Many organizations, small business owners, and industry professionals continue to work towards deepening their understanding of the true value of “Going Green.” Why? Green initiatives are not simply a popular buzzword, nor often unfulfilled “marketing pitch.” Increasingly, business professionals are recognizing that there is a social, economic, and environmental responsibility (and benefit) in both the marketing, design systems integration, and implementation of effective green programs. The net positive on reducing waste, designing green buildings, implementing green operations and maintenance plans … all have continually proven to yield a positive return on investment.
What’s Your ROI?
Social Responsibility: often referred as CSR, or Corporate Social Responsibility, whereby companies are perceived to have a social obligation to thoughtfully consider the best interest of its customers, employees, communities, and shareholders. Often, this is believed to extend beyond statutory obligation to comply with established legislation. Special emphasis is given to the principles of Sustainable Development, in which the core belief is that organizational decision-making should consider company profitability, however also drive corporate policies around short and long-term environmental stewardship as relates to their activities and manner in which it conducts business.
Financial Responsibility: we are seeing an unprecedented level of government programs and initiatives designed to drive corporate decision-making within markets that include manufacturing, construction, etc., to invest in implementing practical and measurable green building design, construction, operations and maintenance solutions. In many cases, the good news is that implementation of sustainable operations can drive increased efficiency through reductions in energy consumption, implementation of building maintenance methodologies that are often cost neutral, decreasing the cost of workspaces through use of recycled furniture while changing too low–use lighting (which provides eco-friendly work environments), to name a few. Government subsidies and incentives often further complement and reward efforts to develop and implement successful sustainable operations and maintenance programs. Nearly all of the points needed for LEED Certification (40 points) can be achieved through the Energy and Atmosphere category (35 points). It is by far the largest category within the rating system, and emphasizes the combination of energy performance and renewable energy, which has shown can lower costs up to 50% in the first year alone.
Regarding financial benefit, consider the following:
8-9% * – estimated decreases in operating costs
7.5% * – building value increases
6.6% * – return on investment and proves
3.5% * – occupancy ratio increases
3% * - rent ratio increases
Environmental Responsibility: I have often stated that data should lead us to the right conclusion, and clearly effective green programs and initiatives yield measurable benefits. For example, let’s look at the negative impact of US buildings on our resources. Such facilities consume 72% of our electricity, produce 39% of our CO2 emissions, 13.6% of portable water consumption, and 40% of primary energy use (Source: Environmental Information Administration & US Geological Survey) – Staggering numbers, right? in comparison, green buildings can reduce energy consumption 24% to 50%, CO2 emissions by as much as 39%, water consumption an average of 40%, and solid waste 70%.
Just as certain, it is widely accepted that green building occupants are healthier and much more productive in their work. With an average of 90% of US people spending more of their time indoors, green buildings often have better indoor air quality and lighting, among other key advantages. 34 of the world’s 100 largest economies are cities. Cities are responsible for consuming approximately 60% to 80% of the world’s energy production. In truth, there seems to be a direct correlation between the implementation of effective green programs and design of green buildings, to improved office worker productivity and employee morale, while driving efficiencies and reduced consumption.
Companies are also realizing the positive impact of an established, effective, and well managed sustainability platform can have on the organizations overall marketing campaigns, both with existing as well as potential customers. To be sure, if data suggests that green programs and solutions are important to major organizations and corporate real estate and facilities management firms, then quite clearly, such programs should be equally if not more important to suppliers of various commodities in the performance of their work.
It is my solid belief that as a people, it is our obligation to except ourresponsibility to thoughtfully protect the environment with practical and effective solutions designed to reduce consumption and solid waste, while working towards reasonable and cost effective renewable energy solutions.
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Isn’t Sustainability our Responsibility?
August 25, 2011 at 5:42 pm
Well,i could’t agree more with the point.I don’t know so many benifits of green buildings before,and yeah,green cleaning is not just an idea,we still got so many things to do,to realise—
August 26, 2011 at 7:15 pm
I agree with your comment. For some, going green is in fact nothing more than what I like to refer to as “marketing fluff.” For others, they understand the value of selling what you do, and doing what you sell! Such businesses, for people, work hard at implementing green solutions in order to provide value to their client. Unfortunately, as you know, there are certain green processes, cleaning agents, etc. that deliver little to no tangible value. It’s our job to help our clients separate fact from fiction
August 31, 2011 at 6:41 am
Great article. Unfortunately with the current economic situation, I’m seeing a drop off in funding and enthusiasm. Any thoughts on this?
August 31, 2011 at 8:08 am
Joe: I agree 100%! The reality is everyone wants to be green, yet no one wants to pay for it … Our opportunity is to drive solutions that are either cost neutral, and/or can generate a significant ROI. I reviewed some interesting articles of late regarding some unique approaches in facilitating this…
August 31, 2011 at 8:56 am
John,
I am seeing the same as Joe Miller. A definite drop off in funding and enthusiasm. Green roofs (with plantings) definitely cost more than traditional roofs. One recent quote was and approximate 60% up-charge. The benefits are not easy to quantify because they are new and reduce water runoff which reduces loads on the storm water system.
October 1, 2011 at 8:46 pm
Going green, everybody agree.
But when it comes to pay a little bit more upfront, good intention often desapears.
It’s important to show proven and measurable benefit ( energy saving, productivit) to CEO and CFo.
January 6, 2012 at 11:58 am
John
Thanks for posting this great article. I too notice the trend in loss of funding and enthusiasm for sustainability. It’s not unlike the “Buy American Made” campaign. In theory, everyone wants the outcome but is unwilling to pay for it. Corporations are under so much pressure to cut costs, they’ve every commoditized every purchasing decision. Unfortunately, their process leaves out things like sustainability or “made in America”. Their shortsightedness will cost them and everyone else in the long run.
I’m in sales so you’ll have to forgive me. My business is leasing technology and other electronic equipment to corporations and other large organizations. Though we don’t pitch it this way, the sustainability benefit we bring to the market is: by leasing equipment, we’re facilitating the return of the equipment and then reselling it to subsequent users. Rather than having the equipment reach a landfill, or get melted down for scrap, the equipment is redeployed to a user to extend the life-cycle of the equipment. Thus, reducing the carbon footprint. The nice part about this, from a corporate perspective, is this reduces their actual cost and cash outlay, and at the same time, does right by the environment.
I wish this would catch on!
January 6, 2012 at 1:00 pm
Greg: you bring up some excellent points & I very much agree w/ your assessment. In large part, this is one of several reasons I wrote this particular article. Having been a supplier of goods/services in the past, I found it far to common for some suppliers to market sustainability, while seeing/realizing that they simply don’t (nor perhaps ever intended), to deliver what they promote. Further, while many large publicly-traded companies are well-intended, & certainly some are fully committed towards “reasonable” environmental programs, there are unfortunately some who still maintain a strong commitment within advertising efforts with regard to corporate sustainability, however do not honor such commitments within their facilities. In my view, its all interconnected … the client needs to sustain its commitment, and suppliers need to consistently drive cost effective (or neutral) solutions that add value to towards sustainability objectives …
Best Regards,
John Garrett President/CEO Facilities Management Advisors, LLC 970.396.2702 (direct) | 888.656.0740 (toll) | 970.797.1682 (fax) http://www.fmadvisors.com (web) | jgarrett@fmadvisors.com (email) | @FMAdvisors (twitter)