By Julia Craighill
Sustainability has become a buzz word, often dismissed as a trend nowadays. There is evidence, however, that there is considerable business value for companies that integrate sustainability considerations into the fabric of how and why they operate their business.
But before a company commits time and resources into the planning and strategizing necessary to truly achieve sustainability integration, one must first ask—Will this be worth the effort? Does it make business sense for our firm to consider sustainability in how we operate and the services we provide?
What is sustainability and how do we achieve it?
While the Brundtland sustainability definition of meeting the needs of the present while ensuring that future generations can met their own needs endures, I like Sustainability Roundtable’s version of corporate sustainability as “a more strategic approach to business innovation and optimization in a world of rising resource constraints.” Simply put, it’s opportunity hiding in plain sight.
In the building industry, sustainability is usually relegated to green building – attributes of the buildings we create. However, no business can successfully have sustainability in the products or services they provide without systematically linking considerations of the Triple Bottom Line, namely People, Planet, and Profit, in their business decisions.
BEE
I have codified the many benefits reaped by companies that consistently manage human, environmental, and financial capital into BEE, which stands for Brand, Engagement, and Efficiency.
The acronym BEE is a double-entendre. It references bees, which play and essential role in plant fertilization and seed development by cross-pollinating. Without bees, our food chain would collapse. Similarly, sustainability has multiple cross-cutting benefits that promote business health and growth.
B – Brand
Brand is your reputation – the perception customers have about your company. Customers connect to your brand, not your business. Having a green consciousness gives clarity to your company’s vision and values, making a strong statement that people identify with and appreciate.
Sustainability creates market differentiation. Most companies are focused on “value”, “cost-effectiveness”, “quality”, and “performance”. But sustainability goes further, connecting your company’s “what”, “how“, and “why” to the needs and desires of the larger world. It gives purpose to your brand, and benefits its reputation.
Sustainability also ensures market relevancy in today’s world of evolving priorities. While social responsibility and sustainability might have seemed like nice to-dos just a few years ago, it’s increasingly expected that business practices demonstrate these values.
E – Engagement
Engagement follows closely on brand. Once you have clearly articulated your sustainability purpose and aligned it with your business processes, people are motivated to support and learn about your brand, both internally and externally.
Internal to an organization, talent attraction, retention, and productivity are the main reasons given for having a sustainability focus. More and more young professionals want to work for organizations that share their values. Instead of just competing on wages, firms are also appealing to and retaining staff based on their practices. Further, employees that are engaged with a company contribute more to the bottom line and often create product and process improvements.
Externally, engaged customers are more likely to buy from and be loyal to a company they like and feels familiar.
Furthermore, external stakeholders—such as suppliers, customers, investors, regulators, communities, governments, and advocacy groups—can provide insight into trends, market developments, and strategic opportunities.
E – Efficiency
Those first to market with an innovation or skill get the recognition. This first-mover advantage also means they are well positioned for incentives or green procurement opportunities.
A company that defines sustainability objectives for their products and services right from the start minimize back-tracking on decisions. This results in greater cost control and minimized cost-uptick.
There is a vast risk landscape facing the building industry including: increasingly stringent regulations, rising resource costs, global instability and supply-chain vulnerability, natural disasters and extreme weather, and health implications from material toxicity. It’s not hard to see the benefit of risk mitigation accruing to companies that are engaged with stakeholders and actively adjusting for environmental and social impacts.
Perhaps the greatest value comes with changes to internal processes. Just as green building certifications, such as LEED®, have shown the need for integrative design, implementing sustainability initiatives leads to greater collaboration and accountability within a company itself. Business practices must be re-examined, which leads to process optimization and quality assurance. Circling back to the BEE analogy, functional silos will break down allowing cross-pollination to flourish.
Green Building Results
For those firms that focus on sustainability, the result in their green building portfolio can be significant. After all, beyond saving money by using less resources, green buildings are setting asset value records.
In 2014 alone, two LEED-Platinum office buildings set resale records. PNC Place, designed by Gensler, was the first office building in Washington, DC to break the $1,000/sf barrier when sold. Similarly, 300 N. LaSalle, designed by Pickard Chilton, became the largest single-building office sale in Chicago history. The former owner noted, “The asset has performed extremely well, which only underscores its enduring quality.”
The fact that these green buildings retained their asset value during resale is a convincing argument you can highlight to your clients in the development community.
Conclusion – Lessons Learned
Sustainability is the inevitable future. We are in a time of depleting resources coupled with increased population and consumption. The building industry has enormous ecological impacts and the need to conduct business in an environmentally responsible manner is increasing. You can treat this pressure as an opportunity or a threat, but ignore this sea-change at your own risk.
Those companies that invest in strategy and pursue excellence within the context of the Triple Bottom achieve long-term business value with better processes, culture, and services.
Footnotes:
- Corporate Sustainability Growth Driven by Financial Impact, Sustainability Roundtable blog post, Feb 28, 2017
- KBS Sells 300 N. LaSalle for Record $850 Million, CoStar news, July 8, 2014
- A new record: PNC Place sells for $1,075 a square foot, Washington Business Journal, Oct. 27, 2014
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Julia Craighill, RA, LEED BD+C, founded Ensight Consulting in 2013 to help companies that want to launch and grow green programs or need a plan to ensure that they will withstand changes in the future. With awards from both USGBC and AIA, she has been an appointee on several government task forces and frequently speaks on the merits of corporate sustainability.
Using her experiences from a 30-year career within the architecture, construction, green building, and sustainability industries; she identifies the specific systems that need to be implemented by an organization to transforms its mission and values into actionable business practices that link People, Planet, and Profit. She has coached and assessed over 30 businesses as consultant for the Montgomery County Green Business certification program.
(Return to the cover of the 2017 PM Digest: Greening your practice)