Greening Corporate America: An Insider’s Perspective

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Green Building Law Blog (GBLB) sat down with Ari Kobb, Director of Green Building Solutions and Co-Chair of Sustainability Committee for Siemens Building Technologies Division to discuss the Siemens/McGraw Hill Construction Study on the Greening Of Corporate America. The study is available for download.

GBLB: What did Siemens intend to accomplish with the study?

AK: We did the first study in 2006, published in 2007, and our main driver was to see the extent to which green and sustainability was being adopted and embraced by corporate America versus the public sector, because we viewed public sector as mandate driven. We thought the private sector drives the market. They make things more accessible when they embrace it. When the lightbulb goes off, they will develop more products, the service providers will be there, it drives market growth. When we did the 2006 study, the tipping point of sustainability and green buildings would be 2009-2010. We redid the study in 2009 because we thought the market had moved significantly, and we wanted to prove out some trend information. With the emergence of a corporate sustainability officer, we wanted to see what role this played. At the end of the day, we wanted to get away from the “if sustainability is significant” to the part where sustainability is driving the market.

Siemens did the study because we are a thought leader in the industry, we want to be associated with the green topic. At the same time, we embarked on our own internal sustainability movement. The data supports both our continued investment and growth in the green area and our own internal journey to becoming more sustainable. The timing was perfect. We started our own sustainability program in 2007, and at the same time, our customers both institutional and commercial were going green, the timing was right on that aspect.

GBLB: Who did you interview?

AK: We interviewed 203 executives from the C-suite of revenue over $250 million—CEO, COO, CFO, Chief Sustainability officer or someone in this position. This is a change from 2006, because there was no one in that position in 2006.

GBLB: What did you find?

AK: The main thing we found was that corporate America has moved attitudinaly toward embracing sustainability as part of corporate strategy. You are not going to be able to be a Stage 1 or Stage 2 company because of benefits the C-suite sees in sustainability. The alignment between efficiency and sustainability is being identified at the highest levels. We have seen an increase in Stage 4 and Stage 5 companies. Stage 4 and 5 combined increased from 18 to 37%, Stage 4 increased from 15 to 30—it doubled. Stage 3 has stayed the same.

This is an attitude study—we gave them a definition, and asked them to place their company. This measures the attitudes of the highest levels of the organization—it may reflect where they want to be. What we are seeing now 1/3 of the market seeing themselves as a Stage 4 and Stage 5.

Most companies have a dedicated sustainability role—61% have a dedicated sustainability staff.

When we looked at what was driving the sustainability efforts, we found that everyone (almost 80%) view a drop in costs as an outcome of sustainability efforts. A convergence of sustainability as an efficiency and cost-savings tool. Greater productivity was also perceived as an outcome of sustainability. Customer retention and attraction and employee retention and recruitment were also seen as benefits of sustainability. The concept is that there is a drive in the market to differentiate by providing more sustainable products, and also being driven to be more sustainable internally by their customer demands. An example is suppliers to major universities. They like green products. They are looking to the market to develop new green products, and they are also asking what their suppliers are doing to go green. In this economy, if this sliver is what will win you the job, you’ll do it. RFQs are beginning to ask how sustainable the suppliers are. 73% say perceived customer retention and attraction benefit.

There are a lot of people coming into the market who have grown up greener, who have a more ingrained understanding and expectation that where they go to work is in the green space, and is green as well. The two have to be connected.

This study was done in the depth of the recession. Over 60% said sustainability initiatives were continuing or growing. The pace may have slowed down, but it hasn’t gone backwards. It is one of the few bright spots we have seen. You can’t stop it. Even the Stage 1 companies will continue along the sustainability path.

GBLB: What is Siemens doing as a result of the study?

AK: We are distributing the information to show that the market has moved—the time to debate the value of embracing sustainability is over. Now, let’s all take it to the implementation level to satisfy what the market wants. The C-Suite are saying that the products, services, solutions are available in the marketplace. The time to say “is this going to take off” is over. The alignment with corporate strategy, profit motive, efficiency tied to conservation is there at the highest level of corporate America. The real question is whether enough is going on. Would you have expected to see more products, more services, etc.? Over 50% studied were providing sustainable products and services to marketplace, over 50% are also seeking sustainability initiatives from suppliers.

Article by Shari Shapiro appearing courtesy Green Building Law Blog

photo: surber

About Author

Shari Shapiro is a policy and communications consultant with Calliope Communications, which specializes in energy, environmental, and building code policy. Since 2007, she has published the Green Building Law Blog.