Stephen Lane is at the forefront of one of the hottest trends in commercial real estate: retrofitting buildings so they use energy more efficiently.
Lane, an executive vice president at Citigroup Inc. (NYSE: C), is overseeing an ambitious program by the banking giant to green up its vast real-estate portfolio, which totals 92 million square feet worldwide. To achieve that, the 59 year old -- whom colleagues sometimes call "the Al Gore of Citigroup" -- has taken an inventory of energy use of all of the company's buildings, adopted power-saving measures such as turning off escalators in lobbies, and is redesigning its bank branches to include more natural lighting and recycled materials.
"I wish I had Al Gore to do this, but it was me they got stuck with," Lane joked in a June talk before fellow corporate real-estate executives at the Sustainable Operations Summit outside Albuquerque, N.M., which had green buildings as a main theme.
Lane's program is just one of many green building initiatives now popping up in office buildings.
Google Inc. (Nasdaq: GOOG) in June installed a solar rooftop at its Mountain View, Calif., headquarters. At 1.6 million megawatts -- enough power to light more than 1,000 homes -- it's one of the largest ever assembled at a corporate campus. HSBC Holdings PLC's HSBC Bank USA Inc. is constructing a green retail branch in Greece, N.Y., that will serve as a prototype for the Wilmington, Del., bank's 400 other branches. And Siemens Building Technologies Inc., a Buffalo Grove, Ill., unit of Germany's Siemens AG (NYSE: SI), is cataloging the emissions from its 800 buildings in the U.S. and may require green design as part of its rental leases.
Such initiatives could have broad repercussions. Power use by all buildings worldwide accounts for nearly a fifth of all greenhouse gas emissions, making it one of the largest sources of global warming, according to many scientists' estimates. Not only do companies help the environment by cutting emissions, they save money by lowering their operating costs.
Lane says Citigroup can save as much as $1 per square foot a year by making its offices use less energy. That would add up to savings of almost $100 million annually. The New York financial behemoth last year launched a $10 billion plan to reduce the carbon footprint from its facilities 10 percent below its 2005 level by 2011.
Some companies are finding that greener buildings are also safer ones. California health-care giant Kaiser Permanente -- which has embarked on a green building plan at 27 new and existing hospitals -- says replacing marble floors in its hospital lobbies with recycled rubber ones reduced the incidence of slips and falls by patients and staff.
In at least one case, green facilities have proven to be a draw to employees. Japan's Toyota Motor Corp. reported a 14 percent drop in absenteeism among its customer-service workers after they were moved into a new green building that featured more extensive sunlight in Torrance, Calif., in 2003.
Overall, the number of U.S. buildings certified under the U.S. Green Building Council's elite Leadership in Energy and Environmental Design standard stands at 6,000 and is forecast to top 100,000 over the next four years. LEED is an industry group made up of experts from across the building industry, and its guidelines have been widely adopted by state and federal agencies as well as private contractors as the pre-eminent green building standard in the United States.
"The entire Fortune 1000 is having this conversation and saying, 'We have to do something now'," says Andrew Winston, an environmental consultant in Riverside, Conn.
Citigroup started its green efforts in 2002, in part after mounting public concern over global warming. Lane, a 31-year Citigroup veteran who once worked as a Naval public-works officer, was tasked with documenting the company's energy consumption. So in 2003, he helped commission an inventory of the energy use of every piece of real estate that Citigroup owned or leased, from bank branches to ATM machines. "What you can't measure, you can't manage," he says.
Getting the data proved challenging, given language differences around the world. In Rio de Janeiro, for instance, local Citigroup managers put down a surprisingly low figure for the amount of energy they calculated the company was using for chilled water to cool its buildings. It turned out the managers thought "chilled water" referred to office water coolers, Lane says.
The inventory showed energy use by building, which Lane says was helpful in identifying which ones needed the most attention. The study found that 80 percent of the energy consumption in Citi's offices was coming out of about 10 percent of its buildings. The places using the most energy were generally Citi's larger facilities, such as data centers, office buildings and skyscrapers.
Lane, who is based in Chicago, then traveled to Citigroup locations around the world asking its 340,000 employees to do their part in saving energy, such as switching off unneeded lights.
After Citigroup in 2006 announced its 10 percent reduction plan, Lane and his team decided to try some quick fixes like changing the setting on thermostats. At a Citigroup operations center in steamy Tampa, Fla., last November, they dialed the thermostat up to 78 degrees from 72. His staff turned the thermostat back down after complaints from many of the center's 3,000 workers.
"You know from the number of calls whether you've gone too far," Lane says, adding that he's learned to increase temperatures more gradually. "Maybe a degree a day," he says.
Escalators have also been turned off during certain hours in the lobbies of some Citigroup towers in New York; employees who are able are asked to take the stairs. In some older Citigroup buildings, meanwhile, workers have been told they can open windows to let in fresh air. And at some U.S. offices, building managers are testing a new urinal design that doesn't use water.
The company may also get tough with landlords, since Citigroup leases about three-quarters of its world-wide space. At a minimum, Lane says, Citigroup would ask for the energy ratings of offices in buildings where it leases, which are used to compare how efficiently buildings use power. Down the road, he says the company would like to require green certifications in offices it leases.
Meanwhile, the company is making its own buildings green, using solar heat and glare controls, timed lighting and other power-cutting measures. Citigroup's new four-building corporate campus in suburban Dallas opened last year, and has been awarded the LEED certification.
Citigroup is also nearing the end of constructing a 15-story building in Queens, N.Y., which will include enough energy-saving features to meet the LEED standards, say bank officials. Some of the eco features include a stormwater recycling system, energy-efficient fixtures and work areas designed so that most employees can receive outdoor lighting.
And the company is also redesigning its new Citibank, CitiFinancial and Smith Barney branches globally with green features such as more natural lighting and recycled materials. About 100 such branches in the United States have been opened so far -- to the delight of some workers who say they can see outside for the first time.
"People are much more like plants and cats than we like to admit," says Shannon Barnes, manager of a new Citibank branch in Chicago's Old Town district.
Besides office buildings, Citigroup is greening up its other facilities, including a data center in Frankfurt, Germany, that is set to feature "living" walls covered with plants -- so as to better insulate the building from summer heat and winter cold.
The efforts are winning cautious praise from some environmentalists, but many say the actions aren't enough. A group of protesters in late July demonstrated outside a Citibank branch in downtown San Francisco, accusing the Citigroup unit of continuing to make loans to coal-fired power plants that are leading sources of carbon emissions.
"All the operational changes in the world aren't going to make up for the carbon from the plants they are funding," says Rebecca Tarbotton, who helped organize the protest by the Rainforest Action Network.
Citigroup officials say that because the United States still relies on half its energy needs from coal, the country can't just move to new sources of fuel overnight. "We need to work on how to get from here to there," says Pamela Flaherty, a Citigroup senior vice president.