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Evaluating the ROI in Going ‘Green’

When the environmental movement of this century began to really gain steam a few years ago, many companies decided to “go green” in a variety of ways. While some companies implemented recycling programs to reduce waste, others installed energy saving appliances and re-designed offices to include more environmentally-friendly materials as well as to take better advantage of natural lighting.  The environmental benefits of these actions are readily apparent:  the U.S. Green Building Council reports that on average, “green” buildings experience 30-50 percent reduced energy use, 35 percent reduced carbon emissions, 40 percent reduced water use, and 70 percent reduced solid waste. However, aside from its obviously positive impact on environment and its connection to good corporate citizenship standing, becoming more sustainable can also have a number of other benefits for companies.

For some companies, going green can lead to actual financial rewards. A great example of this is the financial return on investment seen by PNC Bank, one of several organizations that has installed building materials certified to NSF International sustainability standards. A study by two professors at Notre Dame found that PNC Bank locations that were LEED certified experienced higher deposits than non-LEED locations. Similarly, UK retailer Marks and Spencer has also seen significant financial returns by going green. In 2007 they invested £200 million to deliver a sustainability plan, which focused on better use of energy in stores and distribution centers, reducing packaging, and recycling or reusing materials such as hangers. Within the first four years, the company has nearly recouped their initial investment, saving approximately £190 million since implementing its plan.

Perhaps even more important is the impact that a greener business can have on employees. For many businesses, human capital can be the largest expense for the company. People not only want to work for a company they can be proud of, but even more important, they want to work for a company that makes them feel good — and creating a greener business environment can quite literally make employees feel better. For example, using green cleaning products such as those certified to the EPA’s Design for the Environment program can reduce employees’ exposure to toxins and create a healthier office environment, reducing the number of sick days taken.  Additionally, buying sustainable carpet and furniture can help prevent “Sick Building Syndrome” — a condition where office decor, carpeting and furniture releases odors or fumes into the air that can cause illnesses such as upper-respiratory colds, allergies and eye infections.

The cost savings of going green go well beyond a few sick days.  The US Building Council estimates that companies with “green buildings” can save $58 billion of sick time per year. And when employees are in the office, they are more productive. A separate study from the US Building Council estimates that “green buildings” report $180 billion in increased worker productivity annually.

Green buildings not only make employees feel physically better, but they can also improve employee morale.  For those employees who are environmentally conscious, working for a company that invests time and money in making the company more environmentally sustainable is an important retention tool because they know their interests are aligned with their employer’s. PNC found that one of its LEED certified buildings boasted employee retention and satisfaction rates that were 50 percent higher than its traditional facilities.

If you’re considering going green, the best first-step is to take stock of your current processes and identify potential opportunities. For example, if your company is looking to remodel your offices, consider selecting flooring products that are certified to national sustainability assessment standards, such as NSF/ANSI 140 for carpeting, NSF/ANSI 332 for resilient flooring and BIFMA level commercial furniture sustainability standard, and use Forest Stewardship Council (FSC) or Sustainable Forestry Initiative (SFI) certified wood where possible. Look for appliances with ENERGY STAR and WaterSense certifications to help your office reduce energy consumption and water usage. Many companies today are also looking at LEED certification, which provides independent, third-party verification that a building was designed and built using strategies aimed at achieving high performance in key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.

Today going green isn’t just a way to attract new customers but rather a business decision that has real financial implications.  It has been proven to save companies money on energy, natural resources and human capital.  It’s the next step in our ever-evolving business environment that will only continue to gain importance in the years ahead.

Tom Bruursema is general manager of NSF International’s Sustainability Division. NSF International has been testing and certifying products for safety, health and the environment for nearly 70 years. As an independent, public health and safety organization, NSF is committed to protecting and improving human health on a global scale. Look for the NSF Mark on products you purchase. Through its National Center for Sustainability Standards, NSF develops sustainability standards for a wide array of products, developing the first American standard for residential gray water treatment systems. Operating in more than 150 countries, NSF is committed to protecting families worldwide and is a World Health Organization Collaborating Centre for Food and Water Safety and Indoor Environment. In addition, NSF also and certifies organic and gluten free food and personal care products through Quality Assurance International (QAI).

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One thought on “Evaluating the ROI in Going ‘Green’

  1. Tom,

    Really great article with awesome references to going green. This is the type of company I’m looking to create or job I’m looking to attract. Reduce your operating costs and your environmental impacts through water, waste, and energy reductions. I believe you need to get the top dogs behind this concept and the employees will follow. From beginning with behavioral modifications to assessing the budgets of current operations/expenses, I believe a company can significantly reduce their bottom line expenses (even without being LEED certified). Feel free to contact me, as I need a job in October:) Once again thanks for writing an informative article! carriehubbs78@gmail.com

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