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green@work : Magazine : Back Issues : July/August 2007 : CSR

CORPORATE SOCIAL RESPONSIBILITY

Exelon Takes the LEED
The power company is committed to reducing its carbon footprint through sustainable offices.

by Dennis Walsh


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 of behavior.”

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.


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