From improving energy efficiency to mitigating the impacts of climate change, businesses have been working to meet the demand of a marketplace that's ever-more ecologically conscious. As the shift has occured, executives have learned that "greening" operations isn't just an ethical or marketable endeavor, but a profitable one as well. One industry in which this shift has been markedly noticeable is construction, where companies have turned to new, more efficient techniques, especially when it comes to the modern office building.
"In major markets now, conventional construction doesn't really exist," Nathan Taft, director of acquisitions for green builder Jonathan Rose Companies, told Business News Daily. "We've seen a real shift in the industry, getting a push from government mandate to push people along on the learning curve. People are just realizing that green building makes sense."
Conservation as a competitive necessity
In most major cities in the U.S., at least 40 percent of office square footage is now "Leadership in Energy and Environmental Design" (LEED) certified, according to real estate market research from CBRE. Chicago leads the way at 66 percent LEED certified office space, followed by San Francisco at 61.8 percent. And CBRE found that much of the trend is driven by a market imperative rather than a regulator compulsion. In other words, companies recognize that strategic energy management gives them a competitive advantage.
“Even though the current federal legislative agenda has shifted the focus away from energy efficiency and sustainability, the momentum in the commercial real estate industry toward improving building operating performance and enhancing building quality is hard to derail,” Dr. Nils Kok, associate professor at Maastricht University, said.
As more companies begin to embrace green building standards, LEED certification will become less of a competitive edge and more of a market necessity. Coupled with the advent of Internet of Things (IoT) and machine learning-driven energy management systems, eco-friendly building standards offer business a way to save more dollars, which can then be reinvested elsewhere. Companies that fail to embrace these standards will inevitably find themselves at a disadvantage. [How are IoT and artificial intelligence helping companies reduce their ecological footprint?]
Sustainable building involves an analytical, data-driven approach to various renovations, including installing insulation, updating lighting to LED fixtures, and diagnosing heating and boiler systems. This approach helps companies identify the most wasteful aspects of a given structure and determine how to best address that waste. But sustainable building is not just about renovations. New construction is also a key element, with the designs created from the ground up to accommodate both environmental sustainability and ergonomic needs.
"We position buildings from a holistic standpoint to enhance efficiency, as well as tenant and resident experience," Taft said. "Energy retrofits are often combined with creating a new community space. … We're always integrating green from the very beginning, not just tacking it on at the end. It's really what the building is about from its first inception."
Green building as an economic development tool
Some view sustainable construction as a vehicle to spur further economic development, particularly in communities that are typically seen as disadvantaged when it comes to attracting businesses. The U.S. Green Building Council (GBC) maintains this philosophy as part of its work to spread green building practices throughout the world.
By promoting its LEED certification standards, the U.S. GBC encourages building designs that use less water and energy, reduce overall carbon emissions, and save money. The group might focus on buildings, but the effort is intended to have a ripple effect throughout the economy of entire communities and, ideally, the world, said Mahesh Ramanujam, chief operating officer of the U.S. GBC.
"When we look at the buildings-to-communities-to-cities mission, it's no longer just a green building but it's also an economic development tool," Ramanujam said. "Being able to establish this from an environmental lens [and] economic lens, and most importantly [resolving] the income inequality gap … makes it attractive for businesses to come and invest in and grow the market.
"Our mission is about fundamental behavioral change in the marketplace, for [people] to understand sustainability principles in everything they do, in life cycles of consumers and businesses," he added. "We want sustainability to be embedded in [the] life of the consumer, so that everything you touch, be it clothing, be it eating habits and hobbies, reflects the principles of environmental and human sustainability."
Ramanujam said he believes green construction can affect every other industry, from health care spaces to retail. Not only will operating in a green building save these companies money, but it will also help themproject a sense of corporate social responsibility, which is increasingly important to consumers, according to a Nielsen report issued in October 2015. The report found that 66 percent of consumers said they were willing to pay more for sustainable brands.
"Consumer brands that haven't embraced sustainability are at risk on many fronts," Carol Gstalder, senior vice president of reputation and public relations solutions for Nielsen, said in the report. "Social responsibility is a critical part of proactive reputation management, and companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners and, most [importantly], consumers."
Sustainability outside of the box
There has also been a rise in organizations that aim for environmental sustainability beyond the confines of green construction. One such group is the nonprofit One Tree Planted, which empowers entrepreneurs who want to give back to the environment. For each sale a partnered small business makes, One Tree Planted will plant one tree in a region of the world specified by the partnering entrepreneur. Partnering with a laundry list of NGOs, the nonprofit has helped to plant millions of trees.
Laura Ellis, founder of startup Hidden Hippie, is one such partnering entrepreneur. Having grown up on farmland in Australia, Ellis said she maintained a deep reverence for nature and wanted to integrate a form of sustainability into her business. By partnering with One Tree Planted, she found a way to easily communicate to her customers the added benefit of their purchases.
"I was trying to find something that I was really excited about but that also tied in with my brand," Ellis said. "I love how easy [One Tree Planted] made things and how clear the message is."
Similarly, Taft, who is focused on green building, said marrying the construction aspect with other community-based efforts is essential to bringing about the sort of drastic environmental and economic changes that the U.S. GBC aims to achieve.
"The construction level is the building block, and that's where we're focused, but community-wide efforts are a really important part of the puzzle," Taft said. "Eco-districts and communities with more residential developments and more concentrated real estate are making great strides and really cutting their carbon emissions and greenhouse gas emissions."
With the proliferation of these efforts and the further development of disruptive, green technologies, the promise of greening existing towns and cities becomes more and more likely. For these green builders and entrepreneurs, business has become a tool to help achieve that goal, and if everything goes as planned, environmental revitalization will also lead to economic growth and cleaner, greener communities.
Some source interviews were conducted for a previous version of this article.