Tuesday, December 8, 2009

Parking Lot Funds Genentech Bus

Are you finding it challenging to initiate sustainability projects focused on reducing carbon emissions? Although the reduction in carbon emissions benefits society, there are only so many goodwill projects most corporations are willing to fund. Yet Daniel McCoy, Transportation Director at Genentech persevered and found a way to provide hard benefits that corporations crave. 

With solid ROI, the Genentech commuting program spends millions of dollars each year to provide a private bus service and encourage public transportation, car pooling and biking.

The breakthrough in negotiating funding was to realize that much less parking would be required should employees use alternative transportation rather than drive to work. Land and cost to develop parking is quite expensive in South San Francisco where Genentech was building. If the parking could be reduced significantly, then $75 million in savings over ten years could fund the dreamed of bus service and other commuting programs. Touchdown! Well not quite, only a first down.

The amount of parking associated with commercial structures is regulated by local governments. The next step was to convince the local government that a new approach to commuting could take enough cars off the road to justify much less parking. Since the local government was interested in sustainability and traffic congestion, they agreed.  Second down for Genentech, but for many companies this victory would turn-out to be a dead-end.(Note 1)

With the agreement from the city planners and hard savings in land development costs, the new commuting program was approved by management. Third down, but still needed to ensure adoption by employees to reduce parking, driving and Ghg emissions.  The program’s approach:

1. Set a goal – Genentech’s goal was 30% of all commutes would use alternate transportation.

2. Analyze – Map where employees live to identify key locations. Complete surveys to determine what employees most value in a program and what are impediments to adoption. During this stage, Genentech uncovered potential grant money. By sharing the Genentech shuttle service to / from public transportation, Genentech realized additional funding source.

3. Define and implement - A variety of services is required to satisfy the broad needs of its constituents. Dan McCoy has found that "Focusing on a single program is unlikely to shift enough people."(Note 2)

4. Market program – "A program without focused marketing is likely to fail." stated Dan McCoy. The first step at Genentech was to establish a program brand and tag line. Genentech’s was gRide whose tag line was “Get On Board”. (Note 3.)

5. Measure, provide feedback and adjust services - Make sure to share your employee’s personal contribution and appreciate the effort.(Note 4)

The use of alternative methods is 34% with over 1 million rides each year.
  • 26 “GenenBuses” carried 628,000 passengers to work across the Bay Area.
  • More than half of the company’s 8,500 employees are registered in the program
  • 13% decline in solo-driving
  • 4,000 metric tons of CO2 emissions eliminated annually

Next Steps

The gRide program was justified due to cost avoidance of parking lots. Since then employee productivity has been identified as an area to capture further hard benefits. For example, Genentech found that even if only 20 percent of employees use Wi-Fi, the company benefited by $1.5 million of productive work.

Since its inception, anecdotal information has identified that employees love this program and that it contributes to successful recruiting and retention. Given the scientific culture of company and the newness of these programs, Dan McCoy described that "management feels most comfortable when data is available to back up claims of benefits”. Management agreed to invest in detailed surveys used extensively to measure HR programs called "HR Conjoint Study" to determine the importance of gRide to recruiting and retention. Dan McCoy hopes to share these results more broadly to encourage other companies who are standing by the sidelines to establish better commuting programs.

The approaches employed by Dan McCoy and Genentech can be applied more broadly to fund sustainability projects. First, Dan McCoy determined that commuting was a large contributor to Genentech's carbon footprint and consequently worth the effort to reduce. When he was rejected by management on his first proposal, he persisted. To find hard benefits, he zoomed out to review the entire value chain to understand what opportunities existed for efficiency. Linking solo driving to parking and parking to real estate was brilliant. Genentech then went on to convince other stakeholders to realign incentives to make the benefits realizable;  specifically when local government agreed to change the parking requirements. Finally, Dan McCoy focused on program adoption to ensure that benefits could be achieved to maintain on-going funding.

Note 1: Commercial Buildings
Most commercial buildings in US are developed by a third party and not by the tenant. If Genentech had been working with a developer, most developers would be nervous to reduce parking given that they want the most flexible arrangement for future tenants. Genentech already had low employees per square foot since much of the facility was used for labs. Dan McCoy explained, "A developer would be concerned about insufficient parking in the future should a different type of business lease the space." For example, if the building were used as a call center, the people density would increase dramatically. Since developers are unlikely to run a bus service, they would likely balk at reducing parking. Developers overbuild parking lots since they want to appeal to the greatest variety or potential tenants. This adds to the sprawl which makes most public transportation ineffectual except for the busiest transportation corridors. 

Note 2: gRide Program Summary


 Incentive Resolve Adoption Issue
 All     $4 per day
Guaranteed Ride Home
Midday dasher for errands

 Private bus
 Wifi and other amenities

Pick-up in neighborhood
Not public

 Public Transportation

 $120 / month provided, both pre and after tax Genentech shuttle to / from public transportation
 Car and van pooling

 Preferred parking
Stipend to cover costs of van
 Ride planners and matching services
 Showers and lockers

Note 3: gRide Marketing
  • Dan McCoy emphasized that ”It is essential to the success of the program to communicate reliability, convenience, fun, and even the success of the company.” For Genentech, the program enables the company to invest more in work facilities and less in parking garages.
  • Leverage related events to reinforce the program such as Bike to Work Day, Spare the Air days, and Earth Day. 
  • Organize contests such as top departments
  • Outreach to share information about the program. Dan McCoy used "lunch and learn", cafeteria table events, a program website, and created a component in new employee orientation.
  • Take advantage of spikes in gas prices to start or boost such programs. For example, at Genentech, interest from employees and corporate leadership grew during last year’s spike in gas prices.

Note 4: gRide Management systems
  • Develop systems that can capture quantitative data over time to show the physical and financial impacts.
  • Provide employees with their personal information including reduction in carbon emission and gas money saved. Also share the broader impact from entire company.
  • Track how many people drive alone, carpool, ride shuttles and other alternative modes. Dan McCoy shared that "Genentech has a contractor counting people coming in/out of the campus twice a year. This is more accurate than using the data from the cash reimbursement program, because reimbursement data will be under-reported since some employees will not request reimbursements."
  • Calculate the greenhouse gas emissions from commutes and include in your organization’s sustainability report since commuting is typically a significant contributor to a company's greenhouse gases.

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    1 comment:

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