Ask any 10 real estate professionals to define one of the biggest buzzwords of the 21st century, “sustainability,” and almost assuredly you'll get 10 different answers, ranging from renewable energy sources to environmental management to eco-efficiency.
But that shouldn't come as a shock. After all, the shopping center industry struggles mightily to define the term “lifestyle center” nearly 10 years after it was first coined.
The Merriam-Webster dictionary does little to clarify the meaning of sustainability. It defines this new-age word as “a method of harvesting or using a resource so that the resource is not depleted or permanently damaged.” Talk about fuzzy.
“It's a broad, ill-defined term,” acknowledges Dr. Stuart Hart, founder of the Center for Sustainable Global Enterprise at Cornell University in Ithaca, N.Y. The goodis that such opaqueness presents opportunity, Hart emphasizes. “As strategists, we want to gravitate to situations that are somewhat ill-defined and ambiguous. Once everything has been reduced to standard operating procedure, the profit opportunity is gone.”
The professor's remarks came during a recent presentation at the CoreNet Global Summit in Denver that attracted more than 2,000executives and associated professionals. Hart believes that sustainability is an umbrella term that encompasses everything from best practices in facilities management to dramatic technological change to social and environmental leadership in our communities. “I want to make a case that moving beyond incremental improvement is not only where the real opportunity is, but it's also crucial if we're going to get to a more sustainable world,” says Hart.
The dry-cleaning business exemplifies bold technological change in action. The franchise Hangers Cleaners Inc. uses liquid carbon dioxide as its cleaning solvent instead of the chemical perchloroethylene found in traditional dry cleaning. The liquid carbon dioxide is an effective, environmentally safe alternative to traditional processes. “I would submit to you that within five years the existing approach to dry cleaning will be obsolete,” predicts Hart.
In contrast, the U.S. Green Building Council's LEED certification program is best described as an important incremental change, Hart says, because the focus is on continual improvement in energy efficiency and pollution control rather than a radical departure. Savvy companies like 3M have made incremental upgrades in their building systems since the 1980s, says the professor.
Because the real estate community focuses mostly on energy efficiency, the deeper meaning of sustainability is often overlooked. True sustainability includes a firm's entire product system: where the raw materials come from, how they are secured, and what happens to the product after its useful life. “You think about the entire product system from cradle to grave,” says Hart.
The good news for business is that the power of change rests in its hands. “Unless sustainability builds shareholder value, it's unsustainable,” concludes Hart. “Sustainability has to be financially justified.”