Episode 25 - Daniele Horton, Founder & CEO, Verdani Partners

Speaker A: This is the decarbonization Disruptors podcast. I am your host, Matthew Cohen. On this episode of our podcast, I am very pleased to welcome Daniel Horton, founder and CEO of Verdani Partners. As a licensed architect, lead fellow certified energy manager and counselor of real estate, Danielle brings a unique blend of design, technical and strategic expertise to help organizations future proof their real estate portfolios. Uh, she's also an adjunct professor teaching sustainable real estate at the University of San Diego. Daniel, welcome to the podcast.

Speaker B: Thank you. Uh, I'm really excited to be here and grateful that you invited me to participate.

Speaker A: Yeah, um, I'm excited to have you as well. It's kind of funny, you know, you and I are, have an interesting background now. We work together to help place people, but I think you were one of the companies we were most busy with during like the height of the pandemic. So whenever I talk to people that I've had so many zoom calls with while from my house, it just feels like we're at a different level having gone through that experience together. So definitely, um, excited to talk with you more about your background and kind of what you're doing at Verdani. And I want to start there with your background because I know that you have, um, a background in architecture. And then you, um, transitioned into sustainability. What was your motivation to do that? What did you see that made you want to make that, uh, switch to where you are today?

Speaker B: Yeah, I've always loved architecture, but early in my career I realized that creating beautiful, uh, even if they were sustainable buildings wasn't enough, uh, if they were harming the planet. But also, um, you just spent so long working on a single building while I was pursuing my master's at Harvard and I participated on some of the classes. We were looking at global climate simulation models at mit and it was such a wake up call for me. Um, I saw clearly enough the urgency that we needed to do, uh, to reduce carbon emissions. And I think the built environment, buildings contribute nearly 40% of global carbon emissions. So I realized that my impact could be a lot bigger, um, ah, at the intersection of climate and the built environment. And that's where the transformation must happen. And that's where I chose to lead and focus my, my, my career path on.

Speaker A: Yeah, and I'd be interesting to know kind of how you took that motivation to found Verdani Partners. What was the catalyst behind starting your, your firm, uh, that many years ago?

Speaker B: Verdani was born of both passion and necessity. You know, after over a decade, it has had a sustainability of a uh, national real estate portfolio. Um, I was a um, I was brought onto that portfolio because they were creating a $500 million green uh, fund and we spent almost a decade there. But after I had my second child I needed more flexibility and I needed to move closer to family. At that time, remote work wasn't an option. So I took a leap of faith and launched Verdan in 2012. Uh, my former employer then became my first client. And um, you know we had already lead certified 100% of their assets are in top spot on grass for three consecutive years. And I think that building a lot of those relationships with building owners, uh, while I was m working at the, at the owner side opened a lot of doors. And you know, the accomplishments that we had while working at the company was called Thomas Properties Group gave us a lot of credibility to grow. And so what began as a, at a live work studio, um, had become a, you know, became a global team of nearly 90 professionals managing, you know, sustainability programs for over 10,000 properties globally. We work in Americas, Europe, APAC region and um, in Europe. And so from day one I wanted to build a purpose driven company that supports working parents and proves that you can run a successful sexual business while also prioritizing people and the planet.

Speaker A: And I'd love to hear more about what services you offer today. And moreover, I mean I know the ESG world has really had a lot of uh, changes in the past few years. So want to understand kind of how not only what you offer today, but how your capabilities have evolved in recent years to meet the demand that you see from your clients.

Speaker B: Verdani is a, you know, we're full service, uh, ESG sustainability consult consulting firm. We embed ourselves um, from that experience. From the owner side I really saw what was needed to green a portfolio and so we built kind of business model around that experience. And so we embed ourselves within our client teams to deliver results. Strategy, data management, green building certifications, decarbonization, regulatory compliance, resiliency planning and more. Um, but even when I was like a sole person trying to implement all these strategies from the owner side, I realized I didn't bring all the skills that you need to build a successful team. It really takes a multidisciplinary team and sometimes companies, they can't afford to hire five different people. Someone that's going to manage your corporate sustainability program, an engineer, someone that's going to do communications. We bring fractional people, uh, that bring the right skill set so we can fill those gaps, um, and manage Those programs, uh, on behalf of our clients, we become an extension of their team, really embedded into their organ. Some of our clients that we brought since you know we started the company are still our clients today. Um, and as the industry evolves we also have done that. We expanded our services into decarbonization, resiliency, biodiversity, stakeholder engagement and many areas that are essential to building long term value. So our internal, um, we have a lot of our research and development committees and also created a nonprofit arm called Verdani, uh, Institute for the Built Environment. Um, that helps kind of to also bring a lot of our expertise to the general community, uh, to uh, keep advancing sustainability. And we're very proud to be a minority woman owned B Corp. We have over 70% of our team, um, it's women, people of color. And that diversity really helps fuel our innovation and helps us create inclusive high performance uh, cultures across our different clients portfolios.

Speaker A: And I'd like to get your perspective on and think you would have a good perspective on this, how the real estate industry specifically has changed their approach to ESG in the past few years. Because I think you know, was usually all encompassing like you've talked about between corporate and then the built environment space. And how has that changed? What are your clients looking for as of late that you're trying to meet the demand for?

Speaker B: I think the shift has been massive. Um, I see even though some portfolios are changing how they name their programs, M. But moving away from the issues of terminology, I see that it's no longer nice to have. It's really a business imperative. Uh, regulations are tightening, investors are asking tougher questions and climate risk is really also reshaping the market. So today is not about um, what you plan to do, like having policies or goals is about what you're actually doing. You really have to show implementation, performance, the results. And really the focus is shifting from reporting to real measurable action. You really have to show uh, to be able to implement these strategies and show results. And that's how we work with Verdani. We're hands on, integrated, performance driven. Uh, we help our clients not only with their strategy but ongoing implementation. We track progress, we publish their data on an annual basis. We do a strategy meeting so we can say what's working, what's not, where we have to like retool, repurpose so that we can make sure we're helping them uh, achieve results. And you know, yes, she's becoming a really uh, a new operating system for real estate and we are helping our clients lead that transition. Um, I think with all the different risks we have today, I think it's very risky not to have a program like when you say, you know, what's the cost? I mean what's the cost and the risk of not having some of these initiatives in place where your. Prof. Like it really is, I think in the US it's really they're doing from bottom line because of you know, their bottom lines is to create value, protect value, um, to and right and really future proof their, their buildings and portfolios from um, a lot of the different climate and transition risks that the industry is facing and going off that.

Speaker A: I'm curious and I've been asking this a lot of people in the built environment space lately, what are the areas that you're focusing on when it comes to addressing the bottom line? Like where, where are the, the pain points that you're seeing where you're showing people a return on investment, um, in certain areas of their, of their portfolio that they're grasping onto where they can clearly see by taking uh, action they really can save money and have a better overall portfolio health.

Speaker B: I mean there's the basics of like um, you know, reducing operating expenses, efficiency programs. I mean I think before we focus a lot on like you know, you do an ASHRAE audit, you can, you can uh, you know, pinpoint like return on investment from like doing a lighting retrofit, switching to LED lights. I mean those we call like it's not even a low hanging fruit, fruit hanging the ground. Now we do more comprehensive audits. I mean we look at strategies at the portfolio level, but at the asset level, um, we do call the green property condition assessment that includes like a decarb assessment, a resiliency assessment, efficiency. Um, since they're going on site they can look at that all at once and you can even look at opportunities to implement renewable energy at the property or you know, climate mitigation strategies. And I think that's really important at the uh, during the due diligence process so that you can implement those strategies, incorporate them into our, your underwriting plan, um, and also know if that's a property that it's worth investing. Um, you look at exposure to you know, regulations and if that property is inefficient, you have to factor how much it's going to cost to bring that property um, up to a certain standard because there's a lot of regulations now pushing for decarbonization efficiency. But when we do a decarbonization assessment, you show like this is the cost of like, let's just say, right, replacing this chiller, this is a return on investment. So they have a good solid plan about different ways that they can improve the property, decarbonize it, make it more resilient, make it more efficient. And a lot of those um, assessments have a clear like payback, uh, return on investment. So that can, they can use that information to make decisions. And then as a portfolio, we look at the entire portfolio, we're tracking their data and we can identify here, these are the properties that fall within areas that have those regulations like building performance standards or these are your largest properties with the highest emissions. So we do their annual budgets and so we can also highlight, help them prioritize because you can't do all at once what are the assets that it's going to help you achieve the biggest impact. Um, so there's a lot of different strategies that we use to help them create, um, annual strategies and also like implement those strategies on an ongoing basis.

Speaker A: And I'd love to get your thoughts too. This is one of the areas I always find really interesting is how we communicate the urgency of addressing carbon emissions in the built environment. Because we both know being in this world that like so much of our carbon emissions come from built in environment space in the US we have not addressed it fully. Is it, is it simply a communications issue or is it possibly the technology hasn't caught up to that sort of uh, catalyst of really becoming a net zero environment? Like where, where is the, where, where's the straw that can be broken in order to get the amount of funding and the amount of capital, uh, that we need to really communicate that urgency the built environment needs right now.

Speaker B: Yeah, we need stronger accountability, better storytelling. Buildings are sometimes left out of the climate conversations even though they account for 40% of emissions. So it's not just about saving the planet, it's about protecting value, reducing operations risk and insurance compliance. So what we do is we build clear decarbonization roadmaps and both environmental by financial return investment. And so we can equip our clients to lead, especially markets in the US where regulations are fragmented and processes under political threat, but through like, you know, our, I'd say communications, uh, our strategy showing like from a financial perspective where they can make progress. Um, we're also through our nonprofit Vibe esg, uh, guidance reports. Our next one is going to be about global decarbonization where we're sharing real implementation solutions from companies that are leading the market. We're helping amplify the message not only Sharing challenges, but solutions, how companies are implementing these strategies, um, to disseminate this information across the industry and the community to really move from compliance driven reporting to action oriented leadership. But I'd say as a company in terms of future proving your portfolio, um, many states the world needs to decarbonize. Even when I teach I like to show a graph. The utilities, everybody's going to be decarbonizing, they're going to be moving away from fossil fuels. So um, you know, and there's tools like if you're aligning with the Paris agreement of science based targets, buildings need to be decarbonizing along with it. And we have tools like CRAM that uh, can show like um, year of stranding. So like if you're not decarbonizing along with that curve, right. What is the year where you're decoupling from that? And I think the term stranded assets was really more meant for fossil fuel companies. But I mean they can be used a little bit for buildings as well. And so it's really risky if you're not doing anything about it to be able to decarbonize and lower your emissions along with the market. And I think that building performance standards um, are doing an incredible job. Like they're actually getting results. And that's where we are also prioritizing our clients, properties that have those uh, regulations in place to make sure we're helping them decarbonize so they can, you know, it's over time. It's not like, you know, it's going to take time so they can start doing, taking steps to decarbonize along with the grid. And I'd say um, all of that information is going to become available when we're doing due diligence for new acquisitions, when you're trying to sell, um, you know, because tenants are also making their own commitments, right to their own decarbonization commitments. So they're not going to sign a 10 year lease in a property that's not showing clear leadership and steps to, to get there. So I think that investors understand they're asking for it, tenants are asking for. But it's going to be hard to, you're going to be less competitive. It's very risky to not have a plan and not be working toward decarbonization when the whole market um, has to move in that direction.

Speaker A: And so once you've done that, I'm curious kind of what the next step is for Verdani and the industry that you've started. Is it more about uh, is There a technology play that you kind of see in your future. As we've seen other ESG companies take advantage of like what's on the horizon for the services that you offer that we should know about since we work

Speaker B: with like a lot of portfolios. Like we work with over 10,000 properties globally. Um, we work with our clients to vet some of the best tools and technologies. I also um, recently joined a UNEP group and there's like 50 global experts that meet um, annually and um, to talk about some of the greatest challenges that the industry is facing, how to get there. Uh, and we, you know, there's solutions discussed from like many different countries, what's working, what's not, so that we can work together to find solutions. I think one, uh, and it was interesting because even looking at a global carbon simulation model, um, even if the world, the entire industry was fully efficient, um, powered by renewable energy, both the buildings and transportation sector, we're not even getting close to reaching Paris Agreement targets. Some of the key things that we need to accomplish include having carbon pricing so that there's a real price signal. Especially in the US where everything is financially, you have to put everything from economic lens. Then polluters have to account for the environmental impacts and it makes uh, fossil fuels more uneconomic. So I think that that's going to be critical in pushing the market. Um, at the same time we're pushing for more accountability. Right. So data reporting, we're vetting a lot of different tools, a lot of different solutions. It really is multidisciplinary. Like we really have to work together, um, as an industry to kind of solve the climate crisis. Um, and I think for Verdani, I mean we're not only exploring a lot of these software tools, um, we're also looking at AI and how we can layer that to augment uh, from ah, data analysis and reporting. Um, I think it's really important to make sure we're keeping track with uh, building systems based on the technology of the future, not technology of the past and help our clients navigate to that. Let's say for Vardani, we're entering a new exciting chapter even for us ourselves. Walking the walk. Uh, we recently earned lead gold for our office. We were recognized as a green certified business, uh, by the city of Carlsbad. We certified with Energy Star with a score of 99. So we're also trying to make sure that we walk the walk, um, in terms of helping the market move forward through our nonprofit organization Verdun Institute for the Built environment we're publishing 15 ESG guidance reports to share our knowledge, uh, beyond our clients that can pay for our support. Um, the next one as I mentioned is focus uh, on decarbonization strategies at the portfolio level. And we are, the next one is going to be resiliency. Um, we're integrating AI ah into a global digital tools. We're expanding globally as well, which we're really excited about, um, because many of our clients are in Europe, Latin America, Asia Pacific. So we want to do that. We're forming strategic partnerships to scale our impact and our vision is really to show how even a small values driven firm can lead on a global stage and help build a world where sustainability and equity are uh, the foundation for every business.

Speaker A: Yeah, I mean it all sounds really, really awesome. Uh, one of the themes that I hear from you, not just today, but just knowing you is you've always talked about future proofing buildings and a big theme that you've always pushed is you know, having a long term thinking and having a global collaboration to do it. What I see, uh, I think maybe too often is organizations not being able to break free from that kind of short termism and really want to build something for future generations. What do you think organizations can do to kind of break free from that and think more long term?

Speaker B: Mhm.

Speaker A: To get to the type of goals that you're talking about.

Speaker B: I'm saying if you're, I mean for many industries long term thinking is no longer optional. It's essential for survival. When you think from a climate disruption, water scarcity, biodiversity loss, rising equalities are all interconnected threats. Every business needs to kind of understand how that's going to affect their, you know, their industries and making sure they are thinking long term, they are future proofing their organizations. We can't solve any of these problems in isolation or with just a uh, short term quarterly mindset. We really have to think long term and understand where the industry is headed so that we can um, you know, prepare and plan accordingly. Uh, ever done, we advocate for regenerative design solutions that give more than they take. It's about aligning incentives, capital and culture with a vision that can span generations. And I really believe that organizations can, they can thrive when they connect um, sustainability as she, with both purpose and performance. It's not just like can we afford this? It's can you afford not to do this. The companies that embrace long term strategies across climate, social impact and governance will be the ones that endure, inspire and they're going to succeed, lead and be more Competitive, um, in moving forward.

Speaker A: The last thing I wanted to ask you is, and this gets more into my world is, um, you know, I get a lot, probably a couple times a week, I get people reaching out to me. I'm in oil and gas, I'm in finance, I'm in, maybe even in real estate. And I want to enter the sustainability field. Um, what advice do you give to young professionals who want to do that? What should they be thinking about when trying to enter sustainability? Uh, space.

Speaker B: You know, we need so many voices. We need people with expertise in so many industries. Sustainability is more than just buildings and carbon. It's about justice, inclusion, reimagine, reimagining our systems. My advice is like, don't wait for permission. Start where you are. Learn, connect, lead with your heart. When I pivoted from architecture to corporate sustainability, the field was barely defined. I created Verdani to be the kind of workplace I wish existed for women, for immigrants, for parents. Purpose driven professionals. And today Our team speaks 17 languages, brings diverse, uh, lived experiences to every project. Uh, through Vibe. You know, uh, we offer free education, mentorship resources for students and early career professionals as well. Um, I recommend sometimes volunteering is a great way. Sometimes like the chicken and the egg, right? You can't get a, you can't get a job if you're switching fields or like, if you, you know, get education. But that can be expensive as well. But, like, just get involved with organizations, right, that share your values. So there's so many nonprofits that are doing credible work. And just like volunteering, we can be part of that network, meet people, um, but also have something tangible that you can put in your resume as some experience in that field because it is very competitive out there. But there's a lot of, like so many free courses like our Vibes, um, education resources, like all our guidance reports. And we actually do also every month we do, um, uh, free educational webinars. There's so much content out there. Um, and so if you really care deeply and boldly, there's a place for you in this movement. I mean, we really need all of us to be part of the solution. And I do believe we're building a future together. And every voice matters. And I think everyone can make a difference. Um, so it's great when we see more people that are interested in switching. Um, I think even as we decarbonize, right. It is important to look from a equity perspective as well and create tools, um, to teach people that maybe are working in industries, fossil fuel industries, that need to go away, ah, to retool and teach them about so many other things that they can do, um, with industries that are more sustainable, um, for her long term well being. But I think there's just, there's a lot of opportunity out there, um, and ways that people that are just starting can, can get involved and be part of the solution.

Speaker A: Well, I, I hope that this little conversation of ours maybe stirs someone to, to do that. So, um, this has been great. I've known you for a lot of years now and I'm just really excited to have you a part of, uh, our podcast to have people learn about what you're doing, what's upcoming. And um, I'm excited to see what you, you do next. So again, Daniel Horton, thank you so much for doing this. This is the decarbonization Disruptors podcast and we will see you next time.