Who should be at the table to build out your sustainability strategy?
Engaging the right stakeholders is critical to successful real estate strategies
As more companies develop sustainability strategies for their real estate, there’s a reason why some aren’t as impactful or as well executed as they could be: the right people weren’t in the room at the right time.
Conversations around sustainability are evolving quickly from discussing risk and transparency to focusing on purpose and growth, transforming real estate in a way that wasn’t previously the case.
This shift from sustainability being seen as something companies should do to something that can truly drive growth requires an approach that’s both highly strategic and collaborative.
It means that successful sustainability strategies cannot just be delivered from the top down. What’s needed is a group of stakeholders from across the business and beyond who buy into and actively work together towards a common end goal.
Companies that successfully break down silos will have a competitive advantage – whether that’s smoother and faster progress towards goals, creating more in-demand sustainable space, lower operating costs or better talent retention.
We see this across many situations - at a company and at a building level.
How can companies get it right?
Typically, the C-suite defines the strategic imperatives, while the sustainability team frames the discussion. But to be successful a much wider group of stakeholders need to have a say. The teams responsible for delivering the strategy should be involved, from investment to asset management.
Conversations must be underpinned by three key factors:
Aligned incentives
Metrics and data
Knowledge sharing
A key challenge is that stakeholders are working to different time horizons and incentives. While the executives and sustainability team may be looking at the next five, 10, or even 15 years, the investment and asset managers will be incentivized on shorter time frames.
Successfully delivering on sustainability also requires measuring progress along the way, with data sharing and technology making this easier than in years gone by. As regulations tighten and reporting becomes ever more scrutinized, such collaboration will move from being a good idea to the only way forward.
For many companies, sustainability is a new area where there are many more questions than answers – and taking a business-as-usual is no longer fit for purpose to deliver on sustainability commitments.
How does it work at the building level?
In a building we see the same situation play out. Both the facilities managers and the tenants involved in the day-to-day running of the building are core to operationalizing sustainability measures and monitoring ongoing performance.
That requires a change in traditional ways of working. Even now, building owners and companies leasing space tend to work in siloes, doing their own thing in their own way.
Instead, owners and occupiers must reframe the conversation. They need to see sustainability as a common thread – one that must be fully integrated and embedded across all real estate infrastructure and operations to have the intended impact.
Today, a new generation of green leases are enabling new business models of building management, which promote increased collaboration and communication between stakeholders – with clearly defined responsibilities and benefits.
To be successful collaboration needs to start as soon as possible. Getting both parties and their advisors – including their lawyers – around the table early in the process is vital to define common goals and align on ways to achieve these.
Navigating an evolving space
The risks of inaction on making real estate more sustainable are starting to stack up. Those who fall behind in the coming years will quickly find themselves at a competitive disadvantage as they try to play catch-up. Any company that can’t deliver on its sustainability goals increasingly faces operational disruption and potentially reputational damage.
It’s why bringing the right people together from the start and keeping the communication channels fully open throughout is the best way to ensure that the decisions taken are the right ones at the right time and that plans can be implemented as effectively as possible.
After all, pressure from shareholders, customers and employees to take action on sustainability - and crucially, show proof of progress - continues to increase.
For more information on how JLL can help to develop the right sustainability strategy for your business contact our team of sustainability experts.
Paul Stepan Head of Sustainability Consultancy, EMEA, JLL
Kirsty Draper Head of Sustainability for UK Agency, JLL
