In the previous issues, we covered the basics about corporate sustainability. We presented sustainability as growing from a simple and single department to a mindset change in every major corporation. I hope the article was helpful for industry leaders to emphasize the basics about sustainability and the importance of getting involved in moving towards a sustainable corporate culture as fast as possible.
We also addressed how to develop a robust sustainability strategy for cost reduction. We helped to understand creating a simple message around the returns of sustainable investments which would allow organizations to make fast decisions for executing their projects in our most recent issue.
In this issue, we will discuss the overall cost and the related benefits of the green building while recognizing the rapid changes in the industry based on new tools and techniques which are adding every day. We will talk about alternative ways to improve the existing situation to the portfolio by implementing sustainable initiatives. Last but not least, we will also present couple of case studies that HOK developed for one of our client to integrate and implement for their organization as part of their sustainability initiatives.
Rapid Changes in Sustainability
Organizations expect sustainability to continue as one of the important elements for value creation such as: revenue growth, margin improvement, risk mitigation and avoidance, and brand visibility. Organizations also can develop to build an infrastructure to measure and report social and environmental performance while measuring cost reductions.
Every day we are reading or noticing something new about sustainable development such as tool, technique and/or approach. The value is changing rapidly, so these changes should be taken into account in new strategies for success such as: monetization of carbon, rapidly increasing and unstable energy costs, economic impacts of natural resources, clean water etc…
Green Building Projections
According to the U.S. Green Building Council (USGBC) statistics, in 2007, “Projected green building market value will be at least doubled until end of 2010.”
Chart-1 illustrates the market projection and comparison of the volume for the green building
The cost of building green myth
Most green buildings cost 0% – 4% more than the conventional buildings, with the largest concentration of reported “green premiums” between 0% – 1%. Green premiums increase with the level of greenness, but most LEED buildings, up through gold level, can be built for the same cost as conventional buildings.
This stands in contrast to a common misperception that green buildings are much more expensive than conventional buildings. In fact there is not that much significant difference in average cost for green buildings as compared to non-green buildings.
Chart-2 illustrates the additional cost to build green. Study is based on 146 green buildings by U.S. Green Building Council (USGBC)
Benefits of the green building
Green building presumably provides short and long term savings for the organization. According to the surveys from corporate market report operating costs decreases 8-9% while building value increase 7-8% where ROI value improves 6-7% for green buildings. These drivers also impact the occupancy rate for the overall building up to 4%.
The tangible savings especially come from areas such as reduction in energy use, CO2 emission, water use and solid waste which help us to calculate and to measure the advantages of green building.
Other than tangible savings, there are also intangible savings that green building provides. In the US people spend, on average, 90% or more of their time indoors. If the green building provides better indoor air quality and lighting, this will impact the productivity of the employee in the long run.
From Status Quo to Sustainable Development
Every organization’s goal is to turn their assets into holistic accounting system for measuring an organization’s assets vitality and performance. It goes beyond the standard measures by considering the social and environmental wellbeing of an organization to be equally as important as the economic conditions.
A framework has to be established which help the organization to improve the existing might condition. This will help to develop a sustainable model. Even simple modifications and strategies will improve the current situation.
Chart-3 illustrates the suggested strategies to consider implementing for the current organization
HOK helped one of our valuable clients to create a plan with an unparalleled reputation for natural world education, but no public sustainability message, a basket of disconnected internal resource conservation initiatives and no tracking. After setting up goals, we have developed a custom sustainability framework with several categories that broadens the understanding.
We also provided an assessment, highlighting successes, deficiencies and relationship to peers and the best practices. After the implementation plan; organization led to strengthen their internal sustainable practices committee and public posting of sustainable principles on organization’s banner webpage.
HOK also helped one of our corporate clients to help them to reduce energy consumption of their existing campus. HOK developed a model which prioritized the framework that set benchmarks, monitoring devices, goals and implementation strategies: for existing and future campus systems and facilities as well as operations and maintenance. This provided flexible blueprint for future sustainable activities and stakeholder participation and buy-in.
HOK is a global provider of planning, design and delivery solutions for the built environment. Since the firm’s founding in 1955, HOK has developed into one of the world’s largest, most diverse and respected design practices. We employ more than 2,000 professionals linked across a global network of 24 offices on four continents. Industry surveys consistently rank HOK among the leading firms in numerous building types, specialties and regions, and we have earned many awards and honors for our projects, people and practice.
HOK Advance Strategies works with clients to help align their business strategies with their real estate, facilities, and workplaces to effectively master change. Our consultants draw on their business and design expertise to align our clients’ business strategies with their people, real estate, facilities, workplaces, and information systems. We help clients make value-based decisions to achieve clear, quantifiable results.
Cagri Kanver has six years of progressive experience in the field of global real estate development as a senior consultant. He advised global corporate real estate clients in multiple areas of strategy and operations improvement initiatives. He led number of engagements in the areas of strategic/ business planning & programming, market research / analysis for global site development. Cagri performed professional projects in four different continents for over 20 clients, specializing in the Middle East and Asian markets. He developed key global client relationship in academic, aviation, corporate, government, healthcare, and manufacturing markets. Prior to joining HOK, Cagri worked for Deloitte Consulting as a senior consultant where he was responsible for sustainable development projects for global perspective for Fortune 500 companies. He can be reached at firstname.lastname@example.org.