Translating sustainability into tangible business value has been a focus of many sustainability practitioners since the seminal 1992 United Nations Rio Summit. At the heart of that discussion has been the corporate brand.
Practical benefits that contribute to the bottom line, such as increased market share or enhanced shareholder value, have been important objectives to aspire to because they place sustainability within reach of core business objectives.
In the buildings sector there is evidence of both the hard financial measures as well as what some might describe as the softer, more intangible benefits. The presence of both suggests that sustainability-savvy brands will be an area of innovation in this sector that will be worth watching.
The purpose of corporate branding is no different for the buildings sector or for sustainability than it is for other areas of the economy. The brand is an effort to build a connection between your business and your market (customers).
In essence, your brand is the identity with which your prospective customers must come to associate with your product, service or company. However, sustainability, unlike other more classic branding efforts, is a more challenging communication effort.
If we start with the areas of potential benefit that a corporation may hope to achieve, there are traditional economic benefits, but there are a host of other potential benefits unique to the sector:
- Shareholder value: a function of the success of the corporation compared with its competition in the marketplace. This could relate more to the ethical position a company takes relative to its peers making them a more attractive investment. However, buildings are increasingly being considered for innovative technologies thus innovation may become an attraction for investors;
- Increased market share or protection of market share: a function of the ability of a corporation to attract and retain tenants by appealing to a more conscientious market or tenants looking for better performing buildings;
- Enhanced environmental performance: more successful implementation of energy conservation programs accruing from tenants concerned with their ecological footprint;
- Enhanced financial performance: resulting from energy savings as well as the potential for increased revenue (price premiums) for higher performing buildings (LEED certified buildings).
These benefits do not compare easily with the more traditional branding efforts associated with products such as 'new and improved, stronger, faster-acting and cleaner.'
Most would agree that sustainability as a principal - and values-based leadership effort is a bit more complex, although some might suggest 'new and improved' has a nice ring to it.
The communication focus for the sustainability brand can revolve around the ethics of a corporation, its philanthropy (social good), or the organization's management of its environmental footprint - or a subset of these options, or some additional consideration.
Current sustainability communication seems largely related to corporate social responsibility and ethical obligations, and is expanding into material environmental and economic outcomes. Importantly, in this new application of sustainability brand for the buildings sector perhaps the most important factor that tenants will associate with are safety, comfort and livability.
These are attributes or amenities of their living space or workspace that can translate into improved health or productivity.
In addition to what elements of sustainability a company focuses on, comes the method of sharing those responsible initiatives - through an outside program, or under the company banner?
CSR leaders like Bentall Kennedy and the Oxford Property Group have elected for named initiatives that are incorporated throughout the organization - 'Responsible Property Investing' and 'Sustainable Intelligence', respectively. On the other hand, companies like First Capital Realty, GWL Realty Advisors and Brookfield Asset Management have folded their sustainability initiatives into the general brand.
As companies in the building sector continue to experiment with their respective brands and position, and the attention of their customers and investors, they may find real estate will offer a lucrative brand association.
In the meantime expect to see both experimentation and increased measurement and dialogue among leading companies who will ultimately define the new and improved brand for sustainability in the future.