Lisa Raffin is vice president of professional services at VFA Inc., a Boston-based provider of software and services for facilities capital planning and asset management.
Despite the recent groundswell of greening products and programs, the United States remains the largest energy consumer in the world. Commercial buildings, which cover 60 billion square feet of space in the country today, account for a significant portion of that consumption, using about 40 percent of total primary energy produced annually. They also consume 15 trillion gallons of water, and produce 136 million tons of construction and demolition debris.
Corporate real estate managers and building occupants, as well as members of the building industry, all have a role to play in reducing energy consumption and promoting sustainable commercial buildings. The most energy-efficient businesses already consume 30 percent less energy than their counterparts. What can organizations do with such savings? Possibilities include improving profit margins, increasing funds for development of new products and services, and enhancing overall corporate value.
In recent years, sharply escalating energy costs have forced many facility managers to redirect money from planned building repairs or improvements. Many have implemented energy-efficiency programs to help re-duce long-term energy consumption and cost, ranging from the installation of automated lighting controls designed to reduce energy output to the installation of more energy-efficient HVAC (heating, ventilation and air-conditioning) equipment.
The commissioning of building HVAC systems, although it is a time-consuming and costly process, has been gaining acceptance among maintenance and engineering managers who find the resulting reduction in energy use, improvements in the building environment and enhancements in system reliability and maintain-ability far outweigh the associated costs. Commissioning addresses deficiencies in systems that have evolved over time since initial installation, which may result in a variety of issues ranging from unnecessarily elevated energy use to compromised indoor air quality. For an existing building, commissioning typically results in energy savings of 15 percent in less than one year.
For organizations unable to make a large up-front investment in replacing or commissioning inefficient building systems, small changes to building temperature settings can have a surprisingly big impact. Lowering the temperature a few degrees during the heating season, for example, can reduce heating costs by 4 per-cent per degree.
The focus on facilities’ energy consumption has undeniably been driven by the impact on the bottom line, as the cost of heating and cooling alone has in many cases doubled in just the last couple of years. However, the issue has created an opportunity for facility managers to gain support, not only for investments in long-term energy cost saving measures, but also for broader-based sustainability initiatives. By looking beyond energy consumption to address the range of issues that affect a building’s environmental footprint, facility managers can affect the long-term viability of the built environment within their organizations.
Sustainability is defined by the World Commission on Environment and Development as “meeting the needs of today without compromising the ability of future generations to meet their own needs.” Until fairly recently, sustainability as it applies to buildings was most often discussed in the context of new construction. The U.S. Green Building Council, the building industry coalition formed in 1993 to promote sustainability of the built environment, initially targeted its energy and environmental rating system at new buildings. This standard, known as Leadership in Energy and Environmental Design for New Construction, or LEED-NC, defines six categories in which credit points are awarded toward certification: sustainable sites; energy and atmosphere; water efficiency; indoor environmental quality; materials and resources; and innovation in design.
New construction techniques and technologies still garner the lion’s share of the spotlight when it comes to media coverage related to building sustainability. But it is the facilities that already exist that represent the vast majority of building energy consumption and environmental impact. In recognition of this fact, the LEED-NC standards eventually led to the development of a similar rating system for existing buildings (LEED-EB), which was released in 2004. This standard adds one additional category to the LEED-NC performance criteria, related to building operation and upgrades.
Despite these indicators, the move to LEED certification for existing buildings is still a relatively nascent market today. Through mid-2007, only 53 buildings had been LEED-EB certified, but another 511 were registered for LEED certification. However a total of 8,000 buildings, both existing and new construction, were registered for certification. Clearly, more and more organizations are recognizing the benefits of implementing sustainable practices.
Green Is Gold
What benefits can organizations expect from pursuing LEED certification for their existing buildings? The LEED-EB process, which allows an organization to measure, document and benchmark its sustainability efforts, makes organizations aware of what their responsibility should be towards sustainability, particularly the energy component. That’s extremely important when you consider that the EPA estimates that if every office building in the U.S. reduced its energy use by 30 percent, the resulting savings would be $30 billion a year.
Because energy represents the largest operational expense for most facilities, an assessment of current energy usage and efficiency is a starting point for many organizations on the road to enhancing building sustainability. The results of such an assessment can help identify a variety of potential programs in both the short and long-term to reduce energy consumption. These programs may range from the installation of less power hungry fluorescent bulbs to the retrofitting of equipment that takes advantage of new technologies to heat or cool facilities more efficiently.
The Energy Policy Act of 2005 promotes adoption of such programs by offering consumers and businesses federal tax credits for purchasing energy efficient appliances and products. Organizations can take advantage of significant rebates from their local utility provider when installing such equipment.
By implementing practices and systems that help reduce energy costs, organizations can also take advantage of tax savings. For example, Energy Star programs under the Energy Policy Act currently enable owners or designers of new or existing commercial buildings to take a tax deduction of up to $1.80 per square foot if they save at least 50 percent of the heating and cooling energy of a building that meets ASHRAE standards for energy-efficient design. Partial deductions can be taken for measures affecting the building envelope, lighting or heating and cooling systems.
For those who have already taken extensive steps to reduce carbon emissions through fossil fuel conservation, carbon trading programs, which assign a dollar value to carbon dioxide emissions, are available in some regions to help curb the growth in greenhouse gases. States such as California have rolled out pro-grams for trading emission credits to promote “carbon neutrality.”
Ultimately, sustainable practices need to be integrated into both the facility management programs that organizations implement on a day-to-day basis, as well as into their long-term capital planning process. Corporate real estate managers today are on the frontlines of this process, and positioned to raise the visibility and acceptance of these practices throughout their organizations.
By evaluating sustainability opportunities and planning recapitalization with sustainability as a priority, corporate real estate managers can be heroes – making improvements that will not only improve the financial value of their real estate portfolio today, but also help to save the planet, one building at a time.
