Executive Summary

Green buildings, as represented by the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) Green Building Rating System, are an undisputed market success. In the eight years since the launch of LEED, green has firmly established itself among mainstream leaders in the building sector, representing tens of billions of dollars in value put in place and materials sales.LEED was created to reduce the environmental impacts of the built environment, but so far no comprehensive evaluation of the overall impact of LEED has been conducted. Until now.

This Green Building Impact Report is the first-ever integrated assessment of the land, water, energy, material and indoor environmental impacts of the LEED for New Construction (LEED NC), Core & Shell (LEED CS) and Existing Building Operations and Maintenance (LEED EBOM) standards. (We did not include Commercial Interiors due to concerns about double-counting, which we hope to have resolved before the release of next year's report.)

In this report we attempt to answer whether commercial green buildings live up to their name -- that is, that they are engendering demonstrable environmental improvement.

Our findings are both encouraging and cautionary. Overall, we believe that LEED buildings are making a major impact in reducing the overall environmental footprint of individual structures. However, significant additional progress is possible and indeed necessary on both the individual building level and in terms of market penetration if LEED is to contribute in a meaningful way to reducing the environmental footprint of buildings in the U.S. and worldwide.

Market Summary

To date, our calculations indicate that LEED Certified projects represent more than 6% of new commercial construction, but there has been an astronomical ramp-up in the past year of new project registrations, with new construction sector penetrations approaching a whopping 40%. On average, it takes approximately two years from Registration to Certification, with an attrition rate of 25% to 30%.

LEED NC continues to lead the way, with Certified projects representing almost 6% of new construction starts and new registrations representing approximately 30% of the market.

Registrations of Core & Shell projects have ramped up considerably in the past two years, now approaching 12% of new commercial starts, though they lag significantly behind LEED NC in submarket share and absolute terms. Certified LEED CS projects represent only about 0.5% of new construction starts.

Although introduced three years later, the floor area of new registrations in LEED EBOM has nearly caught up to that of LEED NC, though as a percent of the annual addressable market, certifications remain insignificant.