Many service companies are developing sustainability programs, but few are actually integrating sustainability into their core business activities. In the video below, I describe the experience of KeyBank, which is creating a sustainability program focused on shareholder value. Recycling and energy efficiency programs are only a start for KeyBank. The real gains lie in leveraging employee passion for sustainability to increase productivity and drive improvements in employee engagement, innovation, customer service and product development.

Interested in hearing more? See what else Michael has to say by watching this video.

Most of our energy and sustainability project work focuses on the ‘how’ rather than the ‘why’ – owners of existing buildings tend recognize the benefits of green buildings and are looking to our firm to deliver the best result at the lowest possible cost.  So it was interesting to be part of a discussion last week on the cost-benefit equation of sustainability in new buildings, at the AIA National Conference in Washington DC.

The American Institute of Architects, naturally, is mainly concerned with the design and materials specs for new buildings, where the incremental cost of energy efficient systems is tiny compared to the life cycle energy cost savings. The majority of Jones Lang LaSalle’s energy project work involves retrofitting existing buildings, where the return on investment may be less obvious but the simple payback still fall into the three-to-five-year range in most cases. Increasingly, our cost-benefit discussions around sustainability projects revolve around issues beyond simple payback, such as tenant attraction and employee productivity. For these clients, the financial benefit of energy and sustainability in new buildings is a foregone conclusion. But for the AIA audience, the finer points of green design still leave a lot of room for discussion.

The basic message of my presentation was simple: If you don’t design to LEED, you are designing to obsolescence.  I don’t remember where I read that, but the idea stuck with me, and it resonated with the AIA audience too. Green design is the future, whatever the cost—but it doesn’t have to cost extra. Every serious study of the question over the past 10 years has concluded that, when green features are considered as an afterthought, they tend to add to the cost of construction, but when sustainability is embedded in integrated project delivery (IPD) or similar design-build processes, green buildings cost no more than traditional buildings.

Audience members were also very interested in my comments on the increased evidence that green design makes buildings worth more – quantified in various studies by increased rental rates, increased sale prices, and increased occupancy rates.  Architects want to make a strong case for the value of sustainability with their clients, and the evidence shows that case getting stronger all the time.

Estimations of the Energy Information Administration (EIA) show that global energy use is expected to jump 53% by 2035. Brazil,China and India will be the countries pulling these statistic numbers up. Inspite of that, we know that Energy resources are limited and we need to keep raising awareness on sustainable development, mainly on the emerging countries.

In Brazil, industries now can see a new and positive scenario regarding energy consumption. Last month, ANEEL (National Agency of Electrical Energy) approved rules to reduce obstacles to the installation of distributed generation of up to 100 kW of power (micro generation), and from 100 kW to 1 MW of power (mini generation). The regulation establishes the Energy Compensation System, which allows consumers to install small generators in their consumer units and exchange electricity with the local distributor. The rule applies to generators with incentive that use cleaner energy sources such as hydro, solar, biomass, qualified cogeneration and wind.

In this system, an industrial plant (or even a residence) can produce its own power and the exceding electricity can be injected into the distribution system and convert it into credit that can be used within the following 36 months. Credit information will be available on the monthly invoice for any type of consumer. Companies with subsidiaries that are on the system can also produce energy at one facility that will be consumed in another, reducing the bill at the end of each month.

Besides the Energy Compensation System, ANEEL approved other incentives on the transmission and distribution costs, exclusively for solar pannels projects. Any solar plant that start producing until December 31^st, 2017, will have 80% discount on taxes during the first 10 years of operation. After that the discount will be reduced to 50% which will be the same tax to the new projects on operation after January 1^st, 2018.

This new scenario brings many advantages over the traditional centralized generation such as the reduction of transmission costs, losses on the network and improvement of the quality of electricity service.

The new rules are addressed to generators using renewable energy sources, and with that, the agency hopes to provide better conditions for the sustainable development of the Brazilian electricity sector, through the adequate use of natural resources and efficient use of electrical networks. Good news for Brazil and for the planet!

Sustainability has long been in the C-suite lexicon, but senior managers are beginning to consider the idea with a view beyond cost savings. Shareholders and customers alike are seeking assurance that companies are “doing the right thing” with regard to the environment, while employees increasingly prefer a sustainable work environment, says Dan Probst. Jones Lang LaSalle’s IntelliCommandSM service helps companies benchmark building performance and use their facilities more effectively, says Dan, thus creating value beyond just energy efficiency and recycling.

Interested in hearing more? See what else Dan has to say by watching this video.

With less than 80 days to go to the Games, East London Business Alliance (ELBA) kindly hosted a visit to the London Olympic site in Stratford, which I was lucky enough to attend. I stepped on the tour bus, the guide said “Welcome to the 2012 Olympic site, this tour is all about sustainability and the legacy of the site.” This was great to hear since the organisers consistently said that sustainability will be at the heart of the Games.

He proceeded to tell us about all the sustainability credentials of the site; the Velodrome’s natural ventilation system and 100% sustainability sourced timber; the Aquatics Centre’s recycled material foundation; the cleaning and reusing of tonnes of soil; the parklands that were produced to create biodiversity and green space; and the list goes on. To top it off, all the buildings except the stadium have been already sold to private investors for post-Games use; well except for all the temporary buildings that will be dismantled to be used elsewhere. Needless to say, I was impressed and amazed – and I don’t use the terms lightly.

The Statement from the Chair of the London 2012 Sustainability Ambassadors Group put it very well: “Invite 14,700 of the world’s finest athletes to compete together, watched by millions of spectators from all around the world in the presence of the world’s most demanding media. Locate the whole show in one of the most under-developed areas of your capital city, on some of the most contaminated and derelict land it’s possible to find. Undertake to make sure all the buildings and all the infrastructure required, and all the services provided to stage such a jamboree, meet the highest possible sustainability standards. Give yourselves just seven years to marshal all the money needed, employ the best possible staff, procure billions of pounds worth of goods and services and mobilise thousands of volunteers – with sustainability at the heart of the entire operation – and that’s the London 2012 Olympic Games and Paralympic Games!”

I’ve never been more proud to be a Londoner!

America is undergoing an energy revolution based on natural gas – with some interesting ramifications for the sustainability movement.

We are now virtually shaking natural gas out of plentiful shale deposits throughout the country.  According to a 5/4/12 article in The Economist, we are now sucking out three billion more cubic feet of natural gas every day than we can consume.  As result, prices have fallen from $8 per thousand cubic feet five years ago to about $2 today.

As a very clean-burning fuel, natural gas could be a big improvement over the carbon footprints of dirtier fuels, like coal, gasoline and diesel.   This feature, combined with the growing economies of natural gas, is prompting a race to find places where it can displace other fuels for everything from heating homes to powering vehicles.  There are some significant challenges in converting cars to compressed natural gas, but it’s getting a lot of attention.

Energy self-sufficiency and less pollution are clearly positive outcomes, but natural gas is still an emission-generating hydro-carbon and is, ultimately, not a renewable resource.  Would a massive migration to natural gas stunt the growth of alternative energies like wind or solar?  Would it put a crimp in the evolving market for electric vehicles and hybrids?

Maybe natural gas is a good transition step to better long-term renewable solutions.  But, I am wondering if it might steal away hard-fought momentum toward truly renewable solutions.

Thanks everyone for participating and congratulations to our winners!!

As China urbanizes at an unprecedented rate, the need for strong environmental and sustainability measures is at the forefront of urban planning. Throughout China, zero emission, low noise electric bicycles and scooters are enormously popular and inexpensive and a complete contrast to the noisy fume emitting and inefficient two-stroke pedicabs and motorbikes prevalent in most Asian cities.  Whilst the industry is heavily reliant on coal, residential consumption of coke for heating and cooking, a major contributor to poor urban air quality has dramatically reduced and low tech low cost biogas units are increasingly adopted by rural households.  Public and non-motorised transport usage is amongst the highest in the world, with efficient mass transit systems being rapidly rolled out across many of China’s cities from Chengduto Dalian. 

At the same time, local initiatives to create parklands, relocate industry, restore waterways with riverside parks and promenades, pedestrianize streets and revitalize heritage districts are popular features of cities from Shanghaito Tianjin, ChengdutoZhengzhou. Solar water-heating, solar street lighting and even solar kettles are ubiquitous in parts of China, with the country’s per capita residential energy consumption less than 30% of that the US and 35% of the UK’s.

Neighbourhood planning ensures that areas are well served by public transport and social infrastructure, with ample provision for local business and amenities. Initiatives ranging from electric capacitor buses to mandated low energy light bulbs are helping make Chinese cities sustainable from both an environmental and societal perspective. 

In many of these areas,China’s ability to innovate, improvise and particularly to implement is enabling it to respond to the unprecedented challenges of its relentless urbanization, building communities which are sustainable with Chinese characteristics.

There is a paradox in the increasingly crowded world of corporate responsibility (CR) communications: although the size of CR Reports keep increasing to comply with stringent industry standards, some key information sometimes gets lost on the way. This is particularly the case with one principle set by the Global Reporting Initiative (GRI) known as the “Balance” principle. This principle means that sustainability reports should reflect positive and negative aspects to enable a reasoned assessment of overall performance.

I think this principle is as important (if not more so) than the other core aspects of GRI. We know that standalone CR reports are mainly read by investors. So it is important that they do not come across as simple marketing brochures but rather as real accounts of companies’ or funds’ performance. At the end of the day, what matters is the journey and how you get there rather than your absolute results at a particular point in time. Investors appreciate honest and transparent reports, which get recompensed through awards such as those run by ACCA and Corporate Register 

So here are some tips to make the credibility of your report stand out:

1. Explain good and bad performance trends for targets and indicators
2. Disclose your scores from your Sustainability Indices such as Carbon Disclosure Project and respond publicly to your investors’ feedback
3. Follow the GRI guidelines for your CEO’s statement
4. Perform the tests set out by GRI through its Principles for Defining Report Quality and publicly disclose on how you comply with them
5. Get your report reviewed of assured by a third party and disclose their assurance/advisor’s statement

Check out the full GRI Principles for Defining Report Quality .

A study published late last year by the Pacific Northwest National Laboratory indicates that control strategies for existing package air conditioning units could dramatically reduce energy use in commercial buildings.

Consider that package cooling equipment is used in 46% of commercial buildings, representing over 60% of all floor space.

The study shows that basic retrofit strategies for these existing AC units would cut energy use by 24% to 35% and reduce costs by 38%.  Multi-speed fan controls and demand-controlled ventilation are two of the most effective measures for improving energy efficiency.  Other measures noted include air-side economizers.

The impact could be staggering.  As the study notes, if only half the units in the country are retro-fitted with the “modified control package option,” the savings are equivalent to removing 16 coal-powered (200MW) power plants.