Major savings through building green but energy is not be the main contributor

A consistent theme of the Green Real Estate Forum held in Ottawa on the 10th and 11th of April was that green buildings are major money savers over the life of the building.  What was more surprising was that though energy savings can be significant the major benefits from constructing a green building are in greater worker productivity. These are primarily savings in the pocket of the company occupying the building not the developer.

As Chris Corps, Principal of Asset Strategics explained, “Energy is only a small part of total business costs so a 20% reduction in energy costs only translates into a 0.2 to 0.6% savings (to the building occupant) ….. Productivity gains of as little as 1% for office users where labour may be about 80% of the business cost will give a higher rate of return”.

A recent study initiated by the Royal Institute of Chartered surveyors titled Green Value has shaken people’s views about savings from building green. The study found that the US Post Office in Reno Nevada has substantiated productivity gains of 21%. A Pennsylvania Power and Light building had energy savings that led to a 4.2-year payback while productivity gains accelerated the payback to only 69 days. eTraffic Solutions located in the Vancouver Institute of Technology (VIT) a green building in B.C. has reported a 30% productivity gain after moving from a conventional office environment.

Chris Corps also provided examples of green buildings benefiting their occupants including a Wal-Mart that saw a 40% increase in sales in an area renovated to optimize daytime lighting.  He also described a mental health facility in B.C. where productivity of employees increased and a patient was discharged who was expected to stay for life. 

William Browning, founder of the Rocky Mountain Institute’s Green Development Services and Principal of Browning and Barron, also stressed the monetary value of health and productivity. A Sainsbury’s supermarket in Greenwich, England, a green building with natural lighting, has the highest sales per square metre of any Sainsbury store. Other speakers at the conference cited improved indoor air quality and localized temperature control as significant contributors to better productivity.

Ed Lowans from Stantec Engineering said, “If you ask me the most important aspect of green building is light or maybe light and air control and quality.”  He went on to cited A Business Case for Green Building Design a recent report by Morrison Hershfield which concludes “it would be reasonable to assume a productivity gain of between 2 and 10% when moving from a an average (office) building to a green building that incorporates high quality natural light, exceptional ventilation, and possibly user controls (for air flow)."

Some participants at the conference questioned the validity of studies that show higher productivity in green buildings given the large number of influencing factors such as ‘good and bad’ employers. Browning told the audience that Yale University and the Rocky Mountain Institute are researching the effect of buildings design on people. In Canada, Telus is developing a measurement tool for determining the productivity of workers in green versus conventional buildings.  According to Joe Tibensky, Director Real Estate Services for Telus, “We know there is a difference, but what is it?”

The conference made it clear that there is a strong economic incentive for business operators to chose green buildings. The audience was left wondering when business owners and managers will demand green buildings as a matter of course and how quickly building developers and owners will respond. 

Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

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Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

Read more

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