May 2007

Green Becomes Profitable

Erosion and sediment control is right at the core of an amazingly lucrative trend. While some of us are used to working in a construction arena where ESC requirements are met reluctantly, if at all, and sometimes only with the threat of fines or worse to ensure compliance, there’s another segment of the new-construction industry that’s eagerly embracing ESC and a host of other techniques. It’s the green building movement, and if you think it’s still somewhere on the fringes of the construction world, limited to a few expensive but statement-making corporate headquarters or demonstration sites, you may be surprised.

Over the last several years, the Green Building Council has developed a third-party certification for green or environmentally sustainable buildings, based on a rating system known as LEED (Leadership in Energy and Environmental Design). Under the system, as many of you who’ve worked on LEED-certified projects know, a building can earn 69 credits in five different categories: sustainable sites, energy and atmosphere, water efficiency, indoor environmental quality, and materials and resources. Projects gain credits for design elements, as well as for actions taken during the construction phase, such as good ESC practices. Depending on how many credits it earns, a building can be certified as LEED Platinum, Gold, or Silver.

The green building concept isn’t exactly new; it’s had a cadre of dedicated proponents for years. What’s surprising is how quickly it’s now gaining momentum and how solidly it’s established itself in the marketplace. Today, about 5% of new commercial buildings are constructed following LEED standards, and that’s estimated to increase to 10% by 2010. Not only the buildings it produces but also the concept itself seems to be self-sustaining.

Christine Ervin, former president and CEO of the Green Building Council, talked about why this is happening in her keynote speech at EC07 in Reno, NV. Much of the LEED system was developed during her five-year tenure with the council. The remarkable thing about LEED and the idea of sustainability, she noted, is that they’ve caught on so quickly in a market that is traditionally slow to adopt new ideas. She believes it’s because of the recent convergence of several things: the right technologies, falling prices, a labor force increasingly skilled in constructing according to LEED principles, and, most importantly, market demand.

Market barriers—notably cost—are evaporating, Ervin said. Green buildings were once widely perceived as being up to 15% more expensive to construct, but recent surveys show there is no statistical difference in construction costs as compared to traditional construction methods. In addition, the energy and water savings of a green building can save a significant amount on operating costs over time.

At the same time, she said, market incentives for creating green buildings are increasing. Many cities and some federal agencies now require that new public buildings be built to the standards, and some extend this requirement to private buildings that receive public funding. Other jurisdictions offer incentives like expedited permitting for private projects that voluntarily meet LEED standards. At least one insurance company offers lower premiums for LEED-certified buildings. Some studies also show that green buildings retain their value better and have higher occupancy rates.

After her keynote address, Ervin remarked that the “outdoor” portion of LEED—such as where a building is sited and how it harvests and reuses stormwater—seems to be attracting disproportionate attention and enthusiasm. Could it be that, all on its own as a result of consumer demand, the construction industry is starting to view ESC as fashionable? The lure of earning credits, rather than the threat of losing money, might become the main reason people follow good ESC practices—and that’s one of the best scenarios we could have wished for.