Energy Efficient Developments More Likely to Gain Community Support: Q&A with CBRE Group’s David Pogue

by | Feb 19, 2018

The world’s largest commercial real estate services and investment firm, CBRE Group, Inc., manages more than 5 billion square feet globally. That includes helping more than 700 buildings become certified to the LEED-EB standard and over 6,200 buildings benchmarked to EPA Energy Star. In 2014, the company’s corporate headquarters in downtown Los Angeles became the first pilot office worldwide to receive WELL certification, a standard aimed at improving the health and wellbeing of a space’s users.

“Commercial real estate is at the nexus of many issues — waste, water, energy, emissions, health,” says David Pogue, global director of corporate responsibility for CBRE. “We have a particular responsibility as a real estate services company to help our clients and the whole industry move forward.”

For CBRE, this means adopting a strategy that takes shared values into consideration. Recently we caught up with Pogue to learn how the company is integrating corporate responsibility into its business practices, and what kind of competitive advantages this can produce.

Tell me a little bit about your role.

I was the western regional director for property management for a number of years. We began doing environmental and sustainability practices on behalf of our clients. That transitioned into the current role. My team and I work on our corporate responsibility report, file various protocols, and are involved in setting our environmental policy, and developing strategies and goals.

My role is changing again because corporate responsibility is changing. Over the 10 years we have written and reported on our activities, we can see how much it has changed. At first there was this aspirational attitude. Now we are doing a better job at benchmarking and reporting. We’ve put in place policies that have allowed us to go from aspirational to operational. And as we have begun to better measure what we’re doing, we are now more informational.

How is CBRE’s corporate responsibility strategy changing?

There is greater pressure today on companies to not only lessen their environmental impacts, but demonstrate how we’re doing more good. In corporate responsibility “shared value” is a concept co-developed by Michael Porter at Harvard Business School. For the past 18 months, I’ve been leading a group looking at our shared value.

First you have to understand the material impact of who you are and what you do. We are looking at the role that real estate, commercial real estate in particular, plays in communities. Our own shared value, which we’re calling “shared advantage,” is building healthy communities. And we are looking for ways to demonstrate that in every one of our business lines by integrating corporate responsibility practices into the business practices.

I’m evolving into a more client-facing role. We do corporate outsourcing, and most of these larger corporate clients are faced with the same dilemma. We also work with investor clients who own buildings for profit and the pressure is on them as well.

What’s an example from CBRE of shared advantage?

One example is Trammell Crow Company, wholly-owned independent subsidiary of CBRE focused on development and investment. They traditionally used LEED certification as a proxy for quality environmentally-sensitive appropriate development projects. Now they recognize the opportunities to go beyond the environmental issues piece. A healthy community has good schools and good infrastructure that provides jobs and opportunities.

We’re beginning to look at some of the developments they were involved in. One we studied was a former brickyard. It had become a neighborhood eyesore. On this site, Trammell Crow Company built a million-plus square-foot industrial project. They remediated the environmental issues and added more than a mile of walking paths with hundreds of trees. They provided 1,500 jobs and, by the development agreement, a fair portion were given to people in the local community. They provided assistance for job training. This creates millions of dollars of revenue into the community.

Trammell Crow Company is now broadening their view of their development responsibility, not just to LEED, but to more than 20 additional social and governance aspects. They’re going to tie these to the United Nations Sustainable Development goals to begin measuring the positive impact of a development project.

We are looking at each one of our business lines in the same fashion. Often we have great results, but in some cases they weren’t all connected from the top down. We want to institutionalize the practices, making certain that at every level of the organization this is the way we do our business. There is intentionality and purposefulness.

What is the business case for taking shared value into account?

Development is a challenging business. Most communities, particularly neighborhood communities, are reluctant to embrace new developments. So, by and large, getting developments approved today is difficult. If you can demonstrate through your experiences that you’re going to partner with the community and add significant social, economic, and environmental benefits to the community, you will be more likely to gain support and be able to do more projects.

The data show that sustainable buildings and buildings with better energy efficiency and certifications typically lease faster and for higher rates. We’ve done research on this. Having a better building has an economic benefit. It benefits the folks who are in it, and it benefits us by reputation.

Another aspect is that new workers coming into the marketplace are voting with their feet. We’re all in a race for the next generation of talent, and we want to make sure that we have, express, and live the values that will attract that new employee.

What’s next for CBRE?

We have the capacity to do things on a massive scale. We have over 6,200 buildings that are benchmarked to EPA’s Energy Star. That is a factor of several times any other real estate services company. We have gotten more than 700 buildings LEED-EB certified through our activities. We’ve trained 24,000 attendees through an energy efficiency training program. We are a company that’s willing to think big.

Although certain circumstances will sometimes take a project one way or another, I hope the outcome is that we will be recognized as a company that, at every point of the real estate cycle, has brought the best way of thinking and made a positive difference.

The Environmental Leader Conference & Energy Manager Summit takes place May 15 – 17, 2018 at the Denver Marriott Tech Center. More information here.

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