Embracing Sustainability: Good for the Bottom Line

By Lee Kaufmann

As sustainability mandates begin to drive major renovations and upgrades to existing buildings, facility professionals are faced with the need to develop new approaches to successfully meet these demands. Once, they mainly concentrated on managing projects, schedules, maintenance and budgets, and supervising staff but now new challenges have been added to the mix, including justifying how the investments made to promote sustainability affect the bottom line.

According to the U.S. Green Building Council, “A property’s value increases by $12.50/square foot for every $1.00/square foot saved in operating expenses as a result of green and sustainable measures being implemented.” While some statistics point toward the benefits of sustainability programs, the decisions faced by those responsible for these programs can be daunting.  In order to successfully meet these needs, they must get answers to key questions such as:

• How do we decide what our most sustainable choices are?
• How can we verify the costs associated with green alternatives?
• How do we determine the payback or return on investment for our choices?
• How can we meet potential requirements to reduce our carbon footprint?
• How can I provide recommendations to my organization that make sense and are effective?

The often complex answers to these questions can arm facility professionals with the ability to gather and track new information and make good, data-based decisions which directly impact sustainability across the portfolios they manage. Examples of the resulting decisions include: 1) which equipment will be replaced and when 2) what investments will be made 3) what payback on those investments is required and 4) what will be metered and analyzed (utilities, etc.) in order to gather critical benchmark data.

Key Areas That Yield Results

By focusing on the tasks which most facility professionals undertake on a daily basis, such as keeping track of maintenance, operations and systems lifecycle management, many opportunities for making incremental advances in sustainability present themselves. Among our clients who have faced and answered these questions, most have developed a practical sustainability program that is integrated into an overall facilities capital plan. Rather than embracing a broad range of sustainability initiatives, which can be overwhelming in the face of numerous responsibilities, it can be prudent to focus on key areas (such as energy and water) where efforts are more likely to produce immediate results.  In addition, it’s good for the bottom line, as cost savings from these projects can provide both short and medium-term payback which can be used to fund other projects with longer payback periods.

Some organizations are choosing to focus solely on energy, which can be a good way to see a return on investment. By identifying energy baselines and then undertaking key energy retrofits, such as lighting replacements and replacement of aged inefficient equipment, it is not unusual to see the results in reduced utility bills, more efficient equipment and less exposure due to volatility in the price of utilities. The range of payback in years for implementing such energy conservation measures can be anywhere from two years to upwards of 50 years.
           
Options for Ranking Assets

Using either the organization’s internal criteria or a third-party evaluation system (such as LEED-EB® O&M or Green Globes), each building can be evaluated and then various options can be analyzed. To gain another advantage in building the bottom line, consider the portfolio as a whole. By gathering key data (condition, energy conservation measures, potential for renovation/change of use, water reduction, etc.), facility professionals can rank the building assets against sustainability goals. In addition, by bundling projects which occur across many buildings (i.e. replacing all toilets with low-flow versions), the facility professional can provide additional savings through volume purchasing, and can minimize the use of labor and supervisory resources by deploying them concurrently.
Another way of ranking assets is by target. Many organizations have specific goals and time frames for reaching their targets – for example, reducing carbon footprint. By ranking individual buildings in a portfolio by the potential for carbon reduction, capital expenditures can be directed to reduce energy use, save money, and meet goals.

Embracing Sustainability: Some Examples

The facilities group at Salem State College in Massachusetts recently integrated sustainability into their ongoing capital planning by undertaking a program which included concurrent green building and facility condition assessments. A team of skilled assessors was able to gather critical condition, performance and sustainability information across all four of the College’s campuses. By combining sustainability practices within their normal maintenance and operations, and ranking their buildings by goal, Salem State was able to prioritize their capital spending plan for each asset while still targeting the projects, deferred maintenance, and upgrade opportunities across the entire portfolio that will assist them in reaching their primary goal: to meet their President’s commitment to reducing the College’s carbon footprint (as part of the University Presidents Climate Commitment).

At Lawrence Berkeley National Laboratory in California, one of the leading government-sponsored research centers in the U.S., they have successfully gathered the critical facility data they require to meet the Federal Government’s Executive Order 13423, which mandates reporting on the sustainability of building portfolios. In addition, Lawrence Berkeley created water and energy baselines and used alternative green renewal choices to created integrated capital budgets, demonstrating their commitment to becoming more sustainable while maintaining their portfolio day-to-day.

Return on Sustainable Investment

At the National Renewable Energy Laboratory’s (NREL’s) Science and Technology Facility in Golden Colorado, they have made significant energy improvements and are realizing significant savings. Most of these energy-saving measures have a fairly rapid payback, ranging from 2.2 years to 10.1 years. For example, as seen in the chart below, a $10,000 investment in daylight controls resulted in a $4,111 savings per year and the payback will be realized in 2.4 years. With a planned site life of at least two decades, the investment in infrastructure for the NREL’s facilities will more than pay for itself.

As facility professionals gain new insight into their portfolios and the green opportunities that are available, more organizations are successfully reaching out to embrace sustainability. By focusing on those actions which clearly justify the investment, sustainability improves, the bottom line is positively impacted, and the outcome is win-win – ultimately improving the long-term viability of the portfolio.

Lee Kaufman is Vice President of Professional Services at VFA. He can be reached at lkaufman@vfa.com.