GREEN BLOG

How Green Can You Go? Strategies For Business Success

POSTED OCTOBER 21, 2010

Pogo once said, “We are surrounded by insurmountable opportunity.”
A perplexing pearl of wisdom to be sure, but consider this: The total US building stock is approximately 300 billion square feet and over the next 30 years we will: Tear down approximately 52 billion SF of buildings; Renovate approximately 150 billion SF of buildings; Build approximately 150 billion SF of buildings.

Effectively, over the next 30 years approximately 75% of the built environment will be either new or renovated. Opportunity abounds.

As Yogi Berra famously said, “When you get to a fork in the road, take it.” More than ever, companies are choosing the green road. They are realizing that sustainability is a portal to achieving a greater competitive advantage even in a down (but hopefully rising) economy.

Wal-Mart, for example, is establishing purchasing guidelines for its direct suppliers and has asked each to answer questions examining energy and climate, material efficiency, responsibly sourced raw materials and social responsibility.

Home Depot, another retailing giant, launched its EcoOptions initiative in 2007 to identity environmentally preferable products. More than 3,500 products are labeled as having better environmental performance than other products in their class. Home Depot also sells more FSC certified wood than any retailer and have transitioned more vendors to FSC certified wood than any other retailer in America.

CB Richard Ellis, the world's largest commercial real estate services firm (occupying more than 5 million square feet worldwide) has reached its goal to become carbon neutral by 2010 through targeted in-house carbon footprint reductions, indirect emission reduction commitments from our suppliers and through carbon offsets. According to a company spokesman, "Green building tenant attraction and retention continues to grow stronger, as major tenants increasingly favor healthier air quality over luxury amenities in premium properties, making a green building a better long-term value than an 'SUV property'.”

What CBRE understands (and you should too) is that employees are the greatest cost to business and offer the greatest potential for savings.

Consider this theoretical analysis of the benefits of designing green:

Average annual salary cost/employee: $80,000

Overhead, benefits, & other cost/employee (70%): $56,000

Total average annual cost/employee: $136,000

Average SF per person: 250 SF

Average annual employee cost ($136,000/250 SF): $544/SF

Benefits of a green project:

One less sick day ($136K/260 work days/250 SF): $2.09/SF

30% reduction in electrical use ($4/SF X .30): $1.20/SF

5% productivity increase ($136K X .05/250 SF): $27.20/SF

Total: $30.49/SF

Class A Building (rent net of electric): $45/SF

Electric cost: $4/SF

Total Rent: $49/SF

Potential Savings from Green Interior Build-out: $30.49/SF

Total Effective Rent: $18.51/SF

Clearly, using these examples, selling green is not a hard sell. Implementing green business strategies creates understanding, knowledge, value and recognition. Ask and answer the following:

• Your industry – Who are the green leaders and why?
• Your business – Is your structure and culture green compatible?
• Your people – What do they need for successfully contributing to integrating green?
• Your tactics – What are you doing now; what should you be doing?
• Your future – Are you positioned to embrace developing concepts, evolving technologies and intriguing innovations?

The opportunities are now. Take that fork in the road.

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