The Taxman Cometh: Ernst & Young’s Green Office and Green Agenda
Ernst & Young worked with LEED accredited professionals both internally and with external architectural and construction vendors to design a green space for its 1,800 Chicago area professionals.
By Matt Baker
In 2009, Ernst & Young moved out of their marquee address—the 110-story Willis Tower—into a newer structure up the river. Owned by a joint venture of two John Buck Company funds, Chicago-based investor Brijus Properties and Morgan Stanley’s Prime Property Fund, 155 North Wacker wooed the professional services giant away.
Ernst & Young is the Chicago area’s second-largest accounting firm with nearly 1,800 employees here, and was the Willis Tower’s largest tenant. They hold that title in the new building also, occupying eight floors and over 200,000 square feet of the 48-story, 1.3 million square feet skyscraper.
Their offices were certified LEED-CI Gold by the USGBC last December. Ernst & Young worked with LEED accredited professionals both internally and with external architectural and construction vendors to design a green space.
The company increased energy efficiency, reduced energy consumption and saved on electricity costs with the use of occupancy sensors to control lighting and daylight responsive controls for light fixtures along the window lines. Employing Energy Star equipment and appliances further reduced energy needs.
The Ernst & Young offices achieved exemplary performance in four areas when submitting their LEED paperwork. In general, innovation in design credits for exemplary performance are awarded when a developer is able to double the credit requirements and/or achieve the next incremental percentage threshold.
They first received exemplary performance in their handling of materials and resources when they received an additional point for sourcing a large number of items locally, reducing transportation fuel costs during construction. In fact, 60% of construction materials were manufactured within 500 miles of building’s site. The project also diverted 95% of construction waste from landfills.
A quarter of all materials used on this project contained recycled content. More than half of all wood products used in the Ernst & Young offices were FSC-certified.
All of the decommissioned furniture in their former Willis Tower location was diverted from landfills as well. Ernst & Young took part in Herman Miller’s rePurpose program, which aids corporate donors in finding non-profit sources for their used and unwanted furniture. The program is similar to the one by ANEW which Sustainable Chicago profiled last year.
Highly efficient plumbing faucets and fixtures reduced Ernst & Young’s water consumption by 41% over the baseline requirement of 30%. In addition, the office was made a healthier work environment through the use of less toxic, low-emitting VOC materials such as paint, sealants, carpet, adhesives and composite wood. The firm also developed and implemented a green housekeeping program.
The building Ernst & Young moved into, designed by Chicago-based Goettsch Partners, was itself certified LEED-CS Gold upon completion in June of 2009. It was also one of the first projects in the city to take advantage of the Chicago Green Building Permit program, which expedites sustainable projects through the permitting process.
The tower’s facade is clad in a virtually all-glass curtain wall with painted aluminum and stainless steel profiles. In combination with other elements, the high-efficiency glazing significantly helped the building’s projected energy performance, achieving a more than 10% reduction in energy usage over typical energy code requirements.
Each 27,000 square foot floor plate affords tenants with maximum opportunities for daylight harvesting. The H-shaped layout means increased window surfaces, ideal for the floor-to-ceiling, low-e glass panes to allow light to pour in. Also, there are no interior columns in the rentable spaces. While tenants prefer these for the flexibility they afford, the lack of columns also means daylight can stretch farther into the offices.
Nearly all of the roof surface, over 90%, is covered by vegetation. And as is typical of buildings in the central business district, the location provides a high walkability score and access to multiple lines of public transportation.
As part of its LEED certification, 155 N. Wacker instituted a building-wide recycling initiative. Ernst & Young’s office recycling implementation team helped increase these efforts by ensuring that appropriate bins and signage were provided throughout the new space for recycling metal, plastic, glass and non-confidential paper. The office continues to recycle cardboard and ink/toner cartridges as part of the baseline program. Bottled water was also removed from the vending machines as filtered tap water is available in every service center.
The Chicago office is reflective of the company’s broader green strategy in the US. Ernst & Young’s goal is to have a third of their office space portfolio LEED certified by 2012. They have also adopted a multi-pronged approach to improve their impact on the environment worldwide.
Ernst & Young will measure their carbon footprint by collecting and analyzing data on energy consumption in offices and from business travel. To help address this last point, they put an environmentally responsible travel policy in place.
Since establishing these goals, Ernst & Young’s U.S. operations have reduced overall air miles by 18% in one year and reduced paper purchases by 19% in two years. These are equivalent to more than 70 million miles and 70 million sheets of paper saved, respectively.
Now in its third year, Ernst & Young’s Climate Change and Sustainability Services (CCSS) gives their clients access to the sustainability mindset. As a Big Four professional services firm, Ernst & Young has a large client base that relies on them for fiscal responsibility. As they see it, why not also be a resource for climate responsibility?
CCSS has over a hundred employees in the United States, and more than a thousand globally, wholly dedicated to finding tax credits, deductions, incentives and grants available to a client that takes action towards climate change. “What we are trying to do is get the tax director a seat at the sustainability table,” said Terry Hudgins, a Senior Manager at Ernst & Young.
Just as they would expect a financial report from their accounting firm, many clients who take advantage of CCSS can receive a carbon footprint report or a breakdown of other green metrics. The initiative is also designed to inform existing clients of tax breaks and incentives they might not otherwise know about.
“The states are carrying a huge portion of the sustainability equation,” said Hudgins. According to a study by the American Council for an Energy Efficient Economy, aggregate state spending on energy efficiency grew from $2.5 billion in 2007 to $4.5 billion two years later. That doesn’t even include the sizable American Recovery and Reinvestment Act and other federal incentives.
As Hudgins points out, the company is already in virtually every business sector, from big box clients to manufacturers. For large companies and multinational corporations, Ernst & Young is well-poised to speak about the incentives in different states and countries, as they already have a presence there.
One thing many clients may not be aware of is that incentives are stackable; one company can institute one initiative that reaps federal and state grants or tax credits as well as utility rebates. Many organizations opt for the infrastructure changes with the quickest return on investment, such as lighting upgrades with a twelve- to eighteen-month ROI. While updating something more complex like the mechanical system, Hudgins explains to his clients, may not yield back the investment for two to three years, “It lends itself well to both utility, state and federal incentives.”
Another incentive that organizations may not be aware of is the assignment provision. Section 179D of the federal tax code has in place until 2013 a deduction of up to $1.80 per square foot available to construction companies, designers, architects and engineers upon winning a bid for a government project. The company can in essence use the deduction as capital to construct that project. “A lot of government entities are not aware of the program and have not incorporated it into their negotiations,” said Hudgins. “It’s a win-win for both parties.”