While it seems that more companies label themselves “green” every day, the fact is, most corporations have only a vague idea of how they can make a demonstrable improvement in environmental performance. This is particularly alarming given a number of factors, including imminent governmental regulations and commitments to greenhouse gas reductions (e.g. the Lieberman-Warner Climate Security Act); executive and board-level pledges to customers, shareholders and investors; and rising energy prices and operating costs. This confluence of multiple drivers is escalating the urgency of the need for corporate sustainability and the pressures on businesses to respond.
While 55% of organizations have set policies to reduce their environmental impact, those responsible for achieving sustainability goals lack a clear path to success, according to The Economist. Wouldn’t it be great if the answer to environmental sustainability were right in front of us? As it turns out, for those of us who work in an office every day, it is. Right before your eyes is THE number one environmental culprit: the buildings that house businesses around the world. According to the U.S. Energy Information Administration and the US Green Buildings Council (USGBC), buildings account for a staggering forty-eight percent (48%) of total energy consumption and greenhouse gas emissions.
Buildings contribute directly to global warming through direct environmental impacts such as greenhouse gas emissions, as well as in indirect ways, for instance the energy consumed to heat, light and make buildings functional. The Energy Information Administration and USGBC further report that buildings are responsible for thirty-nine percent (39%) of carbon dioxide emissions and seventy-one percent (71%) of electricity consumption.
Admittedly, there is no single magic key ending to our planet’s woes. While initiatives like clean coal and nuclear power have the potential to provide real return, that value is sometimes decades down the road. In contrast, buildings – both new and existing – represent the low-hanging fruit of corporate sustainability. If we want to make a difference today, real estate assets provide the yellow brick road to green: the fastest path to a reduced environmental impact. Further, as the graph below shows, not only do buildings clearly top other factors like transportation and manufacturing in environmental implications, buildings impact is also accelerating at a higher rate.
Buildings represent the most accessible, immediate and impactful opportunity to improve corporate sustainability, and they also provide a significant opportunity for revenue potential and expense reduction to make a true “triple bottom line” difference. The triple bottom line expands the view of an organization’s performance to include impacts on people and the planet in addition to profit. Sustainable buildings address each aspect of definition of success through decreased in environmental impact and increased operational efficiency, worker productivity, revenue and shareholder value.
For example, over a twenty-year period, a typical company with $1 billion in revenue and 5 million square feet of real estate assets stands to gain $250 in savings from energy, emissions, water, operations and maintenance of the buildings, not to mention increased productivity and real estate health value. Further, according to Dr. Joseph Romm of the Center for Energy and Climate Solutions, the benefits of green building improvements include reduced operating costs by an average of $1 per square foot and increased revenue by $10 per square foot from improved worker productivity.
So how do we take action? Like the sticky alliterative “reduce, reuse, recycle” our children learn in school, “measure, manage, reduce” must become the mantra of executives, board members, and all those with a stake in corporate sustainability. A recent ad hoc survey of more than thirty percent (30%) of the Fortune 500 companies revealed eighty-six percent (86%) of those surveyed could not say definitively what their carbon footprint was. As the old adage goes, “you can’t manage what you can’t measure.” Once we have reliable ways to measure our impact on the environment, making a difference doesn’t seem like such an overwhelming charge because pinpointing opportunities for improvement becomes easier and allows us to focus on action.
It is absolutely imperative that we recognize not only the enormity of the harm buildings cause, but also the significance of the opportunity for improvement. Leading U.S. government and NGO sources agree that buildings are the largest environmental culprit and are therefore the first place an organization should start if they want to reduce their overall carbon footprint, improve sustainability, and reduce energy costs.
George Ahn is the president and CEO of TRIRIGA Inc., a provider of integrated workplace management solutions.