Spotlight on Sustainability Series: Avison Young’s Jon Gibson

Jon Gibson was recently named Global Director, Environmental, Social and Governance (ESG) at Avison Young, a global commercial real estate company. In his new role, Jon leads the firm’s global ESG strategy and program, developing and implementing the ESG goals and overseeing integrated solutions for clients.

In September, Jon spoke with Hamm Hooper and Ryan Windels about the importance of educating employees on carbon literacy, best practices in commercial real estate sustainability and how Avison Young tracks its own carbon footprint.

1. You recently were the head of Avison Young’s U.K. Sustainability team. Some say that ESG initiatives are further along the path in the U.K. than in the United States; what do you think needs to happen in North America for companies and government bodies to increase adoption of ESG practices?

Among the many factors that will drive increased adoption of ESG initiatives in the United States, education – understanding how ESG is fundamentally imbedded in to business and our collective success – is among the most important. At Avison Young, we believe that the most successful companies realize profits are inextricably linked to social purpose. Companies outperform. Assets retain or enhance value. And it attracts more equity to future-proof the business. It’s the regulatory environment too though which varies over geographies, not just existing regulations, but visibility of the trajectory of where regulations impacting investments and operations of companies are heading.

That’s why a long line of investors and companies are facing demand from shareholders, clients and individuals to up their game on ESG. It’s changing the way companies do business – how they respond to climate change, how they invest, how they attract and retain talent, how they innovate. Take a look at the talent piece alone: as a younger generation enters the workforce (by 2025 more than 75% of the workforce globally will be Millennials or Gen Z); it has become more important for companies to prioritize issues that matter to their employees – environmental sustainability being one of those issues. Let’s also remember a high proportion of decision makers within companies in certain sectors, such as tech, are in the Millennial grouping, this is also changing the system.

In the public sector our experience working with governments, city and local authorities or municipalities is all around making sense of and breaking down ambitious net-zero carbon targets, as they relate to buildings, and advising on low carbon interventions over time. There are also avenues for governments to create incentives for businesses to invest in energy efficiency in commercial buildings. As an example, we partnered with the Confederation of British Industry to publish a paper that showed how the U.K. business rates tax system can be changed to encourage the adoption of energy efficiency measures.

2. The office as we know it is being reimagined as a result of COVID-19 and work-from-home policies. What type of opportunity is there to incorporate the best practices in sustainability in the new era of corporate offices?

COVID-19 has clearly demonstrated that flexible work is feasible, practical, and increasingly desirable. In fact, by the end of 2021, we expect more companies to formally embrace the hybrid workplace, as the early feedback from major occupiers suggested that 80 percent will enable a hybrid arrangement. In many ways, this is a once-in-a-lifetime opportunity to reimagine the physical office in a way that maximizes sustainability.

As companies determine how to best bring back their employees to the physical office, they should also be thinking of how to reimagine the confines of their offices and how health and wellness become part of the workplace strategy. Employees will require workplaces that deliver an experiential X Factor, which we believe includes ESG considerations, wellness, low environmental and low carbon materials, appealing design, along with a variety of workplace settings such as collaboration zones, focus-oriented areas, and hospitality spaces. This will result in a modern, agile, high-performance space where employees can thrive.

We’re applying this approach to our own offices. Recently, our Edmonton, Alberta, office implemented some of the latest best practices in office design and sustainability. The wall insulation in that office used recycled denim jeans, which contain 53% less CO2e than conventional fiberglass insulation. In total, the project prevented 1,1880 lbs. of drywall from entering the landfill, eliminating 1,548 lbs. of CO2e that is normally released when drywall decomposes in the landfill. The office includes glass walls and high ceilings to let in natural light and give the office an expansive feel along with a variety of collaboration zones to meet various working styles and needs.

It is both intuitive and empirically true that high-quality corporate workplaces attract talented individuals. As companies re-imagine the workplace, they can do so in an environmentally sustainable way that coincides with the shift to more hybrid work that is emerging from the pandemic.

3. As a commercial real estate company, with assets across the world, how does Avison Young keep track of its own carbon footprint and make strides to improve? What are the advantages of such a strategy?

In March 2020, we announced a commitment to reduce operational carbon emissions to net-zero in all of our U.K.-occupied buildings by 2030. Given we occupy a diverse group of properties across the U.K., this will not be an easy feat, but we firmly believe that the climate crisis requires immediate action, and we want to lead the transition to a more sustainable environment.

Upon announcing our net-zero commitment, we began work on a roadmap for getting there, which included strategies relating to the acquisition and fit-out of any new premises, retrofit of existing workspace, energy efficiency projects, and renewable energy strategies. A key component of our strategy was to collect data from across our U.K.-occupied real estate (and across systems, processes, procedures, and building owners) to establish our carbon footprint baseline. Through our data platform, we created a single repository for both our carbon footprint and our wider sustainability data. There are obvious advantages to such a strategy, as we are now able to establish a baseline for a variety of factors that contribute to our carbon footprint, such as electricity intensity, water intensity, and GHG emissions. Having comprehensive baseline data is critical to measuring our success long term.

Keeping a comprehensive database has also led to some surprising findings. For example, one discovery has been the proportion of emissions in our carbon footprint from business travel, known as scope 3 emissions. In 2019, business travel (rail, cars, and air) accounted for 50% of our total carbon footprint in the U.K. While 2020 and 2021 have been unique years where travel halted and many of us stayed (and worked) much closer to home, travel will be part of our future and we’re exploring strategies to reduce our scope 3 emissions in this area going forward which will have a direct cost save to our bottom line and our clients. It is also raising new areas of inquiry in how we will best align our calculation of emissions from home working with the latest best practice disclosures in this evolving area.

By committing to reduce our immediate carbon emissions in our own workplaces, we are also building the knowledge required and the agency to drive awareness and action in delivering net-zero carbon buildings for our clients. We have helped major public and private sector organizations put in place strategies and plans to reach their own net zero carbon goals and are working on a number of large net zero carbon development projects across our client base

4. Has there been an increase in tenant / client demand for more sustainable commercial real estate properties? If so, what is driving that trend?

There are a variety of factors driving increased demand for more sustainable commercial real estate properties. According to the U.S. Department of Energy, commercial buildings account for 18.7 percent of energy usage, 30 percent of carbon dioxide (CO2) emissions, and 88 percent of potable water consumption in the United States. While these numbers are staggering, they are also quite costly for businesses. A study by Deloitte found that ‘green buildings’ consume 29-50 percent less energy than ‘non-green,’ use 40 percent less water, emit 33 to 39 percent less CO2, and produce 70 percent less waste. Put simply—green buildings are more cost-effective for businesses.

We are also seeing investors and occupiers become more aware of the risks of climate impacts, such as forest fires, flash floods and more frequent storms. Data availability and accuracy has vastly improved over recent years which makes it easier for decision makers to evaluate. This is beginning to have a direct impact on demand for buildings, adaptation costs and insurance premium all impacting value.

As noted above, the COVID-19 pandemic has created an opportunity for many organizations to rethink their physical office spaces. We do believe that organizations will use this opportunity to implement positive change that adapts to changing workstyles with a thoughtful design that places a priority on people’s health and happiness, improving climate resilience while also reducing carbon footprints.

5. What are some of the hurdles to ‘clean’ commercial real estate buildings and the corresponding solutions?

There are a variety of hurdles to more sustainable commercial real estate buildings such as the need for greater government regulation. There are also costs associated with retrofitting older buildings, as 80% of the buildings that will exist in 2050 have actually already been built. Yet, given some of the more dire statistics about climate change, it is imperative that each industry take responsibility in decarbonizing their portfolios and improving resilience over time.

At Avison Young, our approach to climate action is to first understand a company’s needs in the context of their own organization, portfolio and buildings. From there, we work to create a strategic plan and net zero carbon roadmap that is tailored to its goals with prioritized investment and revenue spend. The tools to implement such a plan can range from existing real estate levers, such as refurbishment and maintenance routines, supply chain engagement and leasing activities, to innovations, such as adoption of radical design standards, behavioral change plans, heat decarbonization or renewable strategies and technologies.

Despite the enormity of the challenge climate change presents, we believe we can help play an instrumental role in guiding companies and governments on their path to achieving their sustainability goals and, in turn, creating a more sustainable and resilient future.

The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.

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