How LEED Certification Can Save Your Organization Money

LEED (Leadership in Energy and Environmental Design) certification was developed to foster the development and construction of green buildings. An organization can achieve a LEED rating by adhering to guidelines outlined and advocated by U.S. Green Building Council (USGBC). These guidelines are used to assess a facility’s design and construction in terms of energy efficiency, water usage, air quality, and choice of building materials. LEED-certified facilities achieve high sustainability and eco-friendliness, and are awarded certification on four level: LEED certified (40-49 points), LEED Silver (50-59 points), LEED Gold (60-79 points), and LEED Platinum (80 points or more).

Certainly, all of the environmental elements that comprise LEED certification are good reasons to comply. But there are other advantages to developing a LEED-certified building besides adopting a cleaner, more energy conscious footprint—and they all can have a significant impact on your company’s level of productivity and ROI. In fact, owners of green buildings reported that their ROI improved by 19.2% on average for existing green building projects and 9.9% on average for new projects.

“There are many tangible, revenue-driven benefits of designing a LEED-certified building,” says Gautami Palanki, director of Arc Skoru, a company that offers businesses a technology platform to measure LEED-compliancy. “When a building is operating efficiently, companies can realize lower operating costs, higher productivity, and be recognized as more attractive workplace to employees and investors.

Greater Energy Efficiency = Lower Utility Bills & Operating Costs

By incorporating elements like LED lighting and energy-efficient heating and cooling components and you can realize a significant reduction in energy costs. LEED-certified buildings consume 25 percent less energy and 11 percent less water than non-LEED building, according to the U.S. Department of Energy. LEED buildings also report almost 20 percent lower maintenance costs than typical commercial buildings, and green building retrofit projects are typically able to decrease operation costs by almost 10 percent in just one year.

For example, in a study of financial institutions, annual utilities cost per employee in LEED-certified facilities was $675.26 lower than in non-LEED facilities. In another case study, one major hotel project spent an estimated $184,000 for building energy efficiency improvements and has realized a yearly savings of $58,035, yielding a 3.17 year break-even point.

Tax Breaks, Incentives & Higher Rent

Also worth noting is that LEED-certified buildings qualify for tax benefits and incentives from states and municipalities across the country: tax credits, grants, expedited building permits and reductions/waivers in fees, to name a few. Palanki notes that in some areas of the country where energy audits are required—like Seattle—LEED-certification exempts the building from the audit—another money saver. Not to mention, LEED buildings retain higher property values, according to the USGBC.

Employee Retention, Health Benefits and Productivity

According to a new survey from the USGBC, more than 90 percent of respondents in LEED-certified green buildings say they are satisfied on the job and 79 percent say they would choose a job in a LEED-certified building over and non-LEED building.

“We discovered that today’s employees are more motivated than ever to work for a company that promotes not just a higher standard of living for its employees, but also of its community,” says Mahesh Ramanujam, president and CEO, USGBC. “In today’s highly competitive job market, if companies want to attract and retain highly skilled employees, they must demonstrate a commitment to environmental, human, and economic sustainability.

In addition to attracting and retaining quality employees, which saves on recruiting and training costs, LEED buildings are linked to improved productivity, health and wellness. According to the USGBC survey, 85 percent of employees in LEED-certified buildings say their access to quality outdoor vies and natural sunlight boost their overall productivity and happiness, and 80 percent say the enhanced air quality improves their physical health and comfort.

Better health usually equates to fewer absences and lower health insurance premiums. For example, research indicates that better lighting and a 27 percent reduction in the incidence of headaches, which accounts for 0.7 percent of the overall cost of employee health insurance. This equals approximately $70 per employee annually.

Competitive Edge

LEED-certified buildings with lower operating costs and better indoor environmental quality are more attractive to a growing group of corporate, public, and individual buyers, according to Palanki.

The reputation of operating an energy efficient, environmentally conscious facility trickles down to your customers. In a Nielsen survey on corporate social responsibility , more than half of respondents said they are willing to pay extra for products and services produced or offered from companies that are committed to positive social and environmental impact. This directly impacts your company’s revenue.

For example, in a report issued by the USGBC, A Notre Dame study of PNC Bank’s LEED-certified branches found that the LEED-certified branches brought in $3M more in customer deposits and originated 25.5 more consumer loans annually.

Measurable Differences

It’s one thing to commit to LEED and wait for the cost savings to kick in; it’s another to be able to see the differences happening on a daily basis. Enter Arc, a digital platform from Arc Skoru that allows businesses to track and measure performance, make improvements and benchmark against other projects. Arc is a complement to LEED green building rating systems, standards, protocols and guidelines and allows buildings and spaces to compare performance metrics and connect those metrics to green building strategies. Arc enables incremental improvements and can put a project on track for LEED. It helps everyone in the company access the building’s performance in terms of energy savings, human experience and other facets. “After you have implemented technology for LEED certification, it’s important to be able to quantify and identify which technologies are working for your building and which are not,” says Palanki. “This information can be used to make educated decisions about the types of technologies that can enhance and boost a building’s LEED score, which translates to greater ROI.”