Commercial Retail: Using Sustainability to Improve Profitability

Retail centers are fundamental to American communities and lifestyles. According to the Environmental Protection Agency, approximately 2.4 billion people will patronize 46,000 shopping malls in the U.S. this year. The collective spending on food, goods and services is approximately $3.6 billion. Robust retail activity is essential to our economy, but it is also contributes to higher energy demand and waste generation from both operations and the consumer packaging resulting from sales.

The good news: retail is changing. Forward-looking owners and operators are finding clear business advantages in sustainability. They are improving the bottom line through greener building practices, operational efficiencies, tenant partnerships, and recycling.

Green buildings are worth more and cost less to operate than traditionally constructed buildings. A 2007 CoStar Group study found that LEED certified buildings command rental premiums of $11.33 per square foot and have a 4.1% higher occupancy rate over non-LEED counterparts. USGBC and other studies show that overall employee satisfaction is higher and turnover is lower than employees working in non-green environments. The net impact for shopping centers owners is an increase in property values and occupancy. This is a direct result of their investment in greening retail spaces and implementing sustainability plans.

Waste reduction programs are significant part of greening a retail center and achieving cost reduction. Many shopping centers are realizing the benefits of waste reduction programs:

• Westfield Mission Valley is a 1.5 million-square-foot outdoor shopping center located in San Diego, California. Its annual waste disposal costs dropped by more than 40 percent between 1994 and 2002.

• Plaza Camino Real Shopping Center had been the largest trash producer in Carlsbad, California until implemented an aggressive waste reduction plan, which shaved more than $67,000 from waste disposal costs in a single year.

• VF Outlet Center located in Reading, Pennsylvania decreased its annual waste disposal costs by 67 percent between 1995 and 2002.

Reworking and managing waste programs can be challenging. The logistics can be unwieldy and the process often requires extensive education of tenants and property managers. As a result, many shopping centers recycle on a limited basis with a focus on cardboard. Partnerships are key to acheiving the greatest waste reduction. Successful owners and operators work with their supply chain, waste providers, facility staff, and retail tenants to create broad reaching waste reduction programs that cut costs and demonstrate environmental leadership.

Shopping centers that partner with retailers not only achieve higher recycling rates, but also position themselves for additional recycling and reuse opportunities. Operational materials such as pallets, hangers, fixtures, and furniture are increasingly being refurbished and reused. In addition, retailers are exploring options to reduce packaging and employ more recyclable materials. The goal: reduced packaging and less end product waste.

Beyond recycling, shopping centers are instituting programs that deliver operational efficiencies. A high end mall near Minneapolis, Minnesota uses solar powered trash compaction units throughout their common areas. The compaction units reduce service demands on maintenance staff and also showcase the center's sustainability efforts. This shopping center also uses their 'green program' as a community event platform to draw more foot traffic.

As mall owners and developers adopt more sustainable building and operating practices, they generate very real benefits to the local community and strengthen their own financial position. The shopping mall of the future will be green and sustainable. Those that adapt sooner will be better positioned to service tenants and the consumer market. As the American retail industry goes green, the U.S. will be closer to achieving important national sustainability goals and materially reducing greenhouse gas emissions. The key to creating retail center sustainability is bringing all stakeholders - owners, tenants, and waste managers together. This expands the possibilities for coordination, understanding, and ultimately savings.

To learn more, please contact Waste Management Sustainability Services at 877-441-3046 or visit our website at