Booz Allen Hamilton, a management and technology consulting firm with 25,000 employees, takes its firm-wide commitment to sustainability seriously—and even created a committee of senior leaders to focus on how the firm can fully incorporate sustainable practices into its facilities infrastructure, policies, and operations. But can a firm that leases 100 percent of its buildings ever control its own destiny when it comes to energy efficiency and carbon footprint reduction?
Finding an answer to this question is my task this summer as an EDF Climate Corps fellow at Booz Allen. After a few weeks of training, interviews, conversations, and research, I've managed to identify three key barriers that might stand in my way:
- •Full Service Leases: Also known as a gross lease, this is an agreement under which the tenant pays a fixed fee per unit of area (e.g. ft2). Property taxes, insurance, upkeep, and utility bills are all included. Tenants may not know their electricity usage, expenditures, or the amount they could be saving. New York City Mayor Michael Bloomberg and the Real Estate Board of New York are at the leading edge of a movement to reduce the split-incentives that occur as a result.
- •Lack of Data: Utility bills provide only a small piece of the data puzzle. Unless you are the sole building occupant or lease a space which sub-meters, the data you can collect may not be specific to your operations. Additionally, if you do not have reliable data from your competitors or similar office buildings, you may not be able to accurately identify where the problems lie. The EPA's Portfolio Manager was designed to solve this problem, but hasn't yet been adopted at scale.
- •Lack of Authority: Tenants can provide recommendations, but ultimately the decision-making authority rests with the building owner. To negotiate effectively, according to a 2010 Grubb & Ellis report on Green Leasing, landlords and tenants must build consensus around energy efficiency goals and jointly model financial implications and operational risks.
Though these barriers seem daunting, I'm confident that I will be able to work with the team at Booz Allen to overcome them. Helping me is the firm's existing – and continually evolving – sustainable business model, which has three primary drivers:
- •Internal Expertise: Booz Allen has provided guidance in the sustainability space for a number of years and continues to build a portfolio of expertise both internally and externally to advance its practices and better serve its clients.
- •Real & Sustained Leadership and Organizational Support: The Sustainability Steering Committee, a collection of partners representing all of Booz Allen's markets, directs the sustainability movement at Booz Allen. The Sustainability Committee, a group of internal experts in facilities, law, procurement, finance, IT, HR, marketing and communications, transportation, CSR, and real estate, helps operationalize sustainability throughout the firm. This goes a long way in ensuring Booz Allen's efficiency as a global firm.
- •Employee Engagement: Sustainability contests, seminars, committees, and volunteer events are embedded in the culture at Booz Allen. The firm hosts an annual Earth Day Celebration and Great Green Ideas contest to create new opportunities for staff and their families to become and stay involved. Moreover, the Sustainability Program Management Office (PMO), which leads these initiatives, was created due to demand from the Booz Allen employees themselves.
I was once told that the key to success in business is to surround oneself with intelligent and passionate people. At Booz Allen, leveraging a 97-year track record in energy efficiency and sustainability, it's going to be easy surrounding myself with thought leaders and industry experts.
I'm excited to see what we can accomplish together over the next few months.
--By Aaron Landgraf, 2011 EDF Climate Corps Fellow; MBA Candidate, Johns Hopkins Carey Business School
The Intern Diary: Learning All About Sustainability with Four MBA Candidates
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