When President Donald Trump withdrew the U.S. from the Paris climate accord last month, more than 1,000 companies, universities, municipalities and states signed a “We Are Still In” letter declaring their continued support for the international pact. One significant name on the pro-Paris agreement letter was Skanska, the Stockholm, Sweden-based construction giant.
For a player like Skanska, one of the largest construction firms in the world, that kind of commitment holds a lot more weight than other companies that might not deal with the effects of sustainability as directly.
Leading the Swedish firm’s green practices in the U.S. is Elizabeth Heider, who joined Skanska as a vice president in 2002 and was named to her current role as chief sustainability officer—a position created for her—in December 2013. With a varied and distinguished career in the fields of architecture, construction, design and sustainability, Heider has helped position Skanska as a leader in the realm of sustainable building.
Heider, who is based at Skanska’s Washington, D.C.-area office, initially planned to pursue a career in law before taking an architecture course as a student at the University of Virginia—an experience that she described as a “religious epiphany for me.” She pivoted into an architecture degree and subsequently worked in the architecture and construction management sectors, eventually serving as an outside consultant on the federal government’s first cost study on greening federal workplaces in the 1990s. From 2008 to 2013, she served on the U.S. Green Building Council (USGBC) and chaired the council in 2012.
In June, Heider sat down with Commercial Observer at Skanska’s New York City offices on the 32nd floor of the Empire State Building, where she talked a green streak.
Commercial Observer: Skanska has been outspoken in its commitment to sustainable building practices. When you look at the construction industry at large, is Skanska ahead of the curve?
Elizabeth Heider: I can unequivocally say that we are leaders, but I think that there is so much to do that we can always be better. I see all of the opportunities and all of the things that we still need to do, but I’m really proud of what we’ve been able to accomplish. But I say that with all humility; I’m not going to sit here and tell you that we’ve got it all figured out, because it’s a journey.
Likewise, the design and construction community in the U.S. is on a journey. A catalytic moment was when the U.S. Green Building Council created the LEED [Leadership in Energy and Environmental Design] ratings system [in 2000], because at that moment the entire community had a lexicon: a way to discuss and measure how environmentally- and energy-responsible buildings work. Then, we could begin to celebrate accomplishments and compare progress.
How does Skanska demonstrate that commitment as far as holding itself to green standards?
In the U.S., we have four business units. We have two development groups, and we have our two construction divisions. The construction groups build what our development groups develop, and sometimes, if they’re really large projects like LaGuardia Airport, we’ll partner with other builders. So we’ve got different perspectives on sustainability and we have different control over how green the projects that we build are. On the development side, we’ve committed to building to LEED Gold certification or better on all of the projects that we develop.
We’re a merchant builder—we don’t build and hold projects. We purchase the land, build, tenant [it out], have great operating assets and then sell on to investors with the purpose of investing back into the cycle. I think one of the reasons we’ve been successful in the U.S. is that we’ve developed a brand recognition that we’re building investment-quality assets. Many of the folks that purchase our properties are pension funds and other owners that are going to hold for the long-term, and I’m really glad that the facilities management entities that run our buildings, and the owners that they report to, comment regularly that these [buildings] are great.
Historically, sustainable building has been a cost-intensive proposition, which has led many developers to balk at the notion of green practices. As technology has developed and the market has caught up, are people now beginning to understand sustainability as a long-term, cost-saving proposition?
The market has matured a lot since 2000. In the early days, in some of the cost analysis that we did, there was no question that there was a premium. And part of that premium had to do with the fact that the manufacturers of the materials that go into greener buildings hadn’t tooled up to meet the new demands of the market. In 2000, you were paying a premium for low-VOC [volatile organic compound] paint. Today, it’s everywhere; you have to work really hard to get crappy paint. And it costs no more. So the market has come along, and those premiums have fallen aside.
From a design standpoint, there are absolutely investments that need to be made if you endeavor to create a building that’s environmentally efficient. Whether you certify or not, one is to do an energy model, so you can optimize the energy performance of your building, and the other is commissioning—both early commissioning and then post-construction commissioning and ongoing commissioning—to make sure the building is being run optimally. Those aren’t free. But I would submit that whether you’re investing $100 million or $1 billion in a project, you should do that; it’s just smart operation. It’s an investment.
It also depends on the developer’s mindset and who their customer is. Institutional developers who are going to buy and hold buildings or develop [their own] buildings for the long haul are not going to be looking at what the return is in four months or a year—they’re going to have a longer view than that.
I pat the architectural community on the back, because they’ve really embraced the LEED rating system and there are a lot of architects today that will design to a LEED level of quality, even if the owners decide they don’t want to certify [with the council], because it’s just building a better building.
Skanska works on a lot of different projects across both the private and public sectors. Which sector would you say has demonstrated the greater commitment to sustainable practices?
The [private development] industry got off to an earlier start, and I think the USGBC and the LEED rating system really helped push that along, because there was a language and a way to recognize buildings. There was a value placed on them, and developers and owners started to look at buildings [in that way].
Speaking for Skanska’s civil infrastructure group, the owners [we build for] are almost all public owners. The public owners that we’ve worked for really haven’t asked for sustainability or for us to reveal our sustainability strategies for infrastructure—it hasn’t been on their radar. And because we’re working for them and competing to get their work, if sustainability isn’t a high priority for them and lower cost is, you have to respond to the terms of engagement—the competition rules, if you will—that you’re handed.
In 2012, the Institute for Sustainable Infrastructure (ISI) rolled out a system that is similar to LEED—sort of like LEED for infrastructure—called Envision. Skanska became a charter member of the ISI, and I sit on Envision’s review board. We’ve been a promoter of Envision; we used it on the I-4 project [the reconstruction of Interstate 4 in Florida] as a way for us to focus on the sustainable aspects of that, and submitted it as part of our proposal. And that was considered a positive aspect in our selection.
I think that excited our executive leadership on the civil side to say, “Hey, this could potentially be a differentiator for us.” We’re working really diligently to make sure that this is something that our clients are interested in because we think it’s important; it’s part of who we are as a company, it’s part of our DNA. We can build anything, but we would prefer to build things that are more sustainable.
Shifting to public policy, where Skanska joined more than 1,000 corporate, educational and government entities in declaring its support for the Paris Agreement after the Trump administration announced its intention to pull out of the deal. What does it mean from a business perspective that the U.S. is withdrawing from the accord, and why is Skanska so strongly in favor of the agreement?
I think that we live in a world that’s really hungry for true leadership, and I believe that the United States’ commitment to the Paris Agreement was exemplary of true leadership—saying we want to do our part to make sure that we are not polluting the environment. Because global warming is one side of it, but the crud that goes up into the atmosphere, carbon dioxide, doesn’t only impact the temperature of the climate—it’s pollution. It’s not good for our children to breathe.
[The decision to withdraw] sends a message to the world that the federal government of the United States is not committed to being a world citizen when it comes to pollution and carbon dioxide emissions. Skanska signed the open letter…[because it’s] good for our children and the world, but it’s also good for business. The green technology economy is much bigger than the coal economy, and it is the future.
To what extent are corporate users demanding green practices as part of the buildings and facilities they inhabit? Is that forcing developers to more seriously consider sustainability?
By 2020, 50 percent of the workforce will be millennials. You have a new crop of sustainability natives who are making value-based decisions in ways that the baby boom generation did not. As companies compete to attract the best and brightest talent, that will become a benefit or a dealbreaker.
Buildings aren’t like cars—they’re not a five-year or 10-year investment, they’re a 50- to 100-year investment. The decisions we make today will have an impact for generations. Buildings that aren’t built more thoughtfully will…in the future be more expensive to retrofit.
Can you provide any specific instances of how Skanska is practicing sustainable construction at its projects?
There’s how we build and what we build. At LaGuardia right now, we’re teeing up the job site. I had a chance to walk the site in February to see the de-watering program. They have a whole series of dewatering and filtration modules that will take really nasty water that is being pulled out of the ground on the job site—because we’re putting holes in the job site, those fill with water, and you have to pull that water out. There’s a lot of de-icing fluid that has been used to de-ice planes that are in the ground, and as you pull the water out, you get this nasty cocktail of chemicals coming out of the ground with the water.
So we’re filtering that, and using some of the water for non-potable purposes, like wheel washing and other uses. And then, the water that we’re returning to the site is actually cleaner than the water that we’re pulling out of it. We’re talking about literally millions of gallons of water; it’s just astonishing how much water we’re having to process on the job site.
At Expo 2 [a light-rail line connecting Los Angeles and Santa Monica], we started that project before the Envision certification system was rolled out. The team working with L.A. did a really good job in terms of reusing tunnels and recycling concrete and asphalt that was being dug up, so that it was being diverted from landfill and used on the job site.
Toward the end of that project, we were looking at all of the things that had been done and we thought, “This is probably a certifiable project.” The best way to pursue certification is to start at the very beginning, but in this instance, the certification did not exist at the very beginning, so we decided to retro-certify the project and see where we got. And in the end, it was Envision Platinum—it achieved the highest certification, which is a testament to how our team went about their business.