As the impacts of climate change become more apparent, investors have increasingly incorporated corporate responsibility into their investment strategies. These attitudes are reflected in proposed rule changes from the U.S. Securities and Exchange Commission (SEC) that would require publicly traded organizations to disclose climate data to investors to facilitate informed investment decisions.

For industrial businesses, statistics about the impact on the environment are alarming. Accenture says supply chains produce about 60% of all carbon emissions globally. The World Economic Forum reports that one-fifth of carbon emissions come from global production. MIT says that 3% of global greenhouse gas emissions come specifically from warehouses and ports.

Making green improvements to factories and warehouses—or building greener facilities altogether—takes time. While the SEC rule change details are not expected to be final until April 2024, companies would do well to look at their industrial real estate assets now.

Why Green Buildings Matter

Of course, there is some speculation about whether the SEC ruling will ever come to fruition after several notable delays. Additionally, private companies don’t necessarily need to disclose their climate data at all. But the government isn’t the only one watching what brands do about sustainability.

The U.S. consumer also cares about sustainability in the brands they support. Many studies in recent years have confirmed consumer desire or intent to purchase sustainable goods, but critics often argue that intent and behavior are not the same. To that end, McKinsey and NielsonIQ analyzed five years’ worth of U.S. sales data and determined that the consumer shift toward environmentally friendly products is underway. The business case for sustainability is no longer theoretical.

Companies must take real, measurable action around climate change to foster long-lasting relationships with the American shopper. Updating existing factories and warehouses with sustainable improvements offers a good place to start.

How to Improve the Carbon Footprint of Your Factory or Warehouse

The options for creating a more sustainable factory or warehouse range from small changes you can make immediately to more extensive upgrades that will provide a more substantial return on investment. For example, easy changes might include:

• Switching to LED lighting – According to data from Energy Star, LED lighting uses 90% less energy and lasts 15 times longer than traditional bulbs.
• Sealing doors and windows – Wasting heat or air conditioning drives up energy usage. Sealing problem areas like loading docks, keeping doors closed, and using air or strip curtains to keep regulated temperatures contained can lower energy costs.
• Implementing a recycling program – Consider how much waste your facility produces. Implement a recycling program to keep as much packaging and production waste out of landfills as possible.

These actions can help you get started on a more sustainable journey in your factory or warehouse. However, implementing large-scale changes to your facilities will ultimately create a more notable impact on your carbon reporting efforts. For example:

• Install solar panels – Most warehouses and factories are ideal for solar panels because they have a lot of flat space on the roof for easy mounting. Though the upfront cost of solar panels can be significant, they should pay for themselves in about eight years, after which the energy savings go right to your bottom line.
• Green up your roof – Vegetation on the rooftop absorbs solar radiation and lowers the energy consumption of your cooling system in warmer months. It will also extend the life of your facility’s rooftop. In recent years, companies that offer synergistic installations of solar panels and green roofs have also popped up.
• Be smart about your HVAC system – Automating your heating and cooling will allow you to optimize energy usage in your factory or warehouse and reduce your overall environmental impact. The rise of the Internet of Things and Industry 4.0 has made these systems even more effective for industrial buildings.
• Diversify your facility network – Locating facilities closer to your busiest markets will significantly reduce your environmental impact by eliminating miles driven for the goods you produce or sell.

Whether you’re concerned about SEC climate reporting, increasing sustainability demands from consumers, or you simply want to be a better corporate citizen, implementing green upgrades to your buildings allows you to demonstrate your commitment to corporate responsibility in a measurable way.

About Phoenix Investors

Founded by Milwaukee-based developer Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost-efficient solutions, and a reputation for success.