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SUSTAINABILITY RANKINGS 2023
From Site Selection magazine, July 2023
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SUSTAINABILITY RANKINGS 2023
by Adam Bruns
H

ow important is sustainability, really, to today’s global manufacturers? I put the question to Scott Gatzemeier, the corporate vice president of front end US expansion at Micron who’s leading the construction of new semiconductor manufacturing projects in New York and Idaho worth tens of billions of dollars.

“Sustainability is paramount to a future that enriches life for all,” he says. “If you look at our selection of New York for the future home of our planned megafab, there is availability and access to clean, reliable power and water to achieve our long-term environmental goals. We aim to use green infrastructure and sustainable building attributes for the construction of the new fab to attain Leadership in Energy and Environmental Design (LEED) Gold status. And we aim to achieve 100% water reuse, recycling and restoration as well as use 100% renewable electricity at the new fab.”

As it happens, New York is No. 8 in this year’s Site Selection Sustainability Ranking, based on criteria that include several of the factors Gatzemeier mentions (see charts). North Carolina — which happens to be home since 1995 to the Database of State Incentives for Renewables & Efficiency (DSIRE) located at the NC Clean Energy Technology Center at North Carolina State University — is No. 1, followed by Colorado and Virginia.

Among U.S. metro areas, metro Austin, Texas, claims the top spot, followed by the greater metro areas of Dallas-Fort Worth, Texas; Charlotte, North Carolina; Indianapolis, Indiana; and Columbus, Ohio. Among nations, Sweden takes the No. 1 spot, followed by the United States, Canada, the UK and Ireland. “A greener, more secure and freer Europe is the foundation of our priorities,” said Sweden’s Prime Minister Ulf Kristersson in December as the country assumed a six-month presidency of the Council of the EU.

2307SS_SusRankings_RN-one

The campus of UNC Charlotte — home to the Battery Complexity, Autonomous Vehicle and Electrification Research Center (BATT CAVE) and to ample LEED- or Green Globes–certified square footage — offers evidence of North Carolina’s green credentials in both practice and study.

Photo courtesy of UNC Charlotte

More and more companies share Micron’s perspective. JLL’s 2023 Responsible Real Estate study found that corporate occupiers are looking to prioritize carbon-centered language in their next lease. “Clauses around EVs, embodied carbon, electrification and overall emissions showed the greatest increase in prioritization among these corporate leaders,” JLL said of a survey of more than 800 corporate decision-makers. “Corporate occupiers increasingly view electric vehicle (EV) charging stations as a top priority. In fact, more than 40% of companies in the Americas and EMEA are looking to include EV charging stations in future leases.”

JLL Research also found that cities with greater saturation of green office spaces have lower premiums. “For example, green buildings in Denver represent 85% of Class A office stock and achieve a green premium of 6%. In contrast, green buildings represent only 49% of office stock but achieve 13% premiums in Austin,” JLL said.

Unique Data Index, Valuable Partner Perspectives

First conceived in 2010, Site Selection’s Sustainability Rankings reveal the countries, U.S. states and U.S. metros cultivating the most fertile environment for a sustainable economy. 

Derived from a unique index incorporating everything from green building square footage per capita to manufacturing of renewable energy products and degree of corporate social responsibility among area employers, the rankings offer a metric for assessing which locations are pointed toward a green and balanced future. Unlike many green yardsticks, our index incorporates the “dirty” side of green industry too: We don’t just track where solar and wind energy are being produced, for example, but also where the solar panels and modules, wind turbines and nacelles are being fabricated, assembled and shipped out.


2307SS_SusRankings_RN-twoSweden and Europe are facing the historic task of breaking their dependence on fossil fuels. At the same time, competitiveness must be enhanced to contribute to increased growth.”

— Ebba Busch, Sweden’s Minister for Energy, Business and Industry


This year, in addition to data from our project partners at CSRHub, the rankings welcome back into the index the global building data insights of Measurabl, the San Diego–based ESG platform for commercial real estate that recently raised $93 million in its Series D funding round and whose global portfolio of customers is growing by leaps and bounds: The company now employs more than 200 people and tracks building-level ESG data on more than 15 billion sq. ft. of real estate across more than 90 countries. We also welcome into the index for the first time the global data and analysis of the Center for Active Design, which oversees the Fitwel healthy building certification standard that to date has 1.2 billion sq. ft. registered on the platform, impacting more than 2.6 million people.

“Our data, and the subsequent Site Selection global ratings, align snugly with conventional rankings of the most sustainable and ‘green’ countries,” says Chad Boyle, analytics engineer at Measurabl. “While the United States places uncharacteristically high in your rankings, possibly due to a preponderance of quality data from climate-minded customers, it is unsurprising (and validating) to see top placements scooped up by places like Sweden, Germany, Canada, the Netherlands, and others who are often regarded as leading the charge in sustainable real estate.”

Zachary Flora, vice president of market growth at Fitwel, says of these final rankings, “We’ve seen real estate industry leaders commit to Fitwel certification at scale in many of these top 10 lists. In particular, there’s been significant demand and growth in Canada — and we think it’s just the beginning.” He calls out in particular the Yorkdale Shopping Centre in Toronto, one of Fitwel’s Best in Building Health winners, for “setting the standard for what the future of retail will look like with its people-centric design and operations.” Flora also sees growth coming to the UK and across the EU due to ESG reporting requirements and a drive to strengthen corporate performance when it comes to the “S” pillar.


TOP 10 COUNTRIES

1. Sweden
2. United States
3. Canada
4. United Kingdom
5. Ireland
6. Australia
7. Germany
8. Spain
9. France
10. Netherlands
10. Ireland

CRITERIA:

  • CSR Rankings from CSRHub on locations of high-CSRrated companies
  • LEED Certified Building total and per capita (USGBC)
  • Renewable Energy Capacity, MW and MW per capita (IRENA)
  • Renewable Energy Deployment (EY); Ocean Health Index; World Happiness Index; Green Futures Index (Technology Review)
  • Measurabl data on building-level energy efficiency
  • Fitwel building certification data
  • Green Industry Projects (Conway Data Projects Database) as defined by federal NAICS industry codes considered part of greenindustry supply chain.

 

TOP 10 U.S. STATES

 

1. North Carolina
2. Colorado
3. Virginia
4. California
5. Arizona
6. Oregon
7. Texas
8. New York
9. Illinois
10. Washington

CRITERIA:

  • Criteria: CSR Rankings from CSRHub on locations of high-CSR-rated companies
  • LEED Certified Building total and per capita (USGBC)
  • Energy Star Buildings, total and per capita (DOE)
  • Renewable Energy Generation (Energy Information Administration)
  • Green Laws/Incentives (DSIRE: Database of State Incentives for Renewables & Efficiency
  • Solar Census Jobs (IREC)
  • Measurabl data on building-level energy efficiency
  • Fitwel building certification data; Green Industry Projects (Conway Data Projects Database) as defined by federal NAICS industry codes considered part of green industry supply chain.

Fitwel launched in 2017 and adoption was led by major U.S. metros like New York, San Francisco and Washington, D.C., Flora says. However, recent growth has been bolstered by a number of metros across the South and West that also appear in this year’s rankings, including Charlotte, Atlanta, Austin and Dallas. As for the states, “It’s no surprise to see states like Texas, Colorado, and North Carolina in the Top 10 list,” he says. “The U.S. West and Sunbelt have seen higher rates of Fitwel adoption particularly for multifamily residential assets, which matches larger U.S. population growth trends. As MFR developers and owners strive to deliver health-promoting and high-performing properties we will continue to see them use Fitwel as a mark of quality and a market differentiation tool.” The same, presumably, goes for office and industrial developers and employers seeking to draw that talent to their workplaces.

Finding Common Ground

At a redeveloped textile mill property in Greenville, South Carolina, I recently met with Jackie Baxley, EH&S practice leader and principal at environmental engineering consultancy HRP, and Ethel Bunch, president and CEO of Sustain South Carolina, to talk about how sustainability impacts and is impacted by corporate growth and area economic development. As it happened, it was World Environment Day, with a theme focused on plastic pollution.

TOP 10 U.S. METROS

1. Austin-Round Rock-Georgetown, TX
2. Dallas-Fort Worth-Arlington, TX
3. Charlotte-Concord-Gastonia, NC-SC
4. Indianapolis-Carmel-Anderson, IN
5. Columbus, OH
6. Atlanta-Sandy Springs-Alpharetta, GA
7. Denver-Aurora-Lakewood, CO
7. Phoenix-Mesa-Chandler, AZ
9. Washington-Arlington-Alexandria, DC-VAMD-WV
10. San Francisco-Oakland-Berkeley, CA

CRITERIA:

  • LEED Certifi ed Building total and per capita (USGBC)
  • Energy Star Buildings, total and per capita (DOE)
  • Measurabl data on building-level energy effciency
  • Fitwel building certifi cation data
  • Green Laws/Incentives (DSIRE: Database of State Incentives for Renewables & Efficiency
  • Green Industry Projects (Conway Data Projects Database) as defined by federal NAICS industry codes considered part of green industry supply chain.

Baxley had just completed Sustain SC’s Sustainability Leadership Initiative (SLI), whose purpose statement reads: “We are visionaries and collaborators who find and implement transformative strategies at the intersection of commerce and conservation to facilitate systems change.”

In a reflection posted on LinkedIn, Baxley wrote that her perspective on the complexities of packaging, plastics and recycling was influenced by having in her SLI cohort Caroline James, the director of sustainability at Atlantic Packaging. “I also learned from my cohort how companies are designing in considerations of a circular economy into their product; how conservation easements work; how governmental relations and communication play a critical role; and how business and industry can perform as they transform,” Baxley wrote.

Asked for an example of sustainability influencing site selection, she cites an Irish company looking to locate their first North American operations somewhere in Upstate South Carolina that came to HRP for environmental and permitting guidance. The degree of scrutiny for air permitting in particular was more stringent than the company expected. But HRP helped them build that into the timeline and navigate what was available to them in terms of expedited permitting, then provided similar guidance with regard to wastewater.

“As they got through the construction phase and had an eye on operation, we transferred to environmental compliance and health and safety compliance, as well as ISO 14001,” she says. “The ISO program paves the way for sustainability,” whether the company is aiming for simple compliance or has more ambitious objectives. “They moved to the Upstate seven years ago, and we’ve worked with them ever since.”

Sometimes sustainability means sustaining priorities even if the political atmosphere threatens to poison them. Some states’ legislators have gone so far as to propose legislation denying state funds to any company with an ESG program in place.

Bunch observes that it’s the “S” or social aspect of ESG where the most pushback has come, though there is also the motivation to protect mom-and-pop establishments and SMEs from environmental strictures that may prove onerous if not a downright threat to a company’s existence. Baxley says that “S” also can also refer to workforce development and green jobs. At the same time, that “S” is important to multinationals with strong devotion to the UN’s Sustainable Development Goals. If a territory is looking to attract those companies, she says, it helps to have an SDG study, as her organization does, that she can give to huge area employers as Michelin, BMW and Volvo to take back to their HQs. “The Michelin leader likes to go to France showing where we are moving forward,” she says. “Our mission is to connect sustainability goals to business with local solutions.”

“A big part of being a leader in sustainability is to detoxify the conversation,” says Baxley. “ESG is nothing new. It’s just the first time we’ve put those things under one umbrella. The EPA has been around since the Nixon administration, the social aspects since the Kennedy administration. Governance has always been around. But for whatever reason there is a narrative that it’s the big bad wolf. ESG is just an identification of your risk. Sustainability is how you mitigate that risk.” 

Adam Bruns
Managing Editor of Site Selection magazine

Adam Bruns

Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.

   



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