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NeoCon Green Pages: Give the Customer What They Want, The Green Answer

How green design answers coporate demands

Peter Slatin -- Interior Design, 6/9/2008 12:00:00 AM

With green design, green technology, and sustainable lifestyle products—not to mention green marketing—all around us, it's worthwhile to recall a time not two decades ago when sustainability was a fringe effort, a frontier trading post with few visitors.

Now, however, the fringe is urban fabric. Designers of all stripes have been thought leaders in this process, pointing the way with innovative thinking and problem-solving. But they had significant help—the best kind of help a designer can get—clients with the foresight and fortitude to seek, even demand, new ways of thinking about their working environment and its effects.

On the commercial scale, those clients in the early 1990s were almost exclusively nonprofits, such as the Audubon Society and the Natural Resources Defense Council, whose mission resonates with the message of environmentally sustainable design. They were followed in relatively short order by government entities following the same plumb line as the NGOs. They all seized the opportunity to explain their missions through the message of design. But at that time, there were enough unknowns about sustainable methods and materials to make the decision to go green a daring one. Although today's green onslaught may seem the result of an inexorable march toward sanity about sustainability, it is much more the outcome of dedicated professionals and advocates pushing ahead step by step to create the state of awareness—let's not yet call it consciousness—that exists today.

Now the focus has shifted. The non-profits and government bodies are still pro-active advocates of sustainability, but they have been displaced as thought leaders—and as clients—by the corporate world.

While it may have seemed easy at first blush to dismiss corporate America's move toward sustainable practices as a mere marketing ploy, it is far less so today. That's because, for whatever reason different companies began to explore green ideas—and marketing was certainly one of those prime motivators—there are several factors that have rendered that explanation virtually obsolete. First, to refer to mere marketing is to diminish its very real importance in the corporate scheme. For companies worth billions of dollars, brand dissemination and protection is an enormous priority. Applying green precepts to store design goes a long way toward winning points among skeptics. For giant multinationals, marketing is identity, and identity is wrapped up tight in business practices and public stance.

With that understanding, the basic question when working with corporate clients on their sustainability initiatives is, What do they want?

In essence, they want to achieve three elements of a strategy, even if those elements may seem (or be) incompatible with one another.

Companies want to be distinctive on all fronts, to customers, employees, investors, and even suppliers
Companies want to reduce their operating costs and their real–estate exposure
Companies want to attract and retain top-quality workers

Starting with that last item first, it is widely understood that - despite growing unemployment in the current recession - the U.S. is entering a period in which the labor pool will shrink as baby boomers retire over the next two decades. To attract the most qualified workers at a time when self-employment and entrepreneurial creativity are also capturing talented professionals, employers need to be able to offer more than just a competitive salary and bonus package. As health-care benefits get stripped down, a workplace that is not only attractive but healthful will be key to the attraction and retention game.

The company that provides such a workplace can meet those other two big needs. First, it will find enhanced worker productivity. This can be measured in fewer sick days, longer working hours, and just plain better morale, all of which feed productivity and the bottom line. Energy consultant Charles Lockwood, in his Harvard Business Review article, "Building the Green Way," estimated increased productivity at up to 15 percent. By enhancing attraction and retention efforts, sustainability offers important cost savings on the HR front, where the costs of worker churn can be especially harmful in direct outlays and in lost time for training.

Such important savings are key bulwarks against one of the challenges of going green: the misperception of steeply boosted development cost at the outset. So one thing corporates will want assurances on is not only that their investment will pay back over time in far lower operating costs—as much as 20 percent per year—but also that the upfront costs are truly in line with standard (non-green) building costs. They are.

Developers estimate added costs at no more than two percent.

Developers estimate added costs by implementing a sustainability strategy at the initiation of a project and integrating its precepts and methodologies thoroughly within the project—beyond building systems and materials to the driving force behind the design and development thought process. For that to happen, greenness really has to be a driver for the company's corporate strategy.

That's where another, high-priority corporate need can be met through sustainability: reputation. Companies that may have approached sustainability as a real–estate tool have learned that it also offers the benefit of a stamp of approval as a socially responsible corporate citizen—an indispensable asset.

One real challenge in corporate sustainable design dare not speak its name. But we can do that here: retrofit. The sustainable projects that receive the lion's share of attention are new buildings with exciting designs by well-known international architects. But to take anything from a historic structure to a plain vanilla box and render it sustainable in contemporary terms can be a major accomplishment—and it is something just about every company with real estate on its hands will want or need to do if it takes sustainability seriously as an operating and branding precept.

Whether changing out windows and HVAC systems to installing green roofs and low-VOC (volatile organic compound) floor coverings and paints, retrofitting can feel like a more expensive proposition to a company that just wants to freshen up its offices; the construction cost per foot can rise sharply for a green retrofit. And for corporate tenants withlittle control over window glazing or even HVAC systems in their landlord's building, the options may seem limited. That's when flooring, wall-covering and other materials take on primaryimportance. That is when fuller knowledge of sustainable methods and materials will come to the fore, because the easy answers are not right at hand.

That is familiar territory for most corporate real–estate executives, who find themselves caught between the C-level requirement to keep costs down and the requests from the employee for more and better resources. Sustainability, with its emphasis on the long term, is a new weapon for this group's meager arsenal, one that can meet needs at every level of the corporate structure.

Peter Slatin is the editor and publisher of TheSlatinReport.com, a commercial real estate newsletter, and a financial columnist for Forbes.