Profitability and productivity, the language of green
GBCA’s Romilly Madew explains why corporate boards need to sit up and pay attention to the quantifiable increment in productivity in green buildings.
The language we use when talking about sustainability in the built environment is evolving.
It’s true that we still talk about how designing, constructing and operating our buildings more sustainably can help save the environment – and rightly so.
The Value of Green Star (2013) has found that, on average, Green Star-certified buildings produce 62 percent fewer greenhouse gas emissions and use 66 percent less electricity than average Australian buildings. They also use 51 percent less potable water than average buildings and are recycling 96 percent of their construction demolition waste, compared with 58 percent for average new construction projects.
These days, however, we are also talking about how green buildings can improve the productivity, health and well-being of the people who live and work in them. And this can help building owners achieve bigger profits too.
Where once productivity was a sideline benefit of sustainable building design, today it’s a primary driver for corporate decision-making around where companies place their people.
But why the change?
Well, first, the evidence doesn’t lie. Our industry is finding better ways to gather productivity data – and to talk to others about what it means for business.
The GPT Group’s head office in Sydney, with its six-Star Green Star – Office Interiors v1.1 rating, is a great example. GPT’s project team combined innovative design, technology and a behavioural change program to reduce the size of its tenancy from five floors down to three – immediately slashing the overheads related to occupying and operating the space.
What’s more, the building has become a ‘productivity powerhouse’. Occupant comfort has increased significantly, with the post-occupancy study completed just after the refurbishment revealing a significant jump in employees’ comfort and satisfaction in their new workplace. In fact, employees reported feeling 15 percent more productive in their new office.
Other studies undertaken on Green Star-rated buildings around Australia are just as impressive. Workers at CH2 in Melbourne reported a 10.8 percent productivity increase after moving into their brand new Green Star office, while a 15 percent increase in perceived productivity was achieved after Macquarie Bank staff moved into One Shelley Street in Sydney. At Trevor Pearcey House in Canberra, a green retrofit halved energy use, saving around $20,000 a year – with a 6.2 percent improvement in productivity, which has been estimated to equate to around $300,000 a year in salary costs.
The business case continues to build
International evidence is just as enlightening. The World Green Building Council’s ‘Business Case for Green Building (2013)’ report cites compelling evidence of the links between green design and productivity. For instance, simple measures to improve workplace ventilation have been found to boost productivity by up to 11 percent, while a whopping 23 percent productivity improvement can be achieved through good lighting.
And the evidence doesn’t stop there. McGraw-Hill’s ‘The Drive Towards Healthier Buildings (2014)’ report finds that more than 1200 studies draw a clear link between building design and physical and mental well-being. Burnout, low morale, depression and illness – all these lead to reduced productivity and high employee turnover, and all of them can be addressed through green building design and operations.
In the US, the Gallup-Healthways Well-Being Index (2015) recently surveyed 94,000 workers across 14 major occupation types. More than three-quarters of those workers indicated that they live with a chronic health condition – depression, asthma and obesity were just three examples. The annual costs related to lost productivity from these chronic health conditions were estimated to be US$84 billion.
Imagine if the decision-makers at those employees’ companies understood how green building upgrades could help their workers alleviate or avoid some of these health conditions? What if they knew that green upgrades could drastically reduce the amount of money they lose each year through reduced productivity and absenteeism? Could they afford not to do something about it?
Up to 85 percent of any company’s operating budget is spent on salaries and benefits. The Australian Human Resources Institute puts the cost of replacing a skilled worker at up to 150 percent of their annual salary. Most workplaces can expect to lose around 25 percent of their staff year-on-year – so acting on any opportunity to reduce turnover makes good business sense.
Few ideas are ever truly new, and these days business success is often not about doing something first, but about recognising when others are onto a good thing – and getting on board. Businesses are always looking for ways to increase profit margins and reduce overheads. And green buildings can do both.
The sustainable building industry is one of the most technologically advanced in the world and it’s easy to talk about our successes in technical terms. But we need to remember to talk to business about green building in terms they understand. Terms that will capture their attention. Nothing makes a board move faster than an opportunity to boost the bottom line!
Facility managers have a central role to play in measuring, recording, interpreting and reporting on the positive impacts of green upgrades. No business can reasonably say ‘no thank you’ to a 66 percent saving on energy costs.
But a commitment to undertake and communicate the results of pre- and post-occupancy studies can take us further by proving to businesses what our industry already knows – that green buildings are good for the planet, and they are good for people, productivity and profitability too.
Romilly Madew is chief executive officer of Green Building Council of Australia.