The Leader Magazine

SEP 2016

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renewable energy and a concern for the human health impacts of buildings. towards sustainable operations Across sectors and geographies, many SR Inc Charter Members have recognized that top customers, talent, investors, senior managers and regulators increasingly care about sustainability. CRE leaders within these companies have recognized that expressly advancing a commitment to greater corporate sustainability can help them better organize and animate cross-departmental efforts toward the continuous optimization that has long been key to their job. Corporate sustainability, which has for a generation been advanced through marketing, product and supply chain, has unequivocally arrived as a concern of business operations. Even business-to-business fi rms are seeking to embrace a more sustainable approach to their own, often global, operations. As a result, CRE leaders at dozens of SR Inc member-client com- panies – as diverse as the global, China-based technology leader Lenovo to the far-smaller, Maryland-based fi nancial services fi rm T Rowe Price – have found that it pays to evolve from disparate sustainability-related projects in their own buildings and leased space toward a comprehensive sustainability strategy for operations. Ideally, such a strategy would not require any new spending but would recast operations and CRE's conventional commitment to continuous optimization in a manner better recognized and rewarded by talent, the C-suite, and customers and investors, particularly when highlighted in sustainability reports. Leaders like Deidre Buzzetto, director of International Real Estate at Lenovo, and Brian Dean, VP and director of Real Estate at T Rowe Price, are among the increasing number of CRE leaders who have found that CRE can play a leadership role in helping their companies organize their company's efforts toward more sustainable operations. They have found that both senior management and employee groups (especially those dominated by Millennials) can be no less than "thrilled" when CRE becomes proactive about more sustainable operations. It is important to understand that embracing a leadership role in the effort towards sustainable operations is not a matter of taking on new re- sponsibilities or costs. It is, instead, a matter of embracing a more strategic approach to traditional efforts at continuous optimization and innovation. It's an approach that helps them align their efforts with the interests of top customers, talent, management, investor and regulators. 14 SEPTEMBER 2016 Jim Boyle is CEO & Chairman of Sustainability Round- table, Inc., where he has led full-time teams of experts assisting world-leading corporations, real estate owners, and federal agencies in their move to greater sustainability. He is a graduate of Middlebury College and Boston College Law School. Kelsey Wallace is a senior sustainability analyst at SR Inc, where she assists in the research, development, and implementation of corporate sustainability strategies for global companies leading the transition to a more sustainable economy. 1. Denise, G., Ramanathan, V., and K. Teske. 2014. "Sustainable Strategies: Impact on Corporate Real Estate Portfolios." CoreNet Global MCR Seminar. July 2014. 2. Unruh, G., Kiron, D., Kruschwitz, N., Reeves, M., Rubel, H., and A. Meyer zum Felde. 2016. "Investing for a Sustainable Future." MIT Sloan Management Review Research Report in collaboration with Boston Consulting Group. 3. SR Inc. Sustainability Strategy for Operations – Sustainable Buildings & Business, Sustainable Business & Enterprise Roundtable, Full Report; published to membership December 2013. 4. For a cogent and relatively concise history of the development of global standards and systems in ESG investing, see: Massie, B. "Welcome to the ESG Evolution." Institutional Investor, March 9, 2016. 5. BlackRock. "Exploring ESG: A Practitioner's Perspective." Viewpoint. June 2016 6. SASB is chaired by Michael Bloomberg, who also serves as CEO & Chairman of SR Inc Charter Member Bloomberg LP. SASB was founded in 2010 by CEO Jean Rogers after serving as Principal at Arup and, in that capacity, as an original SR Inc Member Executive. 7. Ceres Investor Network on Climate Risk; letter to the United States Securities and Exchange Commission: "Re: Investor Concern About Poor Climate Risk Disclosure and Request for SEC Action.;" June 22, 2016. CRE leaders who successfully develop CRE leaders who successfully develop CRE leaders who successfully develop CRE leaders who successfully develop and drive a strategy for sustainable opera- and drive a strategy for sustainable opera- tions are regularly strong in fi ve key areas. SR Inc has developed a system of guidance that helps CRE leaders understand and that helps CRE leaders understand and move to best practices in regard to: (a) Vision & Governance; (b) Strategy; (c) Vision & Governance; (b) Strategy; (c) Guidance, (d) Implementation and (e) Reporting Results. Data over the last fi ve years involving more than 70 companies demonstrate that an always-increasing number are becoming adept at developing and driving portfolio-wide strategies for and driving portfolio-wide strategies for more sustainable operations. Components of a sustainable operations strategy F E A T U R E A R T I C L E

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