Green Buildings: More Value Than You Can Imagine

The full story of green buildings is still being discovered. Up to now, the story of green buildings has been described as a costly luxury.  The emphasis to date has been on costs – the costs of green materials, costs of innovative design, costs of meeting LEED (Leadership in Energy and Environmental Design) standards, and so forth.  All of these costs do add up, but these real costs are concretely offset by direct economic benefits.

The Economic Value of Green Buildings

Green buildings have a higher market value because they are in demand, thus commanding higher rents, and operate more cost-effectively.

Lower Costs:  Savings from lower operating and maintenance costs will repay the investment in making the building “green” after a relatively short period of time, according to Gregory Kats.

Higher Income:  Green buildings bring in greater revenues too.  They have 3.5% lower vacancy rates and 13% higher rents than non-green buildings.

The Economic Value for Companies Working in Green Buildings

A recent development is that companies are catching on that working in sustainable buildings is good for their employees and good for their bottom-line. Deloitte Consulting conducted a survey of with companies that had implemented green retrofits. Here are the results:

  • 100% reported increased employee goodwill;
  • 93% reported a greater ability to attract talent;
  • 87% saw improved workforce productivity;
  • 81% saw greater employee retention; and,
  • 75% saw improved employee health (thus fewer sick days).

The Value of Higher Productivity: To be more concrete, every 1% increase in productivity (about 5 minutes per working day) translates to about $650 per employee per year, according to Kats. Thus, a medium-sized business with 1,000 employees could gain $600k-700k per year, while a large business with 5,000 employees could gain $3-3.5 million.

How Higher Productivity is Achieved: Green buildings provide higher air quality, light quality, and greater thermal comfort.  This improves people’s physiology as well as cognitive and social functioning.  Thus, green buildings not only cuts the costs related to “sick” buildings (e.g. illness, discomfort, stress, absenteeism, etc.), but they also grow the top line by increasing productivity.  Lighting improvements alone can increase productivity by 3.2%, according to Carnegie Mellon University.

Just Beginning to Measure the Full Value of Green Buildings

The new focus on measuring the economic benefits of green buildings to companies and employees augments the existing business case of operational cost savings. Even as we strive to more accurately quantify increased worker productivity, there is enough evidence to suggest that green buildings add value for workers, companies, and the environment.


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