The Nova Group is a low-profile environmental engineering firm that is growing fast — in the U.S. and abroad — thanks to new sustainability goals set by many companies in the commercial real estate industry.
"Our timing was fortuitous," said CEO Steve Cummings, a 35-year founder of the St. Louis Park firm that has profitably doubled revenue since 2017. Cummings, 61, expects the firm to top $70 million this year from the work of 325 employees and 500 contractors.
"I don't profess to be the smartest guy," Cummings said. "It was our timing and our people who helped us get here. The results have been good. And we have developed a suite of service that customers want.''
Nova provides real estate due diligence, environmental compliance and remediation, construction services, sustainability audits and more to real estate owners, as well institutional investors, mortgage lenders, government agencies and others.
The firm in 2019 became a "B Corp," or general benefit corporation that values "stakeholders," including employees, environment and community, as much as stockholders. Becoming a B corporation is part of Nova's environmental, social and governance, or "ESG," focus.
Cummings, the company's principal stockholder, credits the conversion to also adding business.
"We put people, planet and property ahead of profit,'' Cummings said. "We have attracted the 'best and brightest,' which also has catapulted our growth and success."
The commercial real estate industry increasingly views climate change as an economic and environmental threat to be addressed. The idea is to slow growth of global warming through energy conservation, renewable energy and otherwise achieving no-carbon status between 2030 and 2050, as advised by the preponderance of climate scientists.
"We developed our purpose in 2018-19," said Lou Raiola, Nova's senior vice president of social responsibility. "ESG provides a grounding framework, an evolution in how we work with suppliers as well as communities. It has been a uniting catalyst, not just for Nova leaders, but [has] allowed a buy-in for everybody around our goals."
Cummings earned a master's degree in environmental science in the 1980s from the University of Minnesota. He worked for a commercial engineering firm with a broad portfolio for several years before he founded Nova to focus mostly on environmental and energy issues for commercial real estate clients and financiers.
"About 40 percent of carbon emissions are attributed to buildings," Cummings said. And "decarbonizing" is a fast-growing trend in buildings in Europe and North America.
Nova's revenue is driven by large, international clients. They include the likes of Zurich Asset Management, J.P. Morgan, Morgan Stanley and Credit Suisse. Nova performs environmental site and property assessments required before building sales, as well as increased focus on investments that yield energy-and-financial savings.
"Nova does very good work, and they are responsive," said Sean Bannon, head of U.S. real estate at Zurich, which has a commercial real estate portfolio valued at more than $9 billion. "ESG is what institutions such as mine are focusing on. Carbon footprint. To lessen it and get into cost-benefits tradeoffs."
European firms are ahead of the U.S. in these goals. Bannon said Nova has been an American leader that will continue to grow fast.
Zurich and other real estate owners work closely with Jack Cummings, Steve's son and a New York-based vice president of Nova Group.
Nova Group got international notice earlier this year for its due diligence on 1,700 European "last-mile" distribution warehouses and other facilities in connection with a huge, $24 billion refinancing of Mileway by Blackstone, the private-equity firm that is one of the world's largest property owners.
Nova recently was named an Urban Land Institute "Greenprint Innovation Partner," a milestone in the industry, Jack Cummings said.
Nova, eating its own cooking, is working toward carbon-neutrality by 2030, ahead of the 2050 deadline set by many companies and governments.
"We reduce our carbon emissions as we can," said Nova President Ben Bohline, also chief financial officer. "We don't fly people across country to do a site contract. We use local contractors. We also purchase carbon offsets.''
Steve Cummings said Nova has rebuffed purchase interest from larger industry consolidators, interested in its fast growth.
"I'm excited to see where this goes," he said. "We continue to invest and lead."