Ten Business Benefits of Green Buildings

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Leave it to Jerry Yudelson to write what is probably the clearest articulation of the business case for green buildings you could ever read.  Jerry Yudelson is the author of several books that we've given away in the past, including Green Building A to Z, The Green Building Revolution, Choosing Green, and Green Building Trends: Europe, as well as about six others worth reading, too.  He was a board member of the USGBC and chaired Greenbuild for about five years; he now heads Yudelson Associates, a consulting firm that is dedicated to "growing the business of green building."  Most recently, Yudelson authored The Business Case for Green Buildings, and this is his conclusion:

"The business case for green buildings is solid, no matter whether one builds directly for a corporate client or constructs speculative office or commercial space.  By 2012, certified green buildings will hold the dominant market share of new commercial buildings.  Now is the time to begin getting experience … "

Most people think the business case for green buildings is purely economic or financial, but Yudelson explains that the business case actually rests on five legs: (1) economics, (2) risk management, (3) marketing, (4) government relations, and (5) employee relations.  Further, there are at least 10 major benefits of green buildings, each of which could be assigned to at least one of these five legs:

  1. Energy and water cost savings;
  2. Increased building valuation from higher profits owing to savings;
  3. Possible incentive payments from government and utilities;
  4. Increased rent and occupancy;
  5. Productivity and health benefits for office occupants;
  6. Risk management (economic, financial, market, legal, political, etc.)
  7. Marketing and public relations;
  8. Increase in reputation value for public companies;
  9. Recruitment and retention of key personnel; and
  10. Access to capital from responsible party investing funds.

Of course, a serious analysis of these benefits must necessarily occur from the perspective of the stakeholder because some benefits only accrue to certain parties.  For example, a tenant may not benefit from increased building valuation, or the landlord may not benefit from productivity or health gains of tenant employees.  For this reason, the business case is particularly strong for buildings that are both owned and operated by the same party, such as with government, school, and large corporate buildings. 

In any event, if you're looking for a succinct and sufficient enunciation of the various business benefits to green buildings, make sure to download and read The Business Case for Green Buildings by Jerry Yudelson.  You'll be glad you took the time. 

[pdf] The Business Case for Green Buildings by Jerry Yudelson.


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  • http://mportlandrealestate.com/ Portland Real Estate

    I believe it is the right time to actually start forcing companies to become greener. Even before we come up with some sort of cap and trade carbon economy, they should change the building codes (which are very very very outdated as it stands now) so that it includes some green features. We are finding more and more over time that the health of the occupants and even their mood can be improved by a green building. No more slacking behind, its time for everyone to swallow this pill.

    -Tyler

  • http://empoweret.com/ Mark Bell

    Whether driven by the economy, business conditions, corporate policies or regulatory requirements, energy audits play a critical role in:

    Reducing operating cost
    Preparing for cap and trade
    Reducing energy consumption
    Additionally, energy audits are a necessary element of any sucessful business to drive energy management and continuous improvement.

    What is an energy audit?

    An evaluation or study on how efficiently natural resources are being used in a business, facility and/or system. This includes evaluating systems including, but not limited to:

    Building envelope
    Lighting
    HVAC
    Water
    Steam
    Compressed air
    Process system(s)
    Operation, control and maintenance of all of the above
    Organizations that have conducted energy audits and adopted effective energy management strategies and built successful energy programs have had very good results. Consider the following:

    Ford Motor Company has saved over $75 million through effective energy management.
    USAA Real Estate has realized a 5% annual energy savings and increased the asset value of a California building by $1.5 million due to energy efficiency upgrades.
    Eastman Kodak saved more than $8.6 million in operating costs in 2002 from its energy management efforts.
    Hines estimates the difference in operational costs between its energy efficient buildings and inefficient buildings at more than $13 million.
    Fairfax County Public Schools estimates an annual energy savings of $4.5 million from energy efficiency improvements.
    Source: Energy Star

    Mark Bell
    Empower ET

    Contact Empower Energy (empoweret.com) today to learn how you can more easily improve your company’s financial performance by reducing energy waste and energy costs, while protecting the earth’s environment.

  • Justin Larson

    Nice and Concise

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