“GREEN is the New BLACK”…Sustainability Comes to Corporate Real Estate

The facts are irrefutable that America’s companies have embraced sustainable business practices that are translating into corporate real estate strategies.

According to the recent UN Global Compact-Accenture CEO Study1, “93% of CEOs believe that sustainability issues will be critical to the future of their business and 96% of CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company.”

The role of corporate real estate to adhere to the C-suite’s commitment to sustainability results from:

A)   Real estate is a significant component of a company’s Plant, Property and Equipment net value and often comprise 20-50%+ of corporate assets on the balance sheet (see CRE3 Forum post, “Impact of Real Estate on Corporate Assets and Financial Performance”2)

B)   Buildings and facilities account for 70% of electricity consumption and 40% of greenhouse gas (GHC) emissions

C)   Owned and leased CRE portfolios house a company’s most precious resource – their staff. And, enable operations therefore, it is critical that they be managed in the most efficient manner possible.

But, the most important underlying reason for the movement to sustainability beyond social responsibility, environmental stewardship and its relationship to alternative workplace strategies is that it makes good business sense by accelerating near and long-term value creation.

The key measurements CRE professionals could or should use to measure progress toward achieving their sustainability goals are highlighted in a proprietary report from the Sustainability Roundtable, Inc. (SR Inc.), a shared cost, member-directed research and conferencing company. The report entitled, “Sustainable Corporate Real Estate Roundtable: Management Best Practices Guidebook 2010”3 cited key measures from their members that include:

  • Energy use and cost
  • Energy efficiency
  • Renewable energy use, and purchase of renewable energy credits (RECS)
  • Scope 1, 2 and 3 CHG emissions
  • Water use, reuse and recycling
  • Waste and recycling

The SR Inc. report goes on to profile examples sustainability practices that have generated impressive results:

Sysco: Continuous Monitoring – achieved 28% savings in electricity efficiency

Google: Performance Dashboards – realized a three-year ROI on their investment in real time monitoring of energy usage

Adobe: System Integrator of Monitoring and Measurement System – achieved 23% savings in energy consumption and 39% reduction in energy demand which resulted in a 120% ROI

In addition to several previous CRE3 Forum Sustainability Strategy related posts, the survey used to publish CRE3 Consulting’s research entitled, “Corporate Real Estate Benchmarking White Paper”4, respondents cited the following sustainability strategies:

“Move forward sustainability initiatives that support the business objectives. Energy Management Systems employed at all locations. Recycling efforts deployed.  Re-lamping of facilities to reduce energy employed. Focus more on Energy Star than LEED.”

“Preparation of a plan for upper management ready for approval. Committee in place to form teams for each business unit. Leaders appointed to enforce initiative budget transformation over a realistic time frame”

“Increased recycling including composting food waste and collection of over 20 types of recycled products (plastic, batteries, binders, etc) Additional renewable energy projects…solar arrays on rooftops and one wind project. Carbon tracking across the entire company”

“Green to Gold treasure hunts, lighting upgrades, building temperature adjustment earlier in day, and increased recycling initiatives”

It is clear; the recognition of senior management’s desire to embrace sustainability and the important role real estate plays is driving CRE strategy and generating measurable results. Because what is at stake in the importance of achieving corporate social responsibility objectives and the significant cost savings opportunities, doing nothing is no longer an option.

But, how can companies gather, disseminate and take action on the information critical to deploy sustainable strategies? There are a range of alternatives that include:

Internal Resources – staff personnel who may be able to commit the time may not have the requisite knowledge of the technological, regulatory or industry best practices necessary for effective results.

One-to-One Consulting (i.e. Accenture, A.T. Kearney, Blu Skye, Boston Consulting Group, CH2M Hill, Deloitte, and McKinsey) – though personalized to a company’s specific needs, consulting fees from mid- to large- sustainability consulting firms may be difficult to justify short term gains. Consulting firms of all sizes and real estate/energy service providers may be better suited to architect the execution of sustainability initiatives.

Industry Trade Associations (i.e. Corenet Global, BOMA, and IFMA) – despite the nominal cost, the research efforts are often volunteer or provider driven and may lack the sophisticated depth and agnostic independence.

Consortiums (SR Inc.) – through a shared-research model and modest investment members can leverage expert, un-metered research and consulting that is both cost effective and actionable. In addition, peer-to-peer interaction that is often a key component of roundtables can leverage information exchange that is unparalleled in traditional settings.

Regardless of the direction you choose, the time is ‘yesterday’ to get started with your sustainability initiatives because, “green is now the new black.”

What has been your experience in gathering necessary information to develop and execute corporate real estate sustainability strategies?

1 A New Era of Sustainability UN Global Compact-Accenture CEO Study, 2010

2 Impact of Real Estate on Corporate Assets and Financial Performance © CRE3 Forum

3 Sustainable Corporate Real Estate Roundtable: Management Best Practices Guidebook 2010

4 Corporate Real Estate Benchmarking White Paper © CRE3 Consulting

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3 Responses to “GREEN is the New BLACK”…Sustainability Comes to Corporate Real Estate

  1. Jim Boyle says:

    Thanks for highlighting our report. The key differentiator between SR Inc’s shared-cost consulting and research on management best practices and the terrific work our industry’s trade associations do is the year-round un-metered consulting SR Inc provides through its growing full-time team which possesses world-class sustainability strategy, architectural, engineering, and management consulting experience and expertise.

  2. Bob Cook says:

    Ten years ago, I would not have predicted that sustainability would become so well embraced by corporate America. To be honest, though, the win-win nature of sustainability … i.e. save-the-planet and save-money at the same time … makes its acceptance not that surprising. Tech improvements over the last decade have opened a lot of avenues for cost-savings in energy, in particular. In fact, from today’s vantage, it’s surprising that more companies haven’t seen the light and made cost-saving investments.

  3. […] the CRE3 Forum’s most read post in 2010 entitled, “Green is the New Black…Sustainability Comes to Corporate Real Estate,” I cited a recent UN Global Compact-Accenture CEO Study, “93% of CEOs believe that sustainability […]

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