Insights

July 5, 2017

Making the Case for a Portfolio-wide Sustainably Healthy Workplace Program

A growing body of evidence points to the clear link between sustainable, healthy workplaces and more satisfied, more productive employees. Therefore, it’s no coincidence that many successful and fast growing companies (including Sustainability Roundtable Inc. (SR Inc) Member-Clients Akamai, Salesforce and others) are developing comprehensive Sustainably Healthy Workplace (SHW) strategies for implementation portfolio-wide.

Bay Area Member-Clients recently joined SR Inc at Salesforce’s LEED Platinum HQ in downtown San Francisco to further explore the research behind this link and to discuss the benefits and barriers to pursuing a more Sustainably Healthy Workplace strategy portfolio-wide.

As SR Inc works towards the development of a decision-support and business case tool for portfolio-wide SHW strategies – in line with SBER’s 2017 Research Charter – the 2^nd quarter of 2017 served as a “Discovery Phase” to determine the major perceived benefits and barriers to implementing such strategies. Some of the key themes that arose as barriers during interviews with dozens of Member-Clients were unsurprising such as:

1. the potentially high dollar and staff time costs of developing and implementing such a strategy;

   

2. the complexities associated with measuring the direct impact of work environments on employee performance; and
3. the lack of available implementation guidance.

However, these interviews also revealed some less obvious barriers, such as:

4. the challenge of quantifying the costs of SHW programs on a per full-time employee (FTE) basis (in addition to per square foot (SF) basis);
5. perceiving existing HR Health & Wellness programs as a substitute for healthy workplace programs, (noting that only 15% of employees participate in their current health management program); and
6. assessing and implementing healthy workplace programs via a single-asset versus portfolio-wide approach.

To overcome such barriers, SR Inc’s Peter Crawley, Director of Research & Consulting, shared some of the core best practices Member-Clients are employing to successfully develop and implement portfolio-wide SHW strategies and – in some cases – related building certifications:

1. Recognize the ability of portfolio-wide SHW strategies to transition the Corporate Real Estate (CRE)

   

   function from cost management to value creation. Directors of CRE that take an employee-centered, portfolio-wide approach to portfolio management are empowered to deliver an integrated strategy that engages employees; integrates sustainability, wellness, and renewable energy initiatives; is highly visible; and is enduring to enable year over year growth and excellence.

2. Allocate the costs & benefits of health & wellness workplace programs/certifications across both CRE and HR departments. A portfolio-wide SHW strategy engages multiple departments beyond CRE – most notably HR – fostering joint decision-making collaboration to align with a greater number of internal stakeholders, attract greater attention/support from the C-Suite, and allow for both costs and benefits of initiatives to be distributed across both CRE and HR budgets.
3. Quantify correlations between Healthy Workplaces & Employee Performance. A range of credible studies exist – from Harvard School of Public Health’s CogFX Study to Integrated Benefits Institute’s suite of tools – that help companies better understand the impact of work environments on employee health and productivity and build the business case for implementing SHW strategies portfolio-wide.
4. Recognize the Risk Management (Regulatory, Brand, Workforce & Market) Benefits of portfolio-wide SHW programs. Portfolio-wide SHW programs can help enterprises align with a range of both internal and external stakeholders, helping ensure they are in compliance with environmental and health regulations; improving brand reputation among customers and investors; reducing risk of workforce illness, absenteeism, and escalating health costs; and future-proofing their building portfolio for anticipated market demand for healthier buildings.
5. Use workforce costs/FTE metrics in addition to building costs/SF when analyzing the business case for SHW programs. The traditional approach to a cost-benefit analysis considers hard costs of building, owning, and

   

   operating a healthy workplace as well as the (sometimes significant) additional costs of certifying that workspace/building. The ROI is typically calculated based on resulting reductions in energy, space, and water costs. A portfolio-wide SHW program invites a reframed cost/benefit analysis that integrates employee impacts into the mix. Specifically, health-related workforce costs such as absenteeism, turnover, health insurance costs, and employee disengagement are costs with significant impact on the bottom line. Inversely, reduced absenteeism, lower turnover rates, lower health insurance costs, and greater employee engagement/productivity are benefits that can greatly contribute to revenue. For example, a portfolio-wide SHW Program yielding a 5% annual reduction in health-related costs  at a company of 10,000 employees can produce nearly $20 Million in cumulative savings over 5 years versus a “Business as Usual” scenario.

As Q3 of 2017 begins and we move closer to SR Inc’s 6^th Summit for Sustainable Operations in Denver on December 8^th, SR Inc looks forward to sharing with Member-Clients a decision-support tool to help Real Estate executives develop a portfolio-wide SHW strategy for their enterprise, and to help build the business case for its implementation (including wellness certifications where appropriate). SBER Premier Thought Leader Delos will also bring its multiple years of workplace health expertise to this effort and help ground the business case tool in credible, evidence-based research. In the meantime, SR Inc is available to answer any general or specific questions your team has regarding health and wellness in the workplace.

Select Relevant SBER Executive Guidance & Tools:

• Member Advisories:
  • Indoor Environmental Quality (IEQ) Settings
• Member Briefings:
  • Energy & Sustainability Management Becomes A Requirement of Compliance
  • Managing Indoor Air Quality
  • Sustainable Food Service Strategies and Standards
• Member SBER Full Reports:
  • Occupant Engagement for Sustainability
  • Sustainability in Leased Space
• Member Executive Tools:
  • SBER Sustainably Healthy Workplaces Multi-year Roadmap
  • SBER Sustainably Healthy Workplaces Strategy Scorecard
  • SBER Sustainably Healthy Workplaces Multi-year Performance Dashboard
• 2016 Symposia Presentations:
  • 2017 Q2 Symposium: Making the Case for a Portfolio-wide Sustainably Healthy Workplace Program
  • 2017 Q1 Symposium: Integrating Health & Wellness into Sustainable Workplace Strategies

As a Senior Manager of Research & Consulting at SR Inc, Kelsey Wallace supports research, development and implementation of enterprise sustainability strategies for companies that recognize the business imperative of more sustainable operations in the face of climate change and an increasingly resource-constrained world. Prior to joining Sustainability Roundtable, Inc., Kelsey worked for an environmental/engineering consulting firm where she supported clients including  the U.S. Environmental Protection Agency and the U.S. Green Buildings Council to promote sustainable buildings, clean energy, and safe drinking water. Kelsey also devoted a year to national service with the AmeriCorps National Civilian Community Corps, where she worked on team-based conservation and community development projects throughout the Southwest United States. Kelsey has her B.A. in Environmental Studies from Connecticut College.

Peter Crawley, Director of Research & Consulting at SR Inc , has led at the intersection of strategic consulting, real estate and sustainability for more than 15 years, serving as the principal advisor to top real estate owners and scores of  operating companies.  Peter has helped the executive teams at these enterprises develop and implement highly profitable Sustainability Strategies.  Prior to joining SR Inc, Peter served as the Director of Sustainability Services at the environmental engineering firm EBI Consulting. Peter is LEED accredited and has deep experience working on energy efficiency issues, product life cycle improvements, and greenhouse gas measurement, reduction, and reporting. He has worked on numerous LEED certification and high-performance building projects, and designed and implemented company-wide behavioral change programs to advance sustainability goals and enhance employee engagement. Peter received his BA from Amherst College, his MS in Real Estate from Columbia University and his MA in Sustainability & Environmental Management from Harvard University.