“How much is this going to cost me?” This is often the first question that is asked when a sustainability initiative is proposed. Until very recently, sustainability has been looked upon as a burden instead of an opportunity. Capital intensive projects such as the replacement of light fixtures, installation of solar panels, and projects to reduce water usage and waste are often the first types of projects that sustainability-minded people bring up because the Return on Investment can be more clearly defined. Switching to LED bulbs can save a certain amount of money each year until the project “pays for itself.” Other changes, like switching to a biodegradable or compostable brand of paper towel or replacing plastic bottles, are closer to cost-neutral, but are still being implemented in pursuit of sustainability goals. When managing a property, this can result in more than just cost savings.
By now, most companies have implemented some sort of sustainability measures, whether they know it or not. Some of them are saving hundreds of thousands of dollars annually as a result of these actions. For many of these organizations, the impact they make through sustainability is buried in annual reports, is a part of an overall annual report, or relegated to internal communications to employees. This is an opportunity that these businesses are missing.
A recent global study conducted by SalesForce.com showed that consumers are more aware than ever about corporate environmental and social values. Four out of five people were more loyal to companies with good ethics, and sixty-five percent actively seek to purchase from sustainable companies. This number is even higher when it comes to millennials and members of Gen Z. Additionally, over half of consumers actively seek to purchase from philanthropic organizations, and nearly 80% believe that companies are responsible for taking steps to reduce climate change. Approximately the same amount think companies are responsible for giving back to the communities where they do business. For Real Estate managers, this can often result in higher tenant retention (whether due to sustainability or lowered utility costs) and the difference between organizations who are mindful of their public image choosing one building over another. In light of this information, why are organizations still burying their sustainability and social endeavors?
It appears that companies simply have not considered the incredible power that sustainability initiatives can have on consumers’ purchasing decisions and loyalty. At a time when a 17 year old climate activist is named TIME magazine’s person of the year, it is surprising to see how few organizations tout their sustainability efforts. Organizations that are doing good should communicate the progress made and, more importantly, the intent to make an impact. One very important aspect is that the company must be genuine. “Greenwashing” occurs when an organization merely gives the appearance of being an environmentally friendly company on the outside, without making the necessary investments to support those claims. Companies such as S.C. Johnson and General Electric have actually been successfully sued for greenwashing claims. Consumers today are the most informed they have ever been, and can easily see through obvious marketing ploys (we all remember the Kendall Jenner Pepsi ad from a few years ago).
It is time for organizations that do the right thing for the right reasons to be rewarded for their efforts. Sustainability does not have to be a cost-saving measure or a compliance issue, it can help businesses who truly embrace it engage their clients, and attract new ones, in a more meaningful way.