Greening Your Triple Bottom Line

by Eileen McMorrow

Executives are lining up for the opportunity to prove their commitment to the triple bottom line. However, few are well-enough versed in the language of sustainability and green design to incorporate it into their real estate decisions such as renovating existing facilities, taking on a defunct company’s brownfield site or building a new corporate facility.

The concept of sustainability says there are actually three bottoms lines to consider. First, the Economic—the financial impact on an individual’s income or spending, or on a company’s profits and losses; Environmental—the impact on the air, water, land and global climate; and Social—the impact on an individual’s happiness, health and productivity, or the impact on the community’s welfare.

According to the Alliance for Sustainable Built Environments, for businesses and other organizations, this is a business approach that creates long-term value by embracing opportunities and managing risks deriving from economic, environmental and social developments or changes. That means integrating sustainability into their decision-making processes and paying attention to how their actions affect the environment and society around them, in addition to how they affect the organization financially.

An example, from the Alliance: A company replaces the lighting fixtures in its corporate headquarters building with brighter, more energy-efficient ones. Because the new fixtures use less energy, the company saves money. But the benefits don’t stop there. As a result of the company’s actions, the local electric utility company generates less electricity and therefore emits less air pollution—that’s the environmental impact. And the brighter lighting fixtures create better working conditions for employees—that’s the social impact. It’s the triple bottom line at work.

“While sustainability traditionally has been linked to doing what is good for the natural environment, it’s also at the core of profitable business strategies,” said Craig Zurawski, executive administrator of the Alliance for Sustainable Built Environments, which has the allegiance of companies such as Johnson Controls, Philips, Owens Corning, USG, Kohler, and Milliken, among others. “High performance green buildings should be a part of every organization’s long-term business plans.”

“Studies have shown that high performance buildings not only positively impact the environment and the building occupants, but deliver substantial financial benefits, including cost savings, increased productivity and a positive return on investment,” said Zurawski. “The Cal/EPA building in Sacramento, for example, is a LEED Platinum building and is currently saving $1.48 per square foot annually when compared to other building operations in the city.” Architects, who are hopeful that clients will embrace the sustainable design process, are getting an assist from the cities and mid-size municipalities that are mandating the standards known as LEED—Leadership in Energy and Environmental Design. The U.S. Green Building Council, a non-profit that started in 1993, launched LEED for New Construction in 1998, as its Green Building Rating System. It’s a group that consists of architects, government planners and suppliers of green products and services. LEED is also becoming an industry standard for new construction (LEED-NC) and existing buildings (LEED-EB).

The LEED Green Building Rating System is a voluntary, consensus-based national standard for developing high-performance, sustainable buildings. The rating system was designed by leading experts in the construction industry to promote buildings that are economically profitable, environmentally friendly and healthy, productive places to work. Currently, there are 850 LEED-Certified buildings in the U.S. and over 6,500 in the construction process that plan to certify upon completion.

As energy costs rise in tandem with environmental awareness, captains of industry are recognizing that their facilities are important to employees, clients, community—and the bottom-line. LEED offers useful guidance for real estate managers and facilities managers planning new construction and operating existing buildings.

LEED for Existing Buildings maximizes operational efficiency while minimizing environmental impacts. It provides a recognized, performance-based benchmark for building owners and operators to measure operations, improvements and maintenance on a consistent scale. LEED for Existing Buildings is a road map for delivering economically profitable, environmentally responsible, healthy, productive places to live and work.

“It’s really not a matter of if a company should green a building, but when,” Zurawski says. “Wouldn’t you rather lead your industry, than play catch up with your competition?”

Embracing it for the pay-off

“In making the business case, facility management professionals are educating the executive suite and gaining recognition for their unique role as green facilitators. In line with supporting the organization’s triple bottom line objectives, facility departments increasingly are moving toward a fully-integrated and holistic approach to design, construction and operation,” says David J. Brady, president and CEO, the International Facility Management Association (IFMA). “These “high performance” and “green” buildings are satisfying occupant needs, reducing environmental footprints, using less land, consuming less energy and helping achieve previously unattainable levels of productivity. They also attract and retain talent because people like to work in these surroundings. Implementations range from sophisticated high-tech building operating systems, to easier low-tech solutions like energy-use education, more efficient lighting and recycling programs.

Just a few years ago, executives were hesitant to employ LEED because of the associated costs of initial investments in funding a sustainable vs. traditional-built facility. The ROI was usually projected at three-to-four years. Then a number of companies came forward to say the LEED buildings were paying back in 12 to 18 months when the price of energy costs rose dramatically—and some have been able to sell power back to the local utility grid.

Among the most publicized for its best-practices approach, is the Adobe Systems Incorporated facility. Just a year ago, it received LEED Platinum certification from the U.S. Green Building Council for Adobe’s West Tower headquarters building in downtown San Jose. The Adobe tower is the world’s first commercial office building to earn this highest recognition possible for energy and environmental design excellence under the USGBC’s permanent LEED Existing Building (LEED-EB) standard.

Working with facilities management and real estate brokerage firm Cushman & Wakefield, Adobe has invested $1.4 million since 2001 for an energy and environmental retrofit of the three towers that comprise its San Jose headquarters campus. Over the five-year period, Adobe has reduced electricity use by 35 percent, natural gas use by 41 percent, domestic water use by 22 percent, and irrigation water use by 76 percent. Adobe now recycles or composts up to 90 percent of its solid waste. Through energy savings projects and the purchase of green power, Adobe has reduced its pollutants emissions by 26 percent.

Adobe undertook a total of 45 specific projects to achieve platinum certification of the West Tower, which opened in 1996; these have netted a 114% return on investment and payback, in some cases, in as few as nine months. Included in the projects were: retrofitting lighting; adding motion sensors; installing variable speed frequency drives on large fans and chillers; adding real-time metering; upgrading building control systems; re-commissioning of major systems throughout the facilities; and participating in peak period power shedding programs.

“Operating in a sustainable, environmentally sensitive manner is the right thing to do—it’s also good business,” said Randy Knox, Senior Director, Global Facilities Services at Adobe. Adobe has always tried to operate this way; in fact, giving back to the community is one of Adobe’s core guiding values. All around the world, we strive to use groundbreaking, environmentally friendly design, construction and conservation methods. Our employees tell us they appreciate our efforts to be a good community citizen. Some of our programs were actually launched as a result of employee suggestions. We’re extremely proud to have received three LEED-EB Platinum certifications, and we hope our efforts can serve as a model and inspiration for other companies.”

Adobe’s Platinum certification was based on ratings in five categories: sustainability; water efficiency; energy efficiency and atmospheric quality; use of materials and resources; indoor environmental quality; and innovations in upgrades, operations and maintenance.

Facility professionals long have been experts at reducing costs, without visibly compromising the quality of the services provided. “Today cost savings are only one part of a much more complex equation. Cost reductions, gains in productivity and other measures must be balanced with the organization’s proverbial new ‘triple bottom line,’” says Teena G. Shouse, CFM, Vice President, Strategic Partnerships, ARAMARK, and Chair, International Facility Management Association. “It’s a new standard of excellence. C-suite executives are busy aligning all the moving parts of the organization in order to meet these heightened expectations. The environmental impact statements of annual reports likely will show greater emphasis on facility operations that have helped achieve greener results and overall better relationships with stakeholders near and far.”

Green on the inside, too

LEED for Commercial Interiors is just two years old, and it has become the green benchmark for the tenant improvement market. LEED for Commercial Interiors gives the power to make sustainable choices to tenants and designers, who do not always have control over whole building operations. LEED for Commercial Interiors is the recognized standard for certifying high-performance green interiors that are healthy, productive places to work, are less costly to operate and maintain, and reduce environmental footprint.