Green building and place standards like Energy Star and LEED (Leadership in Energy and Environmental Design) have become mainstream, demonstrating a clear focus on designing for a sustainable future. While third-party certifications may not fit every project, they add significant value, provide quality control and assurance, and must be considered for prudent business.
Studies prove that LEED certified buildings can demand higher premiums, boast higher occupancy rates, and garner media attention, but green buildings without a certification don’t always receive such perks. Anyone can say their building is green, but when a trusted third-party like the U.S. Department of Energy, U.S. Green Building Council (USGBC), or International Living Future Institute validates green building claims, the claims and buildings themselves become more valuable.
Three specific business advantages to pursuing third-party rating certifications include:
Do More by Using Less
Using LEED as a roadmap, a Western Pennsylvania museum director recently aimed to achieve a high level of energy efficiency so he could reduce his operating costs. The museum achieved LEED Gold certification and its energy bills are nearly half those of similarly sized buildings, enabling him to run a financially lean business while providing his community with high-quality art installations and programming.
In a 2015 Huffington Post article, USGBC’s Roger Platt pointed out that lenders value buildings that pursue rating systems like LEED and Energy Star because their owners have greater potential to generate steady cash flow and withstand certain challenges over time, meaning they’re less likely to default on loans. According to Platt, “green buildings are recognized as high-quality collateral and, therefore, an important variable to reducing risk” of mortgage defaults. Case in point: Fannie Mae now offers multifamily properties reduced interest rates on mortgages if they achieve a third-party green building certification.
Green buildings’ financial benefits come in all forms, including added asset value, higher employee satisfaction and productivity, and cash saved. Companies all over the world have realized that green building certifications pay. The most notable local (and international) example is PNC Financial Services, which has more newly constructed LEED buildings than any company in the world. A 2012 Notre Dame study compared the performance of PNC’s LEED certified bank branches to those that were not certified, and found that LEED certified banks significantly outperformed the others. Consumers opened 458 more deposit accounts and deposited $3 million more in LEED branches than non-LEED branches.
Erie Insurance Company also completed a LEED Gold project. According to Vice President of Environmental Management, Gary Diley: “The decisions we make [like pursuing LEED certification] help our business financially.” According to USGBC, operating costs for LEED certified buildings are 13.6 percent lower for new construction and 8.5 percent lower for existing building projects.
While third-party certifications may not fit every building project, there is no question of the absolute value in achieving them. Achieving a green building certification demonstrates an investment in your building, employees, tenants, and in your city.