October 10, 2010
Green Building Productivity – making the movement move…
Today attention is paid to one of two things regarding green building: energy cost reductions and/or the coveted LEED Plaque. Both are important – one to demonstrate return on investment while the other showcases a company’s ability to “walk the walk.” However within the world of commercial office space, one component of green building should shine above all else – impact of indoor environments on the people who occupy them.
If you haven’t read the University of San Diego study titled “Green Buildings and Productivity,” then you may be missing the largest piece of why green building is so important. The question that CBRE’s Director of Sustainability and folks from the Journal of Sustainable Real Estate address in “Green Buildings and Productivity” is relevant to triple bottom line thinkers but hones in on the crux of why traditional bottom line thinkers are still not sold on green. Green Builders continue their inability to convey value through delivered tangible and tractable economic benefits. Why is this?
The USGBC has failed to convey the importance of life cycle costs to owners and developers and while an overwhelming number of buildings continue to be certified (now over 6000 commercial spaces bear the logo), the meat of the value equation lies in productivity. The question we need to ask is “Do green buildings provide more productive and sustainable environments for workers than non-green buildings, and if so, what is that value?” This question has rarely been addressed and since it bears relative importance, we must first understand the 3 main workforce trends driving this ideal:
- 1. Gen Y
This group of up and comings are integral to any organization and that trend will only be augmented in the next 10 years – Gen Ys refuse to be part of traditional office environments and have leverage even in today’s job environment.
- 2. Communication
Office communication is increasingly crucial – team environments and sharing of ideas in the fast pace of today’s world, even more so. Traditional office environments often lack the parameters to foster this type of productivity.
- 3. Employee Costs
Productivity loss and sick days cost firms the most money and at the same time offer the greatest opportunity for return on investment especially when comparing that to traditional green building efficiencies such as energy and water.
The University of San Diego study finds that an average productivity value added impact per worker to be over $5,000 while the average fewer sick days value added impact per worker was lower at $ 1,250. Combined, that translates to a $153.61/sq ft Net Present Value (Discounted at 10%) and since building green costs relatively little in terms of a total initial increase to project costs, the choice should be as obvious as cost-efficient green buildings’ impact to the bottom line. Since we know that employees and their associated costs are the largest component of most budgets, we must wonder why the correlation between environment and employees is just surfacing. Knowing that a 2008 JLL study found that 70% of corporate executives value sustainability as a “crucial business issue,” we’re left to wonder when the real tipping point for corporate sustainability will begin and the greenwashing will end. As evidence by the overwhelming number of “green” commercial interiors spaces, we certainly know that LEED for Commercial Interiors Certification is where it begins.