A chtung, baby: The new “uber-sustainability”
is here.
It includes design, energy conservation and environmentalism, but
it’s more multifaceted; more ubiquitous. Look at what U2 and
Bono have come to stand for: a multi-million-dollar entertainment
juggernaut pushing an agenda for social justice. As our opening
words implore, like U2’s platinum album of the same name,
it’s time to pay attention.
Performers, products and practices alike are becoming the levers
for a new ethos surrounding social responsibility on a global scale,
often without the influence or impact of governments. That sense
of responsibility—representing a sort of new-world order—is
today characterized by activists and causes, but it extends to global
companies.
3BL=People, Planet, Profit
Sustainability is an important piece of corporate social responsibility
(CSR). Sustaining enterprises, and human and natural resources is
really what it’s coming to mean. Sustainability is gaining
traction at an amazing rate since CoreNet Global first identified
the triple bottom line (3BL) and CSR as the driving forces of sustainability
in 2004 as part of our CoRE 2010 research initiative. Three years
later, it appears to be influencing the migration away from the
industrial-age basics of land and labor, to the information-age
asset base of intellectual and human capital.
Corporations, causes and activists are supplanting governments.
Cisco Systems is building a water system for the community in a
developing country where it’s expanding. Greenpeace is advising
the Chinese national government. Bono is fighting AIDS.
As issues get less local, government is less effective at solving
problems. “More people vote for who’s going to stay
on ‘Big Brother’ than in government elections,”
quipped political economist Dr. Noreena Hertz during September’s
CoreNet Global Summit in Lisbon. The former free market advisor
to the Russian government was obviously stressing a key indicator
about the growing leverage that the globalization of commerce and
industry is having on the world.
So the good and the bad that global companies can do for people,
communities and societies may even determine success in the marketplace.
That’s mainly why, in a recent cover story, CFO Magazine recognized
the transformation of CSR from an ancillary enhancement to a centrally
strategic practice. Describing it as “virtue rewarded,”
CFO’s October issue reported that “companies are suddenly
discovering the profit potential of social responsibility.”
Coming from the voice of the C-Suite, there’s no doubt that
CSR has been blessed as an acceptable form of free enterprise; that
it’s not really some kind of outgrowth of the socialistically
prone systems of Europe, the cradle of CSR and sustainability.
Meaningful Role for Corporate Real
Estate
CSR simply makes good business sense. “Smart companies are
investing in understanding this new environment, and how to manage
within it,” Hertz advised. Referring to the CoRE 2010 3BL
of sustainable-business models, she added that by being more progressive,
global companies “reduce their own risk, increase their own
reputations and enhance their profits.”
Dr. Nick Axford of CB Richard Ellis, who coauthored the CoRE 2010
research, refers to it as “altruistic self-interest.”
The fact that CSR is linked to globalizing operations, recruiting
and retaining talent, and accessing markets and customers makes
it pure business. It also places our industry at the intersection
of a significant global business, economic and social shift.
“Responsibility has never been more important or more appealing,”
Gensler reported on new research showing that through simple cost-effective
measures, sustainable design can support human performance and workplace
flexibility.
Myriad examples demonstrate the point that corporate real estate
departments, their service providers, and other sides of our industry—such
as economic development—have a meaningful role to play in
the CSR transformation. Here’s a modest sampling:
• Europe-based ABN AMRO, one of the world’s largest
banks, uses a Sustainability Index linked to human resources, stressing
the “people” piece of 3BL as its leading form of CSR.
• Adobe Systems attained rare Platinum Leadership in Energy
and Environmental Design (LEED) status for its three headquarters
towers in San Jose, Calif., for energy savings of $1.2 million annually
vs. $1.4 million invested. The payback was realized in only nine
months. Return on investment is 121 percent.
• Wal-Mart acquired U.K.-based distributor Gazeley, and in
the process bought into the latter’s green warehousing practices
throughout Europe.
• The Weather Channel named New York City one of its top 10
“Green Cities” in part because of LEED-branded high-rises
built for Hearst Corporation and Bank of America.
• The iconic Millennium Stadium in Cardiff, Wales, is powered
entirely by renewable and sustainable energy sources, including
wind and hydro-electric power.
• The state of Pennsylvania is basing part of its global economic
development strategy on the recruitment and use of renewal energy-generating
companies, such as Gamesa Corp. of Spain, which located its first
North American operations in the state.
• Toyota’s 624,000-square-foot green addition to its
Torrance, Calif., headquarters cost no more to build than a standard
low-rise business campus in Southern California, wrote Charles Lockwood
in a recent Barron’s guest editorial.
Is CSR for real or are its benefits exaggerated? The mounting evidence,
trends, practices and results being collected say that it’s
not overkill; it’s anything but a fad. Lockwood’s commentary
offered this compelling fact: Green buildings will also impact the
commercial real estate markets. “As the market shift (to green
development) gathers even greater momentum in coming years,”
Lockwood predicted, “standard buildings will become the real
estate industry’s version of the buggy whip.”
In much the same way buildings without air conditioning became obsolete
in the 1950s, non-green buildings will become so in the new millennium.
Profit will come, but not without people and planet.
As Hertz asks: “How creatively are you thinking about the
legacy you can leave? Don't confuse ambition as a utopian vision.
Hope is not a lottery ticket; it's an axe we wield to effect change.
It's a call for action for each of us to take responsibility for
the kind of world in which we live.”
Richard Kadzis is senior contributing editor for Corporate Real
Estate LEADER magazine, published by CoreNet Global.
CORPORATE REAL
ESTATE & COMMUNITY REINVESTMENT |
There are several examples of CoreNet Global
cases in the CSR area of community reinvestment to illustrate
the broad, sustainable social and community impacts that corporate
and commercial real estate can create:
* East Lake, an Atlanta mixed-income community
created by developer Tom Cousins that inspired the creation
of the CoreNet Global Community Reinvestment Challenge. Cousin’s
rehabilitation of a crime- and drug-ridden neighborhood located
near the renowned East Lake Country Club, and as his integration
of golf with improved community safety, education, housing
and recreation turned the former “Little Vietnam”
into a desirable place to live.
* Asylum Hill, a historic Hartford, Conn., neighborhood rebuilt
and revitalized through NINA, a consortium of corporations
based next door to the area that includes The Hartford, ING
and Aetna. Like Eastlake, Asylum Hill is sustained on a continuous
basis through ongoing safety and reconstruction initiatives
between local residents and the corporate interests. NINA
was recognized as a winner of the 2005 CoreNet Global Innovator’s
Award.
* GJK Facility Services work at the Collingwood and Atherton
Gardens Public Housing Estates in Victoria, Australia (akin
to public housing projects in urban America). This resulted
in an ongoing solution to long-term unemployment and crime
by offering maintenance and other jobs to residents while
integrating them into the staff of GJK, which works with the
state government and the Brotherhood of St. Laurence to sustain
the program. It won the 2006 CoreNet Global Innovator’s
Award, like NINA in the Community Reinvestment category
Other ways CoreNet Global and the corporate real estate industry
focus on sustainability include the launching of the industry’s
Sustainable Leadership Award in partnership with the American
Institute of Architects (AIA) and the International Interior
Design Association (IIDA) three years ago. The 2007 winners
will be recognized in early May at the CoreNet Global Summit
in Denver, where the entire conference centers on a wide range
of 3BL practices and impacts.
Another example is the Rocky Mountain Institute’s current
work with the CoreNet Global Applied Research center to study
the obstacles and solutions to energy efficiency. This piece
of the CSR spectrum is expanding rapidly, like most others,
on a global scale. To reinforce the point, the Institute’s
cofounder Dr. Amory Lovins will anchor the Denver mega-session
on “Innovations in Green.”
Also in Denver, Ben & Jerry’s cofounder Jerry Greenfield
will deliver a keynote presentation outlining the ongoing,
sustainable corporate practices that have made the ice cream
maker a $200-million “value-led” business; value
as it equates to responsible practices, not only money.
The Denver event also offers a selection of numerous case
studies on sustainability. Among them, Adobe and Bank of America
will show that environmentally responsible and people-friendly
practices also offer substantial return on investment.
The extensive thread of sustainability is also winding its
way through all of CoreNet Global’s 2007 conferences.
Aside from Denver’s 3BL theme, the late-March Singapore
Global Summit will examine “People Planet Profit: CRE
and Sustainability for the 21st Century.” And, the September
London Global Summit is themed “The Impact of Green.”
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