that may become economically viable to implement in the future (for example solar panels). • Continue to advocate to influence colleagues’ behaviour in terms of day to day activities (water, paper, waste, commute and so on). • Continue to monitor and report on these activities both as part of corporate responsibilities and also as an exemplar to other organisations (for example sustainability case studies).

From an organisationally holistic perspective, PROV is in a transition from ‘establish’ to ‘maintain’ with regard to sustainability at PROV.

They have achieved great results to date and acknowledge they must continue to ensure that this behaviour is embedded in the organisational culture at all levels in order to continue to succeed.

Targets for 2013-14 to 2014-15 1. Introduce new, more energy- and maintenance-efficient plant at the Victorian Archives Centre (VAC). 2. Investigate opportunities to introduce new and emerging sustainability technology at VAC where financially viable. 3. Maintain a philosophy of reducing environmental impacts in the organisation’s strategic planning and management. 4. Continue to raise awareness of sustainability issues among staff, volunteers and tenants and maintain a culture of reducing our ecological footprint wherever possible. 5. Continue to make stakeholder and clients aware of our environmental sustainability commitments. 6. Maintain at least a 4½ star rating within Sustainability Victoria’s Sustainability Assessment Framework. 7. Continue to integrate environmental specifications into procurement and maintain a proportion of ‘green energy’ purchasing. 8. Considering environmental implications when developing any policies and procedures or implementing new activities. 9. Considering waste avoidance and environmental sustainability when making purchasing decisions for capital items and consumables. 10. Continue to support sustainable records management across the Victorian government. 11. Maintain processes to measure, monitor and report on our environmental impacts.

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The following target initiatives are ones that PROV expect will deliver significant benefits to its sustainability targets in the next two years.

Target Initiative Variable Speed Drives

Early in 2013 PROV began the on-site testing of variable speed drives to control the air handling units in our air conditioning system. Initial tests have shown that these devices can reduce electricity consumption whilst maintaining the correct environmental conditions in our repository spaces.

The projected reduction in energy is approximately 10-15% of our current usage (or 4.4 MWh) and the financial payback of the installation costs from energy savings is less than 2 years.

Target Initiative Water conservation

PROV plan to investigate options to install a pulse water meter at VAC.

Leak detection is currently very difficult and a pulse meter will detect a leak within 24 hours, hence avoiding a repeat of the major water loss incident we experienced in 2012.

Target Initiative Chiller Units

In early 2013 PROV commenced a chiller replacement program.

As the current chillers are at the end of their useful life we have researched suitable replacements. We decided upon a chiller that uses up to 40% less electricity (the estimated energy savings are 300mWh per year) and that will cost much less to maintain over its life span.

The new chiller is a ‘PowerPax’ which uses oil-free magnetic bearings and variable speed drives to deliver a superior performance when compared with conventional oil-lubricated centrifugal compressors.

42 STATE LIBRARY OF VICTORIA SUSTAINABILITY REPORT UPDATE

2011 Refreshing our memory – State Library of Victoria does: • generate environmental sustainability outcomes in a heritage building complex • engaging staff in determining environmental improvement priorities • implementing new waste management practices • installing automated air-conditioning systems • installing motion sensor lighting • reducing lighting levels during closing hours • introducing a carbon road mapping process

Immediately after 2010-11 the State Library of Victoria was able to report a substantial saving in electricity usage at the CBD site.

Using the 2005-06 year as a baseline, by 2010-11 annual electricity consumption had dropped by 23% or 1.9M kWhs per annum and annual gas consumption had dropped by 30% or 5,350 GJ per annum.

Over the past two years the Library has seen a slight increase in usage as the initial savings have plateaued and the number of public events held at the Library has increased. The Library is now looking for opportunities to reduce this usage from the current level.

Relative to the 2005-06 baseline year, 2012-13 annual electricity consumption has dropped by 19% and gas usage by 25% per annum.

In essence the gains made in recent years through infrastructure changes prior to 2010-11 still contribute to annual savings but usage has increased marginally since 2010-11.

The Library carries out basic payback period analysis when determining sustainability initiatives and has proceeded with projects that represent good value for money. These have included installation of sensor light controls to approximately 60% of back of house spaces and timers to many lights in public spaces. Whenever rooms or work spaces are upgraded, the Library incorporates environmental improvements in more efficient lighting and replacement of other aging infrastructure.

Furniture and equipment procurement takes into account environmental credentials and life cycle analysis provided by suppliers. With regard to disposal of redundant furniture and equipment, metal items are recycled separately, lamps are taken by a specialist recycler, contractors must break down fittings and dispose of each element in accordance with environmental best practice and furniture is recycled where possible.

These practices are built into all services contracts. For example, the heritage chairs in the Dome Reading Room celebrate their 100th birthday in 2013 and the retention of this furniture, originally constructed of Queensland silky oak in 1913, represents, in part, the Library’s commitment to sound environmental performance.

43 Environmental management system case studies

The State Library is investigating the Greener Government Buildings program for use of Energy Performance Contracts. Over coming years, strategic planning for replacement of aging building infrastructure, including chillers, boilers and data centre cooling units will include thorough consideration of the long term environmental gains to be made through selection of the right infrastructure for the site. The Library’s heritage buildings have good thermal mass and this assists the Heating, Ventilation and Air Conditioning plant (HVAC) to operate efficiently in Melbourne’s climate.

Introduction of the ‘dead band strategy’, which seeks to widen the temperature and humidity limits within a range of 19-24 degrees without affecting the preservation of the State Collection or the overall comfort levels of staff and public, has been successful. In this range the plant neither cools nor heats; there has been no indication of impact on the collection and staff manage their personal wardrobe to achieve comfort.

The State Library of Victoria has continued to engage employees across the organisation with initiatives around waste management and energy consumption. Examples include recycling old mobile phones and introducing separate recycling and waste bins across the staff areas.

Plans for the future include the completion of new LED facade lighting, more efficient chillers and boilers and improving the thermal performance of spaces with 24/7 climate control.

In summary, the Library has made significant environmental gains through careful management, staff engagement and within the constraints of a tight budget.

Figure 11: Annual gas consumption for 328 Swanston St, Melbourne

20,000 18,000 16,000 14,000 12,000

kj 10,000 8,000 6,000 4,000 2,000 0

Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Trend

Note: the 2012-13 gas usage includes estimated June 2013 data.

44 Figure 12: Annual electricity consumption for 328 Swanston St, Melbourne

9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 kwh 3,000,000 2,000,000 1,000,000 0

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Trend

45 Sustainability in major projects

SECTION 3

46 Section 3 Sustainability in major projects

By 2050 another 3 million people will live in Victoria.

Melbourne’s population will reach 6.5 million. Infrastructure will be required to meet the needs of this population.

From the point of view of sustainability, biodiversity and ecosystem services like clean air, fresh water, and recreational opportunities will be adversely impacted.

Those who make the decisions about these matters today will be passing on the legacy of those decisions to many generations.

Reflecting changing times the Department of Treasury and Finance Business Case Template already provides for cost benefit analysis to be captured in different ways by the reporting of sustainability benefits as primary benefits to asset owners or users or separately as economic, environmental or social benefits.

Scholarship from CSIRO, explored at a recent symposium30 and guided by such eminent professors as Dr–Ing Greg Foliente, Michael Batty (University College London), John Curtin Distinguished Professor of Sustainability Peter Newman and AURIN Director Bob Stimson, makes it clear that the triple bottom line of economics, society and environment must increasingly include a fourth element – the built environment.

As we grasp the idea of the ‘urban fabric’ we will need to do so through a sustainability lens.

47 Sustainability in major projects

Major projects will provide possibilities for delivering sustainable outcomes across the generations, having regard to the ‘quadruple bottom line’. In previous audits we have posited the co-benefits which can be harnessed if we are thoughtful and actively plan for multiple benefits. We have shown through numerous case studies that this work is being done and that business and government have roles to play.

In this section of this audit we consider how science and judgement, blended, produce better outcomes.

We also report on sustainable best practice guidelines which would underpin the delivery of genuinely sustainable major projects: how to make good projects ‘great’ by finding and building on the ‘sweet spot’ in the blend of economic, social and environmental considerations in respect of the built environment. This ‘sweet spot’ is one where efficiency is elevated and waste reduced – these issues are not alien to sustainability requirements, they are foundation stones. These guidelines support the Department of Treasury and Finance’s Investment Lifecycle Guidance.i

VicRoads has over time demonstrated the sort of on the ground commitment to these sort of efficiency, no-waste, sustainability principles in the work it has done on building some of our major roads. Potable water is not wasted, infrastructure like tanks and other works are constructed with multiple, continued usage in mind.31 An objective of VicRoads Sustainability and Climate Change Strategy 2010-2015 is that by 2015, 80% (by volume) of all water used during road construction, and 40% of all water used for regional projects and maintenance, is non-potable.32

VicRoads has released a sustainability rating tool known as INVEST. The tool is used to asses the sustainability aspects of major road projects. It includes a range of sustainability indicators covering energy and water management, protecting and enhancing biodiversity and cultural aspects faced in road construction.33

Take-up of these guidelines at the very early stages of project development is pivotal for success as it is at this stage of any project that best practice process and outcomes are embedded and rendered effective.

We thank Major Projects Victoria for the contribution made to these guidelines and for the opportunity to contribute to its development.

Decision makers, project managers, and process technicians at all levels of any project should keep the following consideration of benefits persistently in the foreground:

• the attainment of benefits drive the project • have the benefits been identified? • are the benefits clear? • can the benefits be accounted for? • where is the evidence? And is the evidence explained clearly and cogently? • what is the cost?

If these issues and elements are expressed cogently and thoroughly explained throughout the project planning phase, the investment case will be made out more strongly.

i See the Department of Treasury and Finance website www.dtf.vic.gov.au/Investment-Planning-and-Evaluation

48 Sustainability Investment Guidelines

Technical guide: Supporting the Department of Treasury and Finance’s Investment Lifecycle Guidance.

49 Sustainability Investment Guidelines

Overview Statement of purpose

This sustainability technical guide should be used to help guide projects involving the built environment where there is opportunity for embedding sustainability outcomes as part of asset development.

This is not a strategic planning guide.

It is assumed that the decision to develop the asset is settled as an outcome of a separate strategic assessment.

This proactive guide is concerned with ensuring that ‘sustainability’, as a component of asset development and renewal, is delivered with high regard to achieving stated benefits that are cost-effective.

PART A PART B The Sustainability Investment Process Sustainability Investment: The Fact Sheets 1 ] CONCEPTUALISE Sustainability opportunities 1 ] Energy reduction 2 ] PROVE Sustainability and the business case 2 ] Water efficiency 3 ] PROCURE 3 ] Climatic resilience 4 ] IMPLEMENT Delivery 4 ] Materials resource efficiency 5 ] REALISE Monitor and review 5 ] Transport and travel 6 ] Health, well-being and productivity 7 ] Community, amenity and built form 8 ] Emissions and environment protection 9 ] Ecosystem services

50 PART A The Sustainability Investment Process

1 ] CONCEPTUALISE Sustainability opportunities

It’s sensible to begin thinking about sustainability at the ‘conceptualise’ stage of the Investment Lifecycle process where the project need is being established. A consideration of how sustainability principles could be applied to minimise costs and maximise environmental and other benefits should help to shape a project.

Ask beyond the core project objectives, what wider set of benefits might be realised and how valuable might these be to the project or to the wider community?

The ‘opportunities’ stage is about agreeing which areas of sustainability are most important for a project. This stage will assist in determinig where to focus resources (both time and money). It’s not good enough to say a project should be ‘sustainable’; define what that means. Agreeing areas of focus early starts an important conversation. It locks sustainability and the pursuit of realisable outcomes into the fabric of the project plan.

What do planners and managers need to do? At the end of this stage planners should be able to articulate where the project should go beyond the ‘do minimum’ to deliver enhanced outcomes.

This is not a prescriptive process. Where agencies have their own policy objectives or sustainability frameworks that is the place to start. Remember that at this stage it’s important to think beyond short term objectives: sustainability is long term.

Nine sustainability investment streams provide guidance. Each one is a prompt for the question – “what benefits could the project (or the wider community) gain if we focused our efforts in this area?”

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THE NINE INVESTMENT STREAMS

SUSTAINABILITY EXAMPLE OPPORTUNITY INVESTMENT STREAM

1 ] Energy reduction Minimise use of energy (and carbon emissions) from the asset over its lifecycle

2 ] Water efficiency Minimise water consumption and maximise water recovery

3 ] Climatic resilience Ensure long term security and viability of the asset

4 ] Materials resource Maximise material resource efficiency in the design, construction and efficiency operational phase of the asset

5 ] Transport and travel Reduce the environmental impact and intensity of transport connected to use of the asset

6 ] Health, well-being and Provide a high quality indoor environment which promotes health, productivity productivity and well-being

7 ] Community, amenity Deliver an asset which has a positive effect on the local and wider and built form community

8 ] Emissions and To protect and enhance the environment, minimise emissions to air, environment protection land and water, and better manage the human-environment relationship

9 ] Ecosystem services Maximise ecological benefit and provision of ecosystem services from the asset over its life

These nine investment streams have been carefully developed to represent separate and distinct investment opportunities. They are designed to make sense when aligned with key industry standard rating tools, and assessment against the main environmental regulations.

52 Establishing process – sustainability investment streams There is no specific requirement for how to determine project sustainability opportunities, but it makes sense to include those people who will be involved in the long term operation and running of that asset. Consultation is essential and a workshop to explore the options provide a starting point.

At this stage a technical conversation about how to deliver the objective, should be preceded by a statement of ambition. For each of the nine sustainability investment streams useful questions might include:

• What are the key benefits? • How important is that sustainability investment stream important to the project’s end users? • Does the sustainability investment stream contribute to a stated government policy or objective? • Is the sustainable action likely to improve the cost effectiveness of the broader investment? • Who realises the benefits? The asset owner, users, or the wider community? • Are the benefits financial, quantifiable or qualitative? • How hard should investment in this area be pushed to realise these benefits? Detailed answers are not necessary at this stage. The aim is rather to establish opportunities and priorities for investment. A moderate investment against a wider range of sustainability elements might be the focus or a deeper investment against one or a few. The need and focus for sustainability investment will be different for each project. Accordingly, your sustainability investment streams should be pursued selectively as the need and focus will differ from project to project.

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OUTPUTS FROM THIS STAGE At the end of this stage, two things should be clear: 1. Where the project is going to focus its efforts on sustainability, expressed as a project sustainability opportunity statement. 2. The types of benefits sought.

eg. A Worked Example

Developing the sustainability opportunity

This fictional project illustrates a couple of sustainability opportunities that might be set for a school. This example is developed further in this guideline to show how the opportunity evolves into performance objectives and feeds into the business case.

Sustainability opportunity

The development of the school will focus on a: 1. High level of investment on indoor environment quality to: a. improve pupil learning outcomes b. provide a high quality teaching space to allow the school to attract and retain high quality teaching staff 2. Moderate level of investment on energy efficiency to achieve: a. low operational costs b. reduced carbon emissions c. promote education and professional development in environmental efficiency

54 2 ] PROVE Sustainability and the business case

At the heart of the business case approval is a cost benefit decision.

The intention should be to improve the cost-benefit ratio, making the project a more attractive investment proposition.

This section introduces the concept of sustainability performance objectives and how to use performance objectives to improve the business case.

Science is used to support judgements and turning a sustainability opportunity into measurable, achievable and beneficial outcomes (that is, setting targets).

This is mostly a technical process and may be done by specialist consultants. It can be challenging, but needn’t be complicated. It’s also an iterative process, which you the investor will need to monitor closely.

What are ‘performance objectives’? Sustainability is measured through ‘performance’. It’s what an asset does, or its impact, that defines how sustainable it is. Performance objectives describe performance to others.

A sustainability performance objective includes two things:

1. A definition of achievements in the form of a target. 2. The benefits this will realise.

In other words, a sustainability performance objective is the sum of the target and the benefit. Each sustainability opportunity will evolve into more than one performance objective.

At this stage it’s important to be specific, and if the particular benefit relies on meeting five or six different performance objectives, then each one should be described. In cases where sustainability forms a major part of a very large investment, the technical team, including the ecologically sustainable development consultants, designers and cost planners can give expression to this as part of the costed design and project functional brief.

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The starting point? The starting point should be a quick review of the sustainability opportunity statement. Some time might have passed since this was developed and it’s not uncommon for the project to shift and evolve, so it’s worth revisiting to make sure it is still relevant.

To help give each of sustainability performance objectives some structure, it is useful to answer the following four questions for each identified opportunity:

1. How will it be measured? 2. What’s the aspirational target? 3. What benefits will emerge? 4. Are the objectives feasible and viable?

It might be appropriate to have more than one performance objective for each of the investment streams identified as a sustainability opportunity.

How am I going to measure it? Measurement is important and the manner in which measurement is represented is crucial to ensure effective communication. Quantifying works to remove ambiguity. Where it is difficult to quantify a measure, performance may be measured by qualitative descriptions. Industry rating standards like Green Star or Infrastructure Sustainability rating tools provide widely accepted performance metrics suitable for use in the project business case.

56 i A whole of life approach The Department of Treasury and Finance’s Investment Lifecycle Guidance has renewed emphasis on a whole of life approach to costing. The traditional approach when developing business cases is to focus almost solely on capital cost at the expense of operational or whole of life costs. As is now well understood, the cost of operating a new asset normally far exceeds the initial capital investment. Sustainability investment can be seen as a means of ‘optimising’ the overall investment, and as an optimising mechanism, sustainability might swing a project’s costs by a small up-front margin. But the benefits of this investment may last for 20 to 30 years, or longer. Cost effectiveness should be viewed from a whole of life approach.

Operation costs $ Service delivery costs

Costs linked Equipment costs to provision of core services Equipment Asset maintenance costs procurement/ leasing Development costs - Utilities - Repairs & maintenance Asset development costs - Facilities management + - Capital development - Land acquisition - Design, construction, handover

$

30 years +

Whole of project lifespan

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What’s the target – how aspirational is it? Performance is a relative measure. On a scale of ‘world class’ to ‘just a bit better than the minimum’ decisions have to be made about the extent of the ambition.

In each case the intention should be to find the optimum balance between investment and benefit; ‘world class’ is fine if the benefits are widely agreed, worth it and affordable.

The baseline is established by understanding the relevant regulation and mandatory minimum standards.

In most cases the Building Code of Australia and the range of Australian Standards covering all facets of buildings and infrastructure development will form the starting point of the baseline standard. Other regulations such as planning and environmental protection regimes, Victoria’s native vegetation framework, and heritage protection collectively form the baseline a project must meet.

In order to exceed the baseline, first determine the baseline. The minimum regulatory requirement or industry norm. In some cases the minimum requirement is quite clear and quantifiable. It may be air exchange rates for buildings, but in other areas the regulatory baseline will be qualitative and include a degree of discretion, such as in areas of amenity impact or responses to climate risks.

These regulatory regimes may contribute to realising a sustainable outcome for a project. The Building Code, for example, has requirements for thermal performance; planning is concerned with a range of environmental challenges including amenity and heritage; and environment protection has objective standards for the control of emissions to air, land and water.

‘Industry norms’, may also promote sustainable outcomes. Approaches for some project types go beyond regulatory baselines (which are adopted in response to market signals).

Think about future proofing – government and industry standards It is important to understand where government (both state and federal) has made commitments that will affect the operation of the asset or the delivery of services. Policy on carbon, for example, will create a price differential between carbon intensive services and resources and low carbon alternatives. This should affect current decision making.

There is a lesson here also about ‘future proofing’.

As industry knowledge, technology and capacity to deliver on sustainability principles increases, so will community expectations and the economic pay-offs of meeting a higher standard of sustainability performance.

As business has shown the trend for raising the sustainability benchmark is also likely continue.

58 Notwithstanding this, sustainable investments need to be cost effective on the basis of existing costs, or of substantially locked-in future costs. Investments justified on the basis of speculative increases in water or energy costs that do not eventuate, or which are much slower to emerge than expected, may represent poor value for money for taxpayers. So it will be important to use discount rates from authoritative sources, and sensitivity analysis when projecting long term outcomes.

Describing your target When choosing the target, it is important to communicate meaningfully. General statements of ambition such as ‘very energy efficient’, should be avoided. Absolute terms (see the worked examples below) are more helpful. These targets will need to be communicated to many different individuals through the design, construction and operational phase of the asset, so it is important that everyone understands them.

Again the respective credits in the Green Star and Infrastructure Sustainability rating tools provide a good reference point in formulating targets and setting ‘stretch’ goals.

The challenge for the investor is to establish whether regulatory standards form an optimal performance level for the project, especially from a whole of life perspective, as well as an investment rationale for going beyond the minimum regulatory requirement.

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What are the benefits? Benefits can be financial, quantifiable or qualitative.

Where possible, benefits should be measured in financial terms because it makes it easier to slot them into the cost benefit analysis. If this isn’t practical, it is important to ensure that benefits are identified and recorded as part of the project economic assessment.

Benefits accrue to different parties, for example, either directly to the project in the form of an operational cost saving, or indirectly to a wider set of community stakeholders or the environment.

For each performance objective it is useful to define:

• what the benefits are • who receives these benefits • whether the benefits are financial, quantifiable or qualitative.

Is the proposal feasible and viable? The business plan will need to include some form of design response as part of the project proposal. This will not be a fully documented design solution but will express the intent or direction of the design outcome (to a certain degree).

Some sustainability performance objectives can remain descriptive for the purpose of the business case.

In other cases, some form of design expression of the sustainability performance objectives will need to be developed.

Before committing to any performance objective and associated design response, it is necessary to ask – is it feasible and viable?

Feasibility is a technical test. Can the outcome be achieved from a technical perspective? Is a solution capable of implementation (sensible and practical)?

Viability is a financial test. Ask the question: taking a whole of life perspective, can the measure be afforded? Is there a positive cost–benefit balance?

The level of effort in undertaking this assessment should be proportionate to the scale of your project and the available resources.

The feasibility/viability test activates the process of iteration. It requires consideration of the proportionality of your target to the needs and opportunities of the project, the test options, and exercise both judgement and if possible, science, to arrive at a preferred performance standard.

60 FROM OPPORTUNITY TO PERFORMANCE

SUSTAINABILITY OPPORTUNITY PERFORMANCE OBJECTIVES

MEASURES/ FEASIBILITY AND APPROACHES VIABILITY

BENEFITS TARGETS

THE FINAL GOAL FOR THE PROJECT BUSINESS CASE The net outcome of this process will be a business case that: • has a better cost–benefit ratio due to the inclusion of sustainability approaches • focuses sustainability investment in areas identified up-front as being areas of need and opportunity which are likely to deliver a good investment return • has considered the appropriateness of regulatory and industry standards and has developed a range of feasible and viable performance objectives across each target investment stream • includes performance objectives within the project functional brief (or design brief) and where appropriate, incorporates these into the emerging design response • takes a whole of life approach to cost and benefits, and fully documents these in the business case, integrating sustainability within the fabric of the project investment rationale.

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i Sustainability and economic benefits

Many of the benefits from a sustainable project are received by society as a whole. Avoided costs can be reinvested in another public good, or by specific communities. The economic assessment provides a vehicle by which these benefits can be captured and included in the business case.

The Department of Treasury and Finance’s integrated assessment framework recognises that not all benefits are quantifiable and accommodates more qualitative benefits in circumstances where it might be unrealistic to cost them. The clearer the benefits, the easier it will be to include them in the business case via the economic assessment. And the stronger the benefits in the business case, the more likely it is that the project will secure funding approval.

Further guidance on accounting for monetised and non-monetised project benefits can be found within the supplementary guidelines on Economic Evaluation.

i A note on costing

In most cases it will not be appropriate to have a separate budget item for each sustainability performance objective.

The systems approach to sustainability, especially in buildings, generally means that sustainability initiatives are incorporated into the fabric of the asset and cannot be stripped out as a separate cost item.

Your choice of glazing, for example, will affect thermal performance, indoor environmental quality and amenity, and form part of the building structure. While the glass can be costed, the separate functions and benefits cannot and should not be separately costed.

Instead, the viability test and options assessment should confirm that the outcome can be achieved at an acceptable cost premium, and a sufficient budget has been made to achieve these outcomes.

i Rating systems – Asking the questions

Q. Can I just apply a Green Star or Infrastructure Sustainability rating tool? A. Yes, and no The application of industry standard rating tools such as Green Star, NABERS and IS (Infrastructure Sustainability) is useful, but only in certain circumstances.

Both Green Star and IS apply a systems approach to development and can form a useful basis to establish project performance objectives, assisting in the comparison and judgement of sustainability performance outcomes.

Green Star and IS are, however, project delivery tools and not investment decision making tools. The decision to move towards a rating system should be made once the performance needs of a project are understood and the performance objectives have been developed.

For each credit in the rating system, the difference between the performance required and the rating system certified minimum benchmark will either be in deficit or surplus.

62 If the cumulative difference across all credits is in significant deficit, pursuing a rating accreditation makes little sense. If the deficit is small, consider the cost to plug the gap, add the cost of certification, and then make the decision.

Where the performance you want and the minimum requirement for certification is roughly the same, or if your performance requirement is higher, you probably should go through the formal assessment process. The key point here is that you should first decide what level of performance you want from your asset, then decide whether to apply a rating system.

The Victorian Government’s Office Accommodation Guidelines (2007) advances a 5 Star Green Star rating for new office accommodation built for government tenancies, as well as directions on NABERS (ABGR) ratings.

VicRoads has developed a sustainability rating tool for road construction projects: INVEST – Integrated VicRoads Environmental Sustainability Tool. If road construction forms a component of your project, consult with VicRoads for good sustainability practice.

A significant issue with pursuing a rating system is ‘credit chasing’. This is where contractors and their designers insert attributes to achieve a higher than fit-for-purpose performance outcome to achieve a mandated rating under the contract. This is a poor investment outcome because regardless of the contract arrangement, it will come at a cost to the project. It also means investment decisions on performance standards are handed over to the builder. Crude credit chasing also breeds distrust more broadly in the community and undermines sustainability efforts.

In deciding to apply a rating system, consider whether:

• There is a cost in administering the rating system and achieving certification.

• The certification process will add rigour to the design and construction process, with a strong link to efficient operational outcomes and facilities management.

• The certification itself has a value to the organisation over and above the performance outcomes.

• As a general rule, there is a tipping point above which aiming for higher credits begins to diminish return on investment.

• The weighting of credits across categories is decided by the certifying organisation and might not be appropriate for the project. Water efficiency in buildings in Gippsland, for example, has a different value than water efficiency in the Mallee, but it attracts the same credit weighting.

• Some organisations apply a rating system ‘equivalent’ or self assessment, where the instruments of the rating system are used, but not the formal process. In such cases the project cannot publicly claim or promote the rating system.

First decide what level of performance is required, then decide whether to apply a rating system.

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CASE STUDY – Developing performance objectives

Opportunity – High Indoor Environment Quality (IEQ) to improve learning outcomesii

Reference sources Green Star Education V1 provides a simple appraisal methodology for multiple aspects of a school’s sustainability performance. The aggregate of credits indicates the overall sustainability performance of that school. Green Star provides a logical framework for assessing the IEQ of the school because it provides a simple and recognised set of metrics and performance standards. This is considered preferable to ‘inventing’ a new set of metrics.

In this instance, it may be appropriate to prioritise some credit categories over others.

Targets Drawing from Green Star Education V1

Benefits It is difficult to quantify the benefits achieved from high levels of IEQ in a learning environment. The Department of Education and Early Childhood Development (State Government of Victoria) undertook a literature review into this issue ii showing that there is a strong correlation between a high quality space and learning. While difficult to quantify, it is an important area to prioritise.

The Performance Objective

Objective High Indoor Environment Quality (IEQ) to improve learning outcomes

Targets Drawing from the Green Star Education rating system, classroom areas will achieve the following performance: • Classroom ventilation will be mechanically assisted and will achieve a ventilation rate of greater than 100% of the Australian Standard. • Air flow patterns have a distribution and laminar flow pattern greater than .95 of the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) standard. • All classrooms have a carbon dioxide and volatile organic compound monitoring system. • A daylight factor of 2% is achieved at desk level for over 90% of the nominated area. • Sound levels measured in LAeq and reverberation for classrooms are in accordance with the lower values of the Australian Standard, and partitions achieve a weighted sound reduction index of at least 45 between spaces. • High frequency ballasts are installed in all classrooms. Note: in a business case, these, and other relevant targets would be fully articulated in the functional brief.

Benefits Benefit Benefit type Recipient of benefit

Learning environment Qualitative Users that is conducive to better learning Difficult to separate from outcomes for pupils other variables but an important component

Teaching environment that Qualitative Asset owner supports the school in attracting and retaining Reduce staff turnover and high quality teachers save $ in staff costs

ii Research into the connection between built learning spaces and student outcomes Literature review Paper No. 22; Department of Education and Early Childhood Development; June 2011.

64 Opportunity – High levels of energy efficiency to achieve low operational costs and reduced carbon emissions

Reference sources / High energy performance buildings tend to cost a little more to design and construct, background but return cost savings over the life of the asset. This objective has a focus on the energy costs, and responds to the increasing cost of energy and the need to reduce carbon emissions. The objective is therefore to establish a performance standard which not just reduces carbon and other greenhouse gas emissions, but which also provides a lower discounted cash flow over the life of the asset.

Targets A useful reference point is the energy rating element of Green Star, which provides a clear evaluation methodology and recognisable performance levels for different credits. It allows the setting of a quantifiable energy performance target, without the need for significant effort in defining what this means. Instead, the challenge is to establish (approximately) what is a reasonable performance level. Based on engineering advice, achieving a 30% reduction (equivalent to six credits under Green Star Ene-1) in greenhouse gas emissions under the Green Star conditional requirement is considered sufficient to contribute to achieving a strong operational saving at a relatively low additional capital cost. The target is therefore: To reduce greenhouse gas emissions by 30% under the Green Star conditional requirement.

Financial viability To validate this target, a quick cost–benefit exercise was carried out that compared the capital and benefits and operational cost differences between the baseline and the target performance levels. Increased costs were the result of improving the thermal efficiency of the fabric and glazing, as well as upgrading the performance of the lighting, HVAC and hot water system. Avoided energy costs were calculated by establishing the reduction in gas and electricity and the resultant cost savings (including assumptions about increasing fuel costs). All costs were discounted at 3.5% back to a Net Present Value. For this fictional 1,000m2 school, the cost–benefit relationship over a 20 year appraisal period is: • increase in capital cost: $110,000 • decrease in energy costs: $140,000 • net benefit: saving of $30,000. Note that this is an approximate estimate, relying on simple cost estimation and long term views about fuel costs (over 20 years). The calculation should also have included some options assessment and sensitivity analysis to confirm the appropriateness or otherwise of the initial target.

The Performance Objective

Objective Achieve high levels of energy efficiency to achieve low operational costs and reduced carbon emissions

Targets Reduce greenhouse gas emissions by 30% under the Green Star conditional requirement

Benefits Benefit Benefit type Recipient of benefit

Reduced whole of life costs approximately $30,000 Financial Asset owner over 20 year period

Hedging against future energy price rises – unquantified Financial Asset owner

Reduction in greenhouse gas emissions and contribution Quantitative Community to climate change – 30% reduction over baseline

Positive message that can be communicated to pupils Qualitative User

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3 ] PROCURE

The procurement method and contractual arrangements (i.e. lump sum, design & construct, construction management, PPP etc) assigns the allocation of responsibilities and risks on projects.

It is important to consider how the sustainability performance objectives adopted for a project are best delivered over the chosen procurement route.

Specific actions should be assigned to the parties best able to deliver sustainability benefits. A contractor’s demonstrated ability to deliver the sustainability performance objectives should be a criterion (or form part of a criterion) in tender evaluation.

Additional guidance on sustainability in procurement is included within the technical guidance on procurement as part of the Investment Lifecycle Guidance documents.

Two issues are particularly important:

• clear responsibilities • innovation.

Clear responsibilities The key to successful procurement is clarity. Responsibility for different objectives might pass to different parties – to design teams, to the contractor, or to the facilities manager, or be retained by the agency or department. When procuring services it’s important to ‘lock’ the sustainability component into the procurement process, and into the contract.

If the project has clear and robust performance objectives then the task is made much easier. Make sure that it is clear:

• what performance is required • what responsibility the contracted party will have • how performance will be assessed (under the contract).

Sustainability performance mandated in the contract should be tested before asset hand-over as part of the technical completion and commissioning process. The contractor should also deliver relevant facilities management and maintenance documentation, and where appropriate, an operational environmental management plan.

Innovation Innovation is an important part of the sustainability challenge. The tender process is often a useful time to look for innovation from the market, through design, contracting or construction.

It is often a good idea in any procurement process to encourage tenderers to bring original ideas to the table. This can be an effective way to choose between ‘good’ and ‘great’ suppliers.

66 i Using rating tools in procurement During the tender process, it’s common to see reference to a sustainability rating tool standard used as short-hand for a set of sustainability outcomes. These rating tools are very effective at grouping and weighting a set of disparate (usually environmental) outcomes into a single measure. They are especially useful as they are supported by a rigorous and independently verified measurement protocol. Rating tools should be used to help establish performance objectives. The adoption of a certified rating target is supported under this sustainability guidelines, but only in certain circumstances and after careful consideration. Refer to the section on rating systems for further information on when they should be used. If applying a rating system, the most rigorous tender brief will include specific targets against each credit. Performance objectives will have already established targets. Alternatively, adopting a simpler approach of nominating the number of credit points sought against each target may be a preferred method. This is less rigorous, but acceptable. Nomination of an overall star rating as the sole tender requirement should be avoided, this is because doing so leaves too many investment decisions with the tenderer whose aim will be to minimise construction costs, not maximise sustainability benefits.

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4 ] IMPLEMENT Delivery

Sustainability shouldn’t be bolted on. Measures to meet the sustainability objectives should, as a function of these guidelines, be an integral part of the project. No separate process for sustainability should be required.

As construction projects evolve, there is usually pressure on capital budgets requiring some form of value engineering. A project’s sustainability attributes often present an easy target for false economies.

The Department of Treasury and Finance’s Investment Lifecycle Guidance has a renewed emphasis on whole of life costs, so it is recommended that, when undertaking value engineering, proponents/planners should ensure that the whole of life implications are considered from a cost and benefit perspective. The business case which has been developed has recognised benefits that accrue to the asset owner, users, and the wider community. This militates against later cost cutting that undermines the long term investment rationale, especially from an operational cost perspective.

When undertaking value engineering, ensure that the whole of life implications are considered from a cost and benefit perspective.

5 ] REALISE Monitor and review

Evidence and experience suggests that many projects still fail to deliver what they set out to achieve.

Often high level objectives are met, but compromises in other areas are made. There is plenty of evidence to show that even after best efforts during design and construction, new assets perform differently from the design model. In itself this is not a problem, so long as there is a plan in place to re-tune and re-calibrate the asset to ensure expectations are met. If not rectified, it is often the case that inefficiencies in year one will be magnified over 30 years, this is not sustainable.

The Investment Lifecycle Guidance tool aligns with the more standard procedures of post project evaluation or, in the case of buildings, post occupancy review. The review process must include an examination of the adherence to the sustainability benefits identified in the business case.

The review process should:

• assess whether the asset is fit-for-purpose and performing to meet its performance objectives • assist continual improvement by identifying positive and negative outcomes and feeding this into the planning and design of future assets.

Over time, Victorian government agencies should improve their monitoring and review processes to inform project planning and the setting of performance objectives.

68 PART B Sustainability Investment: The Fact Sheets

Nine sustainability investment streams have been prepared to help focus the approach to sustainability projects. These have been carefully compiled. Each stream:

• Acts as a discrete and distinct type of investment with a cost / benefit relationship. • Can be measured against some regulatory or industry baseline standard. • Provides a high level sustainability opportunity which can be adapted and adopted for project. • Can be split into a range of more specific sustainability performance objectives. • Can act as a launch-pad for later adaption into an industry or agency specific rating tool.

The fact sheets are intended for general use and can act as a useful reference as investment decisions are made.

The fact sheets describe the investment proposition for each sustainability investment stream, and provide a high level ’opportunity’ that can be adapted and adopted.

Each fact sheet describes the nature of the cost benefit relationship and how the benefits might best be realised at a project level.

Not all sustainability investment streams are relevant for all projects; the fact sheet should assist in this determination.

The fact sheets are based on an extensive literature review and draw from a body of evidence to establish a prima facie investment rationale across each of the nine investment streams.

However, in considering sustainability investment, there is a spectrum in the strength of the scientific evidence in establishing a causal relationship between investment and benefits. The spectrum of evidence can fluctuate from hard quantifiable accounting, to leaps of faith.

Where does the project sit? For each investment stream pursued on your project, try plotting a project’s benefits in terms of:

• The type of benefit that will likely result. • The level of confidence that investment in this area will realise.

The purpose of doing this is to test and better understand the potential impact of investment QUANTITATIVE decisions. This test could also be applied for each proposed performance objective.

For the purpose of preparing the business case it is preferable to have a stronger level of confidence with quantitative benefits, Type of benefit Type this is not to diminish the high return on investment that may result from a more qualitative cost-benefit relationship. STRONG WEAK Confidence in realising the benefits

QUALITATIVE

69 Sustainability Investment Guidelines

1 ] ENERGY REDUCTION Sustainability opportunity: to minimise use of energy and carbon emissions from the asset over its lifecycle

Investment proposition The use of energy over the life of an asset can form a major part of the whole of life cost. Failure to achieve operational efficiencies will expose the asset to financial waste and higher than necessary carbon emissions with all the long-term attendant issues.

Achieving an efficient asset relies on good design, high quality construction, effective commissioning and a robust ongoing operation and maintenance regime.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Reduced carbon emissions Positive public profile + Increased design time - Cost reductions if Improved occupancy and modelling achieved through satisfaction levels – low technology / survey data + Heating ventilation passive design and air conditioning Increased NABERS / Green (HVAC) purchase and Star rating (if applicable) installation costs + Robust testing and commissioning phase

Operational cost drivers + Increased energy - Reduced energy monitoring and costs during refinement costs operation - Reduction in responsive repairs and maintenance

70 How to maximise the benefits • Model energy performance using a certified evaluation tool (e.g. Green Star Energy Calculator or Australian Building Greenhouse rating (ABGR) Validation Protocol for Computer Simulations

• Include energy costs in the whole of life cost appraisal, undertaking sensitivity analysis where appropriate

• Design an efficient operating system

• Design a low energy lighting solution

• Robust building management systems and controls – including a smoothed peak power load

• Effective metering strategy that allows for zoning and future flexibility

• Thorough commissioning and handover procedures to ensure as-built performance equals designed intent (note – this is a significant source of non- performance) and requires vigilance at all stages of the project

• Regular planned maintenance and performance reviews

• Design for future adaptation (changed use of asset, climate change)

• Energy harvesting – using solar power to generate on site renewable power for assets, reducing reliance on base load power

• Use of low and zero carbon technologies – e.g. solar, wind, wave, where these are cost effective

• Construction performance contracts that include operational efficiency levels

• Cogeneration or tri-generation

Success factors • Quantify any cashable whole of life savings through efficiency measures

• Early consideration of energy use in design

• Pursuing passive measures over mechanical – where feasible

• Ensuring ‘value engineering’ exercises consider whole of life benefits

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2 ] WATER EFFICIENCY Sustainability opportunity: minimise water consumption and maximise water recovery

Investment proposition Water conservation is a priority issue for Victoria. There are now multiple measures available to reduce water stress from both infrastructure and building assets, which aid in achieving whole of life cost benefits.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Volume of water consumed Reduced stress on the – mega litres p/a environment and its + Inclusion of water - Reduced cost for capacity to deliver water tanks or other storage, water irrigation Volume of water recovered utility for both urban and especially if additional systems in for re-use (grey, black) – rural communities excavation required landscaping mega litres p/a Reduced reliance on third + Inclusion of water Performance against ‘best party water providers recovery systems (grey practice’ benchmarks with energy intensive or / black water) mechanical water supply solutions such as reverse Operational cost drivers osmosis systems or water transport vehicles + Increased servicing and - Savings through maintenance of water reduced water costs recovery systems - Reduced need to maintain landscaping (if drought tolerant plants used)

72 How to maximise the benefits • Effective water metering strategy to monitor consumption

• Low flow taps and similar efficiency measures

• Use of permeable landscaping, green roofs, catchment pools to avoid stormwater runoff

• Selection of drought tolerant (native) planting for landscaping, and / or landscape solution that has minimal reliance on potable water

• Use of water recovery solutions:

- Grey water plant captures water from showers, urinals and dishwashing. It is treated and re used for non potable uses such as toilet flushing, landscape irrigation and make up water for cooling towers - Blackwater plants treat all water used in building for re use in toilets for flushing, irrigation and water for cooling towers (more applicable where not reticulated to up-stream desalination)

Success factors • Quantify any cashable Whole of Life savings through efficiency measures

• Low technology or passive solutions (especially in landscaping) can have high benefits for relatively low costs

• Gravity flow systems should always be the first option

• Water recovery must be appropriate for the asset class (e.g. consider risks of black water use in health facility)

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3 ] CLIMATIC RESILIENCE Sustainability opportunity: ensure long term security and viability of the asset

Investment proposition Climate change will result in more extreme weather events such as peak air temperature, storm, flood and fire (for more information, read Foundation Paper One: Climate Change Victoria). This increases the likelihood of future damage to assets, insurance risks, and premature redundancy.

While the Building Code of Australia and its associated Australian Standards, along with the planning system, provide a robust framework for construction standards, the development of new assets may give rise to site specific or acute climatic risks that require higher than base-case performance.

Mitigation measures adopted during design can significantly reduce risks to people, the extent of damage, or the need for expensive or urgent repair following an event.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Lower insurance premiums Increased occupant for asset based on risk or user security + If mitigation measures assessment are included then they could be low Reduced frequency of cost (increased roof reportable incidents water attenuation or development of Avoided down-time through disaster management closure, evacuation etc plan) through to major project rethink (geographical relocation of asset to avoid hazard).

Operational cost drivers + Low cost solutions - Mitigation measures might involve should reduce or regular repairs and eliminate the need maintenance of the for future asset asset and its curtilage. adaptation or emergency repairs.

74 How to maximise the benefits • Define the resilience of an asset using a risk approach – short term, medium term and long term timelines and the impacts these might have and appropriate mitigation measures – climate data available from Australian Government Bureau of Meteorology (www.bom.gov.au)

• Consider asset resilience in early design to mitigate future replacement and repair costs in the event of an extreme weather event such as a flood, fire, storm events or extreme heat or cold

• Strategies that might be considered include:

- Avoidance measures – eliminating the impact of any event (relocation of asset) - Mitigation measures – reducing the impact of any event (floodways, fire suppressants, landscape management) - Occupant safety – ensuring occupant safety (evacuation zone, disaster management plan, ongoing training, protective equipment)

• Statistical analysis can be used to determine the likelihood and severity of different events, and the cost benefit relationship of different mitigation measures

• Integrate solutions with existing disaster management strategies and other community responses

Success factors Decisions should be based upon robust statistical analysis using climate projections (weather related) and or historical statistics (fire). A balance must be struck between known capital ($) expended versus avoided cost in the event of an incident and the likelihood of the incident occurring.

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4 ] MATERIALS RESOURCE EFFICIENCY Sustainability opportunity: maximise material resource efficiency in the design, construction and operational phase of the asset

Investment proposition Using materials efficiently is a simple way to minimise environmental impact while also saving money.

New capital assets are generally material intensive projects. Materials continue to be used (and wasted) through the operation of the asset, including bitumen, building refurbishment, ICT equipment and packaging.

Strategies that target more efficient and durable products can save on whole of life costs. The selection of materials with reduced embodied energy or which can demonstrate a more responsible chain of custody, can significantly reduce negative environment impacts.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Waste management – Reduced need for future % waste diverted away adaptation or repair + Additional design time - Reduced project from landfill to ensure resource costs through efficiency efficient use of Materials sourcing – materials and % Forest Stewardship + Specification of reduced wastage Council timber/Fairtrade sustainable, ethically allowances goods/other sustainably sourced materials sourced products - Reduced costs + Potential increase in through improved Embodied carbon – tCO2e waste disposal cost logistics and to achieve high levels materials handling Materials re-use – % of of segregation and materials re-used on site recovery - Re-use of existing (esp. civil engineering materials on site schemes) - Reduced cost for waste disposal through reduction in volume of waste

Operational cost drivers - Reduced materials procurement costs through efficiency savings - Reduced disposal costs through waste segregation

76 How to maximise the benefits Materials resource efficiency should address:

• The efficiency with which materials are used and the need to reduce waste before it is created:

- Use of modular construction solutions - Designed / engineered solutions to avoid materials loss or waste - Careful measurement and procurement - Secure, safe and tidy material storage - Use of ‘Just In Time’ delivery solutions

• The impact that these materials might have on the environment:

- Using materials with low levels of embodied carbon - Using materials that are sustainably sourced - Avoiding those with harmful chemicals (VOCs) - Using materials that can be reused or recycled - Using materials with longer lifecycles

• And the disposal method of those materials:

- Re-using materials where possible - Recycling (including provision of space for storage and segregation) – especially electronic goods - Down-cycling – this downgrades the quality of the material (i.e.crushed concrete to hardcore)

Success factors • Promote efficiency behaviours and environmental impact awareness in all aspects of the project lifecycle

• Consider resource efficiency issues early in design

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5 ] TRANSPORT AND TRAVEL Sustainability opportunity: reduce the environmental impact and intensity of transport connected to use of the asset

Investment proposition The way in which an asset is designed and developed can affect the travel behaviour of users and occupiers.

Different modes of transport have different levels of environmental impact intensity with road generally a high impact solution, and cycling or walking lower impact and essentially carbon free.

But a transport and travel strategy should consider more than just intensity, and also consider volume. Reducing the total amount of transport or travel impact can bring environmental and social benefits for users of that asset, and for surrounding communities.

Nature of the cost-benefit relationship

The issue of transport is very specific to the asset type. It is difficult to generalise beyond the fact that resource and carbon intensive transport solutions like individual road transport are often expensive solutions, and will become more so as the cost of carbon increases. Avoiding excessive dependence on these carbon based solutions provides a buffer against further carbon cost increases.

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Increased people Lower environmental movements impact from reduced + Provision of enhanced - Avoided need for use and dependence facilities for low carbon car parking Reduced travel needs – on resource intensive solutions (electric car Air miles p/a transport solutions charge, bike lock ups, shower and changing Reduced carbon intensity Employee facilities, etc.) of travel – tCO2e/Km satisfaction levels + Provision of video Reduced ‘down time’ conferencing / through business travel telepresence facilities Reduced reportable OHS incidents Operational cost drivers Contribution to - Reduced business economic growth travel costs Car parking provision – % less than maximum permissible planning allowance Bicycle parking – number of secure spaces

78 How to maximise the benefits Infrastructure projects

• Linking to existing low carbon transport modes

• Adequate provision for bicycles (in carriage, cycle paths using shared infrastructure)

• Minimised car parking and improved access by bus / tram / train

• ‘Green transport planning’ in precinct zones which prioritises pedestrians and cyclists

• Improved lighting for cyclists/pedestrians

• Non vehicle pedestrian corridors

Building projects

• Reduce the number of car parks available on site – but increase other low carbon transport modes

• Locate asset near transport hubs for easy accessibility

• Provide bicycle lockers and shower facilities on site

• Provide transport timetable information on site

• Incentivise car pooling

• Using IT solutions to replace the need for excessive business travel (videoconferencing/teleprescence)

Success factors • Consideration of travel needs and options in early design

• Re-prioritise decisions around the pedestrian and the cyclist

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6 ] HEALTH, WELL-BEING AND PRODUCTIVITY Sustainability opportunity: provide a quality indoor environment which promotes health, productivity and well-being

Investment proposition Buildings with high levels of indoor environmental quality have been shown to increase productivity, reduce sickness levels, and enhance user and occupant satisfaction levels.

There is a strong relationship between indoor environmental quality and public policy outcomes, particularly in healthcare, aged care and education.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Reduced sick leave – person Increased productivity days lost through sickness + Costs to achieve - Floor plate per annum Increased ability to thermal comfort levels efficiencies through attract tenants – enhanced controls, ‘smarter working’ Improved staff retention ventilation rates, and use of flexible – % staff turnover p/a Improved patient care daylight glare control workspace outcomes in hospitals strategies Higher occupant satisfaction + Floor plate – satisfaction survey Higher learning inefficiencies to meet performance in schools daylight access needs Safeguard against and provision of future liability external views + Provision of enhanced comfort features (more breakout space, catering facilities) + In-built flexibility to accommodate future changes in need from space

Operational cost drivers + Need for ongoing - Reduction in staff reviews turnover and adaptation - Higher rental yields (if applicable)

80 How to maximise the benefits Use an agreed evaluation methodology (e.g. Green Star) which measures IEQ across 17 areas:

• Ventilation rates

• Air exchange effectiveness

• Carbon dioxide monitoring and control

• Daylight

• Daylight glare control

• High frequency ballasts

• Electric lighting levels

• External views

• Thermal comfort

• Individual comfort control

• Hazardous materials

• Internal noise levels

• Volatile organic compounds

• Formaldehyde minimisation

• Mould prevention

• Tenant exhaust riser

• Consider the need for future adaptation or different tenant occupant requirements

Success factors • Clear identification and response to the specific function of the asset

• Understanding the relationship to policy outcomes

• If necessary, inclusion of flexibility to accommodate changing needs

• Consideration early in design of asset – not as an after-thought

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7 ] COMMUNITY, AMENITY AND BUILT FORM Sustainability opportunity: deliver an asset which has a positive effect on the local and wider community

Investment proposition Any new capital asset has the potential to have a positive and lasting impact on a landscape and the community it serves. There are many examples of projects around the world and through history where the visual quality of the solution has resulted in the success or failure of the development.

A built asset can have a high value for the community, over and above its utility. Some assets can be representative of societal or policy objectives, or seek to act as community landmarks.

Investors should consider the impact of design on the local landscape including aesthetic, cultural heritage and community interest issues, and how the asset will be regarded over its life.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers High usage levels – footfall Positive community rates, ticket sales feedback and industry + Increased design fees - Cost savings interest through the re-use High levels of demand + Increased material of existing asset, increase operational Increased community costs, construction avoiding new efficiencies satisfaction levels – programme (note – build costs sentiment surveys quality design should not always Heritage assets equate to increase conserved and valued in cost) Asset becomes a + Additional costs to ‘go-to’ destination – repair / conserve strong sense of place historic fabric

Operational cost drivers + Potentially increased operating costs because of building inefficiencies (i.e. poor thermal insulation in historic fabric)

82 How to maximise the benefits • Clearly define project needs and sustainability opportunities detailing what is important about the design of the asset

• Engage early with a wide stakeholder group – especially the local community

• Consider issues of cultural or historical importance early in the design

• Communicate positive environmental outcomes such as improved air quality, reduced noise, higher health or education outcomes and lower energy use

• Create linkage between delivery and operation of new asset and local job creation or skills development opportunities

• Consider sensitive incorporation or adaptation of heritage assets, and recognise the potential aesthetic or functional value that these might provide, as well as intrinsic value, particularly for Aboriginal cultural heritage

Success factors • If important for the project, set clear objectives around aesthetics and amenity (don’t assume outcomes)

• Establish an open and interactive communication channel with local stakeholders and consider the extent to which the asset will contribute to social capital

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8 ] EMISSIONS AND ENVIRONMENT PROTECTION Sustainability opportunity: to protect and enhance the environment, minimise emissions to air, land and water, and better manage the human-environment relationship

Investment proposition Victoria’s land, air and water environment is a precious and finite resource which must be used sensitively and efficiently.

Victoria faces significant challenges of making good the outcomes of insensitive practices contributing to land contamination, soil erosion, salinity, emissions to water and the air, and the effects of noise and light.

The environment protection system provides a framework and direction for appropriate environmental stewardship through the adoption of state environment protection policies.

The development of new assets provides opportunities to undertake cost effective remediation, enhance the local environment where possible, and minimise the externalities of development and asset use.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Avoidance of litigation Reduced environmental and ‘clean-up’ costs impact, particularly + Increased expenditure - Innovative chemical emissions to on attenuation remediation Increased area of land, air and water measures including solutions such productive land and acoustic barriers or as in-situ reduced contamination Higher local amenity interceptors, as well treatments as civil engineering Improved performance over solutions for water minimum standard (e.g.) management • % reduction in peak stormwater flows + Desk and field risk assessments and • % reduction in outflows mitigation strategies to sewerage system • % light levels do not + Land remediation exceed requirements solutions that go of AS1158 for beyond the regulatory illuminance minimum or provide flexibility for future use • % noise abatement over minimum standard Operational cost drivers + Ongoing monitoring - Careful design might negate need for reactive (expensive) mitigation measures during operation

84 How to maximise the benefits Solutions are many and varied but might include focus on:

• Cost effective measures to rehabilitate and enhance the land

• Appropriate top soil management

• Limited use of refrigerants or use only those with zero ozone depleting potential & global warming potential

• Leak detection systems

• Stormwater filtration (for enhanced water quality) and/or slowing of storm water run-off

• On-site sewage treatment

• Interceptors (temporary or permanent)

• Acoustic barriers

• Habitat recreation or protection

• Lighting barriers / controls to avoid light pollution

Success factors Going beyond the minimum regulatory requirement can be challenging, so it is useful to identify the following early in a project:

• What are the largest impacts?

• What areas will be prioritised?

• Why they will be prioritised (what are the benefits)?

• What is the minimum standard for the project (regulatory, planning)?

• How will performance be measured (e.g. % improvement over baseline)?

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9 ] ECOSYSTEM SERVICES Sustainability opportunity: maximise ecological benefit from the asset over its life

Investment proposition The development of new assets provides an opportunity to reorient the human-ecology relationship across the asset footprint and its direct surrounds.

Planning and environmental controls will establish base-line requirements, but there may be opportunity to provide cost effective ecological enhancements, linkages, or the creation of new ecological communities.

This category considers opportunities to exceed minimum performance standards and enhance any ecological benefit.

Nature of the cost-benefit relationship

Financial costs and savings (+ or -) Quantifiable benefits Qualitative benefits

Capital cost drivers Enhanced species Enhanced biodiversity population levels + Desktop or site Enhanced local amenity investigation Number of species protected from threat of Improved fresh air + Additional measures depletion or extinction to protect, enhance Improved fresh water or create new habitat Footprint of ecological such as green roofs, communities tunnels, creation of aquatic reserves, etc. + Provision of undeveloped green space

Operational cost drivers + Long term costs of monitoring and maintenance of local environment

86 How to maximise the benefits An ecology study is normally required to identify what ecological features of a site are significant (either in need of protection, removal or reinstatement). Any project design should respond directly to this and include measures to maximise these benefits (assuming an acceptable cost benefit relationship).

Key things to consider are:

• Protection of native species which may not be listed as threatened or endangered

• Opportunities to enhance or expand the local ecology

• Provision of ‘green corridors’ to allow migration and movement of wildlife

• Leaving some land un-developed

• Removal of invasive species

• Phasing of any works to allow for seasonal windows (i.e. periods of dormancy) and/or ensuring sufficient time is allowed for migration and re-population of habitats

Success factors • Pursue enhancement opportunities over mitigating negative impacts

• Consider and plan for ecological interventions well before the works to ensure that the works are not confined by seasonal restrictions

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89 Endnotes

Endnotes

1 MIT Sloan Management Review, 2013 Sustainability savings of environmental management systems to the and Innovation Global Executive Study and Research Monash Churchill campus. Savings recorded compared Group with Boston Consulting Group, Sustainability’s to business as usual, over 5 years, were in the order of Next Frontier. Walking the talk on the sustainability $500,000 for electricity, $45,000 for gas and $169,323 issues that matter most. Authored by David Kiron, Nina for water consumption Kruschwitz, Holger Rubel, Martin Reeves, Sonja-Katrin 14 See the 2013 State of the Environment Report for recent Fuisz-Kehrbach and found at http://sloanreview.mit.edu/ commentary on life cycle assessment. http://www.ces. projects/sustainabilitys-next-frontier/ vic.gov.au/publications-and-media-releases/state-of- 2 ISO 14001 is the recognised international voluntary environment-report pages 341-44 standard that sets generic requirements for the preparation 15 See the 2013 State of the Environment Report for recent of an EMS. It requires an organisation to prepare an EMS commentary on life cycle assessment. http://www.ces. that identifies and controls the environmental impact of its vic.gov.au/publications-and-media-releases/state-of- services products, continually improves its environmental environment-report pages 341-44 performance and implements a systematic approach to setting, achieving and monitoring progress towards 16 Commissioner for Environmental Sustainability, 2012, meeting environmental objectives and targets Strategic Audit, Sustainability – designed to be signed, sealed and delivered: environmental management 3 The Minister for Environment and Climate Change is systems in the Victorian Government January 2012 required under the Commissioner for Environmental Sustainability Act 2003 to table the strategic audit report 17 http://www.dtf.vic.gov.au/About/Projects/Greener- in Parliament within 10 sitting days of its receipt Government-Buildings accessed 18 December 2013 4 Includes Department of State Development, Business 18 http://www.transport.vic.gov.au/projects/ev-trial and Innovation; Department of Education and Early accessed 18 December 2013 Childhood Development; Department of Health; 19 See the commentary in the 2013 State of the Environment Department of Human Services; Department of Justice; report about the electric vehicle possibilities found at Department of Planning and Community Development; http://www.ces.vic.gov.au/publications-and-media- Department of Premier and Cabinet; Department of releases/state-of-environment-report page 467 Primary Industries; Department of Sustainability and 20 http://museumvictoria.com.au/scienceworks/whatson/ Environment; Department of Transport; Department of past-exhibitions/our-water/ accessed 18 December 2013 Treasury and Finance; Environment Protection Authority 21 See our Water Foundation Paper for a discussion of the Victoria; Sustainability Victoria possibilities which open up to a community if integrated 5 Further information about individual department and water cycle management is adopted; Commissioner for agency environmental performance may be found in their Environmental Sustainability, 2013, Water, Victoria: the annual reports science, our urban communities and our water futures 6 Commissioner for Environmental Sustainability, 2011, 22 http://coralrekindlingvenus.com Lynette Wallworth Choices, choices: Environmental and sustainability 23 See our Climate Change Foundation Paper for a discussion reporting in local government in Victoria of the impacts of climate change on oceans Commissioner 7 Commonwealth of Australia, 2009, National Greenhouse for Environmental Sustainability, 2012, Climate Change, and Energy Reporting Streamlining Protocol, Canberra Victoria: the science, our people, and our state of play 8 Australasian Procurement and Construction Council, 24 http://www.greeningaustralia.org.au/ accessed 18 2010, National Framework for Sustainable Government December 2013 Office Buildings March 2010 25 National Australian Built Environment Rating System, 9 Commissioner for Environmental Sustainability, 2013, http://www.nabers.gov.au/public/ Strategic Audit, environmental management systems in 26 Commissioner for Environmental Sustainability, 2013, Victorian Government 2011-12. Co-benefits: the rise of Strategic Audit, Co-benefits – the rise of environmental environmental profit and loss profit and loss 10 Jackson R., Knight A., 2010, Accountancy futures: the 27 Commissioner for Environmental Sustainability, 2012, carbon we’re not counting ‘Accounting for scope 3 Strategic Audit, Sustainability – designed to be signed, carbon emissions’, http://www.accaglobal.com/content/ sealed and delivered: environmental management dam/acca/global/PDF-technical/sustainability-reporting/ systems in the Victorian Government January 2012 not_counting.pdf 28 Note: only the direct fuel cost was used for Greener 11 The Greenhouse Gas Protocol categorises direct and Government Buildings return on investment calculations indirect emissions into three broad scopes. Scope 1: all direct emissions; Scope 2: Indirect emissions 29 Subject to GreenPower being made available to Public from consumption of purchased electricity, heat or Record Office Victoria under the Whole-of-Victorian steam; Scope 3: Other indirect emissions, such as the Government energy purchasing framework extraction and production of purchased materials and 30 CSIRO event supported by the University of Melbourne fuels, transport-related activities in vehicles not owned and the City of Melbourne – Sustainability and the City. or controlled by the reporting entity, electricity-related A science frontier symposium June 2013 activities (e.g. transmission and distribution losses) 31 See the VicRoads Building sustainability into our not covered in Scope 2, outsourced activities, waste road network video at http://www.vicroads.vic. disposal, etc. http://www.ghgprotocol.org/calculation- gov.au/Home/Moreinfoandservices/Environment/ tools/faq accessed 11 October 2012 SustainabilityAndClimateChange.htm 12 t CO -e = Activity data x energy content factor (if 2 32 http://www.vicroads.vic.gov.au/NR/rdonlyres/ applicable) x emission factor converted to tonnes CO -e 2 4DB4B3E3-E5E9-4DD6-8F15-9B7EBB33D90C/0/ 13 For a similar example of the economic and environment SustainabilityandClimateChangeStrategy20102015.pdf co-benefits of undertaking this sort of work see our 33 See http://www.vicroads.vic.gov.au/NR/rdonlyres/ 2012 report on public environmental efforts across the BE125F3A-4C18-4888-9396-2D84BD9F513D/0/ state – Many Publics: Participation, Inventiveness and INVESTMar2011VicRoadsV2.pdf Change, at footnote 65, in which we report the financial

90 Images Section 2 images sourced from: Zoos Victoria Victorian Electoral Commission Parks Victoria Public Record Office Victoria State Library of Victoria Museum Victoria • Royal Exhibition Building gardens: Photographer Frank Coffa • Melbourne Museum Foyer: Photographer Michelle McFarlane • Royal Exhibition Building western forecourt: Photographer Heath Warwick Office of the Commissioner for Environmental Sustainability Level 22, 50 Lonsdale Street | Melbourne Victoria 3000 T +61 3 9096 2424 | www.ces.vic.gov.au | [email protected]