In commercial real estate, “green building” can mean a variety of things. Some organizations use the term to set design standards for energy use and conservation in their buildings. Others focus on setting sustainability targets and building life cycle performance for their portfolio. Many integrate the definition into larger corporate social responsibility and Environmental, Social And Governance (ESG) initiatives. By being specific about your organization’s green building definition, you can clarify your environmental goals and pursue strategies that will help you achieve them.
Why Develop Your Own Green Building Definition?
Establishing and maintaining green building standards costs time and money, so it needs to be as efficient as possible. If not, disconnects can arise between green building objectives, business drivers, and long term capital investment strategies. Organizations should deploy a strategy that will help them meet their requirements for their green building definition in a meaningful and realistic way.
If you are a firm looking to develop or update your green building definition, what should you keep in mind? We list four considerations below.
1. Focus on Financial Objectives and Limitations
Whether you are a major real estate investment firm or a large government entity, a focus on financial performance is key when considering your green building definition. This alignment will help ensure that you have the financial capacity to meet your goals. Consider what you can reasonably achieve with your existing budget, and prioritize the most important goals and projects.
2. Align Green Building Definitions with Organizational Objectives
A green building definition should also align with the organization’s core values and sustainability objectives. For example, the majority of your capital should not be allocated towards sourcing sustainable building materials if a core mandate is to promote occupant health and wellness first. Instead, your green building definition should focus on indoor air quality, water use and space design. You could include the occupants’ thermal comfort (which is directly tied to both the building’s HVAC & it’s exterior glazing design) and interior lighting layout.
3. Consider Organizational Resources and Capacity
When crafting a green building definition, consider resources you have available to meet it. This goes beyond budget; a comprehensive definition and goals can’t be met without adequate staffing, technology and expertise. Understand the scale of what you can reasonably do, and remember that you can always adjust your definition over time. Flexibility can help firms actually meet their green building definitions and targets. “Going big” right away can lead to underperformance over the long term.
I would say creativity is vital as well. There are many ways to improve your green building without making significant architectural changes. Company and employee incentives can also make a difference, such as encouraging employees to bike, providing preferred parking spots to efficient vehicles and establishing recycling and waste stream protocols. The list is extensive, as you can imagine.
4. Understand Whether Certifications are Required
When developing a green building definition and strategy, many firms immediately pursue certification with a third-party green building rating system. While pursuing green certifications is a good idea and a great standard to set, many underestimate the resources involved in actually achieving and maintaining the certification. Because these certification systems often focus on every aspect of a building’s footprint, firms pursuing certification need to understand that it is a comprehensive (and expensive) investment that will impact all operating areas. With green building certification, firms cannot target specific environmental features. For example, energy use requires the same capital investment as waste reduction.
The “green” investments pay for themselves over time. If your company doesn’t have the necessary funds to accomplish all your goals at once, it might be wise to use a segmented approach and allow each investment to create a return before proceeding with the next.
That being said, some organizations may require green building certifications due to stakeholder and tenant obligations. If so, they should refer to the first strategy above and align their green building definitions with larger financial objectives.
If a green certification is not a reasonable target for your organization, consider what you can do. Then, use that information (combined with the strategies above) to determine what being green means to you. Your green building definition will help you prioritize environmental tasks and goals that your organization can actually accomplish.
Being “green” involves significant financial capacity and resources over time. As such, organizations that are able to develop a strategy reflective of their core mandates have a better chance of meeting green standards and financial objectives over the long term.
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