November, 2009

7 Ways to
Improve Corporate Sustainability Analyst Insight
while Cutting Costs Aberdeens Insights provide the
analyst perspective of the
Cost-cutting and working toward corporate sustainability top the list of
research as drawn from an
pressures for many organizations. Understanding that these two goals need aggregated view of the research
not be in opposition to each other can help organizations on both fronts. surveys, interviews, and data
The touted concept of the triple bottom line - actions that have better analysis
results for people, the planet and profitability - can become reality when
organizations know where to begin. One big area organizations often find
easy ways to improve is in its buildings / facilities / real estate management.
Based on recent Aberdeen sustainability research, Best-in-Class companies
are 72% more likely to list rising facilities costs as one of their top three
pressures than all other companies.
According to the United States Green Building Council, buildings account
for a significant percentage of environmental impact. Buildings are Best-in-Class Definition
responsible for: The Aberdeen Competitive
Framework defines enterprises
72% of electricity consumption as falling into one of the
39% of energy use following three levels of
practices and performance:
38% of all carbon dioxide (CO2) emissions
Best-in-Class (20%)
40% of raw materials use Practices that are the best
currently being employed and
30% of waste output (136 million tons annually)
are significantly superior to the
14% of potable water consumption Industry Average, and result in
the top industry performance.
Source: United States Green Building Council
Industry Average (50%)
Cutting consumption translates into cost savings and helps the environment Practices that represent the
at the same time. Reducing your overall square footage reduces your average or norm, and result in
electrical consumption and your carbon emissions. Here's how you can get average industry performance.
started.
Laggards (30%) Practices
that are significantly behind the
1. Know what you've got and what you're consuming average of the industry, and
Reducing a footprint - be it carbon, energy, water or space - requires result in below average
knowing what you have so you can determine how to improve it. In fact, performance.
Best-in-Class companies are 164% more likely to be currently tracking
carbon footprint and 84% more likely to be currently tracking water
footprint. Overall, Best-in-Class companies are four times as likely to have
visibility into their facility efficiency than all other companies.

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This data clearly shows that top performing companies have made
controlling their facilities expenses a priority. In order to achieve Best-in-
Class performance here's what you need to know:
The actual square footage of your buildings
The percentage of occupancy Best-in-Class Performance
The number of occupants Carbon and cost emerged as
the top two metrics that
Hours of occupancy mattered most for companies
Energy consumption looking to measure the success
of their sustainability initiatives.
Services consumed Therefore, Aberdeen used
three key performance criteria
The distance traveled by employees
that significantly impact both
The LEED or BREEAM certification of your buildings (if you have it) corporate carbon emissions
and operating expenses to
distinguish Best-in-Class
2. Determine how you can reduce space companies. The Best-in-Class
In reducing the amount of space you use, you reduce the amount of energy achieved:
needed to heat it, cool it, and light it. You likely reduce the amount of water An 11% decrease in paper
and services you consume. In determining how you can reduce space, costs
consider how you are using your space and how that can change. Here are
areas to consider: A 10% decrease in overall
facilities costs

Promoting a Work-from-Home Culture A 9% decrease in energy

You can reduce the overall carbon footprint of your organization if you costs
reduce the amount of commuting done by your employees. In fact, over
27% of Best-in -Class firms, compared to 21% of all other firms, currently
have tele-work or work-from-home policies and are looking to enhance
them over the next twelve months. Employees working to maintain a good,
healthy work-life balance find the hours they save in their commutes gives
them more usable time, and reduce the cost and risk of travel. Because
information and communications technologies (ICT) can enable effective
remote working environments, enabling workers to work from home can
dramatically reduce your need for providing offices, cutting your real-estate
and associated expenses.

Flexible Office Management and Hotelling

Largely through the use of technology and flexible office management
systems, companies can transform their office or campus environments
from fixed to flexible environments that enable location-independent
working. "Hot-desking," or, the sharing of workspaces, has emerged as
viable option for most companies and organizations implementing a
"hotelling program". With a hotelling program, employees make a
reservation to use a workspace when they need to be physically in the
office. They do not have allocated workspace reducing the cost of rent,
furniture and facilities.

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3. Manage Your Facility Costs

As shown below, Best-in-Class companies consider the rising facility costs as
one of the top cost related challenges second only to rising energy cost.
This illustrates the importance for having both a unified facility management
strategy and the necessary technological infrastructure to manage these
costs. In support of a facility management strategy, companies are further
challenged to manage disparate facility systems and benchmark facility
performance in support of decision making on buildings, facilities and the
work place.
Like all sustainability initiatives, companies must measure and monitor assets
in order to effectively develop strategies to reduce costs and carbon
footprint.

Top Challenges for Effective Facility Management

30%
Best-in-Class
24% Average
25% 23%
22% Laggard
Percent of Respondents

21%
20%
17%

15% 14%

10%
7% 7%

5% 3%

0%
Rising energy costs Rising cost of Rising cost of
facilities/operations waste/disposal

Source: Aberdeen Group, February 2009

Using an Integrated Workplace Management System (IWMS) can greatly

facilitate building and real estate management by providing visibility into key
metrics across an entire portfolio of holdings. IWMS tools can help
organizations drive toward goals of cost savings and sustainability.

4. Carbon and Stakeholder Collaboration

Aberdeen research reveals that top companies while measuring and
monitoring carbon footprint and other sustainability metrics, also actively
promote collaboration among all stakeholders. Still, top performers are
decidedly more focused on data analytics and carbon management. Further,
the top companies repeatedly demonstrate that the adoption of
sustainability and corporate responsibility (CR) oriented services and
technology tools are increasingly essential components of success. Best-in-
Class companies are 41% more likely to have sustainability and CR-oriented
services and technology tools currently in place. This level of commitment

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to developing the technological infrastructure is critically important

particularly when it comes to energy or carbon tracking, lifecycle analysis,
responsible product development, efficient facilities management, or
effective communication and stakeholder engagement across an extended
organization. This improved management and tracking of performance
through the use of CR-related software and systems provides the required
visibility to effectively communicate and interact with company stakeholders.
Top companies excel at
Measuring so that they can manage - Best-in-Class companies are
more than six times as likely to measure overall corporate carbon
footprint than all other firms.
Collaborating and communicating - 40% of Best-in-Class companies
have established collaboration initiatives versus 31% of average
companies.
Adjusting and reinvesting in improvements - Best-in-Class
companies are 21% more likely to invest in process innovations on a
continuous basis.
Without visibility and proactive management sustainability remains narrowly
understood and not well implemented. Companies leave money,
opportunity, and innovation on the table.

5. Contracting and Green Suppliers

Based on multiple Aberdeen studies, the number one action in support of
sustainability initiatives is to adopt or expand a responsible sourcing and
procurement strategy. In fact, this trend is highlighted even more when
looking at the Best-in-Class organizations. 45% of Best-in-Class companies'
list responsible procurement strategy as their top action compared to 39%
of all other firms. Organizations are overwhelmingly adopting sustainability-
directed criteria for company purchases and supplier relationships in
support of both internal and client-facing activities. By starting with highly
efficient and responsible materials, products, services assets, as well as
infrastructure, organizations are able to meet and even preempt evolving
expectations and mandates for social and environmental responsibility. In
addition, they are more effectively integrated into the fabric of the business.
As corporate sustainability agendas continue to evolve, the top three action
items on the executive agenda are statistically close in level of importance
and often pursued in tandem. The focus on responsible purchasing and
internal stakeholder education and collaboration dramatically catalyzes
energy and other reduction goals necessary for meeting carbon targets,
reducing costs, increasing efficiency, and gaining thought leadership.

2009 Aberdeen Group. Telephone: 617 854 5200

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Top Strategic Actions to Support Sustainability Initiatives

Adopt or expand sustainable /
responsible / ethical procurement 39%
and sourcing strategy

Implement staff collaboration /

37%
education initiatives

Adopt carbon footprint /

36%
emissions reduction plan

Incorporate sustainability metrics

into overall value chain 32%
performance management
Redesign product or service
development strategy to align 25%
with sustainability goals

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Percentage of Companies

Source: Aberdeen Group, February 2009

6. The Greening of Real Estate: Smart Buildings

Looking beyond "greening" of the data center and the IT infrastructure,
companies are challenged to reduce the energy costs and carbon footprint
of their buildings. Industry and government estimates indicate that buildings
consume up to 72% of electricity in United States. While newly built
"green" and "smart" buildings are demonstrating break through innovation in
sustainability design and building technology, the challenge remains to
retrofit existing building worldwide.
Top companies are adopting building intelligence technology and
implementing organizational changes needed to execute smart building
programs. 35% of top performing companies are currently using or planning
to implement facility management software solutions within the next 12
months while only 28% of all other firms are using these solutions.
Companies are using building intelligence technology to proactively
transform legacy building systems and processes, and then use the systems
to monitor and measure on an on-going basis.

2009 Aberdeen Group. Telephone: 617 854 5200

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Key Sustainability Technology Enablers by Performance Class

28%
Environmental management software 23%
7%

24%
Facility management solution 18%
Best-in-Class
18%
Average
24% Laggard
Product traceability software
20%
5%

17%
ERP system sustainability module 14%
11%

0% 5% 10% 15% 20% 25% 30%

Percent of Respondents

Source: Aberdeen Group, February 2009

7. Eliminate Paper Processes, Save Space and Money,

Help the Environment
Printing and paper consumption are good targets for improving sustainable
business and transforming your office environment. Best-in-Class companies
are 46% more likely than all other firms to have paper reduction policies
currently in place throughout their organizations. Further, Best-in-Class
companies are aware that their paper reduction strategy must go beyond
the office. Top performance companies are more than four times as likely
than all others to have packaging or packaging waste paper reduction
policies in place.
Processes that involve paper are good prospects for business process
innovation, because moving from a paper process to an electronic process is
much more efficient over time, easier to manage and modify, and consumes
much less paper. The demand for paper is driving harvesting of precious
forests which in turn destabilizes land, reduces bio-diversity and evicts
indigenous peoples. Paper production has a very high water footprint using
more than 2 gallons of water to produce a single sheet of 8 1/2 by 11 inch
paper.
Organizations have the opportunity to eliminate or curb their consumption
of paper, including use of electronic forms, business process improvement,
duplex printing and other paper-saving processes, as well as guidelines for
environmentally friendly paper choices. Reducing the storage space for
paper can help your real-estate footprint as well.

2009 Aberdeen Group. Telephone: 617 854 5200

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Key Sustainability Management Capabilities

74%
Formalized Sustainability Policy
58%

63%
Formalized Paper Reduction Policy
43%

Sustainability Criteria Integrated Into 52%

RFPs/RFIs 28%

Develop Products According to 44%

Sustainability Criteria 36%

Ability to Measure Corporate Carbon 26% Best-in-Class

Footprint 21% All Others

0% 10% 20% 30% 40% 50% 60% 70% 80%

Percent of Respondents

Source: Aberdeen Group, March 2009

Case in Point "If you want to implement a

The city of Antwerp, Belgium, has one million people and 1,200 municipal facility management system,
facilities including office buildings, schools, sports facilities and swimming you need a good
pools. In 2003 they embarked on an aggressive green agenda starting with a implementation team of people
commitment to making the citys services adhere to the Kyoto Protocol. who understand business
process in depth - persons who
The city further committed to reducing its carbon emissions by greater than
understand the business in a
the European norm of 20% by 2009. functional way. IT specialists
In 2008, Antwerp carbon emission baseline was 98,000 tonnes. To meet the are not enough."
Kyoto Protocol and exceed the European norm, the carbon emissions have ~ Luc Lebon,
to be reduced by more than 20,000 tonnes before the end of 2012.
City of Antwerp
To achieve its ambitious goals and enable decision making, the city needed a
comprehensive understanding of its 1,200 real estate assets, workplace
usage and energy consumption. The city used Planon Software's Integrated
Workplace Management System to benchmark energy consumption by
building, by building type, and by square meter. The benchmark revealed
that 20% of the assets were responsible for 80% of the energy consumption.
Although an integrated IWMS solution can provide the right information
and decision support, organizations must first define their sustainability
strategies. Its important to make a good business case when you start
before you start to implement software systems," says Luc Lebon, who is
responsible for change management for the City of Antwerp. "First you
must know what you want to do, so that the software follows your needs
rather than vice versa."
Lebon credits Planon Software for enabling key decision making for
Antwerp's real estate sustainability program and the ongoing day-to-day
management. Further, Lebon commented on the software's impact on the
2009 Aberdeen Group. Telephone: 617 854 5200
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city's customer service: "We can organize relationships with clients much
easier and better than before. It helps with client friendliness."

Key Takeaways
Top performing companies understand that cost savings initiatives and
sustainability initiatives go hand in hand. To achieve Best-in-Class
performance, firms must both focus on reducing consumption and gaining
efficiencies. Integrated workplace management systems can be used as a
foundation to sustainability programs and cost-savings programs. With the
right systems in place, organizations can:
Cut costs through reduction of energy consumption - Top
performing companies were over twice as likely to use energy and
fuel calculators and were 55% more likely to use energy
management software.
Extend the efficiency and lifespan of facilities assets through planned
maintenance - As a complement to planned maintenance, top
companies are four times as likely to have full visibility to facility
related efficiency.
Reduce their carbon footprint - While many strategies can effect
your company's carbon footprint, 21% of top performing companies
using carbon modeling techniques compared to just 6% of all other
firms.
Manage energy supply and costs - Top performing companies are
12% more likely to have a formalized energy reduction policy.
Comply with organizational and federal environmental mandates -
Top companies were more than twice as likely to use a third party
verification provider to check compliance.
Track LEED or BREEAM certification status across an entire real
estate portfolio.
To reach Best-in-Class performance results from sustainability initiatives
requires an investment in base-line technological infrastructure. An IWMS
that becomes central to real-estate and facilities management can help
organizations deliver on their sustainability commitments and reduce their
costs and consumption at the same time.

For more information on this or other research topics, please visit

www.aberdeen.com

Related Research
The ROI of Sustainability May 2009
Sustainability Matters The Corporate Executives Agenda:; March 2009

2009 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897
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Related Research
Authors:
Carol Baroudi, Research Director, Green IT and Sustainability,
carol.baroudi@aberdeen.com
Bill Lesieur, Research Director, Green IT and Sustainability
bill.lesieur@aberdeen.com
Kevin Permenter, Research Associate, Green IT and Sustainability,
kevin.permenter@aberdeen.com

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2009 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897