Part of a series taking important new concepts and wording it so you can pass basic information to your colleagues and contacts.
Background
With growing public awareness and concern about climate change and environmental peril, upgrading buildings is becoming of greater importance. Buildings play a significant role in our everyday human life. We spend so much of our time inside buildings. They must not only serve our purposes and be comfortable but have a minor impact on our environment. How can we design and operate buildings in this way to be “green”?
What Is “Green Building”?
There is no specific, universal standard for a “green building”, and, sadly, some claims are controversial. The USGBC has a green building standard called Leadership in Energy & Environmental Design (LEED). Any building meeting LEED standards and certified by the USGBC as thus, can certainly claim to be “green”. But meeting strict LEED standards is expensive and takes time, a hardship for some. Owners can benefit from incorporating at least some green building features. Any building improvement resulting in energy efficiency, reduced water usage, better indoor air quality, reduced waste formation (and/or greater recycling rates), and incorporation of innovative technologies, such as green roof systems and renewable power, are positive steps toward being “green”, will likely result in financial benefits, and is worth talking about.
The Many Financial Benefits of Green Building
It is important to understand that implementing strategies in some or all of these areas will result in positive financial benefits. Here are some.
• It’s Not So Expensive. Conventional thinking is that adding “green” features to an upgrade will make the project prohibitively expensive. Not true. Most “green” technologies have dropped in price because there is more competition. Also, many utilities and governments have reason to encourage “green” upgrades and will pay part of the upfront cost directly to you in rebates or tax incentives.
• Reduced Costs. Key phrase: if done properly, a green upgrade will reduce your operating costs, such as electricity, fuel, and/or water enough over the lifetime of the change to pay back the initial investment and much more. ROIs equivalent to 20, 30, or 40% or more per year have been achieved. What many people don’t realize is that, for example, for technologies to reduce electricity usage (improved lights, better HVAC, improved insulation), you pay for it one time, but get the cost savings year after year. (It’s not like you are going to yank out the efficient lights and re-install the old ones!) In fact, if you determine that you save, say, $10,000 per year in electricity costs the first year after changes, the savings will not only be another $10,000 the next year, but actually more, as savings are based on your utility rate, and that only rises in time (have you seen a utility lower its electric rates?). This is why such projects – again, if done smartly – should not be thought about as cute or “cool”, but as a very good financial investment, too. According to the California Sustainable Building Task Force (https://www.thespruce.com/benefits-of-green-buildings-1708553), a 2% invest-ment in green building design will save over 10 times that investment in the long run. A $20,000 investment in green features of a $1 million project, will typically result in $200,000 in actual cost savings over 20 years. A question I like to ask: what bank or Wall St. investment pays a return like that?! And with no risk?
• Reduced O&M. Many “green” upgrades result in reduced O&M costs compared to previous. For example, LED lights do not “burn out”. Many LED lights are warrantied for 7 to 10 years, unlike most fluorescents which typically last about 2 years. This means less time for Maintenance to change light bulbs, freeing them to focus on high-priority projects and also reducing accident risk (fall off a ladder).
• Higher Rents, Better Tenants. Having a certified “green” building is known to attract more high-end tenants who want/need the association, allowing the owner to charge higher rates. The resale value of certified “green” buildings is higher because potential buyers know that costs (energy, water, waste) will be lower.
• More Satisfied Tenants (Less Turnover). There is enough experience now that studies have shown that working in a certified green building is good for both physical and mental health, improving the productivity of the tenant company and resulting in the desire to renew the lease for the long-term. Lower tenant turnover and having successful businesses as tenants is good for the building owner. Investment by an owner in such features as better ventilation, no VOC carpets and furniture, no toxic pesticides, green roofs can result in this. A building owner can go further and invest in upgrades for gyms, more bike racks, better furniture, upgrading staircases, etc. to boost the health and well-being of building users. A new standard from the USGBC called WELL codifies such changes. One major study (http://newsroom.ucla.edu/releases/study-certified-green-companies-238203) showed that employees who work in green buildings were 16% more productive than those who work in traditional buildings. Another one (https://www.nationalgeographic.com/environment/urban-expeditions/green-buildings/surprising-ways-green-buildings-improve-health-sustainability/) showed that employees in green buildings were better at making decisions, reaching goals, and completing tasks. Some “green” features helped circadian rhythms, allowing workers to sleep better at night and be more alert.
• Finally, Environmental Progress. While this article has focused on financial benefits, let’s not forget that “green” building results in indisputable environmental benefits, too. By moving toward “green” building, your firm can demonstrate to stakeholders progress which can be tracked through the amount of greenhouse gas emission reductions achieved.
CCES has the experts to help you assess your buildings and determine which green features will provide you with the most direct financial benefits, whether it be a full LEED certification or just upgrading with select features. We can assure you that the features will be incorporated correctly and provide the maximum financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.