Johnson Controls is bringing sustainability from the basement to the boardroom – GWC Mag

From its beginnings as a supplier of building thermostats, Johnson Controls has become one of the world’s largest providers of building technology, software and services. In pursuit of its vision to create “a safe, comfortable and sustainable world,” it has committed to achieving net zero for Scope 1 and 2 emissions by 2024. Working across healthcare, education, data centers and other industries, the company deploys its technologies to improve building safety, energy efficiency, comfort and more. 

According to Katie McGinty, vice president and chief sustainability and external relations officer at Johnson Controls, sustainable buildings are “headed toward a normalization, and mainstreaming as a part of C-suite conversations.”They must be, “because the board has this on the agenda,” said McGinty, the first woman to serve as chair of the White House Council on Environmental Quality.

What’s on directors’ minds

In order to “bring us from the basement to the boardroom,” McGinty said, sustainability professionals need to speak to the areas of relevance to a company’s board. “Health, cash, competitive advantage are key issues on the minds of board members and buildings have a story to tell there.”

Understanding how buildings align with business fundamentals provides the “ability to unleash capital flow and put cash on hand to address critical operational needs,” said McGinty. Improving sustainable performance unlocks “the potential for a building to go from a static and costly burden on the balance sheet to an agile, dynamic asset of a winning organization.”

Stories of successful ‘multisolves’

Three examples below demonstrate the power of smart building technology to address both sustainability and core business problems simultaneously. McGinty called these “multisolves”: individual improvements that can help solve multiple problems at once. A classic example is planting a tree along city streets, which provides shade, sequesters carbon, stabilizes soil, provides habitat for urban wildlife and more.

Reducing costs and improving air quality in schools

Energy efficiency improvements are often sold to school systems with the proposition that they reduce operating costs. But the same improvements, especially to heating and cooling equipment, can also improve indoor air quality, creating a healthier learning environment. 

When McGinty makes the value proposition for Johnson Control’s technologies she leads with cost savings and closes the deal with the health impacts. For example, in Colorado’s Cherry Creek School District, Johnson Controls completed a project that is projected to reduce annual carbon emissions by 25 percent “and provide net savings to the school district of $20 million over the next 20 years — all while creating a more improved learning environment,” according to the company.

Air quality improvements have been shown to directly lead to higher proficiency in student learning and improved standardized exam results. “Now, you’re talking the language of leadership,” she said. 

Making hospitals healthier and more efficient

Executives of cash-strapped hospitals are happy when Johnson Controls knocks on the door and says, “Listen, I’m going to slice 25 percent off your electricity bill.” But cost savings are a lower priority for them than their core mission of saving lives. 

So, what if “the same temperature and humidity centers that I will use to modulate and optimize” for energy savings “are sensors that also detect and destroy viral particles in your patient’s room?” said McGinty.

For example, Children’s of Alabama, a LEED Gold certified healthcare facility in Birmingham, partnered with Johnson Controls to deliver $450,000 in annual savings and reduce the use of natural gas by 69 percent.

The combination of reduced costs and improved health outcomes made it an easy “Yes” for the executives, said McGinty. “Now we’re in the heart of why the organization exists.” 

Earning LEED status for arenas while delighting fans

During the Milwaukee Bucks’ run to the 2021 NBA championship, Fiserv Forum, the Bucks’ home court which opened in 2018, welcomed nearly 85,000 fans near the height of the COVID-19 pandemic. The arena uses Johnson Controls’ OpenBlue Healthy Building solutions to “keep the players, fans and staff healthy and safe,” according to the company.

Johnson Controls’ integrated building technologies also helped Fiserv Forum become the first sports entertainment venue in Wisconsin to earn a LEED Silver certification from the U.S. Green Building Council (Fiserv has since achieved LEED Gold status).

The core mission of large arenas, though, is the fan experience. As McGinty explained to an executive at another large stadium, the same occupancy sensors that can turn off the heating and cooling system in a vacant seating area can “send Katie McGinty in the Taylor Swift concert a personalized note on her phone that says, ‘Guess what, there’s no line at gate 13 for the merch!’ I am then a delighted fan.” 

The 3-30-300 rule

The 3-30-300 rule describes the average order of magnitude between a company’s costs for utilities, rent and payroll (per square foot, per year).

• $3 for utilities
• $30 for rent
• $300 for payroll

Improvements to the sustainability, resilience and health of a company’s real estate portfolio also improve the performance of each cost center. But they are only one side of the equation. From educating children to healing the sick and delighting fans, the ultimate value proposition of sustainable buildings is to directly improve the core purpose of the businesses and tenants that occupy them.