Can Corporate America Go Green?Published: January 14, 2004 in Knowledge@Emory
When the founder of the Smith & Hawken outdoor living and gardening store chain came out in 1993 with his theories on being a good corporate citizen, his ideas were generally considered well-meaning, though economically unrealistic, by many in business. But now, with consumers indicating a preference for those companies with a mind toward environmental concerns, and many more company leaders thinking “green” themselves, the move to make big business more earth-friendly is gaining favor.
At the heart of the reform, says John Wegner, campus environmental officer and a senior lecturer in the department of environmental studies at Emory University, are efforts to build workplaces that operate in a much more energy and water-efficient manner. This is particularly key in the environmental movement, as some estimates, such as those from the nonprofit resource management group Rocky Mountain Institute, indicate that buildings use up about a third of the country’s energy. Today, says Wegner, company leaders have many “green” design options at their disposal, from natural water collection for irrigation and cooling use, to energy reduction plans that supplement fossil fuels with solar power.
While the jury is out on exactly how much more the additional design costs would be for a “green” building than for a more standard design, any price difference is still a cause of concern for many companies, says Steve Walton, a professor in the practice of decision and information analysis at Emory’s Goizueta Business School. Estimates from various sources range from 1% to 10% or more in additional cost, depending on the design enhancements. “But the benefit to the company, in terms of the savings on heat and water use, generally pays for any additional costs within the first few years of a building’s operation,” adds Walton. “Nonetheless, many companies are not willing to spend any money for what doesn’t appear to be an immediate and clear payoff.”
As well, says Walton, there are those “talking the talk,” but not necessarily “walking the walk.” The research group Corporate Watch issues a “Greenwash” award to those companies that have poor environmental records, but instead advertise or play up their “green” practices. Having environmental watchdogs on the case has made corporate leaders more fearful of the negative publicity associated with such a designation. Still, Walton believes that certain standards may need to be forced onto business through regulation, or alternately, rewarded by way of financial incentives for sustainable designs.
Big business is taking baby steps in the direction of the “green” revolution, courtesy of organizations such as the Coalition for Environmentally Responsible Economics, the Sustainable Buildings Industry Council, Southface Energy Institute, and a host of other groups who are applying pressure on the business world. Additionally, a limited number of local and state tax breaks are encouraging companies to create less pollution and use smaller amounts of energy.
Universities appear to be at the forefront of the sustainable design movement for now. A number of environmentally sound projects on Emory’s own campus are causing quite a bit of interest from the academic and corporate world. Emory has 10 projects, valued at over $300 million and spanning over 1 million square feet of space, seeking “LEED” certification, an environmentally-friendly building standard established by the nonprofit U.S. Green Building Council (USGBC). The council is made up of architectural firms, engineering and construction companies, governmental agencies, academia, and industry suppliers.
Christine Ervin, president of the USGBC, says that the voluntary green design standard, LEED (Leadership in Energy and Environmental Design), is providing a needed framework for environmentally friendly construction. The LEED standard rates a project based on five key areas, including: 1) sustainable sites (storm water management, public transportation access, and proper site selection); 2) water efficiency; 3) energy and atmosphere impact (CFC reduction in air conditioning systems, ozone effect, and green power); 4) materials and resource use (construction recycling efforts and use of recycled and regional materials in construction); and 5) indoor environmental quality.
One particular Emory building, the Joseph P. Whitehead Biomedical Research Building, an $83 million, 325,000 square foot state of the art biomedical facility, received the LEED silver rating. The structure features heat recovery wheels and natural daylight to reduce energy use, recycled condensation water for cooling, and storm water reclamation for irrigation. “It is estimated that the LEED program adds 1/2 to 1&1/2 percent to a project’s overall budget -- a cost that is decreasing as Emory staff gain more experience in implementing the program,” says Emory’s Wegner.
Across the country, the establishment of LEED as a consistent benchmark for ranking green design has helped to accelerate the movement. “There are currently 60 projects in the U.S. that have achieved certification with the LEED rating system,” says USGBC’s Ervin. “There are 903 registered projects that hope to eventually become certified when they have completed the building process. That is over 122 million square feet -- a 5% penetration in the new construction market.” Today, organizations and companies that have already achieved some type of LEED certification for one of their properties are a diverse group, including the likes of the U.S. Department of the Navy, Ford Motor Company and Sabre.
For now, the LEED certification applies only to new construction. The USGBC is piloting an effort to establish benchmarks for a green building renovation. But for Corporate America to buy into any aspect of environmentally friendly building initiatives, a larger cross-section of architects and builders must better understand sustainable design themselves, and develop expertise in selling it to business. Daniel Williams, chair of the American Institute of Architects, Committee on the Environment, says his profession sits at the forefront of these changes. He notes that architects need to stay on the cutting edge of developing these ideas, and expand the application on an urban and regional scale. "We have found that green design impacts the bottom line by increasing productivity through improving the quality of the work environment."
Luckily, says Wegner, as techniques in the “sustainable design” field advance, any additional building costs should decrease, making it easier for architects and builders to “sell” green construction. And, as research on the impact of indoor air pollution becomes more available, employers will readily see the benefit of environmentally friendly construction. Wegner notes that the health of employees, and in turn worker productivity, seems to improve when there is access to fresh air and natural sunlight, an integral part of “green” building design.
Mark Schurman, spokesperson for furniture maker Herman Miller, adds, “This is not a ‘head in the clouds’ approach -- reducing, reusing and recycling has an economic benefit.” In the 1990’s, Herman Miller helped fund the start-up of the USGBC. The company received numerous awards for solid waste reduction and recycling, and commissioned visionary architect William McDonough to design a greenmanufacturing facility that served as a pilot project for the original LEED process. Schurman says the company’s founder, D.J. De Pree, took an environmentally friendly approach to business back in the early 1950’s, long before the idea was in vogue, based on deeply held religious values. “We first implemented a waste-to-energy facility in the late 1970’s, and a lot of people questioned its value. But in a relatively short period of time, it all paid for itself. Doing the right thing can pay.”