Why McDonalds and United Airlines are moving to the city
Corporate America is on a cities kick. In Chicago, where I live, more than 50 companies have announced relocations from the suburbs to downtown since 2010 — including Kraft Heinz, McDonald's, Motorola Solutions, Mead Johnson and United Airlines.
While Chicago has been leading this effort, it is hardly alone. Companies around the country are focused on talent and talent increasingly wants to live in cities. The hidden win is that cities are critical in the fight against climate change.
Let’s start with talent. A 2015 report (PDF) from Smart Growth America identified attracting and retaining top talent as a critical reason companies move to downtown locations. For many workers today, the amenities that city life can offer are must-haves. If the Chicago case is any indication, companies are catching on and locating their offices where high skilled workers want to be.
In June, McDonald's announced a move from the suburb of Oak Brook to Chicago’s booming downtown West Loop neighborhood. CEO Steve Easterbrook said, "This world-class environment will continue to drive business momentum by getting us even closer to customers, encouraging innovation and ensuring that great talent is excited about where they work."
Mead Johnson President and CEO Kasper Jakobsen was reading from the same playbook when the company announced its move to downtown Chicago last year. "Our new downtown location will offer us advantages in terms of access to resources, employee and visitor amenities, and our ability to attract and retain the very best talent," he said.
As chief sustainability officer for the city of Chicago, I saw firsthand that when you create live, work and play opportunities in urban environments, the people will come — and that pays major sustainability dividends.
Despite that they do not always appear green, living in cities is a climate win. Urban residents in the United States and many other countries typically have a smaller carbon footprint than the national average.
Think of an afternoon in the city. Chances are it was filled with walking from place to place, perhaps hopping on the train. That’s no surprise. City dwellers own fewer cars, as they walk, bike or take transit. City residents also typically live in more efficient homes with smaller physical footprints (picture apartments, not McMansions). These smaller homes in multi-unit buildings share walls, helping to retain the heat or the cool — so it takes less energy to get the needed indoor temperature.
Those differences in transportation and housing get multiplied hundreds of thousands or millions of times over. It adds up. In Chicago, at last count, per capita emissions of city residents were 20 to 30 percent (PDF) lower than the surrounding suburbs. Every time a corporate relocation brings more people into the city, it is a win for climate.
It’s worth noting that these moves have limitations. An ongoing concern is that many corporate teams moving downtown are relatively small and made up of elite, high-skilled employees — not representative of the company’s overall personnel footprint or of all the jobs cities need.
Additionally, more expensive housing associated with city living limits who gets to buy in to walkable neighborhoods and the chance to live close to where you work. Demographic trends charted by Jed Kolko, former chief economist at Trulia, confirm that "returning to the city" right now is a largely white and affluent phenomenon.
While encouraging the growth and accessibility of urban neighborhoods is good for carbon reduction efforts and sustainability writ large, the challenge will be to work toward more investment in the infrastructure and policies that make city living possible regardless of income: strong public transit systems; affordable housing; thriving urban schools; and safe, vibrant neighborhoods.
These policy prescriptions for the health of cities aren’t new and in many cases are long overdue. Sustainability, however, can and should be front and center in the need to take action — and corporate support can push for results.
Relocating corporate headquarters to city centers is just one part of the climate and sustainability puzzle. But it is one to be encouraged. Companies should trumpet the many benefits of moving downtown and fully embrace their role in building great cities. It’s good for business. It’s good for the climate.