When companies develop a sustainability strategy to reduce operating expenses, among the first areas they address is the “low hanging fruit” of energy efficiency as it represents one of the largest cost buckets behind rent or debt service.

However, many or most organizations may not think about “picking up the watermelons lying on the floor” by partnering with their utility company to create an energy plan. Because power providers are incented by federal regulators they are required to extend rebates and provide cost saving programs as part of their service to rate payers.

In a Member-Only meeting of the Sustainability Roundtable, Inc., New England-based National Grid was featured to share some information about programs they offer to their customers. They cite that partnering with a utility provider to develop a long-term strategic energy plan includes:

• New initiative to meet aggressive energy saving goals
• Targets top quartile customers
• Sets long-term and high energy saving goals (road-map) for customers rather than ‘short-term’ ad-hoc upgrades
• Create (or modify) an organizational shift to how energy efficiency decisions are made within a large organization
• A financial model that enables a re-investment based cash flow positive structure for energy efficiency upgrades

Their presentation highlighted that, in addition to ‘triple bottom line’ energy planning, there are several other key areas they recommend organizations to address:

Financial – incentives, on-bill financing, investment criteria

Technical – benchmarking, energy use data, coordination with LEED standards

Operational – staff training, building certification, O&M guidelines

Other “green” measures – indoor air quality, day lighting, water savings, GHG tracking, productivity studies

The presenter during the program was National Grid’s Michael McAteer who said, “a significant opportunity exists for customers to maximize the technical expertise and achievable energy savings potential in their business environments by partnering with their utility. Adopting a comprehensive data driven approach to reduce operating costs with support from utilities is a smart move and provides valuable dividends to customers.”

McAteer suggested a process that you and your utility company could take might include:

• Establish contact with top management of large customers and the utility company
• Identify energy goals, financial criteria, and sign memo of understanding
• Identify/prioritize projects
• Benchmark existing use
• Implement measures and incentive payments
• Evaluate progress
• Develop long-term road map for the entire portfolio through “collaborative effort”
• Train operations staff, create case studies, and assist other studies (water savings, productivity, LEED etc.)

The key takeaways the SR Inc. program highlighted were:

• Leading companies that develop and implement portfolio-wide sustainability strategies prioritize scalable best practices in energy efficiency and energy cost reduction, and seek to maximize innovative financing, including utility benefits.
• Utilities are responding to market demand for a portfolio approach by looking beyond buildings, building systems, and technologies for opportunities to assist customers to reduce demand and consumption.
• The portfolio-wide approach enables customers and utilities to partner at a strategic level, and achieve greater reduction and savings a lower cost and in less time than a fragmented ‘Energy Conservation Measure’ or technology rebate approach.

As you embark on the green to gold treasure hunt or search for the proverbial ‘low hanging fruit’, be sure to reach out to your energy provider who is ready to help and can play an important role to address energy cost, save money and pick up some ‘watermelons.’

If you would like to receive a copy of National Grid’s presentation or to learn more about how you might forge a strategic partnership with your utility company, please contact me at larrysimpson@sustainround.com.

As part of an overall sustainability strategy, leading companies are innovating beyond traditional workspace practices and are evaluating shifts in the location of work, hours of work and schedule of work hours.

At a recent Client-Only meeting of the Sustainability Roundtable, Inc. (SR Inc.), new research on “Integrated Alternative Workplace Strategies” (AWS) was presented that found:

• Changing demographics, advances in technology, new business needs (24/7 service), globalization trends, and environmental considerations influence the move to greater mobility and accelerate the adoption of AWS.
• Leading companies implement AWS to reduce real estate operating costs and carbon footprint; retain and recruit top talent; increase human capital outcomes; enhance real estate and operational agility; and enhance their brand.
• Executives follow an iterative process to plan, implement, and evaluate AWS to maximize benefits.
• Executives deploy AWS on company-wide level after making a compelling business case, aligned with business goals, ensure departmental integration (RE, HR, IT, EH&S), conduct initial assessment, and test pilots.
• Executives integrate AWS into their company’s sustainability strategy; adopt options customized to meet their business goals and organizational culture to enhance sustainable value creation across the enterprise.

The organizational readiness of companies to adopt AWS differs and this impacts the level of employee mobility they are ready to embrace. SR Inc. classifies AWS into four types of solutions based on the level and mode of mobility:

Internal Mobility – working and moving within a dedicated office, group workstations, open office, and hoteling

External Mobility – working across multiple offices of the same company or home-based work, remote/satellite offices, and telework centers.

Virtual Office – full mobility and third places of cafes, libraries, airports, and client sites.

Fourth Generation Office – fully furnished flexible offices worldwide with outsourcing office and equipment provision to 3^rd parties. I.e. Regus, Metro Office, Workspace Group

SR Inc.’s research included case studies from American Express, AT&T, Cisco, GSA, Nortel and Oracle that highlighted lessons learned of:

• AWS aligns workplace and technology with the way employees already conduct work.
• Proactive stakeholder engagement is critical. This includes a cross‐functional team with start-to-finish support from RE, HR, IT and the C-suite and engaging employees.
• Building a legitimate business case, includes RE, HR, IT, and EH&S perspective as well as a real employee value proposition.
• Technology is available, mature, and effective. It is expected to advance significantly in the next several years, and therefore, companies can design for maximum IT flexibility
• Formal, comprehensive assessments of the program helps determine what works within the unique company’s context in order to make appropriate adjustments and maximize benefits.

As much as organizations are looking to AWS for the inherent benefits it is important to anticipate the needs to facilitate face-to-face interaction that can stimulate team building and knowledge exchange.

SR Inc.’s VP of Research and Consulting, Irina Mladenova, says, “companies across industry sectors find it necessary to revisit their workplace strategies to accommodate evolving working needs. Those who are unwilling will find it challenging to retain top talent, improve collaboration and innovativeness, and ensure low costs. One issue executives still struggle with is capturing space utilization accurately and attributing real estate and GHG footprint optimization or reduction specifically attributed to AWS. Another issue that companies still need to address more directly is how to adapt standard AWS practices company-wide level to local culture and practices.”

If you would like to learn more about how AWS could become part of your company’s sustainability strategy, feel free to down load the Executive Summary of “Integrated Alternative Workplace Strategies” at http://sustainround.com/research/AWS.php.

Many top companies have developed a sustainability strategy to enhance enterprise value, reduce operating expenses, limit risk, and align with stakeholder expectations. 

Corporate real estate portfolios, which typically consist mostly of leased space, are often keystones in these strategies, as real estate leaders seek to improve operational efficiencies, reduce environmental impacts, and create work environments conducive to productivity and retaining/recruiting top talent.

While the move to more sustainable leased space is gathering momentum, many challenges remain. Recent research by the Sustainability Roundtable, Inc. (SR Inc.), entitled “How Leaders are Moving to More Sustainable Leased Space,” cited the following barriers to implementation:

• Perceived cost premium for more sustainable space
• Limited tenant leverage in smaller leases
• Lack of relevant KPIs, benchmarks and metrics
• Few reliable sources of information about best practices
• Lack of a single solution and the need for incremental innovation
• High hurdle rates based on ROI expectations

The research includes information on best practices on ‘green leases,’ and features case studies from Gensler, Brandywine Realty Trust, Equity Office, Akamai Technologies, Autodesk, and the General Services Administration.

Discussing the research findings, Michael Gresty, SR Inc.’s Executive Vice President of Research and Consulting, notes that, “leading companies have found ways to design, build and even certify more sustainable leased space at little or no cost premium. The most experienced among them, such as Adobe, are consistently pursuing LEED-CI Platinum level certification, because they have proven that the benefits exceed those of basic certification. However, the barriers to adoption identified in our research are real, and can only be overcome by persistent efforts and greater collaboration between corporate tenants and landlords, and further efforts to negotiate win-win solutions in green leases.” 

The key takeaways of the research presentation include:

Leased Space is an Opportunity not an Obstacle – Tenants and landlords can find common ground based on sustainability to reduce costs, risks, and, together, create enterprise value.

Adapt to Mainstreaming of Sustainability – Corporate Tenants, Investors, Advisors, and Owners, recognize that sustainability has become a mainstream concern, that there is no cost premium, and they can innovate within their organizations to adapt.

Overcome Market Barriers – Tenants and landlords still face institutional and cultural barriers to more sustainable leased space; leaders have adopted proven strategies to overcome them, including ‘green’ leases.

Develop an Integrated Strategy – Companies that adopt a cross-disciplinary strategy using Integrated Project Delivery methodology rather than trying to ‘green’ conventional design and management methodologies can maximize sustainable value.

If you would like to receive a copy of the presentation, email Larry Simpson at larrysimpson@sustainround.com.

The real estate footprint boundaries of large companies and real estate owners have expanded, subsequently the challenge to measure, manage, report and reduce energy and carbon data efficiently and accurately to support portfolio-wide sustainability strategies have increased.

This challenge has immediate and particularized relevance for the users of corporate real estate, the owners of corporate real estate, and investor-advisors invested in corporate real estate. On April 21^st, the Sustainability Roundtable, Inc. (SR Inc.) released a management best practices research report entitled “Deploying Enterprise Energy and Carbon Accounting (EECA) Software,” that provides practical guidance on software selection and implementation. To access the report, GO TO http://sustainround.com/research/EECA.php

SR Inc. clients who provided case studies include Adobe, Autodesk, Intuit, and Brookfield Properties. Among other findings, the report highlights that:

• The key drivers for deploying EECA software today to manage GHG emissions include cost control, disclosure requests, brand enhancement, and new, superior technological solutions.
• The deployment of EECA has significant benefits over the use of spreadsheets and complements other enterprise systems.
• Careful initial planning and decision-making throughout the three deployment phases (selection, implementation, utilization) can reduce risks and maximize the benefits of EECA.
• The use of EECA as a management tool first, and reporting tool second, enhances sustainable value creation across the enterprise.

Over the past three years, the market for software to manage sustainability metrics and produce management, regulatory, and voluntary reports has exploded, with over 200 vendors offering products of varying maturity. Since real estate is one of the leading sources of corporate GHG emissions, primarily due to purchased energy use, one software class—known as ‘enterprise energy and carbon accounting’ (EECA) — has become the preferred approach for priority sustainability data management and reporting.

While some research is available on the EECA market size, market share and characteristics of the leading vendors and products, there has been little decision-support for real estate executives on the selection, procurement, and implementation of EECA software until the SR Inc. report was released.

Michael Gresty, SR Inc.’s Executive Vice President of Research and Consulting, observed that “while numerous companies have already deployed EECA solutions, many more have not, and are looking for guidance about why and how to do so from the early adopters. Our client-sourced best practice report includes strictly vendor-neutral step-by-step guidance on deployment by corporate real estate executives.”

Enterprise-wide information systems have become the fabric in today’s corporate/investor landscape but, with the emergence on the importance to track and report carbon emissions, manage sustainability initiatives and gauge success call for a new class of software – enterprise energy carbon accounting and SR Inc.’s guidance on how to deploy it successfully.

How does your organization track, measure and report its’ carbon emissions and sustainability initiatives?

In recent years, “green” has become a predominant theme in the corporate and social lexicon, and a critical business driver in many companies’ overall strategy.

In an emerging trend, senior level executives publically proclaim the “green” high ground as a corporate philosophy while middle management supports the organizational objective with “green” real estate strategies, many of which tend to be focused on energy efficiency because it has the greatest potential for savings.

More recently, water scarcity and associated rising costs have become critical issues bordering on a crisis, as a survey of recent headlines attests: “metro eyes evening lawn sprinkling ban to conserve water,” “water shortage warning issued for 16 Florida counties,” “Pasadena will face water shortage emergency this month,” and “spring watering restrictions now in effect.”

The Sustainability Roundtable, Inc. (SR Inc.) recently released a client briefing with the following key takeaways:

• The five market drivers for water efficiency in corporate real estate portfolios are rising costs, increasing water scarcity, reputational risk, green building certification, and investor concerns
• Domestic use, heating and cooling, landscape, and kitchens are the four main categories of water demand in commercial buildings
• Water foot printing is important to evaluate both direct and indirect water use
• Mapping flows and measuring water consumption using metering, sub-metering, and estimation are essential to benchmarking and setting goals

Water scarcity has increased average water rates of 310% over the past 25 years compared to a 207% increase in the CPI. In many areas, water consumption charges do not yet reflect the true cost of water, but they are rising quickly because subsidies that kept them artificially low are being phased out. For instance, NYC has raised water rates 12.9% for three years in a row, and plans to do so again in 2011. Water districts are raising prices to cover the full cost of water treatment, storage, and delivery. As water scarcity intensifies and water rates increase so does the pressure for governments to mandate efficiency.

Companies that utilize LEED standards on new construction and existing building retrofits can reduce water consumption by 20-50%. The LEED certification guidelines include a pre-requisite for water reduction (20%), water efficient landscaping, innovative wastewater technologies, water performance measurement and cooling tower management.

Water scarcity and increasing costs are getting attention from investors who are interested to learn how companies manage their water use. In 2011, for the second year running, the Climate Disclosure Project is requesting information on the risks and opportunities companies face in relation to water on behalf of 354 institutional investors with assets of $43 trillion. Water is sometimes called “the new carbon,” but while CO2 emissions are only priced in some markets, water costs and risks are increasing in all markets.

Most companies already focus on energy efficiency, but water and energy are interconnected. Efficient use of water reduces on-site energy use, as well as the energy required to supply fresh water and treat wastewater and recycle water. Power plants which produce electrical power use water for cooling or to turn turbines. By extension, water use causes carbon emissions because of the energy required to source and pump it. The Environmental Protection Agency reports that about 8% of US energy demand goes to processing and moving water.

Storm water is typically a problem which requires expensive infrastructure both on-site and off-site to solve. Leading corporate real estate executives are seeking ways to re-assess the management of storm water to capture its value and reduce capital as well as operating costs.

As water is beginning to play an increasingly important part of an overall sustainability strategy, measuring and auditing water use is essential to create a baseline and to benchmark. Common corporate water efficiency goals are incremental 2-3% annual improvements as a reduction in the volume of water used by area (gallons per square foot), but some organizations are targeting 20-30% 1-year goals.

An integrated approach to implement water efficiency includes:

• potable water use reduction – low-flow fixtures, cooling towers, leak repair, xeriscaping;
• water recycling – onsite water recycling and rainwater harvesting; and,
• water diversion – incorporating storm water management for re-use will yield optimal results to address the increasing water crisis.

Michael Gresty, SR Inc.’s Executive Vice President of Research and Consulting, comments that “many corporate real estate executives remember the poor quality of the first generation of more efficient low flow fixtures, and associate water efficiency with thoem and associated municipal mandates that had low or no payback. Today, there are numerous solutions on the market that have been thoroughly tested and work extremely well. Moreover, while bathroom fixture replacement is important, our research shows that the biggest gains can often be in leak detection and repair, cooling tower efficiency, and non-potable irrigation or xeriscaping, all of which can both be easier and less costly to implement.” 

The operational market drivers of rising costs and increasing scarcity, in concert with strategic drivers of reputational risk, green building certification, and investor interests are compelling leading corporate real estate executives to create value through water efficiency.  To achieve this, industry best practices are to:

• Meter and measure water use across your portfolio to establish baselines
• Benchmark using ENERGY STAR
• Track changes in water to identify leaks and other anomalies
• Focus on preventive maintenance of cooling towers (responsible for a high percentage of water consumed) and improve fixture efficiency
• Implement green roofs, bio-swales, and other solutions to manage storm water for re-use (irrigation or on-site filtration)

Clearly, “blue has become the new green” due to the importance of water conservation to address operating cost reduction and as an integral part of a successful “green” sustainability strategy.

Increasingly, companies are publishing information about their greenhouse gas emissions, climate change initiatives, and sustainability strategies because they believe that doing so makes them more attractive to investors. This is the carrot.

A number of organizations promote voluntary sustainability disclosure and reporting, such as the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP). The GRI provides guidelines for reporting, while the CDP compiles voluntary disclosures from over 2,500 companies, including 330 members of the U.S. S&P 500, in response to it’s annual questionnaire issued on behalf of hundreds of leading investors.

Some companies already incorporate information about their sustainability initiatives in their annual reports and Securities and Exchange Commission (SEC) filings. The latter has become a necessity for most, given that in February 2010 the SEC clarified that existing disclosure rules requiring companies to report on issues material to investors also cover climate change risks and opportunities. This is the stick.

Which, carrot or stick, does your company respond to?

Many companies still decline to disclose voluntarily or file with the SEC on the issue of climate change. The extent of non-compliance with the SEC requirements was recently highlighted in a report developed with input from Ceres’ Investor Network on Climate Risk, which outlines generally weak climate disclosure by businesses, and proposes steps for improving such disclosure, especially in the annual 10-K financial filings due by March 31, 2011. The Ceres report comes just after Mercer issued a new study warning that climate change could increase investment portfolio risk by 10 percent over the next 20 years.

Sustainability Roundtable EVP of Research, Michael Gresty, observes that “failure to disclose signals either that companies are unwilling to reveal poor performance that will present them in bad light, which is a red flag to investors, or that they have not assessed the risks and opportunities, which is an even bigger red flag. Since real estate assets are the main source of direct and indirect GHG emissions for most companies, and these correlate closely with their cost of energy, we see the sector leaders in our Sustainable Real Estate Roundtable working actively to measure and manage energy and GHG emissions, and to report on their portfolio-wide sustainability initiatives.” (See SRER report Portfolio-wide Sustainability Strategy for more information.)

A proactive response to voluntary (carrot) and SEC mandated (stick) disclosure requirements has created a competitive advantage for companies that develop and implement successful sustainability strategies.

To some companies the underlying driver behind sustainability initiatives is to reduce operating expenses by applying the principles of sustainability that include: improve energy efficiency; utilize better resource management and waste reduction; procure renewable energy sources; and, optimize space through alternative workplace environments that reduce the overall size and cost of the real estate portfolio — for many companies, the OPEX reduction is ‘carrot’ enough. But, as mainstream investors increasingly use broader environmental, social and governance (ESG) research to mitigate risk and seek alpha, those companies that fail to disclose raise doubts about what they may be hiding, and cede the terrain of transparency to their competitors.

Business, community, academic, and public leaders will convene to explore the latest developments in sustainability in the half-day NJ/PA Sustainability Symposium, which takes place on March 31, at Rutgers University’s Camden campus.

The symposium focus will be on the latest in regional planning, funding opportunities, community involvement, and how businesses, universities, hospitals and municipalities will engage and execute their sustainability plans in 2011. The symposium has three tracks: Business, Community, and Hospital/University.

Attendees will gain insight into the economic, policy, and green energy implications of pending changes in New Jersey’s Energy Master Plan. This symposium will also highlight leading regional innovations, and feature thought leaders. Topics vary from the east coast roll out of the electric car, to electricity deregulation in Pennsylvania, New Jersey’s leadership role in solar energy, and wind power off the Jersey shore.

SRER Member Brandywine Realty Trust, is among the event sponsors. Featured speakers include Jim Boyle, CEO, Sustainability Roundtable, and Brad Molotsky, EVP and General Counsel, Brandywine. Sustainability Roundtable members are actively developing and implementing portfolio-wide sustainable real estate strategies. See the executive summary of the recent SRER report on Portfolio-wide Sustainability Strategy.

For more information, go to Sustainability Symposium NJ/PA 2011.

Benchmarking is essential to create a real estate strategy that ultimately can drive sustainability excellence…to get where you want to go, you have to know where you are starting from.

The primary purpose of benchmarking corporate real estate data is to discover areas of underperformance (both relative to relative to leased and owned assets within your portfolio as well as relative to industry standard by building type, industry, and geography), investigate the reasons for this, set goals, and develop improvement initiatives to achieve those goals.

Benchmarking is not usually a one-time exercise. Regular benchmarking on an annual basis is key to achieving goals and continuous improvement.

Throughout the benchmarking process you have to keep in mind the axiom, “you can’t manage what you can’t measure,” and that the purpose is not measurement for it’s own sake, but measurement to manage for greater sustainability.

In a monthly webinar by the Sustainability Roundtable, Inc. (SR Inc.) in October 2010 entitled, “KPIs and Benchmarking Portfolio-wide” we cited sustainability key performance indicators (KPIs) in the most common categories, include:

Operations (energy, water, waste, and space utilization)

Financial (capital investments, savings generated, operational investment of savings, return requirements/criteria)

Environment (indoor air quality, GHG emissions, and land use)

People (sustainability expertise, occupant engagement, alternative workplace options & utilization and occupant absenteeism)

The fundamental barrier to benchmarking is the difficulty to obtain reliable data, both for the assets to be benchmarked and for the benchmarks to be used. The critical steps to start an effective benchmarking program for real estate sustainability are:

• Establish KPIs, or review them if these exist already, to evaluate whether or not you’re making progress across key impact areas. If not, select the appropriate common KPIs relevant to the company’s specific business model, product, and needs.
• Determine whether the data for these KPIs exist within the enterprise, and if not, implement a longitudinal measurement and collection program to gather and track data.
• Create a data repository (not spreadsheets) to collect and analyze the data, determine its completeness and reliability, and assure data quality.
• Select the set(s) of external benchmarking data you will use, and ensure that these will be updated and available in the future.
• Analyze the data and compare them to the benchmark set.
• Publish the results to the teams responsible for data collection, and for facility and asset management. This establishes a baseline.
• Set meaningful short, medium and long-term improvement goals, to position your assets and your portfolio where you want them to be.

Some of the more commonly used metrics are:
Energy use (all types, gigajoules per square foot per year)
Water use (gallons per square foot per year)
Waste to landfill (pounds per square foot per year)
Carbon dioxide equivalent, CO2e (pounds per square foot per year)
Air quality (particulates and other pollutants, parts per million)

Some available resources for benchmarking information can be found at:

BOMA’s Experience Exchange Report (EER) service – $279 Per Year
CoreNet Global Real Estate Benchmarking (REB) Portal – $175-275/Building
ENERGY STAR Portfolio Manager – FREE
Climate Disclosure Project – Cost Varies by Level of Inquiry
Corporate Global Reporting Initiative (GRI) Reports – FREE

Michael Gresty, SR Inc.’s Executive Vice President of Research and Consulting, notes that, “each one of the benchmarking steps are essential to create a process that empowers executives and staff with actionable information to support decision-making. Doing this is difficult—if it were easy, everyone would have done it already—but essential to the effective management of real estate assets for greater sustainability. Benchmarking is not an end in itself, but without it, it is impossible for managers to set robust goals to measure progress.”

Corporate real estate professionals who are serious about creating sustainable enterprise value from real estate assets ensure that they have a meaningful benchmarking program in place, and are committed to it long-term because, “you can’t manage what you can’t measure.”

The GSA’s Office for High Performance Green Buildings has been a leader in the development of tools and methodologies for more sustainable federal buildings since the 1970s. The Office continues to innovate, and this week announced the availability of a new public online decision resource, Sustainable Facilities Tool, www.sftool.org.

This new website for federal agencies and private developers provides extensive one-stop guidance for cost-effective, innovative strategies for managers and consultants when renovating or retrofitting buildings. It provides information on best practices in design choices, material selection, construction practices, and occupant behavior, based on years of GSA experience.

The GSA is a Charter Member of SR Inc’s Sustainable Real Estate Roundtable.

Sustainable corporate real estate strategies:

- reduce operational and occupancy costs through energy efficiency and space optimization, AND

- avoid customer, employee, environmental and regulatory risk, AND

- align portfolio management with an organization’s overall objectives.

Sustainable development, which has been defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs,” is a policy objective and global megatrend that companies must align with to create enterprise value.

The hallmark of corporate sustainability excellence is inclusion in the Dow Jones Sustainability Index (DJSI). The DJSI recognizes that “corporate sustainability is attractive to investors because it aims to increase long-term shareholder value. Since corporate sustainability performance can now be financially quantified, they now have an investable corporate sustainability concept. Second, sustainability leaders are increasingly expected to show superior performance and favorable risk/return profiles. A growing number of investors are convinced that sustainability is a catalyst for enlightened and disciplined management, and thus, a crucial success factor.”

DJSI recognition does not necessarily require a sustainable corporate real estate strategy, but those organizations that proactively incorporate the principles of sustainability into managing their portfolio of leased and owned facilities can make significant contributions to their organization’s overall enhanced value.

The challenge for the corporate real estate and facilities professional is made a bit easier when senior management fully embraces the principles of sustainability and is willing to make the necessary investment that achieves an acceptable internal rate of return. 

The way real estate strategies play a major role to create enterprise value is best highlighted in the Sustainability Roundtable, Inc.’s (SR Inc.) “2010 Corporate Real Estate Management Best Practice Guidebook” which reports the following best practices they originally researched from leading corporations:

• Portfolio-wide sustainable real estate strategy is an essential component of a corporate response to the sustainability megatrend.
• Leading real estate executives align with corporate strategy to establish a vision of sustainable real estate; implement effective governance; guidance; short-, medium- and long- term goals; and demand accountability for results.
• Executives can create sustainable efficiency and value by developing and implementing portfolio-wide initiatives to improve portfolio performance and increase asset value.

Going forward, innovative real estate professionals are being increasingly recognized for taking the lead to exceed goals. To be successful they must implement proven sustainable real estate strategies that: compliment the corporate vision; anticipate long-term environmental impact; meet shareholder demand for financial returns; foster customer loyalty for company products and services; set high standards for the corporate code of conduct; and, maintain employee affinity and job satisfaction.

Michael Gresty, SR Inc’s EVP of Research and Consulting, observes that “today, the corporate real estate function is often by default the internal champion of sustainability initiatives. CRE teams can now do more to secure C-suite buy-in that enables them to maximize value creation rather than simply minimize costs. CRE is experiencing a metamorphosis to become a new source of value and risk management.”

Sustainability is no longer just “a good idea” or “the right thing to do,” sustainability is now an investable strategy as sustainable real estate portfolio management has become an important element in creating benefits for companies and their investors. As the sustainable enterprise value creation dynamic expands, it will have an even more profound effect on improving individual and corporate financial performance, the global economy, and environmental stewardship.