July 17, 2015
A Multi-year Sustainability Strategy
For more than two decades, Karen Cochran has been adding value to Pacific Gas & Electric’s (PG&E) corporate real estate in a variety of functions, and since 2007, she has worked as PG&E’s Sustainability Lead to optimize more than 7 million square feet of PG & E real estate across California towards sustainability. In 2013, SR Inc recognized Karen Cochran as a Sustainable Business and Enterprise Roundtable (SBER) Outstanding Executive for her leadership on sustainability in PG&E’s corporate operations and real estate. Today, Cochran and her team are reflecting upon the success of PG&E’s 5-year Environmental Leadership Index (ELI) Program, which concluded in 2014.
Ms. Cochran developed and oversaw PG&E’s ELI Program over the past five years, which established ambitious targets to reduce the company’s environmental footprint with a specific focus on energy, waste and water and, more broadly, embedding the consideration of sustainability into the real estate lifecycle. The company exceeded all targets set as part of ELI Program, making significant strides towards more energy efficient and optimized operations and real estate.
During this 5 year period, PG&E saw a 16.4% reduction in combined MMBTUs for electricity and gas across 168 sites, a 30.4% reduction in water use, and an 81% waste diversion rate. Furthermore, PG&E obtained LEED certification for 14 buildings, representing 31% of its facility footprint, and established a policy requiring all new construction to, at minimum, meet LEED Silver certification standards. Ms. Cochran’s leadership enabled these industry-leading achievements, which ultimately saved the company $10 million in utility costs over the course of the program and will continue to net savings of nearly $3.4 million per year going forward.
The Approach
In 2007, PG&E’s CEO Tom King (later CEO at National Grid in the U.S.) challenged the company to “walk the walk” in promoting energy efficiency and “green” its real estate portfolio. As someone with a personal passion for environmental issues and a desire to have a real impact, Karen Cochran was eager to respond to this challenge. She led the Corporate Real Estate Strategy & Services (CRESS) team in setting targets and creating strong internal and external support to achieve ambitious energy, water, and waste reduction goals.
Throughout the process, Karen Cochran recognized the importance of effective communication and relationship-building, noting that employee engagement and multi-stakeholder participation would be necessary for the successful implementation of the Program. She attributes much of the credit for PG&E’s success to the internal and external teams that accomplished all of these goals. Ms. Cochran’s vision and initiative allowed her to leverage internal and contractor expertise to collect and organize the right data, track performance, make adjustments, and drive results.
Ms. Cochran and her team enabled a number of noteworthy accomplishments during this Program, including the development of a life cycle replacement and design standard for facility equipment, which is enforced by data collected via sub-metering and bill management systems. She also managed the remodeling of PG&E’s 145,000-square-foot San Francisco Service Center Garage, which was awarded a LEED Platinum certification in 2013. Further, Ms. Cochran remained persistent in her search for new, innovative products and techniques worth integrating into the ELI Program.
Aligning with SR Inc’s Five Component Strategy
Ms. Cochran managed PG&E’s ELI Program in alignment with SR Inc’s five component strategy to achieve more sustainable corporate operations and real estate.
Vision and Governance: After establishing a vision for the ELI Program, she led in pulling together an internal team that consisted of the Project Delivery and Facility Management teams, an Account Representative, and PG&E employees engaged in the Grassroots Green Network. An external team provided additional support and included Entech, iReuse, and Customized Energy Solutions (CES).
Strategy: Ms. Cochran developed the scope of this Program to address issues material to PG&E and ensured that Program priorities were communicated in a clear and compelling way so as to maximize employee engagement and commitment, thus making it resilient to changes in company operations and culture.
Guidance: The goals of the ELI Program were aligned with both ENERGY STAR and LEED Frameworks, and monthly, quarterly and annual goals were reported to facilities and upper management.
Implementation: Ms. Cochran oversaw implementation of a number of initiatives between 2009 and 2014, which included:
Reporting Results: As a result of this program, PG&E exceeded all targets for energy, water, and waste reduction in addition to achieving LEED certification for 14 new sites. The ELI Program saved the company $10 million in utility costs between 2009 and 2014 and will continue to net savings of nearly $3.4 million per year going forward.
Lessons Learned
Upon reflecting on the ELI Program, Karen Cochran noted that effective efforts towards healthier, more sustainable facilities can significantly reduce costs at the same time that they help engage and retain valued talent. Further, she recognized the value to an enterprise of having a multi-year sustainability strategy with clear and consistent baselines, reporting that it is not only “the right thing to do” for the planet but is also necessary for optimizing company operations. As she recently summarized, “I view environmental impact as an issue of long-term safety, and the air quality and health of our buildings and communities is a top value at PG&E.”
Ms. Cochran’s leadership enabled industry-leading achievements, which ultimately saved her enterprise – and by extension rate payers – millions of dollars in on-going operating costs. She created a vision aligned with her enterprises vision which included – but extended well beyond – energy savings. And this bold, broader vision of what more efficient operations could mean helped Ms. Cochran effectively recruit and energize in-house and contracted experts to effectively advance PG & E’s Sustainability Strategy as manifest in the ELI Program. As a result, Ms. Cochran provides a compelling example of the advantages of developing a Sustainability Strategy for operations which leverages existing, respected frameworks such as EPA’s ENERGY STAR for Buildings and the USGBC’s LEED building rating system, to substantial reduce year over year costs and adverse environmental impacts through constructively engaging employees in a shared mission to demonstrably “walk the walk” in the necessary move to more sustainable corporate operations.
