Greening the U.S. economy may cause pain for electric
utilities and automakers, which stand to bear the brunt of state
and federal efforts to fight global warming. Electric power companies
are the largest industrial emitter of carbon dioxide, and utilities
and autos together produce about 55 percent of these gases.
One power company isn’t shying away from its responsibility
to quell damage to the environment. Exelon Corporation, a Chicago-based
electric power company with one of the nation’s largest portfolios
of electricity generation capacity and a recent advocate for climate
change legislation, is calling on other power companies to invest
money in running cleaner. The corporation is leading by example
through its involvement in nuclear operations, “green certified”
headquarters and commitment to addressing climate change by improving
its own operations.
Fifteen states, representing more than a third of the national economy,
will have greenhouse gas emissions limits by 2012, and federal caps
will likely follow. Corporate America, which once disregarded cries
of “global warming,” is embracing the need to reduce
the human contribution to rising temperatures. Forty companies—including
Boeing, IBM, John Hancock and Whirlpool—have publicly endorsed
the notion that climate change is real.
In 2005, Exelon established a voluntary goal to reduce greenhouse
gas emissions by 8 percent from 2001 levels by the end of 2008,
and this goal will be partially realized through the redesign of
its company headquarters.
Last year, Exelon was named to the Dow Jones Sustainability North
America Index. “We hope to retain that distinction this year,”
said Helen Howes, the company’s vice president of environment,
health and safety. “But I think more companies and certainly
more of the financial institutions are looking at these kind of
analyses to make investment decisions, and that should drive a lot
The Dow Jones Sustainability World Index recognizes companies leading
the world in sustainability. It captures the top 10 percent of the
largest 2,500 companies worldwide based on long-term economic, environmental
and social criteria. Components are selected according to a systematic
corporate sustainability assessment that identifies the sustainability
leaders in each of 58 industry groups.
The underlying research methodology accounts for general as well
as industry-specific sustainability trends and evaluates corporations
based on a variety of criteria, including climate change strategies,
energy consumption, human resources development, knowledge management,
stakeholder relations and corporate governance.
Exelon consolidated its downtown Chicago locations and one suburban
location to increase productivity and reduce long-term occupancy
costs. Rather than building new, Exelon chose to renovate existing
space following Leadership in Energy and Environmental Design (LEED)
standards. The project involved the design and construction of more
than 220,000 square feet of office space on 10 floors in an existing
landmark building in downtown Chicago.
“I applaud Exelon on the platinum LEED certification for their
headquarters, and we hope that others in the private sector will
follow their lead in sustainable building practices,” said
Sadhu Johnston, commissioner of Chicago’s Department of Environment.
“Chicago is proud to be home to three platinum LEED-certified
buildings or office spaces with the first being the Chicago Center
for Green Technology. The city of Chicago is committed to constructing
all new city-owned facilities to LEED standards.”
In its new green headquarters, Exelon has reduced electricity consumption
by more than 43 percent and water consumption by 30 percent. It
has created a healthy and more productive work environment for its
employees. From workstations, offices and conference rooms, all
employees have outside views so they can benefit from natural light.
In addition, air quality was improved through the use of low-emitting
materials, paints, carpeting, furniture and finishes, and the installation
of high-density air filters.
“Energy efficiency and sustainability have become two of the
most important factors in building design,” said Donna V.
Robertson, dean of the Illinois Institute of Technology’s
College of Architecture. “I’m optimistic that Exelon’s
leadership in building green will inspire other similar projects.”
Exelon purchased more than 60 percent of the project and construction
materials from manufacturers located within 500 miles to reduce
emissions associated with transportation. Three-quarters of construction
waste was recycled or salvaged, and nearly one-third of furniture
and other materials were reused to reduce waste. Exelon also purchased
Renewable Energy Certificates to offset 100 percent of electricity
usage for the office space from regional, Green-e certified wind
power. The downtown office is near public transportation and offers
bicycle racks and showers for employees who want to ride their bikes
to work to further reduce emissions.
“Exelon has demonstrated an unwavering commitment to the environment
by striving and obtaining platinum, the highest level of LEED certification,”
said Rick Fedrizzi, president, CEO and founding chair of the U.S.
Green Building Council. “Buildings are responsible for 39
percent of CO2 emissions in the U.S., which directly impacts global
climate change. However, LEED buildings consume half the energy
of conventional buildings. Companies like Exelon recognize the full
environmental impact of their decisions and will serve as an example
for other organizations to follow.”
Environmental Changes can Benefit the Bottom Line
Many institutional investors are beginning to demand that companies
disclose their financial exposure to future climate change. Last
year, Goldman Sachs chairman Henry Paulson warned that the time
needed to address climate change was running out. According to the
Ceres organization, a coalition of institutional investors and environmental
groups, annual weather-related insured losses rose from $1 billion
in the 1970s to an inflation-adjusted average $15 billion in the
past decade. Battered by losses from four Florida hurricanes, Allstate
will no longer renew policies with homeowners and commercial property
owners in the state.
However, there is an army of companies committed to helping others
improve energy efficiency. “One-third of the target greenhouse
gas emissions can be eliminated with increased energy efficiency,"
said Richard Baxter, a senior vice president with Ardour Capital
Investments. “That’s the first thing that companies
should consider doing.”
And companies that do make an effort to be more environmentally
responsible often reap financial benefits as well. DuPont initially
made changes to address its carbon footprint by using corn to produce
a chemical necessary to make clothing. Because of this switch, the
company’s Loudon, Tenn. plant will use 40 percent less energy
than traditional oil-based processes. The resulting reduction in
greenhouse-gas emissions will be the equivalent of removing 22,000
cars from the roads.
Other companies are following the leaders by making green investments.
Retail behemoth Wal-Mart is budgeting $500 million a year for emissions-cutting
measures. Bank of America, Exelon, Swiss Re and Toyota have all
pledged to reduce their U.S. operations’ contributions to
global warming over the next few years.