How a Sustainable Approach to Offices Can Sustain Profits

When companies start looking for “greener pastures” of profits, they don’t necessarily look outside. These days, some of the most successful organizations start by looking inward, at their own office space.

They are, in part, simply giving investors what they want. As the latest State of Green Business Report notes, “Companies are increasingly responding to customer and market demand for greener products and business models.” But they are also looking to their own bottom lines, having discovered the truth of what multiple studies show – that environmental and social responsibility can pay off with lower operating costs, higher profitability and increased valuations.

In fact, one study, using the now-prominent Environmental, Social and Governance (ESG) Criteria, reported that “investors rewarded the top performers in specific ESG topics with valuation multiples that were 3% to 19% higher, all else being equal, than those of the median performers in those topics.”

That’s the very promising view from 50,000 feet – but how’s it playing out in practical terms at ground (or office) level?

Changing space and changing habits

Consider the case of the global tech leader that took major steps to reduce its offices’ environmental impact (and increase its own savings). This international corporation manages 18 million square feet of office space, used by 53,000 employees, making good environmental stewardship a major challenge. After discovering that their traditional, assigned office spaces were going unused sixty-five percent of the time (while meeting rooms were typically in short supply), they undertook a major experiment in office redesign. They converted a main administrative building to an open office plan. But they didn’t simply cut back on walls – this tech giant also cut back on each individual’s number of devices, aiming to encourage more sustainable work habits as well as encourage more collaborative working.

The result was a smaller footprint and bigger savings. As one spokesperson put it, “[This approach] requires less building infrastructure, takes up less space, produces less heat, and consumes less power than traditional workplaces, while supporting employees more effectively.”

Any company can benefit from sustainability

Companies don’t need to completely redesign their offices to leverage sustainability as a boost to profitability. Here are three basic steps that almost any business can take with relative speed and ease:

1. Holistically reduce energy consumption

Commercial buildings account for 36 percent of total primary energy use in the U.S., and 30 percent of greenhouse gas emissions. Look for energy savings in the obvious places, such as the type and number of electronic devices and other equipment used. But also “look for the overlooked” opportunities, such as encouraging knowledge workers to work from home once a week, cutting down
significantly on the environmental impact of their transportation to the office.
And reconsider your sources; explore renewable energy for at least part of your office electricity needs.

2. Fight waste

Cutting back on waste isn’t simply a matter of using only what you absolutely need. It’s also a commitment to sourcing recycled products, and investing in waste-reducing technologies – smart moves which one study showed can improve ROI by up to 18%. So can your bathroom lights turn themselves off when no one is using the room? Do your hand towel dispensers limit the number of paper towels to only those needed? And is that recycled and compostable paper in those dispensers? The more you can answer “Yes,” the more your bottom line (and investors) will appreciate it.

3. Require suppliers to be equally responsible

The sustainability of your office and organization doesn’t start or end at your front door. Every supplier you rely on, from power generation to maintenance services to office products, can make a positive (or negative) environmental and social impact. Make sure your procurement process includes standards akin to the above-mentioned ESG Criteria. You won’t be alone – in the forestry and paper sector, to name just one industry, 70% of companies already have a sustainability target built in to their buying protocols.

Sustainability is an investment – and it gets others to invest in you

While the ESG Criteria can help you take stock of suppliers, their biggest impact may be on your company’s stock price. As Forbes magazine reported, “An analysis of more than 2,000 empirical studies…suggested that ESG investing provides superior returns.”

It’s time to look at your whole organization through the lens of sustainability – and there’s no better way to start than with a fresh look at your offices.

GreenBiz: The State of Green Business
Forbes: Socially Responsible Investing
Cisco: Office Design Case Study
Industrial Packaging: Why Green Packaging is Good for Your Business