3 Reasons Why Building with LEED Materials is Better for Your Business

Enhanced value of property assetsn

The green building industry is one of the fastest growing segments of the construction industry, and demand for environmentally conscious buildings is only expected to grow. The US Green Building Council (USGBC) estimates that LEED building construction projects will provide 386,000 jobs and contribute $26.2 billion in wages by 2018. Yet surprisingly, only a small portion of new buildings constructed can be considered sustainable.

Buildings form an important component of our life – we live in them, work in them, rest and sleep in them. However, excessive amounts of energy and other natural resources are consumed during the construction phase; during their lifetime for maintenance, repairs and refurbishment; and finally when they are demolished and the waste disposed of, which is simply not sustainable.

It is estimated that buildings contribute nearly 40% of all CO2 emissions released into the atmosphere in the United States. But according to the USGBC, LEED buildings are not only 25% more energy efficient, they product 34% less CO2 emissions, and divert more than 80 million tons of waste from landfills compared to standard construction methods.

Sustainable buildings are designed in such a way that they optimize environmental and economic performance while providing a safe, healthy and productive space for the building's occupants. Special consideration during the planning, design and construction stages results in lower energy consumption, reduced greenhouse gas emissions, and improved environmental stewardship.

At the same time, a green building also adds value to the occupants of the building, to the surrounding community, as well as to the owners of the building - a sustainable building offers benefits to people, improves profit margins, and considers the environment, in accordance with the principles of corporate sustainability as defined in the triple bottom line concept: people, profit, planet.

According to a report titled "The Business Case for Building Green", released by the World Green Building Council (WorldGBC), sustainable buildings offer many benefits - including financial value - to multiple stakeholders throughout the building's lifecycle. These benefits include:

  • reduced operational costs as a result of energy and water savings,
  • reduction in the amount of waste generated, and
  • enhanced quality of the indoor environment

This in turn improves the comfort of the buildings occupants, which leads to even more benefits, including increased productivity.

Reduced Building Costs = Bigger Profits

As green building becomes more common practice, there is a trend towards lower construction costs associated with building sustainably, due to improved technologies and more readily available environmentally friendly building materials.

It is now possible to construct sustainable buildings for the same cost as their non-sustainable counterparts, and to even save costs in some instances. Some examples of inexpensive alternatives that offer savings in terms of building costs and/or energy costs include:

  • Careful selection of labor-efficient and/or energy-efficient building materials can cut down labor costs during construction, as well as energy costs associated with running the building
  • Attention to placement and orientation of windows, apertures and open spaces to facilitate daylighting. This can alleviate the need for artificial sources of light, offering substantial energy savings
  • Strategic placement of windows and air-vents allows cool air to circulate and warm air to be expelled from the building, alleviating the need for energy-hungry cooling systems

An additional return on investment? The savings that are recouped from reduced operational costs, combined with higher productivity, as a result of a more pleasant working environment.

Enhanced Value of Property Assets

Green buildings are designed in such a way that they improve indoor comfort for the building's occupants. This not only provides a healthier indoor environment, improving the health and well-being of the occupants, but also improves overall productivity levels of employees, which ultimately has a positive impact on business profitability, too. People are generally more environmentally and socially aware, especially with regard to the impact of their daily activities and the environmental footprint of the buildings in which they live, work and play. Businesses and corporations are required to submit annual corporate sustainability reports detailing both the social and environmental impacts of their operations. Building sustainably is attractive to investors, building owners and tenants, as it not only improves sustainability credentials, but also improves their corporate image by showing them to be an environmentally and socially responsible organization. It has been proven that green buildings are not only easier to sell or let, but due to the high demand for these types of structures, higher sales prices and rentals are attained for sustainable buildings, too.

Mitigating Sustainability Risk

As countries around the world scramble to reduce their greenhouse gas emissions, sustainability regulations are rapidly changing and becoming much stricter. New regulations are being implemented globally that require property developers and building owners to disclose information pertaining to the energy-efficiency of their buildings, including the energy-efficiency of building materials used for construction, as well as that of the HVAC systems, appliances, lighting, and energy management systems installed within. Sustainable buildings greatly reduce the risk of buildings being penalized for being inefficient, and property assets being devalued due to non-compliance. Furthermore, as tenants becoming increasingly more aware of the benefits of green buildings they may favor sustainable structures over non-sustainable ones. This changing trend could severely impact the demand for non-sustainable buildings, which would need to undergo expensive retrofitting or risk standing vacant and, in effect, becoming obsolete.

Better for Business All Around

Green buildings offer multiple benefits to property investors, property developers, building owners and building occupants (Table 1). Business savvy property investors, developers and owners are beginning to realize the long-term financial rewards, like increased initial appraisals and sustained value over time, that green building projects offer. These financial incentives and increasing interest in sustainability is likely to drive an upswing in the trend towards even more sustainable development in the future.