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Corporate Social Responsibility (CSR) is an idea that corporations have to consider the interests of customers, employees, shareholders, communities, and ecological considerations in all
Socially responsible investing (SRI) describes an investment strategy which combines the intentions to maximize both financial return and social good.

green@work : Magazine : Back Issues : Mar/Apr 2007 : CSR


Beyond Green Buildings
The trend in sustainability is migrating away from the industrial-age basics of land and labor, toward the information-age asset base of intellectual and human capital.

by Richard Kadzis

A chtung, baby: The new “uber-sustainability” is here.

It includes design, energy conservation and environmentalism, but it’s more multifaceted; more ubiquitous. Look at what U2 and Bono have come to stand for: a multi-million-dollar entertainment juggernaut pushing an agenda for social justice. As our opening words implore, like U2’s platinum album of the same name, it’s time to pay attention.

Performers, products and practices alike are becoming the levers for a new ethos surrounding social responsibility on a global scale, often without the influence or impact of governments. That sense of responsibility—representing a sort of new-world order—is today characterized by activists and causes, but it extends to global companies.

3BL=People, Planet, Profit

Sustainability is an important piece of corporate social responsibility (CSR). Sustaining enterprises, and human and natural resources is really what it’s coming to mean. Sustainability is gaining traction at an amazing rate since CoreNet Global first identified the triple bottom line (3BL) and CSR as the driving forces of sustainability in 2004 as part of our CoRE 2010 research initiative. Three years later, it appears to be influencing the migration away from the industrial-age basics of land and labor, to the information-age asset base of intellectual and human capital.

Corporations, causes and activists are supplanting governments. Cisco Systems is building a water system for the community in a developing country where it’s expanding. Greenpeace is advising the Chinese national government. Bono is fighting AIDS.

As issues get less local, government is less effective at solving problems. “More people vote for who’s going to stay on ‘Big Brother’ than in government elections,” quipped political economist Dr. Noreena Hertz during September’s CoreNet Global Summit in Lisbon. The former free market advisor to the Russian government was obviously stressing a key indicator about the growing leverage that the globalization of commerce and industry is having on the world.

So the good and the bad that global companies can do for people, communities and societies may even determine success in the marketplace. That’s mainly why, in a recent cover story, CFO Magazine recognized the transformation of CSR from an ancillary enhancement to a centrally strategic practice. Describing it as “virtue rewarded,” CFO’s October issue reported that “companies are suddenly discovering the profit potential of social responsibility.”

Coming from the voice of the C-Suite, there’s no doubt that CSR has been blessed as an acceptable form of free enterprise; that it’s not really some kind of outgrowth of the socialistically prone systems of Europe, the cradle of CSR and sustainability.

Meaningful Role for Corporate Real Estate
CSR simply makes good business sense. “Smart companies are investing in understanding this new environment, and how to manage within it,” Hertz advised. Referring to the CoRE 2010 3BL of sustainable-business models, she added that by being more progressive, global companies “reduce their own risk, increase their own reputations and enhance their profits.”

Dr. Nick Axford of CB Richard Ellis, who coauthored the CoRE 2010 research, refers to it as “altruistic self-interest.”

The fact that CSR is linked to globalizing operations, recruiting and retaining talent, and accessing markets and customers makes it pure business. It also places our industry at the intersection of a significant global business, economic and social shift.

“Responsibility has never been more important or more appealing,” Gensler reported on new research showing that through simple cost-effective measures, sustainable design can support human performance and workplace flexibility.

Myriad examples demonstrate the point that corporate real estate departments, their service providers, and other sides of our industry—such as economic development—have a meaningful role to play in the CSR transformation. Here’s a modest sampling:

• Europe-based ABN AMRO, one of the world’s largest banks, uses a Sustainability Index linked to human resources, stressing the “people” piece of 3BL as its leading form of CSR.

• Adobe Systems attained rare Platinum Leadership in Energy and Environmental Design (LEED) status for its three headquarters towers in San Jose, Calif., for energy savings of $1.2 million annually vs. $1.4 million invested. The payback was realized in only nine months. Return on investment is 121 percent.

• Wal-Mart acquired U.K.-based distributor Gazeley, and in the process bought into the latter’s green warehousing practices throughout Europe.

• The Weather Channel named New York City one of its top 10 “Green Cities” in part because of LEED-branded high-rises built for Hearst Corporation and Bank of America.

• The iconic Millennium Stadium in Cardiff, Wales, is powered entirely by renewable and sustainable energy sources, including wind and hydro-electric power.

• The state of Pennsylvania is basing part of its global economic development strategy on the recruitment and use of renewal energy-generating companies, such as Gamesa Corp. of Spain, which located its first North American operations in the state.

• Toyota’s 624,000-square-foot green addition to its Torrance, Calif., headquarters cost no more to build than a standard low-rise business campus in Southern California, wrote Charles Lockwood in a recent Barron’s guest editorial.

Is CSR for real or are its benefits exaggerated? The mounting evidence, trends, practices and results being collected say that it’s not overkill; it’s anything but a fad. Lockwood’s commentary offered this compelling fact: Green buildings will also impact the commercial real estate markets. “As the market shift (to green development) gathers even greater momentum in coming years,” Lockwood predicted, “standard buildings will become the real estate industry’s version of the buggy whip.”

In much the same way buildings without air conditioning became obsolete in the 1950s, non-green buildings will become so in the new millennium. Profit will come, but not without people and planet.

As Hertz asks: “How creatively are you thinking about the legacy you can leave? Don't confuse ambition as a utopian vision. Hope is not a lottery ticket; it's an axe we wield to effect change. It's a call for action for each of us to take responsibility for the kind of world in which we live.”

Richard Kadzis is senior contributing editor for Corporate Real Estate LEADER magazine, published by CoreNet Global.

There are several examples of CoreNet Global cases in the CSR area of community reinvestment to illustrate the broad, sustainable social and community impacts that corporate and commercial real estate can create:

* East Lake, an Atlanta mixed-income community created by developer Tom Cousins that inspired the creation of the CoreNet Global Community Reinvestment Challenge. Cousin’s rehabilitation of a crime- and drug-ridden neighborhood located near the renowned East Lake Country Club, and as his integration of golf with improved community safety, education, housing and recreation turned the former “Little Vietnam” into a desirable place to live.

* Asylum Hill, a historic Hartford, Conn., neighborhood rebuilt and revitalized through NINA, a consortium of corporations based next door to the area that includes The Hartford, ING and Aetna. Like Eastlake, Asylum Hill is sustained on a continuous basis through ongoing safety and reconstruction initiatives between local residents and the corporate interests. NINA was recognized as a winner of the 2005 CoreNet Global Innovator’s Award.

* GJK Facility Services work at the Collingwood and Atherton Gardens Public Housing Estates in Victoria, Australia (akin to public housing projects in urban America). This resulted in an ongoing solution to long-term unemployment and crime by offering maintenance and other jobs to residents while integrating them into the staff of GJK, which works with the state government and the Brotherhood of St. Laurence to sustain the program. It won the 2006 CoreNet Global Innovator’s Award, like NINA in the Community Reinvestment category

Other ways CoreNet Global and the corporate real estate industry focus on sustainability include the launching of the industry’s Sustainable Leadership Award in partnership with the American Institute of Architects (AIA) and the International Interior Design Association (IIDA) three years ago. The 2007 winners will be recognized in early May at the CoreNet Global Summit in Denver, where the entire conference centers on a wide range of 3BL practices and impacts.

Another example is the Rocky Mountain Institute’s current work with the CoreNet Global Applied Research center to study the obstacles and solutions to energy efficiency. This piece of the CSR spectrum is expanding rapidly, like most others, on a global scale. To reinforce the point, the Institute’s cofounder Dr. Amory Lovins will anchor the Denver mega-session on “Innovations in Green.”

Also in Denver, Ben & Jerry’s cofounder Jerry Greenfield will deliver a keynote presentation outlining the ongoing, sustainable corporate practices that have made the ice cream maker a $200-million “value-led” business; value as it equates to responsible practices, not only money.

The Denver event also offers a selection of numerous case studies on sustainability. Among them, Adobe and Bank of America will show that environmentally responsible and people-friendly practices also offer substantial return on investment.

The extensive thread of sustainability is also winding its way through all of CoreNet Global’s 2007 conferences. Aside from Denver’s 3BL theme, the late-March Singapore Global Summit will examine “People Planet Profit: CRE and Sustainability for the 21st Century.” And, the September London Global Summit is themed “The Impact of Green.”

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