Some say “going green” while others prefer “sustainability”. Let’s assume they share the same meaning and concentrate on what it means to be sustainable. Sustainability is becoming more critical globally and presents a baseline requirement for the healthcare industry just like in any other industry. Is it really all about going green? It really is all about competing in a new world.
Admittedly, there is a lack of information and many deep arguments amongst academics and economists about whether to pursue sustainability and how best to achieve cost savings. There are compelling facts that demonstrate sustainability will help to create environmentally, socially responsible and economically driven projects for an organization.
How is it Changed in Time?
Especially within the last five years, sustainability has developed from being a simple and single department in every major corporation where policing activities occur both internally and externally, to a mindset where the real activists force every member of the company to use these new regulations in their daily work for three major reasons:
- Social responsibility
- Environmental responsibility
- Economic drivers
What are the Important Factors?
Regardless of the industry, there are important factors for organizations to focus on as their social and environmental responsibilities.
Some of these important facts that are forcing organizations to seriously consider their responsibility include:
- Global warming
- Cost of energy
- Government and local authority concerns
- Corporate awareness
- Individual awareness
- Media attention
- Consumer expectations
According to the U.S. Green Building Council (USGBC) statistics, in 2006, “U.S. buildings accounted for 35% of the nation’s greenhouse gas emissions at 2,521 million metric tons of CO2 equivalent – more than the transportation sector’s 28% (2,010 million metric tons).
Buildings also consume 70 percent of the electricity load in the U.S. If half of all new commercial buildings were built to use 50 percent less energy, it would save over 6 million metric tons of CO2 annually for the life of the buildings – the equivalent of taking more than 1 million cars off the road every year.”
Who Should be Involved in the Organization?
Quite simply, everyone in the organization should be part of the process, with different roles and responsibilities. Stakeholders and investors are responsible for the governance and setting of project goals. Employees from each function and/or department are responsible for creating a sustainable workforce by setting the mindset for a new workplace culture.
Sustainable workplace is one of responsibilities of owners and management. They have to apply, adjust and control different strategies during the life cycle of the project. As a result, an organization might gain a benefit on cost savings such as energy efficiency, alternative energy systems and location strategies for consolidation, adjacency requirements and utilization studies of the core functions i.e. ambulatory care, inpatient bed area.
What Would be the Initial Cost?
If properly planned, sustainability efforts may require little to no additional funding. To keep costs to a minimum, the organization needs to make a strategic decision and strong commitment during the initial phase of the project. This implies that stakeholders and investors will show their good faith and are make value decisions for their social and environmental responsibilities.
Why Should an Organization be Part of this Process?
Each organization in this new era should not consider “going green” or “sustainability” in order to jump on a trend. Moreover organizations have to believe in this as an opportunity to become a pioneer and integrate the thinking into its guiding principles.
Stakeholders and investors should remember that sustainability is an ongoing process. Unplanned situations might take place during the process. However; with a strategic planning at the beginning, subsequent results would be more expected. Sustainability is not about the design, the construction or the building.
Sustainability is beyond all of these. Each part of the organization could benefit and involve during the life cycle of the project such as operations, procurement, HR, finance, accounting… For instance sustainability can provide tax efficiencies while providing savings from CO2 reduction for the organization.
One other example; green retrofit of the buildings might offer alternative ways to save money, different options to improve productivity and brand equity.
Let’s give a specific example with expected results for a healthcare project:
- Building energy efficient buildings – Economic driven (cost reduction)
- Reducing noise and local air pollution within the healthcare campus or the stand alone building – Environmentally responsible
- Building a new healthcare campus in an area where it is close to the public transportation and offer travel passes as part of the employment packages – Organizational changes (HR benefits for creating a new culture in workplace)
- Placing environmental and social equity requirements on suppliers – Socially responsible
- Consulting with local community about noise, pollution, transport, parking… – Socially and environmentally responsible
How Are the Benefits of Sustainability Identified and Measured?
Sustainable projects create tangible and intangible benefits for any in both the short term and the long term based on the goal settings.
There are numerous ways of measuring the results and the different outcomes to analyze from every project. Every organization from different industries has their unique driver that runs the business. The stakeholders and investor initial expectations are to focus on and potentially to reduce the cost with an achievable approach in a reasonable time frame.
These business drivers might vary and effect each organization differently. Business drivers could be; telecommunication, electrical, travel, CO2 emission, space where annual cost per square meter or cost per employee matters. Most of these measures are tangible with return expectations in the short term and in favor of the stakeholder and investor.
There might be also cases where results are measured over the long term and results may be preliminary intangible such as change management, workplace better solutions and employee productivity. One of the main expectations of the stakeholders and investors reduce the cost in a short term.
This may be achievable and can only be accomplished with a good strategy which has to establish during the decision phase. The results would even help to observe intangible benefits in the long term during the lifecycle of the project. The benefits for the organization during the process could be laid out as:
- Cost Savings such as reducing energy consumption translates into direct and immediate payback and improved asset efficiency.
- Risk Management such as reducing an organization’s exposure to business disruption in the form of energy shortages, brownouts and blackouts as well as legal/political obsolescence.
- New Market Opportunities for the organization to enter.
- Brand Equity such as creating intangible brand value by marketing overall corporate social and environmental responsibility.
Sample Case Study
The return on investment (ROI) and payback are two key metrics to consider for any investment. Additionally, social and environmental benefits can be evaluated at the same time the project team is determining the ROI and payback.
A headquarters development for a US insurance company was carrying 30% more real estate assets than their current utilization required.
The client’s objective was to reduce their footprint. The project team recommended developing a strategy where the client could reduce the carbon emission in addition to reducing the footprint. During the decision-making phase, project managers, consultants and the steering committee set up the goals for the overall project including sustainability.
The results were significant. This particular organization significantly reduced the carbon footprint ten thousand tons per year as a positive byproduct of reducing the footprint of the current portfolio.
Social and environmental responsibilities were accomplished simultaneously to reducing the operational cost.
The ideas of “GOING GREEN and SUSTAINABILITY” are still fairly new and evolving. So the current benchmarks or studies do not always satisfy the stakeholder and investor. One way to help address this issue is to set up goals for accurate cost planning with a committed project team during the initial decision phase. Sustainability goals and strategies have to set up and processed during the same time as other project goals and strategies. Sustainability has to be one of the biggest priority not a below the line item to get the benefit.
Rather than asking “Why and How much?” organizations should be asking”How can we include the sustainability goals as part of our overall goal settings?”
Healthcare organizations have to have a strategy of the sustainability initiatives for either existing assets or new developments. The advantages and the target for the organization should not be only for cost savings but also their future message especially the way the organization addresses the social and the environmental responsibilities.
HOK is a consulting and design firm that helps the clients from the process where roadmaps and strategic planning are conceived. HOK carries forward the established principles to implement a project and create a sustainable life cycle approach for achieving long-term success.
Cagri Kanver has six years of progressive experience in the field of global real estate development as a senior consultant. He advised global corporate real estate clients in multiple areas of strategy and operations improvement initiatives. He led number of engagements in the areas of strategic / business planning & programming, market research / analysis for global site development. Cagri performed professional projects in four different continents for over 20 clients, specializing in the Middle East and Asian markets. He developed key global client relationship in academic, aviation, corporate, government, healthcare, and manufacturing markets. Prior to joining HOK, Cagri worked for Deloitte Consulting as a senior consultant where he was responsible for sustainable development projects for global perspective for Fortune 500 companies.