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Four key questions to ask when creating your sustainability action plan
Your organization has committed to an aggressive schedule to meet its sustainability goals and it’s critical your plan to reduce carbon emissions aligns with broader global agreements and the science that drives them. Studies show the built environment contributes up to 40% of the world’s carbon emissions, which is why it’s important to begin with your real estate footprint. As a corporation committed to the health of the planet, it’s a laudable effort, but what does it actually mean for your real estate portfolio?
Many corporates are stuck on where to reduce emissions in their portfolio. Answering these four questions can help.
1. What carbon reduction opportunities exist and what initiatives should we prioritize?
Before you can start reducing your carbon emissions, you must first determine exactly what makes up your organization’s carbon output. A first step is to measure how and when carbon is emitted based on three groups or 'Scopes' using the Greenhouse Gas (GHG) Protocol, an international standard for reporting. The Scopes define three levels or GHG sources:
Scope 1 - Direct, on-site emissions owned or controlled by the reporting organization (usually due to the burning of fossil fuels)
Scope 2 – indirect emissions associated with energy/utility purchases to operate the business (includes electricity and steam)
Scope 3 - emissions related to all other company activities (not directly controlled by the company itself)
Correctly categorizing your emissions into these scope levels will give you an accurate assessment of your organization’s carbon footprint and will ultimately allow you to prioritize action steps towards your sustainability goal. This is where a real estate sustainability expert steps in. A knowledgeable partner can evaluate and collect the right data for your carbon footprint across your portfolio (owned or leased), develop a strategy with energy efficient initiatives that fit your context, and develop a long-term plan of action to meet corporate targets.
2. Where should we focus our 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.
In 2015, the CFO from a Fortune 100 global software-industrial company was under pressure to allocate capital for energy and sustainability initiatives.
Working with JLL, the company developed a strategic plan to make significant investments in energy-efficient projects such as audits that identified conservation opportunities that delivered long-term savings across its aging portfolio. This was a win-win for both the CFO as well as the firm’s corporate sustainability leader. Not only did the investments pay for themselves, 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.
Make sure your capital projects receive the funding needed for successful strategy development and implementation. Our checklist will help you secure CAPEX approval for your sustainability projects and get critical initiatives approved.
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 onsite 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. It’s important to have the right partner who will allow you to pace yourself and prevent unnecessary delays by involving the right stakeholders along the way.
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 determine the levels of expertise you currently have in-house and identify resources and knowledge gaps so you can find the right partners to supplement your in-house teams.
In the implementation phase of the strategy plan, this same Fortune 100 global software-industrial company client discovered a new challenge after accelerating investments in energy efficiency projects. 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 develop a strategy and 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.
To craft sustainability strategies that are built for action, for next steps or visit our website and talk to an expert today to learn how to create a sustainability strategy that drives results.