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Mind of the Corporate Occupier: large corporations and non-profits turning to real estate, facilities, to achieve triple-bottom-line (people-planet-profit) goals
CHICAGO, September 27, 2012 — Jones Lang LaSalle (NYSE: JLL) today announced new insights compiled through its work with leading multinational corporations and large non-profit institutions. Organizations are increasingly leveraging the commercial facilities they own and use to demonstrate progress toward triple-bottom-line (people-planet-profit) goals. The opportunity is significant: according to the U.S. Dept. of Energy, commercial buildings represent nearly 20 percent of U.S. energy consumption and carbon emissions.
While blue recycling bins have long been a fixture at employee desks, CEOs and CFOs are now digging deeper, and looking increasingly frequently to operations-focused programs that can deliver long-term value across a global footprint, such as integrated facility management, supply chain diversity and energy use reduction initiatives.
“Buildings, and how they are run, shape an organization’s environmental footprint, reflect its dedication to its workforce and contribute to shareholder value,” according to Chris Browne, Jones Lang LaSalle Managing Director and head of integrated facilities management. “Since real estate is a top-three capital investment, CEOs, CFOs and corporate boards cannot truly impact the triple bottom line without looking at the design and operation of the spaces where customers buy, employees work and goods are produced.”
“An innovative CEO can demonstrate leadership by partnering with his corporate real estate professionals to approach the triple bottom line as an integrated challenge, no longer separating sustainability and diversity from profitability,” according to Jones Lang LaSalle Executive Vice President of Sustainability Strategy, Michael Jordan. “They can leverage action in the real estate function to realize ambitious targets.”
For example, Cleveland-based KeyBank, a Top 20 U.S. financial institution, is leveraging its real estate to support its mission of helping communities thrive, and to increase employee satisfaction and improve the customer experience.
According to Jessica White, KeyBank head of sustainability, the bank has set a goal to reduce carbon emissions by 20 percent from 2009 to 2016. She explains, “KeyBank is very focused on sustainability—more specifically, environment and social governance. We really define sustainability in the classic definition of managing business for the long term. While we are very committed to reducing the impact of our operations on the environment, we also are thinking about governance issues, about risk management, about our products and services and even our social influence.”The Opportunity for CFOsCFOs once viewed the real estate function as purely a cost center. But with the expanding role of the CFO, top executives are increasingly turning to real estate strategies that consider total value creation rather than simple cost reduction. Such value can include encouraging employee teamwork and innovation, increasing well-being and productivity, and reducing enterprise risk. Jones Lang LaSalle’s experience working with leading corporations and non-profits has resulted in many examples of transformational triple-bottom-line results achieved through corporate real estate programs.
People: Supplier Excellence and DiversityBoth Jones Lang LaSalle and many of its corporate clients run annual award programs that recognize suppliers for diversity, sustainability and overall excellence. By establishing vendor diversity goals and measuring progress, a corporation can instill a culture of quality, inclusion and excellence throughout the supply chain for its facilities—and reap the innovation benefits of drawing from diverse points of view, whether from a technology firm or a maintenance provider.
“Companies recognize that their suppliers represent potential customers and shareholders, and they seek a supplier network that reflects global diversity,” said Marc Campbell, Senior Vice President of Strategic Sourcing at Jones Lang LaSalle. “Our clients are asking that up to 43 percent of their suppliers meet diversity requirements such as certification as a small, minority, woman or veteran-owned business. Through our procurement of facilities-related services, we help our clients fulfill a notable percentage of their diversity goals.”
Planet: Carbon Footprint ReductionReducing energy use and waste is a significant source of cost savings for many companies, and these measurable results can also be tied to a culture of operational excellence within the real estate department.
The energy used to operate commercial buildings costs the United States approximately $200 billion annually and, on average, 30 percent of this energy is wasted, according to the U.S. Dept. of Energy (DoE). Through the implementation of building efficiency programs, even reducing energy use by one percent could save collectively $2 billion per year, along with significant carbon footprint contraction.
To this end, CEOs from multiple major corporations, including Jones Lang LaSalle, have signed on to participate in the DoE’s Better Buildings Challenge, a public-private partnership program dedicated to increasing profits through environmentally responsible building programs.
Furthermore, Jones Lang LaSalle recently surveyed more than 60 of its procurement managers—who collectively control $1.5 billion in in annual expenditures for large corporate clients—to find that 57 percent of these companies view environmental sustainability as a factor in supply-chain decisions. And about 71 percent of sourcing managers believe supplier sustainability is growing in importance at the companies they serve. To align with clients’ leadership in sustainability and procurement, the procurement managers reported integrating requirements from organizations like the U.S. Green Building Council (LEED certification) and the Carbon Disclosure Project.
Profits: Program Execution is CriticalCorporations are realizing higher profits thanks to contributions from the corporate real estate function. The 2010 Accenture-United Nations Global Compact Report CEO study states, “the motivator (for triple-bottom-line achievements) is no longer just social responsibility; it’s now equally about achieving high performance measured in terms such as lower costs, stronger customer relationships and increased revenues.”
But the study also states “…CEOs see implementation (of sustainability initiatives) as the key challenge. 88 percent of CEOs are championing the integration of sustainability through their supply chain. But only 54 percent believe they are achieving this, highlighting a key performance gap between aspiration and reality.”
Some of the ways corporate real estate can close that gap include:
Many times these opportunities are realized through new technology-enabled integrated facilities management platforms that focus on triple-bottom-line results, such as the IntelliCommandSM integrated facilities management and PortfolioCommandSM portfolio optimization platforms from Jones Lang LaSalle.
A leader in the facilities outsourcing field, Jones Lang LaSalle’s Corporate Solutions business helps corporations improve the cost, efficiency and performance of their national, regional or global real estate portfolios by creating outsourcing partnerships to manage and execute a range of occupier services. This service delivery capability helps create new client relationships, particularly as companies turn to the outsourcing of their real estate activity as a way to manage expenses and enhance productivity and profitability.For more news, videos and research resources on Jones Lang LaSalle, please visit the firm’s U.S. media center Web page. Bookmark it here: http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/News.aspxAbout Jones Lang LaSalleJones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47 billion of assets under management. For further information, please visit www.joneslanglasalle.com.