BOSTON—Green is rapidly becoming a necessity as companies as diverse as Bank of America, Genzyme, Goldman Sachs, IBM, and Toyota are now pushing green buildings fully into the mainstream, according to “Building the Green Way” by Charles Lockwood. This article in the June 2006 issue of the Harvard Business Review makes the case for green and cites the U.S. Green Building Council’s (USGBC) and its LEED Green Building Rating System. The article examines the national energy crisis, and raises a looming threat to commercial real estate portfolios.
The Green Tipping Point
Before 2000, companies generally regarded green buildings as interesting experiments but unfeasible projects in the real business world. Since then, several factors have caused a major shift in corporate thinking and pushed green to the tipping point:
1. First, the creation of reliable building-rating and performance measurement systems for new construction and renovations, like the USGBC’s rigorous LEED (Leadership in Energy and Environmental Design) Rating System.
2. Second, hundreds of studies have proven the financial advantages of going green, from reduced construction costs to lower operating costs.
3. Third, employers have experienced significant workforce benefits in green buildings, including stronger employee attraction and retention, as well as fewer illnesses and lower absenteeism, which reduce health care costs. In particular, green buildings can boost employee productivity by approximately 15 percent.
4. Finally, says Lockwood, green buildings today cost no more to construct than standard buildings thanks to lower materials and technologies costs, much greater availability of green building products, and greater real estate industry experience in planning and constructing green buildings.
The Green Energy Solution
With gasoline prices soaring past $3 a gallon in many locations, everyone is talking about creating more fuel-efficient cars, but no one is talking about energy-guzzling buildings.
In the United States buildings account for 39 percent of the nation’s total annual energy consumption, whereas transportation (including cars) comprises only 27 percent of total energy use, according to the Department of Energy and Department of Transportation.
A proven strategy for reducing U.S. energy consumption is green buildings, which significantly lower energy consumption and costs compared to standard buildings. In its first year of operation, Genzyme’s green 12-story headquarters in Cambridge, Massachusetts used 42 percent less energy than standard buildings of comparable size.
Get Ready For Massive Obsolescence
While the looming shift to green buildings brings many benefits to companies, it also brings massive obsolescence to hundreds of billions of dollars in existing commercial space in the United States and worldwide.
“The owners of standard buildings must act now to protect their investments,” says Charles Lockwood. The impact of green going mainstream will be as profound on commercial real estate as the invention of central air conditioning in the 1950s and 1960s, or elevators in the 19th century.”
Some building owners have already started reviewing their portfolios to see how green their buildings are and what they need to do to meet growing market demand. Citigroup, for example, is studying how its 100 largest buildings stack up against accepted green standards. The company will then review its entire worldwide real estate portfolio.
Existing facilities outnumber new construction by four to one. To protect their investments, building owners will make green renovations of their standard buildings a major trend in the near future, Lockwood says.
To construct a green workplace on a standard budget, Lockwood recommends that companies follow 10 rules:
1. Focus on the big picture. All development decisions from the start must be guided by a green mind-set. A collaborative green project team begins by examining the building site, the plans for the exterior and the interior, and the budget, thus managing up front how each planning decision affects the overall project.
2. Choose a sustainable site. Do not build on prime farmland, parkland, a historic or prehistoric site, the habitat of an endangered species, or within 100 feet of wetlands. Ideal locations for green development include in-fill properties like parking lots and vacant lots, redevelopment sites like rail yards, and remediated brownfields.
3. Do the math. Apply a cost/benefit analysis to each building component before allocating funding. A green (landscaped) roof costs more than a standard roof to install, for example, but its return on investment is greater because it lasts years longer and provides more benefits, particularly storm water management and lower energy costs.
4. Make the site plan work for you. Site planning can minimize the amount of on-site infrastructure like roads and parking lots, reduce earthwork and grading, and provide easy access to public transportation—all of which lowers construction costs and earns LEED. Building orientation can reap significant benefits, like creating a daylit interior that needs much less artificial lighting.
5. Landscape for savings. Landscaping minimizes heat islands—the buildup of heat from sunlight pouring onto dark, nonreflective surfaces—which lowers energy usage and costs. Landscape strategies include: green screens on building walls; mature trees shading building walls, roads, and parking areas; and a green roof, which reduces interior heat gain (lowering air conditioning requirements), cleans the air, serves as wildlife habitat, and absorbs rain.
6. Design for greater green. Companies can use a wide variety of strategies to cost-effectively design a green building. A long and narrow building shape, for example, maximizes natural lighting and ventilation for workers. Operable windows and skylights enable natural ventilation. Windows with low-E (low-emission) glazing minimize interior solar heat gain and glare.
7. Take advantage of technology. Green building technologies like motion-sensitive lighting sensors, individual climate controls in offices and at workstations, and highly efficient HVAC systems help conserve energy. Green facilities can also produce some of their own electricity with alternative technologies, like photovoltaic systems, wind turbines, and natural gas microturbines.
8. Save and manage water. To save water, firms can install water-conserving irrigation systems and plumbing, waterless urinals (which are more sanitary than standard ones), and native and drought-tolerant landscape plants, and they can use recycled (not potable) water for landscape irrigation. Green storm water management strategies include bioswales (shallow “canals” lined with plants), green roofs, and man-made retention ponds and wetlands.
9. Use alternative materials. Many types of sustainable, nontoxic building materials are now readily available at mainstream prices, including low- and zero-VOC (volatile organic compound) paints, strawboard made from wheat (rather than formaldehyde-laced particle board), linoleum flooring made from jute and linseed oil (rather than toxin-packed standard vinyl), 100 percent recycled carpeting and heavy steel, and furniture with significant recycled content.
10. Construct green. How you build is just as important as where and what you build. Achievi