People, Planet, Prosperity: How Flexible Office Space Leads Sustainability in Commercial Real Estate
The rise of Environmental, Social, and Governance (ESG) considerations in today’s business landscape stands as one of the pivotal discussions within the flexible workspace industry today.
ESG is not just a passing trend; it has evolved into a guiding principle for organizations and their workforce.
Today’s businesses are seeking more than just office spaces – they aspire to inhabit workspaces that prioritize well-being and reflect a steadfast commitment to our planet.
To dive deeper into this transformative trend, we sat down with Raul Velarde, Director of ESG at CP Group, exploring:
The connection between commercial real estate and sustainability
The definition of sustainability in office space
How flexible office space operators are leading ESG in commercial real estate and how modern organizations benefit from operating in these environments
CP Group's commitment to sustainability within its worCPlaces flexible office service offering
Here is what he revealed:
worCPlaces: Can you tell us about your role with CP Group and your areas of focus?
Raul Velarde: In my role, I look at our portfolio nationwide, including our worCPlaces office line, to establish the best ESG practices for our buildings, particularly around environmental and social impact.
Our key environmental goal is to optimize performance. This includes evaluating building materials, sourcing, and supply chains. It involves questioning why and how we are using resources in every aspect of our development and operations. At CP Group, our goal is to achieve net zero carbon operations by 2035.
How would you define sustainability in terms of commercial real estate—specifically office space?
The real estate industry is one of the largest emitters of carbon emissions, with buildings accounting for 39 percent of the global total. Although there is a considerable focus on the construction side, operational emissions account for a full 28 percent, according to the World Green Building Council.
We are tracking our energy, water, and waste at the property level so we can get granular in strategic initiatives.
As we gather more data, we will identify drivers of consumption and how to tackle them. This could be as simple as installing an occupancy sensor, or it could mean changing all the light fixtures based on the building.
Our next step will be to study our waste stream. This will assess how much we are recycling and how we can increase our diversion rates so cardboard boxes, for example, don’t end up in landfills.
Strategically, we dig deeper into what we are using as well. When we look at the supply chain, we want to understand what is in each product, where it came from, and whether it was ethically produced. If something is made out of wood, do we know if it has been harvested sustainably and in accordance with environmental best practices? Do we know whether it contains harmful volatile organic compounds (VOCs)—cancer-causing gasses emitted from products and processes?
At CP Group, we are establishing a resilient and responsible supply chain and developing a human rights policy for that supply chain to make sure essential products and equipment are built and bought from OECD countries. This allows our properties to maintain operations in the event of international unrest.
Historically, there has been a tendency to think more about what color the office walls are going to be than where a nail is coming from, for instance. But this is all part of the sustainability puzzle.
At a glance, the average office user might not draw a connection between commercial real estate—specifically office space—and sustainability. Can you help connect those dots?
When you look at office space on a micro level, most people intuitively think about the small sustainability initiatives that are incorporated into individual buildings—energy-efficient light bulbs, for example.
These considerations are still important, but that is only a small piece of a much bigger picture. In terms of sustainability, it is essential to also take a macro perspective to office space.
In the U.S., 5.9 million commercial buildings contained 96 billion square feet of floor space in 2018. By 2050, commercial building floor space is expected to reach 124.6 billion square feet, a 29% increase from 2022. Much of this is currently (and will continue to be) used for office space.
Ground-up office development is extremely carbon-intensive. Constructing bigger buildings will emit about 35 kilograms per square foot of carbon dioxide equivalents. And even for an interior fit-out, the figure is still about 3.5 to 4 kilograms per square foot.
Concrete, wood, plastic, and glass materials are all internationally sourced, creating a significant impact on the environment before accounting for the environmental toll that daily use of those office spaces will take.
Sustainability in the office sector begins with the construction process and extends to the details and operations of the building. For environmentally-conscious organizations seeking office space, these are all important factors to consider, and this is a big part of our ESG work at CP Group.
What are the most significant ways in which flexible office spaces help to drive sustainability?
In the context of office space, flexible workspaces are key drivers of sustainability due to three main factors.
1. Sustainable design and operations
A workspace that has been built properly and sustainably is set up for success from day one.
In the construction industry, decisions come down to budget and time. All too often, this means sourcing the cheapest materials that are not fabricated sustainably and require emissions-heavy overseas transportation to deliver the products quickly. Long-term, this is not the most sustainable method nor the best decision for your workspace.
This can also extend to the daily operations of the office. For example, if cheap mechanical systems are used, they will require more maintenance and use more energy than higher quality (and more expensive) energy-efficient systems. If the wrong air conditioning system has been purchased, people have to sit in the office with their sweaters on in the height of summer, wasting energy as a result.
It’s essential to understand that one wrong decision can create a ripple effect.
Although it comes at an extra expense, it is worth hiring engineers or specialists who are more experienced and knowledgeable about these solutions.
2. Optimal space usage
For a time, the amount of square footage per person shrank from 150 square feet per person to about 125 to 130 square feet. That number has started to grow again post-pandemic.
Organizations are realizing that they want extra office space, collaboration spaces, and lounge areas. The reality is that office space needs ebb and flow.
Many flexible workspaces, like worCPlaces, have factored this into what we build and how we build it.
We have designed our spaces so that organizations can scale their office space square footage flexibly to meet their needs without requiring any demolition or rebuilding—and without the environmental toll that comes with doing so.
For example, in some worCPlaces locations, we built modular walls that can be shifted to alter the way spaces are used. Our existing tenants can request that we shift walls within their suites, and we can also easily alter our spaces to meet the exact needs of new tenants.
This means that every square foot of a flexible office space is optimally used, and the environmental toll associated with servicing that space is reduced.
3. Sharing resources
Sharing resources is a big part of the flexible workspace value proposition. This is a cost-saver for tenants and has sustainability benefits as well.
Consider kitchen facilities, for example.
In a flexible workspace, these resources can be shared across multiple organizations rather than each tenant having their own.
This eliminates the need for multiple sinks running water, and reduces the requirement for multiple dishwashers or refrigerators when only one is necessary.
Why is sustainability important for modern organizations?
Sustainability ultimately comes down to people, the planet, and prosperity.
Consider the values of the future workforce.
Today’s employees have a heightened awareness of environmental stewardship and demand that their employers align with those values.
Sustainability and a commitment to caring for the planet are becoming key tools for attracting and retaining engaged employees who will help make your organization more profitable.
How can organizations benefit from operating in a sustainable workplace?
While it’s only one piece of the puzzle, selecting the right office building helps demonstrate to your employees and customers that your organization is committed to sustainability and environmental stewardship.
Being in a LEED-certified or WELL Health-Safety Rated building like those in our worCPlaces portfolio makes this a cost-effective proposition. From a financial standpoint, sharing amenities and services minimizes usage and costs, benefitting tenants who do not want to pay inflated costs on energy use.
There are also employee performance benefits that can be derived from working in a sustainable office building. A study conducted by Harvard University found that adequate indoor air quality benefits cognitive function and improves productivity.
In addition to our LEED certification, CP Group also follows the WELL Health-Safety Rating and is highly focused on improving indoor air quality across our portfolio.
How is CP Group working to ensure its worCPlaces office line abides by sustainability best practices?
We use metrics and data to track our efficiency and energy use. We are also rolling out sensors next year that can sense carbon dioxide, carbon monoxide, particulate matter, and VOCs.
Beyond that, I am taking our suppliers’ carbon emissions into account. We have already installed some of Shaw Carpentry’s net zero carbon products into our buildings, and we can order a larger amount for our workplaces at a more affordable price.
We recently had a new member join our Lakeside worCPlaces location and elected to source their furniture from CANOA—an ESG-centric sustainable furniture and design firm. When you place an order, it actually shows you how much carbon you’re saving. This is a benefit we extend to all new members.
With worCPlaces, prioritize sustainable office space that will benefit the planet, our tenants, their employees, and their customers.
If you are in search of an innovative, sustainable workspace, we invite you to take a tour of worCPlaces at Lakeside. Contact us today or book a tour now.
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