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From Site Selection magazine, January 2010

Ready for the ‘CSO’ Mantle?

Real estate managers’ preparedness for sustainability
assignments might make or break their careers.

The new 102,000-sq.-ft. (9,476-sq.-m.), $50-plus-million campus of Thornburg Investment Management in Santa Fe, N.M., earned LEED-Gold certification in October. Strategies including daylighting and innovative air-flow systems should help the campus use 40 percent less energy than a baseline building. The project, profiled at, was helped by an industrial revenue bond from the City of Santa Fe, and is expected to earn a state sustainable building tax credit
Photo by Robert Reck Photography


ven as the science behind global warming research is thrown deeper into doubt by the recent email debacle at the U.K.'s East Anglia University — the presumptive repository of climate change data — corporations know they need a strategy for sustainable growth. Enter the chief sustainability officer (CSO), whose role in the corporate firmament can be a radiant, stand-alone star on the one hand, or merely part of a constellation of senior managers charged with green building practices, enterprise-wide recycling initiatives and related tasks on the other.

CSOs and related titles are on the payrolls of most major corporations — Wal-Mart, Dow Chemical, Coca Cola and Georgia Pacific, to name a few. But do they share a single Green Imperative? No, and it stands to reason that they don't. A global shared-services provider's sustainability strategy will necessarily be different from that of a plastics manufacturer. Their strategies may overlap in some instances, such as a possible mandate to use "green construction" when embarking on new facilities projects. (How to avoid LEED-certification pitfalls is the subject of the sidebar.)

But CSOs, to varying degrees, are charting a new course, determining whether the shareholders', customers' or CFO's agenda comes first, for example. Consider this input from CSOs who participated in a late 2008 survey of sustainability executives by New York–based Hudson Gain Corp., an executive leadership and human resources firm:

  • "I can make buildings 100-percent green, but then we won't be in business."
  • "Some employees are pushing us to change faster than we are. Younger employees tend to be more green. I think [buying into sustainability] is a generational issue as much as an industry issue."
  • "We have an organizational development group that we lean on to move these issues forward."
  • "More and more, the Board is discussing [sustainability] and considering it when making decisions."

There's not much in the way of consensus, but then executives in such diverse sectors as automobile manufacturing, food and beverage, financial services, technology and other industries took part in the exercise. Hudson Gain's "Going Green?" report is based on research of more than 1,200 organizations and interviews with more than 60 sustainability executives.

"As executives take on the sustainability role, it becomes more and more strategic, which allows them a seat at the [senior management] table, if they don't already have one," says Hudson Gain Senior Vice President Victoria Zelin. As for corporate real estate executives, she adds: "In addition to being able to incorporate sustainability considerations into locating new sites, they can get into a lot of other things as well. They can now interact with everyone in the organization. It's a natural progression."

Sustainability represents numerous ways for the real estate manager to introduce cost savings, notes Zelin. He or she can easily demonstrate the cost advantages of turning some little-used office space into a video conference and Webinar center and eliminating thousands of dollars in travel expenses, for instance. But more than that will be required for the CSO, or real estate executive with CSO duties, to stand apart.

The trick, says Hudson Gain Managing Partner Roger Thorne, is to leverage the corporate real estate role into a true leadership role with the organization.

"Once people see that you are creating a sustainable organization, then the leadership and strategic importance of your role come to the surface very quickly," he says. "Sustainability is your ticket to your seat at the senior management table. Ultimately, in our view, the chief sustainability officer of a company needs to be the president, because he is responsible for making sure that the business runs on a perpetual basis and does what is necessary to protect its people and the planet and to make sure the types of activities it's involved in respect and promote that agenda."

CSO Checklist

Hudson Gain's "Going Green?" report reveals several skills essential to being an effective and successful CSO, however one arrives at the assignment. They are:

  • Communication. "CSOs need to educate and persuade, and they need to mobilize resources and inspire people to action." At the same time, according to the report, "many CSOs warned against making communications the cornerstone of the strategy — if it's all talk and no science, or no action, the initiatives become hollow and tend to fail."
  • Technology. "A good CSO candidate needs to be generally familiar with the technology of the organization he or she serves as well as the technology of sustainability (energy, waste, carbon emissions, etc.)."
  • Financial Responsibility. "While most CSOs agreed there are long-term benefits that companies often strive for, the great majority cited short-term opportunities to save money with sustainability practices." Wall Street notices improvements to the balance sheet, and that supports sustainability initiatives.
  • Measurement. "Gather data, establish your baseline, benchmark to your peers, set goals and continuously improve, measure and start the cycle all over again."
  • Innovation. "Most CSOs were very modest about what is happening in the field today and stressed the urgency to find new drivers of sustainability. What is going on now is not enough."
  • Ethics. "Keep a balance among the three Ps of the triple bottom line — profits, people and planet — and pursue these with transparency and for the right reasons."
  • Supply Chain. CSOs need to be familiar with their organization's entire supply chain, from design and sourcing to production and delivery. "The most advanced sustainability programs are making changes in their own operations, throughout their supply chain and in their suppliers' and customers' behavior."
  • Operations, Structure and Culture. "An understanding is required of how structure and culture work in order to have the type of impact required to make sustainability a priority for every department and division in the organization and to be empowered by the Board, CEO, CFO and HR with the right authority and resources to get the job done."

Story in Pictures

The lobby of the new 102,000-sq.-ft. (9,476-sq.-m.), $50-plus-million campus of Thornburg Investment Management in Santa Fe, N.M.
Photo by Robert Reck Photography
Click for a larger view.
Click for a larger view.

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