Four key questions
to ask when creating
Determine the initiatives to help you accomplish every goal on your sustainability journey
Every organization’s sustainability journey begins with a vision—a high-level understanding of what they want to achieve—followed by a strategy detailing individual goals to reach along the way. But while many sustainability strategies look great on paper, they’re often not fit to be implemented.
For example: An organization has committed to cut greenhouse gas emissions by 30% over the next five years. Their high-level strategy could include gradually reducing energy consumption by specific amounts during that timeframe. To achieve these goals, they might prioritize their portfolio’s top 10 energy-consuming buildings, determine how to improve equipment efficiency, and identify which outdated assets need replacing and more.
Does your organization have a sustainability vision and strategy but lack an action plan to make good on them? You’re not alone; even though almost all organizations have sustainability goals, four in five companies don’t know what actions they need to take to act on them. Answering these four questions can help get you started.
1. What opportunities exist and what initiatives should we prioritize?
Each action should fall into one of three buckets:
a. Enterprise-level: The definition of sustainability can be quite vague, and it is important to make sure your organizational definition of environmental, social and governance (ESG) goals is clear and set at the enterprise level. These initiatives are executed across the entire organization and may or may not be specific to real estate. For example, environmental aspects of ESG may include circular economy, sustainable supply chains or green travel policies. Non-environmental actions might focus on the social and governance aspects of ESG and could include employee training programs, diversity and inclusion, fair wages, community impact, and health and wellness programs.
b. Portfolio-level: Initiatives such as policies and operating standards are governed across the entire real estate portfolio. For example, an organization with plans to achieve net-zero carbon emissions by 2030 could establish operating standards and policies around any design or construction work to curb carbon emissions, as buildings account for 39% of global carbon emissions. The organization may also consider green leasing guidelines to ensure any future leases incorporate sustainability elements, or review renewable energy purchasing options across its real estate portfolio.
c. Asset-level: These initiatives are more granular, involving individual buildings and the equipment within them. Energy audits can help determine which energy conservation and carbon reduction initiatives to prioritize and quantify the impact of each opportunity. Asset-level sustainability initiatives require collaboration and insight from various stakeholders, including the site operations teams, who are most intimately knowledgeable about each building and its improvement opportunities.
Once potential initiatives have been identified, business cases should be developed to justify and prioritize acting on them.
2. How much should we budget?
How much you need to budget will depend on where you’re starting and where you’re going. For most organizations, capital budgets are often tight, and decision makers are often forced to defer investments that aren’t deemed critical. That’s why establishing a business case and prioritizing the actions you want to take is an important step. If you’ve clearly defined costs and benefits for each action, you can prioritize those actions based on their impact toward meeting your goals. This makes it easier to get the capital investment necessary to meet future goals. These investments can provide even more significant return on investment and benefit you more in the long run by reinvesting those savings to continue making progress in meeting your goals. Regardless of where you are starting, if you’re serious about sustainability, you need to be prepared to invest.
For instance, in 2007, a Fortune 100 global software-industrial company tasked its real estate leader with delivering multi-million-dollar energy cost savings annually. Working with JLL, the company made significant investments in its sustainability program to help deliver long-term savings across its aged portfolio. Then in 2015, the company’s CFO allocated CAPEX investments for new energy capital projects, helping them reduce their operating costs and carbon footprint. Not only did the investments pay for themselves, but also both the ongoing program and the capital projects program delivered a combined $65.3 million in energy cost savings and a 3.5% carbon footprint reduction, proving that it’s possible to save money and do good at the same time by budgeting and investing appropriately.
3. How much lead time should we build in?
While not all activities will require a lot of planning, certain ones will. It’s important to assign the appropriate amount of lead time to each one by working backward from its deadline. For instance, you won’t need much notice to change a building automation system’s sequence of operations, as the system is already installed and can be optimized easily. However, you’ll need significant lead time to establish capital-intensive programs like an on-site renewable energy program. The evaluation, design, procurement and construction processes will have many moving pieces and require more internal signoffs every step of the way. Moreover, getting capital approvals can be time-consuming and require multiple reviews by a committee, which can hold up the process considerably.
4. Who should be responsible for each initiative?
After you’ve prioritized your initiatives and budgeted time and capital toward them, you still need to create a governance strategy to ensure actions are aligned with organizational owners. Many in-house teams lack the capacity or the expertise to execute a capital-intensive energy or sustainability program on their own. It is important to prioritize determining the levels of expertise you currently have in-house and identify resource and knowledge gaps so you can find the right partners to supplement your in-house teams and fill those gaps.
Case in point: After accelerating investments in energy efficiency projects, the aforementioned client discovered a new challenge. The traditional mechanical, electrical and general contractors hired for capital project implementation lacked the specialized expertise needed to budget for and execute energy specific projects. We partnered with them to supplement the on-site project managers with energy and sustainability subject matter experts. This ensured execution of energy capital projects by contractors with the right level of energy and sustainability expertise.
Having sustainability ambitions and a strategy to achieve them is great. But every strategy must be actionable. Whether you’re trying to determine which initiatives to prioritize and implement, how to plan and budget for them, or who will execute them, the right partner can make all the difference. Contact us or visit our website to learn how you can create an effective action plan for your sustainability program.