Over the past quarter century, Cleveland-based Forest City Enterprises (NYSE: FCEA and FCEB) has become known for its large, mixed-used projects that require working with communities to redevelop underutilized pieces of real estate. Because these projects are connected to existing city infrastructure and transportation, they have an inherent quality of sustainability. It was not until 2004, however, when the 80-year-old, family-owned business took on the redevelopment of the former Stapleton airport, a 4,700-acre mixed-use project in Denver, that Forest City began to think in terms of a “triple bottom line” — or people, planet and profit.
As a result of insights gained from Stapleton, in 2006 Forest City created a department of sustainability to incorporate green measures into its new development portfolio, to improve the company’s overall utility usage, and to build an internal culture with an understanding of green as a core value. To address the corporate culture, last November Forest City launched its WorkGreen program. NREI recently spoke with Jon Ratner, the company’s director of sustainability, about the new initiative.
NREI: Can you briefly discuss Forest City’s approach to sustainability?
Ratner: It’s about understanding best practices, working to incorporate those into our new developments or existing portfolio and working to create an internal culture that promotes and understands what sustainability is and how each of our people can make active that core value in their day-to-day business. It’s about working to innovate and incorporate new practices and policies.
NREI: Can you tell us a bit about Forest City’s internal WorkGreen program and what the company hopes to gain from it?.
Ratner: The goal is to make what can be a very obtuse, very amorphous topic of sustainability relevant and real to every one of our associates — whether they’ve been here for 30 years or three months. The program has seven areas of impact, which are very similar to those promoted in comprehensive green programs like LEED [Leadership in Energy and Environmental Design]. They include 1) energy 2) water conservation 3) waste & recycling 4) procurement 5) transportation 6) health and wellness and 7) community involvement.
NREI: How many of the seven programs have you done to date?
Ratner: In each of those [seven programs], we partner with other internal groups to promote [sustainability.] Our human resources group is really taking the lead on our health and wellness program, for example.
We have a series of launches throughout the year both in our corporate headquarters in Cleveland and in our regional offices around the country that focus on one of those seven areas. We’ve had two to date. The first was on waste and recycling and the second was on energy efficiency. We find an element that we’re going to be changing, upgrading or highlighting, and we put information out to our people about it. We’ve initiated an internal blog that I write to popularize the ideas and give people a forum to respond.
NREI: What is the organizational benefit of WorkGreen?
Ratner: The plan is to have WorkGreen as an umbrella program where we can share all of the unique one-off projects that are happening entrepreneurially around our organization under one framework, and to organize those efforts under certain benchmarks and performance metrics.
NREI: What is the business case for an internal sustainability program?
Ratner: There are clearly cost savings. Our energy efficiency measures that we instituted in a new power management program for all of our computers we estimate will save $150,000 a year at our current size. As we grow, that will just be greater. Similarly, installing low-flow bathroom fixtures, showers, faucets, toilets, relamping our office facilities, putting in occupancy sensors — all are opportunities to save on the bottom line.
NREI: How have Forest City employees reacted to the call for sustainability?
Ratner: It’s a changed management process as much as it is a technical implementation process. There were those in the organization from the moment that we made it a core value that said, “Yes, I’ve been waiting for this. I’m going to consider this in every action that I take,” and instantly the value ran very true to them and they’ve worked to incorporate ideas into their practices. There are others who are understandably skeptical and thought this was nothing more than a marketing fad that would pass.
But I think overwhelmingly now, particularly amongst our senior leadership, there’s a recognition that if we want to maintain our competitiveness, if we want to be able to respond to the demands in the marketplace — both from the community scale as well as individual user scale —if we want to be able to attract and retain talent, if we want to be able to operate a portfolio of buildings that is highly values, durable, safe and functioning, that this provides us with a great umbrella to move into those spaces.