Gil: Green buildings have long been an attractive investment due to lower operating costs (e.g., for energy, water, and storm and wastewater treatment) and improved worker productivity (largely from better lighting and air quality) that deliver an attractive return on investment on the higher capital cost of delivering "green." But many builders and owners jam on that higher first cost.
But as the industry moves up the learning curve, improving both technologies and design processes, the cost penalty is disappearing. As I wrote recently in New Bottom Line.
An analysis of 33 green buildings conducted for the State of California by Greg Kats of Capital E found a range of zero to two percent incremental first cost, and handsome ROI from lower operating costs, but- and this is key -- essentially no correlation between greenness and cost. The most significant correlates, in our experience, are whether greening -- and stakeholder inclusion -- are integrated into the project from the very beginning, or whether they're added in (or slapped on) later. Some cases in point: Toyota recently opened a 626,000 square foot LEED Gold building in Torrance CA that draws just half the electricity from the grid as a comparable building -- due to a combination of good design and on site photovoltaics; the building came in, according to California Construction, "on a budget ($90 per ft. for shell and interiors) that would be consider[ed] modest for speculative development, let alone a corporate headquarters proves that green can be 'mainstream.'" Herman Miller's C1 and MarketPlace buildings cost less than local comparables.
The key to successful projects with successful economics, according to my colleague Bill Reed (one of the developers of the LEED rating system), is three "E"s: "Everyone, Everything, and Early. Engage all stakeholders; consider every aspect of the project in an integrated way; start early in the development process."
This will produce far better economic results than adding "green" on to an existing design -- a common a reliable way of increasing costs.
One downside: documenting a building for a LEED rating does add cost, and there are challenges to USGBC to streamline the process. On the other hand, some developers and owners choose to design to LEED standards, so they could get certified, but skip the formal process to avoid those costs.
Reed encourages people to do one of two things to assure they achieve the levels of performance they think or proclaim they are getting.
- Commit the team to achieve measurable and verifiable performance objectives. It's all "air guitar" without the discipline to demonstrate the goods.
- Get a LEED certificate or have an SOP in place that consistently measures key performance indicators.
"If people aren't interested in a rigorous certification process, they must achieve and monitor what I call the "non-negotiable criteria" in LEED: 1. The Stormwater Management Credit (our source of drinking water); 2. The Building Commissioning Credit (if they don't do this they likely will not even have the building they thought they were buying - green or no green); 3. Energy Optimization (duh); 4. Measurement and Verification (feedback loop 'cause entropy happens).
"If they don't document these mere minimums they the buildings are likely not doing anything more than the ordinary despite protestations that 'we do this level of work on all our buildings.' Right."
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Gil Friend, systems ecologist and business strategist, is president and CEO of Natural Logic, Inc. -- offering advisory services and tools that help companies and communities prosper by embedding the laws of nature at the heart of enterprise. Sign up online to receive his monthly column via email.