The Business Case for Sustainable Real Estate – Part 1, Green Edge LLC

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ellen sinreich

(Ellen Sinreich, green building strategist, attorney and president of Green Edge LLC, is a guest columnist who has written about the dollars and sense of green buildings)

By Ellen Sinreich, President, Green Edge LLC

Whether or not you believe that global warming is real or is a result of human action, it is hard to dispute that it is less risky to take action to reduce green house gases than to do nothing. The ancillary benefits of taking action are numerous: increased efficiency, fresh air and fresh water, reduced waste, pollution and dependence on fossil fuels, to name a few.

Buildings are big contributors to the overall emission of greenhouse gases. In the United States alone, buildings account for:

  • 65% of electricity consumption,
  • 30% of greenhouse gas emissions,
  • 30% of raw materials use, and
  •  30% of waste output
    If we can reduce the need in

buildings for the generation, transmission and consumption of electricity, for the harvesting, transportation and transformation of raw materials into installed finished building products and for the transportation and disposal of waste, the built environment will move a long way on the spectrum toward being a part of the solution.

Many in the real estate industry have begun to take action to increase the sustainability of their buildings. The impetus behind this ever expanding embrace of green buildings goes beyond the statistics above and the motivation these statistics suggest. The tipping point for the real estate industry’s embrace of green has occurred because green is good for business!

Why Go Green?
What is often referred to as the “business case” for green real estate is beginning to be understood, documented and quantified. Intuitively, it makes sense: buildings that use minimal amounts of energy and that have highly efficient and appropriately sized mechanical systems, that feel better to be in, incorporate recycled, rapidly renewable and
regional materials, make the most of sun, wind and storm water patterns, contribute to diversifying natural ecosystems, allow for more open green space and reduced water consumption and minimize their burden on aging, overtaxed municipal water systems are more valuable buildings than they would otherwise be.

The hitch is understanding the cost involved in order to get to this increased bottom line and more valuable, green asset. Value creation can only occur if the cost of green does not overwhelm the benefit derived from green. Because “green building” does not mean any one particular thing and every green building has its own unique green features and therefore its own unique green cost, the cost/benefit analysis of developing or renovating a green building must be made on a case by case basis.

This article was first published in the Real Estate Journal in March 2008 and appears in The Saint Report with the permission of the Real Estate Journal and author, Ellen Sinreich, president of Green Edge LLC, a Green Building consulting/law firm that provides strategic sustainability services to businesses and governmental entities. email web www.greenedgellc phone   212 828 3840  212 828 3840  

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