Even With Lower Energy Prices, Corporations Are Focusing On Efficiency & Sustainability
Even without soaring energy prices as a primary motivator, global corporations -- and more specifically their real estate departments -- are increasingly focused on achieving a state of zero net energy (ZNE), according to a report from CoreNet Global, The Bigger Picture: The Future of Corporate Real Estate.
CoreNet Global is the world's foremost professional association for the corporate real estate profession.
The strategies to achieve those reductions and move closer to ZNE often fall into three main buckets, according to Mike Bendewald, a manager at the Rocky Mountain Institute, a non-profit sustainability research and consulting firm based in the U.S.
One is energy efficiency, including retrofitting buildings with LED lights, improved water filtration systems and heating/cooling; and, constructing buildings with more efficient systems in place. A second is adding renewable energy sources on site. And a third is off-site renewable energy purchasing, such as purchasing renewable energy credits (RECs) or power purchase agreements where firms contract to buy energy from a wind or solar farm.
"It is a very active topic, but it may not be driven as much by cost and cost savings as it has in the past," says Karen Ellzey, executive managing director of consulting for Global Workplace Solutions at CBRE. "I think it is going to be driven more by regulatory issues and companies' perspectives on how this is going to support their broader brand and social responsibility objectives."
While companies are approaching energy usage with varying levels of focus and reasons for doing so, innovation is clearly taking place:
- Unilever CEO Paul Polmon announced in November 2015 that Unilever will work towards a goal of being carbon positive by 2030. Essentially, 100 percent of its energy across operations will come from renewable sources, and with the help of partners, the company will directly support the generation of more renewable energy than it needs for its operations, making the surplus available to the markets and communities in which it operates.
- Oracle has had success in introducing solar power at some locations. The company added a three-canopy PV (solar) system to its new Gold LEED certified building in Burlington, Mass. The system sits atop a four-story parking deck and is expected to generate about 720,000 kilowatt-hours after its ?rst year of operation. That's enough energy to power approximately 80 average-size homes for one year.
As buildings are one of the biggest users of natural resources, and producers of greenhouse gases, corporate real estate executives will be on the front lines of developing and executing strategies to improve energy efficiency and sustainability. In addition to construction features, companies are taking a broader view by considering locating near public transportation, and policies that support employees who ride their bikes or buy hybrid vehicles.
The challenge for CRE leaders, according to the report, will be to present the value of capital expenditures that are necessary in terms of their return on investment.