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4 Ways Businesses Can Get the Most Out of Public-Private Collaboration:  Lessons from the Building Efficiency Accelerator

New construction in Tianjin, China. Businesses design, build, finance, own, operate, renovate and occupy most buildings in cities. Photo by Hugi Ólafsson/Flickr

How can businesses provide more value to, and receive more value from, collaborative initiatives with cities? Businesses are the ones that design, build, finance, own, operate, renovate and occupy most of the buildings in cities. Without active collaboration and support from the private-sector, cities will never be able to scale the impact of their actions to improve building efficiency.

The Building Efficiency Accelerator (BEA), which WRI Ross Center and Johnson Controls co-lead with support from UN Environment and the Global Environment Facility, is a partnership of businesses, NGOs and institutions assisting local governments to improve their building stock. The requirements for participation are simple: Cities must commit to introduce a new building efficiency policy, implement a pilot project and track progress.

The BEA has 33 city partners in 20 countries, 25 NGO/institutional partners and 13 business partners. In a recent survey, 100 percent of responding business partners gave the two highest ratings for their experience in the BEA compared to other partnerships. However, when the same businesses were asked how much they felt their organizations benefitted from and contributed toward the partnership, only 40 percent gave the two highest ratings.

I have four recommendations, borne from three years of experience with the BEA, to help businesses get the most out of the BEA and other public-private collaborations.

1. Be Practical

One of the greatest contributions businesses can make to policymakers in a multi-stakeholder collaboration is to provide practical advice on how things actually work – and don’t work – in the real world.

Many well-intentioned policies end up stalled in practice because of overlooked barriers in procurement, burdensome project requirements, unequitable transfer of risk, or the lack of technical or financial resources for implementation. The time for businesses to speak up about the practicality of new policies and programs is in the early planning stages, not after they are approved by the mayor and city council.

In Mexico City, Eskişehir and Bogotá, regular participation from the private-sector in multi-stakeholder projects brought valuable input and in-kind technical resources, as well as encouragement to city leaders to continue and expand building efficiency actions. Private-sector participants in multi-stakeholder working groups in Belgrade and Bogotá also jointly developed work plans and recommendations for action.

2. Be Public

Business not only has a responsibility to speak up about the practicality of proposed policies and programs, but also to publicly support those policies and programs through the political process. The private sector is typically silent on a new initiative, unless it negatively impacts their business. At this point, they can become quite public in opposition.

One example is building code initiatives which often face opposition from home builders who fear that new efficiency requirements will increase the initial cost to purchase and reduce sales. Meanwhile, the local building efficiency industry as a whole stands to gain from an increase in demand for higher efficiency building materials, equipment and appliances. When like-minded businesses act like a coalition in support of high-efficiency buildings, the minority but vocal interests can be balanced in the political process. These coalitions can be especially important during the inevitable changes in government leadership, when every initiative risks being stalled or started over from scratch.

3. Be Professional

It is important that business participates in collaborative policy and program development as a community stakeholder and not as a prospective product or service provider. Cities are justifiably nervous about opening up their planning processes to businesses who might be motivated to seek preferential access to local government officials or secure an inside track to future project work. Businesses are likewise concerned with inadvertently violating city procurement rules and finding themselves ineligible to compete for project work.

The best practice in this regard is to leverage a local non-profit organization or trade association to coordinate the participation of the private sector in local government planning activities. In this way, the broad interests and input from all business stakeholders can be represented, while assuring compliance with local government ethics and procurement requirements. In the BEA, a non-profit partner with local presence – like the national Green Building Council, an ICLEI regional office, or a WRI international office – plays this role for each city, convening public and private sectors in multi-stakeholder processes to design the city’s building efficiency action plan.

4. Be Patient

Businesses need to be patient if they are going to contribute to and benefit from public-private collaboration activities. This can be challenging, as quarterly financial results and monthly sales targets drive many businesses to be focused on the short term.

But some business representatives are better aligned to long-term thinking than others. Those with strategy, marketing, policy, government relations and public/industry affairs roles are more likely to understand and support longer-term collaborative planning and market development activities. A government relations colleague of mine once told me his job was to “help make the pie bigger over time while our sales people fight with competitors over pieces of the pie.”

The motivation for business to participate in collaborative planning activities is to increase the market demand for private sector products and services. Planning is great, but projects and purchase orders are needed to actually scale impact.

The opportunities being opened up by the BEA are indeed significant: Nine early BEA partner cities have identified over $1.5 billion in potential projects for funding. When businesses collaborate with local governments in a practical, public, professional and patient manner, they can achieve substantial benefits from these building efficiency actions in their communities.

Clay Nesler is the vice president of global energy and sustainability for Johnson Controls and serves as a senior advisor to WRI Ross Center for Sustainable Cities.