The Why and How of Sustainability
Companies and other organizations are feeling increased pressures to demonstrate achievements in not only their financial performance, but also in how they impact the environment and social issues - the three elements of the triple bottom line.
Economic Issues
Pressures:
Organizations of every kind - corporations, government bodies, universities and others - are all trying to cut their expenses to stay competitive, attract investors or manage budget cuts.
Investors, meanwhile, are demanding full disclosure of the risks to a company’s profitability that may arise because of environmental, legal, health or safety issues, or rising energy costs. Anything that is perceived to be either a short or long-term risk to a company’s profitability makes that company less attractive to investors.
Sustainable Solutions:
By building new facilities - or renovating old ones - to meet "green" building standards organizations are improving their financial bottom lines by lowering the costs of new construction, site preparation and landscaping, waste disposal, utilities and maintenance while increasing the dollar value of their buildings. In addition, there’s research suggesting that companies that reduce their environmental impact perform better financially.
Disclosing these sustainable efforts helps shareholders better evaluate the risks of investing in their organizations.
For example: Upgrades to heating, air conditioning, ventilation and lighting resulted in nearly $1 million in cost savings for STERIS Corporation - a manufacturer of products for the health care industry headquartered in Mentor, Ohio.
Social Issues
Pressure:
Shareholder and other advocacy groups are pressuring companies to be better corporate citizens by improving working conditions for their employees and contributing to the communities in which they operate.
These same groups are also demanding that companies disclose more information about the social impacts of their business. A recent report by the World Economic Forum indicated that more than 70 CEOs surveyed believe that interest in these corporate citizenship issues is increasing among mainstream investors.
Sustainable Solutions: Companies that adopt sustainable practices in their buildings tend to have healthier, more productive environments for workers - and they have more resources available to support their local communities and institutions. Using specific guidelines, many companies are preparing sustainability reports with their annual reports to provide complete information to investors about how their operations impact the social conditions around them.
For example: Installation of a highly efficient power generation system at a military base in Petawawa, Ontario freed up funds and reduced the chances of a disruptive blackout, permitting Canadian military forces to focus on their mission of protecting citizens at home and abroad - an important social responsibility.
Environmental Issues
Pressure:
Some of these pressures come from the marketplace. These include:
Other pressures are legal, such as:
A combination of both Sustainable Solutions:
New and improved technologies that include improved lighting, building controls and windows
Sustainable practices such as recycling, reductions in water usage and environmental transportation options
For example: Replacement of an inefficient medical waste incinerator at the VA Medical Center in Salt Lake City, Utah reduced the Center’s harmful emissions.
Green Buildings
One very visible way in which many companies are adopting sustainability is by making improvements to their buildings. Non-residential buildings in the U.S. offer plenty of ways to be more sustainable.
They consume 30-40% of the nation’s energy
They emit 30-40% of air pollution
They use 60% of electricity generated
They consume 25% of the water used
They contribute 35-40 of municipal solid waste
They use 25-30% of wood products
"Green" buildings are designed, built, renovated, operated or reused in ways that not only save energy and money, but also provide healthier workplaces that improve morale and productivity while reducing absenteeism.
The United States Green Building Council (USGBC) has developed the Leadership in Energy and Environmental Design, or LEED, rating. The LEED rating system ensures that green buildings meet certain requirements for using energy, water and other resources more efficiently, protecting the health of people who occupy the building, improving employee productivity and reducing the overall impact of the building on the environment.
The improvements necessary for a facility to achieve LEED certification as a green building typically add to the cost of constructing or renovating the facility. However, at least one study estimates that the cost savings generated by the improvements pay back the original investment ten times over the life of the building.
There are hundreds of LEED-certified green buildings in countries around the world. Thousands more are either the construction or design phase and the number is growing each year as companies and organizations seek triple-bottom-line benefits.
