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Sustainability is no longer just a “nice to have” for today’s organizations. Customers, employees and investors – current and prospective – view sustainable practices as a priority and expect organizations to do the same. Businesses that prioritize sustainability in their operations will attract the best talent, secure the most investment and outperform their peers. Once your organization has determined which goals to pursue, they need to create a plan that transforms ambitions into actions, as well as report on their program’s progress. However, many don’t know where to begin. The following answers to two of the top questions among corporate real estate (CRE) leaders can help you as you look to embark on your sustainability journey.
The corporate sustainability team has given me specific energy reduction and sustainability goals to work toward. How do I develop an action plan to achieve them?
Having a comprehensive action plan is critical to making significant progress on your goals, but it’s also important to begin acting immediately, even if you don’t yet have all the answers. You can continue crafting a complete plan and improve on it while taking small, but powerful steps toward your larger goal.
If you’re not sure of where to begin, turn to a partner to help translate your ambitions into action. When you do get started, base your plan on the outcomes you want to achieve, not on your current available resources.
An effective action plan should include the following steps:
- Understand where you are today by baselining your organization – measuring monthly utility bill expenses, energy usage, equipment efficiency, water consumption, recycled waste versus landfill waste, carbon emissions, etc.
- Establish KPIs and ensure you have the ability to continuously track performance, supply regular reports and analyze data.
- Determine reporting frameworks to align with, as they’ll inform what to measure and guide your approach to benchmarking, data management and reporting.
- Map out which actions and projects can be funded through your operating budgets and which will require capital expenses (CAPEX). Where CAPEX is required, make sure to account for approval processes, budgeting timelines and prioritization requirements well in advance of the project’s kickoff.
- Identify the low-hanging fruit that can help you make fast progress toward your sustainability goals without requiring massive up-front investments. For energy-related goals, consider energy audits to identify these opportunities for reducing consumption, retro-commissioning to identify where equipment might be consuming more energy than it should, managing utility bills centrally across your portfolio and lighting retrofits or other equipment upgrades.
- Plan for long-term challenges. Many longer-term investments that have a greater impact require significant budget and advanced planning. Identify where your current budgets might fall short so you can get on top of additional funding needs and make your business case early. Consider where you may be able to reinvest early-stage cost savings into long-term, capital-intensive projects.
- Communicate progress externally and internally. Externally, publish reports to inform shareholders, customers, business partners, the media and others of your progress. Internally, provide employees with regular updates on key sustainability initiatives and milestones, giving everyone in your organization the opportunity to become an ambassador for your brand. And make sure to recognize and celebrate your wins along the way.
I want to participate in a voluntary sustainability reporting framework, but I’m not sure which one is best for my business. What should I consider when evaluating my options?
The sustainability reporting frameworks you adopt depend on several factors, including your business type. But in general, there are three questions that can help you determine how to move forward:
- What frameworks do your peers use?
Your peers in the same or similar business sectors likely are subject to similar expectations from stakeholders and face similar material issues and societal pressures. If they’ve done their due diligence in identifying the most important frameworks, then it’s not unreasonable to assume that the same frameworks apply to you. Examine both in-sector peers and out-of-sector peers who are recognized sustainability leaders. This will help you determine minimum expectations and what you should aspire to based on your ambitions. An experienced partner can help with performing a peer analysis, helping you determine what your peers’ actions and commitments mean.
- What frameworks will resonate with your stakeholders (e.g., investors, shareholders, customers)?
This is even more important than a peer analysis. Since reporting is a tool for external communications, it should be driven by the needs of your stakeholders. These will vary considerably, as investor expectations are likely to be more technically focused than those of customers. Voluntary standards such as CDP1 and TCFD2, along with benchmarks and indices such as GRESB3 (for real estate), are very investor-focused, with a heavy bias toward the third factor in ESG (Environmental, Social and Corporate Governance). Frameworks such as UNSDG4 and GRI5 more likely will be relevant to customers, especially large corporate customers who may expect you to participate as a supplier. Going through a formal stakeholder mapping and analysis exercise can help you understand what your stakeholders care about and inform your decision. An experienced partner can help with the process.
However, unless you devote considerable resources to reporting, there’s no way you’re going to meet all your investors and customers’ expectations. Talk to your most important stakeholders to understand what their expectations are. Outside of these, don’t be afraid to push back and explain why you choose to prioritize certain frameworks over others.
- What data is accessible to apply toward a reporting framework?
The data that you need to collect will be dictated largely by the reporting framework. The most commonly requested data relates to the environmental impacts such as energy, greenhouse gas emissions, water and waste, and employee impacts such as employee diversity, health and safety, training and development. Outside of this, it can feel like the list of required information is endless. You’ll find that although the number of reporting frameworks is growing rapidly, many of them are converging over certain issues and require common data and information, particularly around climate change impacts.
When collecting data, the right technology can help centralize it, streamline processes, report on progress and identify opportunities to improve performance. This replaces and helps alleviate people of what’s often a manual and headache-inducing process, and makes both reporting your data and getting it ready to submit to frameworks an easier lift.
And remember: Reporting should incorporate more than just quantitative data. Qualitative information on governance procedures, management approaches, materiality assessments, risk identification and mitigation, supply chain engagement and stakeholder outreach are equally important.
Start taking action – now
Committing to sustainability is important, but putting a plan in place to act on your goals and reporting transparency is the hard part. An experienced partner can help.
Visit our website to learn how to translate ambitions into action on your organization’s journey to becoming a more sustainable, resilient and responsible enterprise.
- CDP focuses primarily on GHG emissions but has grown to address water and forestry issues, as well.
- TCFD helps public companies and other organizations more effectively disclose climate-related risks and opportunities through their existing reporting processes.
- GRESB focuses on ESG performance in the global commercial real estate sector only. It includes asset- and entity-level disclosures.
- UNSDG Cooperation Framework guides the entire prorgam cycle,
- GRI focuses on corporate social responsibility with an equal weight on ESG factors. It’s heavy on stakeholder engagement to determine materiality.