LEED and ROI

While LEED is not for everyone, nor is it likely the “best” high performance building approach, it would appear that ROI can be significant for this and similar approachs.

The below is from –  Series: Green Corporate Climate, Source: http://www.facilitiesnet.com – via http://www.4clicks.com

the-roi-of-leed-ci

LEED For Commercial Interiors Can Result In Productivity Gains, Energy Savings

By Rod Vickroy and Rob Moylan

Green buildings have long been called high-performance buildings in Europe and in segments of the U.S. facilities market. The idea is that, while environmental responsibility is noble, sustainable design also should support better human comfort and business results.

Experience — and related research — bears out this thinking. The U.S. Green Building Council’s LEED rating system, for example, is widely seen as a way to improve a building’s environmental profile and energy use. Yet research indicates that it improves workplace effectiveness and return on investment (ROI). A 2009 Michigan State study, Life Cycle Cost Analysis of Occupant Well-being and Productivity in LEED Offices, found that groups moving to LEED office buildings missed less work and put in almost 39 hours more per person annually. According to the study, the total bottom-line benefits from gains related to fewer allergic reactions and reduced stress. The productivity boost ranged from $69,601 to more than $250,000 per year, the study showed.

Yet there are even greater returns. Today, leading companies and institutions are using LEED for Commercial Interiors (LEED-CI) — which certifies the sustainability of tenant improvements and interior renovations — as an opportunity to transform their business cultures and even enhance their brands. Add to that gains in energy efficiency and the market value of a space, and it becomes hard to imagine not building green.

The key to linking LEED to ROI and other valuable measures of organizational effectiveness is to plan early and strategically. The experience of several leading office tenants across the country demonstrates how implementing a LEED-CI-based plan can create measurable value through green interiors. What’s more, the following six tactical solutions are surprisingly achievable and economical when LEED-CI is viewed as integral to project planning rather than as an “add-on” to interiors projects (see “Debunking LEED-CI Myths on page 28). The examples show how these organizations thought performance could be improved, why they chose LEED-CI as part of the answer, and what it has delivered.

1. Corporate brand performance. Viewed as critical to competitiveness, branding has practically become its own industry in recent years. For many organizations, environmental stewardship is seen as central to brand identity: It’s the right thing to do, for their own people and society at large. So a workplace build-out to LEED standards simply reinforces these core values.

The power plant engineering firm Sargent & Lundy saw a 2008 relocation of their Phoenix regional office as a way to symbolize their expertise and forward-thinking attitude on global energy issues. Not surprisingly, the LEED-CI Silver build-out features energy-efficient lighting and systems. But more than that, the 14,000-square-foot open environment appears collaborative and interactive, reflecting the firm’s consulting approach. Wall-free clusters of sun-drenched workstations with mobile components encourage flexibility and communication, while designated “quiet rooms” allow privacy behind closed doors. Glass, light-toned wood and stone give tactile evidence of Sargent & Lundy’s green streak.

Similarly, health care software developer Burgess Group, based in Alexandria, Va., saw LEED-CI as another way to reinforce its image as a large, stable company — both for employees and for customers. As in the case of Sargent & Lundy, corporate goals intimately connected to the company’s brand drove project decisions as much as energy efficiency or workplace comfort. The result is a statement to the outside world and to employees that resonates with the tenant’s identity and mission.

2. Human performance. Among the benefits of LEED cited in studies like the Michigan State report are direct gains in overall health for office workers. These improvements come from better indoor air quality (IAQ), increased daylighting, and other changes seen to enhance morale or reduce stress. The bottom line: Happier, healthier, more relaxed employees tend to produce better work.

This thinking informed the planning of a 68,000-square-foot headquarters for an office furniture manufacturer. The company chose to renovate its 100-year-old former window sash factory, reaffirming its commitment to the local community and business line in the process. Using exposed brick and timber with new interior construction, the company created a clean, contemporary look in flexible and open loft-like spaces. The effect on employees working in the renovated space, who report gains in output and work enjoyment, quickly validated the approach. The facility, targeting LEED-CI Silver, was designed to be “open, productive and approachable,” according to executives.

The headquarters of Burgess Group (targeting Gold certification) was installed in a well-located new building with a green roof and bicycle facilities. Glass-walled offices and open workstations allow daylight deep inside office areas. Recycled materials, low-flow fixtures and GreenGuard-certified finishes are often touted by employees of this health care software developer. Beyond pride of place, Burgess Group workers are now more effective and efficient, says the company.

3. Organizational performance. By exploiting a LEED-CI renovation as a means for strategically reconfiguring the workplace, savvy occupants have improved organizational functioning, too. In this case, the bottom-line gains go beyond productivity to measures of work satisfaction such as reduced employee turnover and improved recruitment. Anecdotal and measurable improvements to organizational effectiveness include increased interaction, reduced e-mail volume, and shorter product development cycles.

For a Microsoft sales office in Chevy Chase, Md., LEED-CI strategies were integral to designing a space that would entice road warriors to spend more time with colleagues in the home office. The interiors needed a timeless aesthetic appeal that would suit a broad demographic spectrum, from retired generals to recent college grads. Company executives say the LEED-CI features — and the label itself — have helped galvanize the team.

One furniture manufacturer’s workplace offers similar conclusions. The company’s transparency and openness is reflected in open perimeter areas, sunlit atriums and light wells, and even a glass-enclosed boardroom. Employees — called “members” — enjoy casual meeting areas and a café during the workday.

4. Cultural performance. The precepts of green building have been shown to support such intangibles as customer relations, internal camaraderie and personal work satisfaction. The Michigan State study shows that IAQ, daylighting and views to the outdoors correlate with the highest post-move increases in employee satisfaction.

The law firm Bowman and Brooke took advantage of this cultural aspect in creating its Minneapolis headquarters. First, the firm takes pride in not seeming like a typical buttoned-down litigator, and it saw LEED-CI certification as a chance to be the first of its kind to differentiate from competitors. Second, the firm’s directors wanted a fresh, bright feel, not the dark, wood-paneled foxholes so common in the legal field. Third, LEED-CI would be another reminder that Bowman and Brooke does what’s right for their clients, employees and community. The resulting renovation — with its three-story open stair and innovative materials — ties into the firm’s brand identity while also supporting its personality and cultural uniqueness.

5. Energy performance. Another significant and highly tangible performance gain for LEED-CI projects is reduced utility costs. Energy savings can be reinvested immediately into the business, and the reduced carbon footprint benefits the community and environment as a whole. The power plant designers at Sargent & Lundy were especially motivated to showcase energy-saving technologies. From simple ideas such as passive solar daylighting integration to “seamless electronic interfacing with staff and resources” at their Chicago headquarters, which cuts travel expense and waste, the design spared few energy-saving ideas.

Similarly, construction and real estate development firm The Christman Co. in Lansing, Mich., transformed a former power plant into an energy-efficient headquarters, earning dual-Platinum LEED certification with CI and LEED for Core and Shell (LEED-CS). The building beats minimum requirements for energy efficiency significantly, cutting carbon dioxide emissions. A T5 fluorescent lighting system on occupancy sensors and daylight-regulated dimming are important elements of the energy- efficient design. According to Christman, a Web-based building management system tracks power use at the sub-tenant level to encourage conservation, but even the power is green: Every kilowatt-hour of electricity for the headquarters is offset by renewable wind energy certificates.

6. Facility performance. Add it all up, and the gains that accrue to the brand, to individual and collective work, and to operating costs speak to the multifaceted power of great facilities. The workplace is a platform for serving business needs on a daily basis, and LEED-CI makes it a stronger and more agile infrastructure. Leading organizations are jumping on this opportunity, including the charitable group Easter Seals for its low-cost, LEED-CI Silver headquarters in Chicago and the consultancy Deloitte for the firm’s global “workplace of the future” project.

The Deloitte office in San Diego encapsulates how LEED-CI will shape facilities as the United States climbs out of a recession.

Recognizing the need to balance cost and effectiveness, the firm targeted low to moderate build-out costs, quick turnaround times, and LEED-CI ratings as key components of their facilities strategy. The result combines space layouts using “neighborhood planning” with more open-systems furniture and more natural light to produce gains in productivity and employee wellness. LEED-CI, as it turns out, is a good model and a neutral checklist for developing progressive workplace criteria.

There’s one more thread connecting many of these case studies where LEED-CI led to so many performance rewards: Most came about as the result of a move. Clearly, there is no better time to reinforce one’s brand and revamp organizational performance goals than when the company is fitting out a new space. That’s the time to ask big questions and to remember one overriding idea that links LEED and business goals — that organizations are valuable because of their people, and LEED-CI helps make the most of who they are.

Rod Vickroy, IIDA, LEED AP is a principal and design director for Chicago’s workplace studio at SmithGroup. Rob Moylan, IIDA, LEED AP, Associate AIA, serves as one of SmithGroup’s sustainable design leaders specializing in commercial interiors. Vickroy and Moylan participate in the firm’s collaborative workplace practice. The firm specializes in the workplace, health, learning, and science and technology markets.

LEED Certified Buildings Not Performing

There is nothing surprising about this article.  Many LEED / Green / Sustainability initiatives will fail due to the following:

  1. Critical design stage information relative to specification of building elements is currently lost during design / bid stages ( and other phases).
  2. Above causes buildings to perform lower than design range due to improper / ineffective maintenance, repair, replacement (O&M) practices.
  3. It is possible to capture this data and create lifecycle building cost models, and associate O&M policies/procedures, as well as project and update associate costs today, at a fraction of the cost of developing the same later in the building life cycle.
  4. Yes the above could be accomplished with most FM Software technologies… only if however, they had customized, robust cost models, and standard reference cost data fully integrated within them … however they do not.
Some Buildings Not Living Up to Green Label

Published: Monday, 31 Aug 2009 | 8:37 AM ET
By: Mireya Navarro

 The Federal Building in downtown Youngstown, Ohio, features an extensive use of natural light to illuminate offices and a white roof to reflect heat.

 It has LEED certification, the country’s most recognized seal of approval for green buildings.

 But the building is hardly a model of energy efficiency. According to an environmental assessment last year, it did not score high enough to qualify for the Energy Star label granted by the Environmental Protection Agency, which ranks buildings after looking at a year’s worth of utility bills.

 The building’s cooling system, a major gas guzzler, was one culprit. Another was its design: to get its LEED label, it racked up points for things like native landscaping rather than structural energy-saving features, according to a study by the General Services Administration, which owns the building.

Builders covet LEED certification — it stands for Leadership in Energy and Environmental Design — as a way to gain tax credits, attract tenants, charge premium rents and project an image of environmental responsibility. But the gap between design and construction, which LEED certifies, and how some buildings actually perform led the program last week to announce that it would begin collecting information about energy use from all the buildings it certifies.

Buildings would provide the information voluntarily, said officials with the United States Green Building Council, the nonprofit organization that administers the LEED program, and the data would be kept confidential. But starting this year, the program also is requiring all newly constructed buildings to provide energy and water bills for the first five years of operation as a condition for certification. The label could be rescinded if the data is not produced, the officials said.

The council’s own research suggests that a quarter of the new buildings that have been certified do not save as much energy as their designs predicted and that most do not track energy consumption once in use. And the program has been under attack from architects, engineers and energy experts who argue that because building performance is not tracked, the certification may be falling short in reducing emissions tied to global warming.

Some experts have contended that the seal should be withheld until a building proves itself energy efficient, which is the cornerstone of what makes a building green, and that energy-use data from every rated building should be made public.

“The plaque should be installed with removable screws,” said Henry Gifford, an energy consultant in New York City. “Once the plaque is glued on, there’s no incentive to do better.”

Scot Horst, the council’s senior vice president for its certification program, said that any changes in the process would have to be made by consensus to ensure that the building industry would comply. Already, some construction lawyers have said that owners might face additional risk of lawsuits if buildings are found to underperform.

The council is planning several meetings with builders, owners, developers and others around the country in September and October to promote its building performance initiative, which could lead to further revisions in the rating program to ensure buildings reduce energy consumption as much as they can.

Mr. Horst called the issue of performance one of his “absolute priorities.”

“If you’re not reducing carbon, you’re not doing your job,” he said.

The LEED label, developed by the council in 1998 to have a third-party verification of a building’s environmental soundness, certifies new homes, schools and other buildings, as well as existing ones. (The certification for existing buildings is the only one currently tied to energy performance.) Its oldest and largest program, in terms of square footage, is the certification of new commercial and institutional buildings, with 1,946 projects already certified and 15,000 more that have applied for certification. Many other buildings include environmentally friendly features and advertise themselves as “green” but do not seek the LEED label.

The program uses a point system based on a broad checklist of features and buildings can be certified by accumulating points on not just efficient energy use but also water conservation, proximity to public transportation, indoor air quality and use of environment-friendly materials.

Council officials say that these other categories also help reduce energy use and emissions. And many architects and engineers praise the comprehensiveness of the label. But the wide scope of the program, many in the industry point out, also means that buildings have been able to get certified by accumulating most of their points through features like bamboo flooring, while paying little attention to optimizing energy use.

Another problem is that the certification relies on energy models to predict how much energy a planned building will use, but council officials and many experts agree that such models are inexact. Once a building opens, it may use more energy than was predicted by the design. And how a building is used — how many occupants it has, for example — affects its energy consumption.

“If the occupants don’t turn off the lights, the building doesn’t do as well as expected,” said Mark Frankel, technical director for the New Buildings Institute, which promotes improved energy performance in new commercial construction and conducted the research commissioned by the Green Building Council on LEED buildings.

“In the real world, the mechanical systems may have problems, so that increases energy use,” Mr. Frankel said, adding that keeping track of energy use is rarely a priority for owners.

LEED energy standards have grown more stringent over the years, and construction like the Youngstown federal building, built in 2002, would not be certified under the current version of the program, the G.S.A. study noted. The LEED standard goes through periodic revisions, and this year, the minimum energy requirements needed for the basic LEED certification for new buildings were raised.

But in its own study last year of 121 new buildings certified through 2006, the Green Building Council found that more than half — 53 percent — did not qualify for the Energy Star label and 15 percent scored below 30 in that program, meaning they used more energy per square foot than at least 70 percent of comparable buildings in the existing national stock.

Anecdotal information from follow-up research to that study indicated that the best-performing buildings had limited window areas and tended to be smaller.

Sometimes, a building’s inhabitants are the first to notice energy-wasting features.

At the Octagon, a LEED-certified residential rental building on Roosevelt Island in New York City, residents like Alan Siegal say that obvious energy savers, like motion sensors in the hallway, are hard to miss.

But Mr. Siegal, 59, a customs service broker, said his three-bedroom apartment has floor-to-ceiling glass windows that offer great views but also strong drafts. 

“If there’s a lot of glass, is that going to be efficient?” he asked.

Bruce Becker, whose company Becker and Becker Associates developed and owns the Octagon, said that the windows offer day lighting but conceded that there were plenty of opportunities to become more energy efficient. He said the Octagon would soon switch to a fuel cell system for heat and electricity, partly to cut energy costs at a time of a depressed rental market.

Mr. Horst, the LEED executive, said that LEED may eventually move toward the E.P.A.’s Energy Star model, which attests to energy efficiency only for the year the label was given, similar to restaurant ratings.

“Ultimately, where we want to be is, once you’re performing at a certain level, you continue to be recertified,” Mr. Horst said.