Retail Observer

RETAILOBSERVER.COM APRIL 2015 46 Green Building Earth Day Tribute HAS GREEN BUILDING HIT THE WALL FOR RETAILERS? G reen building activity has peaked in the U.S. at about 4,500- 5,000 projects per year, as measured by newly registered LEED ® , Green Globes ® and Living Building Challenge projects, representing less than 0.1% of the total U.S. commercial building stock of 5 million buildings. If one assumes that the U.S. adds about 1% to the building stock (by number) each year, it's clear that efforts to green the building stock are falling behind. Looked at another way, despite all of its manifest success, the U.S. Green Building Council's LEED system, introduced in 2000, has certified fewer than 0.5% of the U.S. commercial buildings in 15 years of hard work (about 25,000 buildings) and less than 3% of the 85 billion sq. ft. of commercial buildings (measured by area). There is NO WAY that the current system of building certification can reach the organization's stated objective of transforming the built environment. In some ways, green building rating systems have made a valuable contribution in improving the quality of many building materials (think healthier paints, carpets, interior furniture, etc.), in promoting energy efficiency in new commercial buildings, and in changing the conversation around what constitutes sustainable building design and operations. A key question is: WHY hasn't the current system had more marketplace success? Where LEED is most successful: by the numbers, in larger commercial offices in mostly the downtown areas of large cities; in corporate real estate; in "Policy Driven" markets such as government, and in "high-profile" projects of various kinds (think professional sports stadiums, etc.) What's been left out? Most retail operators, small offices (80% of commercial buildings in the U.S. are less than 100,000 sq. ft. in area; 50% are less than 50,000 sq. ft.); K12 schools, most university, healthcare facilities, and the like. Collectively, these represent most of the U.S. building stock. For a retailer, the question is: does the public care? I maintain that a green building certification can help a retailer stand out, particularly to the Millennial generation, both as customers and as employees. Think back a few decades to the Body Shop, Benetton, etc., and fast forward to Patagonia, Whole Foods, etc., in today's world. One has to ask WHY? My answer is simple: perceived benefits do not measure up to actual costs. My own experience as a LEED consultant, as a speaker on green building for the past ten years and as the author of 13 books in the field confirms how difficult it is to sell green building certification to the person who "signs the front of the check." Perceived benefits are slight, in most cases: (1) savings in energy efficiency that would be achieved in most cases with just an Energy Star label (but without a green building certification); (2) claims for improved employee health and productivity backed by weak empirical evidence; (3) better PR and marketing benefits for retailers and developers, etc. However, the associated costs are real: just the required building commissioning services in LEED can add $0.50 to $1.00/sq.ft. to the cost of a building, typically a minimum of $15,000 even for a small retail store. Add in the consulting costs, which can easily run into six figures for larger projects and one begins to understand why for most retail owners and developers, pursuing green building certification, unless mandated by policy or driven by government incentives, is something for which they are increasingly saying deciding, "no thanks." What do we need to do? Cut costs and improve benefits, so that we can bring "the other 99%" of buildings to the table, to upgrade the sustainability of their design and operations, cut operating costs and enhance the retail brand. The math is simple: saving 5% in 50% of buildings trumps saving 50% in 0.5%, by a factor of 10. Jerry Yudelson is a professional engineer and a widely published author of 13 books on green building and a green building and sustainability consultant. He is president of the Green Building Initiative, a national nonprofit based in Portland, Oregon. www.thegbi.org. (Exclusive to The Retail Observer, April 2015) RO

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