The Business Case for Green Only Grows

Oct. 1, 2009

Editor in Chief Chris Olson talks about the business case for green.

The proposed cap and trade legislation is a flashpoint for those with conflicting views on climate change, but the fire and smoke can’t obscure this fact: the business case for green only gets greener in terms of greenbacks.

MBA programs increasingly treat green business as a mainstream proposition. As Newsweek pointed out in a recent article, more than half of MBA programs offer coursework in sustainable business, which you could describe as an education in the 3 P’s: planet, people, and profit. A few schools offer “Green MBAs,” which are as dedicated to profit as any program; they simply pursue it in an emerging industry.

For several years some insurers have been offering premium discounts to commercial buildings with LEED certification. Initially, the discounts were viewed as a bonus for buildings with green features, but the discussion now has moved beyond the benefits of green buildings to the risks associated with buildings without green features. David Cohen, senior director of real estate, commercial insurance, at Fireman’s Fund, notes that these risks include obsolescence, lack of market competitiveness, and possible exposure to new and costly regulations. Potential liability for occupants’ health due to air and environmental quality is another risk.

If your spreadsheets don’t have cells for green factors, you are probably passing some profits by.

If your spreadsheets don’t have cells for green factors, you are probably passing some profits by. This month’s article on water conservation describes how One Bryant Park, Manhattan’s new LEED Platinum-certified high-rise, incorporates a variety of systems to reduce its water usage by an estimated 13.4 million gallons per year, or 45 percent of total water consumption. The net savings in water bills is some $50,000 per year – and that’s year after year after year. The $50,000 does not even include energy and maintenance savings from pumping, treating, and heating less water. Some of the water savings is a result of integrated design and cross-discipline coordination whose costs were negligible.

Clearly, water conservation is a good business to be in.

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