A trio of nonprofits has created a new answer to that question for Northeast Ohio through a new digital online tool enabling companies to measure racial equity and environmental factors when deciding where to locate offices, factories, or other facilities.
Team NEO and the Fund for Our Economic Future, aided by the Lincoln Institute of Land Policy in Cambridge, Massachusetts, announced Tuesday that they recently launched the tool, “ESG to the Power of Place.’’ The tool is available at wherematters.teamneo.org.
Combining data from the U.S. Census Bureau and other sources with mapping technology, the tool provides demographic, workforce, and commuting data for the 18 Northeast Ohio counties served by Team NEO, the region’s leading economic development agency.
Advocates likened the tool to the popular Walk Score and Bike Score websites, which provide comparative measurements of bike- and pedestrian-friendliness on an address-by-address basis across the U.S.
They also believe the new tool is the first of its kind in the U.S. designed to enable companies to compare real estate locations according to factors related to racial equity, climate change, and access to talent.
The letters “ESG’' stand for environmental, social, and corporate governance standards that are increasingly used by investors and company boards to measure how companies perform on criteria beyond profits and shareholder returns.
“If your goal is to hire a more racially and ethnically diverse workforce, the way to reduce your risk in achieving that goal is to locate as close as you can to racially and ethnically diverse populations,’’ said Bryce Sylvester, senior director of Site Strategies for Team NEO. “We’re just trying to shine a bright light on that.”
The new digital tool can be used to measure the skill sets and racial diversity of the workforce within a 30-minute commute by car, transit, bike or walk.
The tool quantifies the costs of various modes of travel for potential employees, and estimated emissions of carbon dioxide, a greenhouse gas. As such, the tool could be used to analyze the environmental impact of locating a plant in a particular location, as well as the impact of commuting costs on employees.
For instance, a location more distant from employees could translate “directly into upward pressure on wages,’’ said Brad Whitehead, a senior advisor at the Fund for Our Economic Future and a nonresident senior fellow at The Brookings Institution, based in Washington, D.C.
Users can compare up to five different locations by entering addresses into the tool.
The Fund, a network of foundations and civic leaders devoted to equitable economic development, spent $112,000 to develop the project over the past year, of which $40,000 came from the Lincoln Institute, a real estate think tank established by John Lincoln, the founder of Euclid-based Lincoln Electric.
The Chicago-based nonprofit Center for Neighborhood Technology created the new tool by designing its underlying methodology and marrying that technique with available data. The tool’s website includes a detailed description of its methodology.
Location decisions based on climate and equity
Jessie Grogan, the Lincoln Institute’s associate director of Reduced Poverty and Spatial Inequality, said that employees and consumers increasingly want to see corporations make decisions based on climate and equity goals.
“Helping businesses and economic development professionals make the best location decisions could have an impact’' on achieving equity and sustainability goals, she said.
Grogan also said the online tool could be replicated across the U.S.
“We’re willing to license this to the world, free,’’ Whitehead said.
The online tool is rooted in the Fund’s earlier work in helping to develop the Vibrant NEO 2040vision for Northeast Ohio, which showed how the region is expanding its developed land area while losing population. The inefficient pattern creates a recipe for higher taxes to pay for increased infrastructure used by fewer people.
A 2018 report completed by the Fund, entitled “Two Tomorrows,’’ detailed how Northeast Ohio could combat systemic racial exclusion in employment through new strategies in job creation, preparation and access.
Among other things, the report identified the issue of “job sprawl,’’ caused by companies that have located suburban plants beyond the reach of low-income residents in urban areas who can’t afford to own a car.
“Sprawl is killing us,’’ Whitehead said. “We have known for some time that the spatial aspects of growth are fundamental to the health of the economy here, that it is crucial to our ability to be competitive in the global marketplace. It underpins our ability to achieve racial equity. But we didn’t have a way to do anything about it other than to say we need to be smarter about it.”
In 2019 the Fund instituted the $1 million “Paradox Prize,’’ challenging private sector transport companies to provide mobility solutions for suburban companies that needed urban workers and vice versa.
Team NEO and the Fund followed up last year with another report, entitled “Where Matters,’’ which outlined a new quantitative method for comparing industrial sites according to racial equity, access to talent, environmental sustainability, and access by transit.
The report provided a hypothetical comparison of five different sites ranging from urban to suburban, showing how they’d score in comparison.
The new online tool makes it possible for anyone to make such comparisons possible between up to any five sites across Northeast Ohio.
A hypothetical example
Team NEO provided a hypothetical example enabling a local supplier to compare five vacant sites of roughly 10 acres in size in Cleveland, Bedford, and Valley View that could accommodate a new food storage and packaging plant for a national brand.
Of the five sites, a 9.48-acre parcel at Woodland Avenue and Woodhill Road in Cleveland, near the new Opportunity Corridor boulevard, ranked highest with a combined score of 94. Ranking lowest of the five was the Valley View site, with a score of 63.
The Woodland site had the highest equity score, 97, although it also ranked highest in commuter emissions, with a score of 90. The higher score on emissions (in which a higher number is worse) was canceled out by the higher scores on equity and other positive factors.
The Valley View site, at 69, was tied for the lowest equity score with a site along Cleveland Parkway in Cleveland.
Whitehead said the new tool could be used not only by companies comparing the virtues of various sites but could also be used by local governments to analyze various properties and to figure out how to improve their scores, for example, by providing better transit service.
Sylvester said that three companies are already using the new tool in site selection processes with Team NEO, although he couldn’t provide specifics because of non-disclosure agreements.
But he said that in the future, as more companies working with Team NEO use the tool, the nonprofit intends to report on whether the tool is helping companies and communities to meet equity goals.
“In this instance, information is power, but it’s power to the employers, economic developers, and employees,’’ Whitehead said.
“Ultimately everybody will benefit from this kind of information. We have a tool to actually shape our destiny.”
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