While public sector policies for development are the guiding force in private sector practices, not all municipalities have fully embraced sustainable, responsible development. With growing public pressures from environmental and social organizations the private sector has the opportunity to become more proactive in addressing these emerging challenges.
In order to effectively address these challenges it is necessary for developers, businesses and organizations to overcome the perceived obstacles of sustainable practices, which include (and are not limited to): concerned about return on investment, lack of understanding benefits, lack of service providers, a belief that these practices are simply too difficult, too multi-disciplinary, take too much time, and often have a lack of shareholder support. Many of these perceived obstacles exist due to a lack about education of sustainability practices and how they can enhance an entity’s social, economic and environmental performance.
The built environment has a tremendous impact on the degradation of our environment and accounts for 38 percent of the U.S. carbon dioxide emissions, 71 percent of electricity usage and 40 percent of total energy use (Department of Energy. 2006 DOW Building Energy Data Book). In addition, buildings consume substantial portions of the country’s water and produce large quantities of waste through construction, demolition and remodeling processes. By adopting more holistic, responsible and sustainable practices the built environment can become more ecologically responsible and still contribute positively to owners’ and developers’ economic bottom-line.
Although many companies have begun to implement various energy saving mechanisms, recycled materials, rain/waste water recycling, etc - the term ‘green’ building has often been applied too loosely, which contributes to the growing phenomenon of “greenwashing”. This is a term that is used to describe the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service. To avoid this misrepresentation, and begin to create a truly responsible public image, it is necessary for entities to address the issue holistically and realize how these strategies have many positive economic benefits.
Traditionally, the success of a development is based upon minimizing development costs while maximizing income. The cost of green construction has often created fears that the added costs would reduce the overall profitability of the development. However, we are beginning to realize that green developments are becoming increasingly attractive in the marketplace. The main attractiveness of green development is their energy efficiency, especially as traditional energy sources continue to rise in price. From a social standpoint, the enhanced indoor environment has demonstrated impacts on reducing absenteeism and increasing worker productivity. By going green, private sector entities can begin to differentiate themselves within the marketplace and provide attractive alternatives to traditional buildings and developments. Soon, this “differentiation” will consist of development companies recognized for their progressive, responsible stances on adding to the built environment, and the “other” developers. By maintaining a higher level of social and ecological responsibility it will increase the attractiveness to investors and shareholders and can contribute positively to long-term financial stability and the natural and social environments. It is important for developers, businesses and other private entities to understand how different performance outcomes related to sustainability can effect the various elements of a business plan including: financial bottom-line, image within the community, creating a competitive advantage and enhancing working relationships with governmental entities. The diagram below identifies specific performance outcomes of green, responsible building and illustrates their impact on the different elements identified within the business plan.
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