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Being A Sustainable Real Estate Business Can Help You Hire The Best New Workers

Patrick Sisson,

Allen Morris Co., a Fort Lauderdale-based firm that focuses on commercial development, has become known across Florida for a portfolio of more creative office projects that focus on sustainability. In the last decade, the firm has developed 4M SF of LEED-certified buildings in the Southeast.

But ask Director of Construction Scott Flately if Allen Morris is using its sustainable focus as a talent attraction tool and he’ll pause. He believes that over the last few years, many new hires have sought out the firm based on its body of work.

“The younger generation does probably think about sustainability more,” Flately said. “I never thought about it as a way to attract talent. To be honest, I don’t think we do enough of it, and we need to be doing more.”

Sustainability has become a bigger and bigger focus for CRE firms. The significant emissions footprint of buildings — 39% of total annual energy use in the U.S. goes toward commercial and residential buildings — and the drive for energy efficiency to cut costs makes sustainable construction and operation a financial advantage. That’s why JLL hired a new global head of sustainability and ESG (Environmental, Social and Governance), Guy Grainger, earlier this year. Other companies now also have such a position. Lisa Brylowsi, vice president of portfolio management at Brookfield Property Group, said that “ESG has become a pillar” in the industry, with good ESG now a “best practice.”

According to the most recent global industry sustainability survey by industry analytics firm Dodge Data, 47% of major companies said that by 2021, they expect to build green for 60% of their projects.

With so many firms bragging about green bona fides, can sustainability be a talent attraction and retention tool, as well as a sign of corporate responsibility? The Dodge Data survey also found that 17% of firms said building green was part of an internal corporate commitment, while 13% said branding and public relations factors were at play. Clearly, part of going green is to burnish a company’s credentials for new hires.

Companies that can effectively communicate their sustainability story can use it to attract and retain talent.

There is increasing evidence a greener corporate image may play a larger role with a younger generation of employees. A Gallup report, How Millennials Want to Work and Live, found that younger adults are exceptionally purpose-driven, and a global survey by tech firm HP found that sustainability played an important role in hiring: 61% of participants believed sustainable practices were mandatory, 46% said they’d only work with companies with sustainable business practices, and 40% would look to change jobs if the company they worked for didn’t implement sustainable business practices. A corporate plan for environmental responsibility could “ally your company with a very demanding generation as well,” the report noted.

Not everyone is convinced that this thinking has fully penetrated the world of real estate. Chris Papa, a managing director at Jackson Lucas, an executive search firm that specializes in real estate, said he doesn’t believe sustainability alone will sway any hires.

“I have seen younger folks become more interested in diversity and if diverse folks are in positions of leadership,” he said. “They find that attractive.”

But some CRE firms have instituted employee groups to promote sustainable practices and improve employee retention, and onboarding of new employees includes an overview of the firm’s sustainable practices.

CBRE has had a CBRE Green employee group for a decade, Senior Vice President of Quality Initiatives and Corporate Social Responsibility Alison Caplan said. Events like film nights, as well as more substantial efforts, such as volunteering and planting trees, and matching employee donations, reinforces the company’s commitments. (It is the only CRE services firm on the Dow Jones Sustainability World Index.)

She finds significant overlap between the employee attraction and retention functions of these kinds of groups within the company.

“Creating a sense of community among employees keeps you at a job, it’s that stickiness,” she said. “These groups also bridge gaps between different silos and parts of the firm and provide leadership opportunities.”

Flately said he sees the shift toward more sustainable business practices as analogous to how consumer demand for different kinds of green buildings shifts. While LEED used to be the standard, now, more and more clients are asking for COVID-free elements, such as touch-free surfaces, more balconies and UV lighting in air conditioning. The top-flight office environment CRE firms seek to provide to clients is just as important as the one they provide to their own employees.

“A decade ago, this wasn’t as prominent an issue,” he said. “But we’re designing a new office building in Orlando, and these features are the No. 1 thing on the list.”

As a new, socially engaged generation of workers enter the industry’s ranks, sustainability will become just as important in attracting staff as attracting clients.

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