State of the Industry Report 2007-2008

Chapter Five what will it look like by 2010? • Sustainability includes but goes beyond energy management and ‘green’ buildings, extending across the CRE supply chain leader Magazine’s Industry Tracker introduced the concept of “the new Über-sustainability” in 2007 to draw attention to the broader practice of sustainability as integrated holistically in supply chain fashion through products, policies and practices: another version of the 3BL. beyond 2010: • We also said that the requirement for publicly-traded companies to report their results in Triple Bottom Line fashion is more likely to happen on a broad scale by 2020, not 2010. That still appears to be the case. • The value of non-sustainable properties decreases while a green building’s value increases by at least 10%. • “Green leasing” becomes commonplace. • Federal government regulation is as pronounced in North America as seen in Europe today. possIble outCome: Cso or Cre? Recent CoreNet Global research shows sustainability as one of the fastest-rising issues ever placed on the corporate agenda, especially through the energy cost and management perspective. Heidrick & Struggles’ John Wasley confirms the trend through the search firm’s view of the executive suite. The new C-Suite title of “Chief Sustainability Officer,” or “CSO,” is emerging, Wasley told members of CoreNet Global’s Executive Leadership Council during the Atlanta Global Summit. management, supply chain, construction, development and other functions that are also part of the sustainability and social responsibility spectrum. the 2030 Challenge The u.s. energy Independence and security act became law recently. Section 433 of this bill requires that all federal buildings meet the energy performance standards of The 2030 Challenge. fiscal year percentage reduction 2010 55 2015 65 2020 80 2025 90 2030 100 This Bill requires the federal government achieve the standards of the 2030 Challenge in all new buildings, beginning in 2010 with a 55% reduction in energy utilization from 2003 levels. Cities, municipalities and states are following suit. While the early standards are relatively easily met with current designs and technology solutions, the ultimate goal of a 100% reduction in energy utilization by 2030 will require innovation. Companies like DuPont are early adopters. Click here for more information. u.s. green buIldIngs to grow fIVe-fold Tenants and investors are buying into new ecofriendly corporate agendas in the U.S., reported CoStar in early January, 2008. “Bloated energy costs, local lawmakers and looming federal regulation” are among the many factors influencing green’s unparalleled rise on the 2007 corporate agenda. “Corporations are demonstrating they’re willing to pay a premium to work in sustainable office space, while the federal government – by far the nation’s largest tenant and property owner – has mandated sustainability across much of its real estate portfolio.” Furthermore, “the volume of (U.S.) green real estate is expected to quintuple by 2010 to comprise 10% of the U.S. building stock, according to McGraw Hill Construction.” CoStar also quoted PREEF, one of the largest property investors in the U.S., as saying property owners will need to adapt quickly, or “risk the consequences of sharply shrinking demand for property that, over time, becomes increasingly obsolete.” chapter five There’s a natural opportunity for CRE to play a CSR-related energy role starting with the energy mandate to save on cost, consumption and footprint and the direct linkage to facilities and real estate as a primary solution. With well-established groups like the Center for Corporate Citizenship catering to CSO’s through the same corporations that populate CoreNet Global, what is the future of CRE in regard to CSR and the CSO position within the executive suite? The key is for CRE to leverage its leadership opportunity now, especially in the area of energy management to keep the dynamic one of partnership with, rather than subordination to, CSR, as CoreNet Global research and Wasley’s observations suggest. It’s also an integration and partnership opportunity. The main advantage, however, may be that many CRE executives already drive community reinvestment, location strategies, workplace practices, lifecycle asset State of the Industry 2007-2008 19 http://www2.corenetglobal.org/home/index.vsp http://www2.corenetglobal.org/dotCMS/kcoAsset?assetInode=1112073 http://www.architecture2030.org/home.html http://www.bcccc.net/index.cfm http://www.bcccc.net/index.cfm

Table of Contents Feed for the Digital Edition of State of the Industry Report 2007-2008

State of the Industry Report 2007-2008 Contents Chapter 1: Introduction : CoRE 2010 Framework and Report Structure Chapter 2: The Changing Business Environment Chapter 3: Executive Summary of Key Findings and Conclusions Chapter 4: CoRE 2010 Adoption Rate Chapter 5: Sustainability/Corporate Social Responsibility Chapter 6: Global Sustainability Survey and Roundtable Findings Chapter 7: Workplace Practices/Work Environments Chapter 8: Workplace Related Issue: The War for Talent Chapter 9: Asset Management/Portfolio Optimization Chapter 10: Solutions Delivery Chapter 11: Location Strategies/The Strategic Role of Place Chapter 12: Location Related Issue: Site Selection Morphs to Portfolio Alignment Chapter 13: Strategic Competencies/Enterprise Leadership Skills Chapter 14: Competencies Related Issue: The War for Talent in Corporate Real Estate (CRE) Chapter 15: Integrated Resources Infrastructure Solutions – IRIS Chapter 16: Technology and the Web Chapter 17: Technology Related Issue: Removing the Obstacles to Industry Data Standards Acknowledgements and Sources

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