Diamond Developer:

Project is in full swing and going well. The CEO has a lot of ambition. And wants to develop property for profit. He wanted to set the standard for sustainable real estate development in the middle east and beyond. From his prior ventures he started to work out the details for a sustainable City project.

They purchased 5 million square feet of land in a master development called Dabailand. The final plan is for 500 townhouses and villas. THis is able to accommodate 2500 residents.

The vision did not stop there. The company is also planning on eco hotels, a school with sustainability considerations, a center of excellence for a museum, community center, and other facilities.

The company awarded 3 million dollars to scientific research so that they could do more to help their environmental sustainability. The money went toward the research for water treatment, waste recycling, composting, and innovative methods for the generation of renewable energy.

The challenge is translating these general ideas of sustainability into a coherent set of measures and targets. There was no clear set of principles or standards that could guide Diamond Developers in its realization of Sustainable City. There, also, are other real estate industries that also have sustainability indicators and ratings. This is led through LEED.

Diamond Development noticed that although the rating schemes had succeeded in focusing attention on sustainability they had several aspects of the assessment methodologies. This had competitors come to them with intense criticism.

Unfortunately, Sustainable City in Dubai would not earn the full credit of four points for treatment of storm water due to it only raining 2 days per year on average. This made it so extensive investments in stormwater treatment provided little environmental or financial benefit. The CEO believed that money would be better spent on solar energy or waste recycling. Even though the number of points (3) they would get would be the same whether the solar technology produced 20% or 100% of the energy for Sustainable city.

BREEAM is another option for an organization rating. Their weighting did not reflect the sustainability priorities of the desert climate of Dubai. An example, rainwater harvesting and flood risk assessment and management accounted for more credit points than a developments energy strategy. There was also significant weight attached to cycling facilities even though the weather and urban layout of Dubai were unfavorable for cycling as a means of transportation.

How can sustainability be defined for Diamond Developers?

What are the benefits and concerns of the different approaches that Diamond Developers can use to develop its sustainability indicators (i.e. in-house development versus adaptation and use of existing systems)?

How should Diamond Developers proceed with the development of sustainability indicators? Should it use or adapt an existing system or develop its own? What are the potential benefits and risks of either approach? How might those risks be mitigated?

If the company decides to develop its own system, how should it go about doing this? What role could universities or other outside experts play? Who might be the other beneficiaries of such a system? What conditions would be necessary for an internally developed system to have value for other stakeholders?

Which measures (i.e. indicators) would you suggest to assess how sustainable the Sustainable City is in terms of environmental, economic and social dimensions?

EXHIBIT 1: SUMMARY OF THE GLOBAL REPORTING INITIATIVE'S STANDARD ECONOMIC AND ENVIRONMENTAL DISCLOSURES FOR THE CONSTRUCTION AND REAL ESTATE SECTORS