Sustainability - History and Evolution

Feb 05, 2018

Written by: Tom Klaers, Clean Response

This article was written in January 2018 for the 2018 Quarter One newsletter.

Sustainability is a word we all know, though what sustainability defines is continually evolving. The scope of sustainability continues to grow, and its importance to people, companies, and investors is driving a focus on global performance improvement. A closer look at where sustainability is going, and why, helps us understand why it should be important to all of us.

Sustainability origins are in:

    Environmental health and safety (EHS) - what organizations must do to make sure they protect the environment and do not cause harm to anyone.
    Philanthropy - giving to benefit humanity
    Volunteerism - providing labor, typically for community services
    Workplace - Green and sustainable business practices, including energy, water, labor and more.

Today, sustainability includes the items above and:

    Carbon Footprint - amount of carbon compounds emitted
    Climate Change - an organization's impact on climate
    Corporate Governance - transparency, accountability, responsibility and fairness
    Diversity & Inclusion - improve how people talk and listen to each other
    Economic Impacts - on regions, communities and people
    Employee Engagement - enthusiasm and satisfaction of workers
    Ethics - morality and professionalism for long term success
    Human Rights - all all levels and locations including supply chains
    Product Responsibility - environmental impacts, R&D, quality, safety, health, marketing, labeling and more.

Much of thus change has been driven by investors and stakeholder interest in the sustainability practices of companies and organizations. The Dow Jones Sustainability Index was launched in 1999 and now measures thousands of companies against benchmarks based in the criteria listed above. Companies, investors, fund managers, and Wall Street now understand that the more an organization implements sustainable practices, the more likely it is to have long term success.

Organizations use a variety of names for their programs and policies related to sustainability. Here are some examples:

    Environmental Social Governance (ESG)
    Corporate Responsibility
    Corporate Citizenship
    Corporate Social Responsibility (CSR)
    Social Responsibility
    Sustainable Development

How the components within a sustainability program are weighted vary by company and how sustainability is balanced against revenue and profit goals may cause conflict between the company's functions. Owners of BOMA buildings many also struggle with evaluating the return on investment for improvements in their building's sustainability. The benchmarks, metrics and calculations related to the ROI of sustainability investments are often difficult to establish and apply to a property. However, considering the ever changing needs and wants of tenants, including tenants' perspective on sustainability (not just amenities), is always a worth while practice.

For example, BOMA members might have a prospective tenant who requires LEED certification for a newly constructed or remodeled building or an existing tenant who wants to know the carbon footprint, energy efficiency and/or waste management approaches of a property, because they have "green" service and procurement policies that call for them to lease sustainable properties. Tenants may also want to know the property owner's employment practices and if they have human rights policies that address things like diversity, working hours and fair wages for their employees, as well as how they monitor those issues in their supply chain. Having objective information about these topics just might win a property profitable long term tenant.

No matter what terms are used, sustainability is evolving to a multifaceted but singular goal - a means to manager and be accountable for a company's impacts on people, planet and profits. The importance of this "triple bottom line performance," is affecting the decisions of those who own and invest in the buildings in our communities as well as their companies (and their employees) that lease space in our buildings.

Category: Industry Insights

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