Sustainability: BNY Mellon’s LEED Certification Journey

Sustainability takes many forms within an organization. Some companies look at their global footprint and CO2 emissions; others look at their energy use; still others address the amount of waste they are sending to the landfill. And, of course, some ambitious organizations tackle them all. What important is that businesses today have begun to recognize that action is required and corporations must lead by example. As Pope Francis wrote in Laudato Si, his environmental encyclical: “Humanity is called to recognize the need for changes of lifestyle, production and consumption.”

Perhaps another way of thinking about this is that corporations must LEED. Yes, the pun is intended. In the past 10 years, an increasing number of businesses have committed to sustainable building, or green construction, making it an emerging global business. In fact, according to McGraw Hill Construction, green building has grown from a $10 billion dollar industry in 2005, to a projected $248 billion dollars in 2016. Many organizations now require that their new construction projects, building renovations, and leased or controlled space, have Leadership in Energy and Environmental Design (LEED) certification (See Origins of LEED Certification at the close of this article *). According to the U.S. Green Building Council (USGBC), as of January 2015 more than 3.6 billion square feet of building space is now LEED-certified.

Buildings that are LEED certified are designed to reduce operating costs and impact to the environment. However, obtaining LEED certification can be costly for a business and the process required to receive certification can be rigorous. Is achieving LEED certification a good way for businesses to address environmental issues? Should your organization pursue it?

LEED is one of the important approaches to sustainability that we have taken at BNY Mellon, where I am the Chief Procurement and Real Estate Officer. In that role, I have partnered with Patrick Penfield, Syracuse University's Whitman School of Management Professor of Practice, to craft a roadmap based on BNY Mellon's experiences to support the case for Sustainability via Green Building and Leasing plus efforts towards Leadership in Energy & Environmental Design (LEED) Certification.

In the following article, we will discuss share BNY Mellon's multi-faceted sustainability approach, Including our approach to LEED certification for new construction, property renovations, and leased offices. Along with challenges and success stories, we have provided a snapshot of actionable and achievable sustainability activities for readers to consider.

While some question the impact of sustainability on a corporations bottom line, BNY Mellon has realized significant environmental benefits that impact the cost of our operations, such as saving approximately 283 million kilowatt-hours of electricity by applying the Green Grid Administration's Power Usage Effectiveness (PUE) metric as a baseline and diverting 69% of all its office waste from landfills as of 2014.

Sustainability at BNY Mellon
As the world's challenges increase with diminishing natural resources, climate change, pollution, income inequality and greater volatility of weather events – the need for leadership and collaboration between the private and public sectors has become more critical.

Since it was established in 1784, BNY Mellon has grown into one of the world's largest financial institutions, entrusted with safeguarding more than $28 trillion, or about one-fifth of the world's financial resources. The people of BNY Mellon represent some 50,000 employees in 100 cities and 35 countries. A leading investment manager, BNY Mellon is also one of the top U.S. wealth managers, with $1.7 trillion in assets under management.

In addition to financial stewardship, BNY Mellon has made a commitment to pursue business objectives with environmental stewardship in mind. It has adopted a disciplined, holistic approach to environmental sustainability founded on teamwork, innovation, and excellent resource management. Its pursuit of LEED certification for its new and retrofit construction projects is one of many steps we have taken to deliver on our commitment to become more environmentally sustainable. In recognition of these efforts while addressing business risks associated with climate change, BNY Mellon is proud to be part of the Dow Jones Sustainability World Index and tops CDP's (formerly referred to as Carbon Disclosure Project) Climate Change program. Underscoring the effectiveness of the company's sustainability strategy, BNY Mellon's emissions reporting data and material progress to reduce carbon emissions and actions taken to address climate change is consistently rated the highest among its peers by CDP.

BNY Mellon's Living Wall (see photo), which is comprised of more than 11,000 plants, is but one example of its commitment to sustainability. Located in the main entrance of one of its major facilities in New York City, the wall provides clean air and promotes the good health of everyone in the building, and is a beautiful focal point. The Wall also stands as a physical symbol of BNY Mellon's commitment to green building and energy efficiency, which resonates with the company's environmentally conscious clients.

The Costs and Benefits of Green Building Practices
LEED Certification requires the use of sustainable materials that improve indoor environmental quality and provide a good return on investment. The use of those materials, as well as green building practices, can cost $40,000 to $50,000, per site. This includes hiring an architect or LEED consultant to handle all LEED administration and a design team to oversee and detail the sustainable measures. In order to reduce costs, BNY Mellon uses internal resources wherever possible and leverages existing best practices and procedures to streamline certification.

Despite the additional cost, many organizations, including BNY Mellon, have found that designing spaces that are energy and water efficient provide both environmental and financial benefits over the long term. For example, although there are initial costs to implementing energy and water efficient technologies, such as low flow and flush faucets and commodes, demand controlled ventilation, daylight harvesting/dimming and LED lighting, payback often occurs quickly.

In fact, securing LEED certification for existing buildings can reduce operating expenses quite significantly. According to estimates by the U.S. Green Building Council, operating expenses can be reduced by approximately 8.5% for renovations and 13.6% for new construction.

In terms of impact on the individual, the health and productivity of employees can be greatly improved by taking steps such as making improvements based on audits from groups like ASHRAE (American Society of Heating, Refrigerating, and Air-Conditioning Engineers), installing specially designed HVAC systems which provide filtered air, designing internal spaces with views outside, and using natural light with controls for lighting and temperature wherever feasible.

Additionally, implementing sustainable operations and maintenance practices, including green cleaning, integrated pest management and sustainable procurement, all lead to healthier indoor spaces for employees while reducing environmental impacts. These elements are intended to provide a comfortable environment for employees and a work area where they can be most productive.

BNY Mellon's Life Cycle Approach
In addition to using green construction where possible, BNY Mellon takes a life cycle approach to sustainability in its real estate portfolio. It assesses every real estate development project for sustainability looking at three components: design and construction, leasing agreements and operations, and maintenance procedures. If a project is too narrow in scope to obtain LEED certification, BNY Mellon makes a commitment to build and operate the facility in a manner that is aligned with environmental best practices utilizing guidelines based on LEED and sustainable design principles.

Existing or Controlled Properties
BNY Mellon's sustainability strategy for existing owned or controlled properties requires an evaluation against the required elements for LEED certification, including the Energy Star score. This evaluation process includes determining potential point credits and establishing a budget for the projected work required to attain LEED EB:OM certification. The identified projects can then be reviewed for return on investment (ROI), which helps BNY Mellon determine whether to proceed with the certification process. All construction projects are individually assessed with a focus on ensuring that sustainable operations and maintenance processes and products are implemented where feasible. In areas of the world that do not recognize LEED, all interior projects for owned properties are implemented with energy and environmental design principles that meet or exceed LEED guidelines.

Green Leasing Projects
When leasing properties, BNY Mellon seeks a sustainable or green lease whenever feasible. This helps to ensure that everyone is doing their part to reduce the impact on the environment. BNY Mellon has made the process of identifying sustainable leases relatively simple. A Sustainable Leasing Questionnaire (SLQ) is used to help determine whether a lease in a particular building should be signed. The questionnaire helps the company assess whether there are efficient and sustainable workspaces and that employee health will be promoted. In 2014, 100% of domestic and international transactions utilized the SLQ (see Appendix 1). BNY Mellon is also currently assessing all existing leases for sustainability including issues impacting employee health.

Six Important “Design for Sustainability” Questions
In pursuit of sustainability within our real estate portfolio, BNY Mellon asks six basic questions when determining if a construction design is sustainable:

1. Will the indoor environment be improved for employees – in terms of both health and productivity?
2. Does the site location provide proximity to good neighborhoods and amenities?
3. Can energy use be reduced?
4. Will water consumption decrease?
5. Can space and material usage be minimized?
6. Are operating and maintenance practices optimized?

The assessment results help BNY Mellon evaluate whether a piece of real estate will promote the health and safety of employees, reduce the consumption of natural resources and the environmental impact. By using this assessment before purchasing a property, BNY Mellon has seen significant cost savings and many environmental benefits.

Benefits BNY Mellon has derived from LEED Certification
BNY Mellon is committed to being a good steward of the earth and functioning in a socially responsible manner to improve and sustain today's environment. These principles impact the standards BNY Mellon sets for those property and building projects managed by the company. Below are various easy to achieve, and a few more complex examples, of environmental initiatives that have contributed to BNY Mellon's LEED certification and savings:

• Implemented a water conservation and monitoring program which achieved more than a 40 percent reduction in potable water use at specific facilities;
• Reprogrammed outside air units to bring in fresh, cool outside air, thus reducing air conditioning costs;
• Reduced light pollution and energy costs by turning off all non-essential interior lights after normal business hours and shielding exterior lights;
• Partnered with local nonprofit organizations to redistribute used office furniture and fittings;
• Applied sustainability and LEED standards in BNY Mellon international locations including United Kingdom, India, Poland and Germany;
• Diverted 69% of all its office waste from landfills as of 2014;
• Became a Dow Jones Sustainability World Index Member in 2014;
• Became the 22nd largest purchaser of green power in the US based on EPA rankings, ranking second among financial companies); and
• Saved nearly 283 million kilowatt-hours (kWh) of electricity and more than $21 million, by applying the Green Grid Administration's Power Usage Effectiveness (PUE) metric as a baseline. (You can read more about BNY Mellon's Success on The Green Grid
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Conclusion
Over the past decade, BNY Mellon has achieved 38 LEED certifications including: four Platinum, fifteen Gold, twelve Silver and seven Certified Projects, constituting 22% of its global portfolio. There are currently an additional four LEED certification projects in progress.

Although there have been additional costs involved in obtaining LEED certifications, BNY Mellon has demonstrated that the benefits far outweigh the costs in terms of healthier, more productive, and responsible spaces for employees. Additionally, its commitment to sustainability has led to high ratings by reputable organizations like the CDP, Dow Jones Sustainability Index, Newsweek and Bloomberg, who determine rankings by considering a company's operational footprint, resource use and environmental initiatives. This recognition further demonstrates to BNY Mellon's clients, customers and communities, that it is serious about its commitment to sustainability.

BNY Mellon believes that creating a healthy environment is paramount to the success of the organization and continues in its goal to be the industry leader in LEED certification. The LEED journey has contributed to a healthy environment, benefiting the company's employees, customers and the earth, and increasing profits.

About The Authors:
Carol Britton is BNY Mellon's Chief Procurement and Real Estate Officer. She is responsible for developing and guiding strategies to manage all addressable expenditures across various expense categories and a global real estate portfolio across 230 locations. Under her guidance, products and services are strategically sourced by category, leveraging BNY Mellon's scale. She can be reached by email at [email protected].

Patrick Penfield is a Professor of Practice- Supply Chain Management and Director of Supply Chain Executive Management Programs at the Whitman School of Management, Syracuse University. His research focuses on supply chain sustainability, project management, performance metrics and continuous improvement. He can be reached by email at [email protected]. For more information, visit https://whitman.syr.edu.

* Origins of LEED Certification
In 1993 the United States Green Building Council (USGBC), a registered non-profit organization, was formed. Their mission was to “Promote Sustainability in the Building and Construction Industry”. In order to facilitate this mission, they introduced a green building certification called Leadership in Energy & Environmental Design otherwise known as LEED. In order to receive LEED certification through the USGBC projects you must satisfy certain requirements and your construction project obtains points when you meet these goals. Based on the amount of points you generate through your project you can receive one of four certification levels (Certified 40-49 points, Silver 50-59 points, Gold 60-79 points and Platinum 80+ points). Through the years, the USGBC has broadened the systems that can receive LEED certification. Currently there are five rating systems that you could receive LEED certification for and they are: Building Design and Construction (BD+C), Interior Design and Construction (ID+C), Building Operations and Maintenance (O+M), Neighborhood Development (ND) and Homes. According to the USGBC over 4.3 million people live and work in LEED–certified buildings. LEED certification is recognized around the world as the “bell-weather” certification for the green building industry.

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