The economic value chain of Green building was explored last week in a Master Speaker presentation by Tom Leppert, chairman and CEO of The Turner Corporation, at the 2006 Greenbuild International Conference and Expo in Denver, Colo. Accompanying Mr. Leppert were fellow leading experts in their fields: Brian Schwagerl, vice president of real estate and facilities planning for the Hearst Corporation, New York; Dan Winters, managing principal of Evolution Partners, Washington, D.C.; and Vivian Loftness, head of the architecture department at Carnegie Mellon University, Pittsburgh, PA.
"I predict that in a few short years, the industry will have completely closed the gap between traditional and Green building costs," says Leppert. "But for now, in order to convince owners to build Green, you must be able to properly describe the elements that make up what I refer to as the economic value chain relationship. This encompasses everything from the construction costs, maintenance and energy, Wall Street and investor analysis, consumer preference, and soft costs and benefits."
"One of the biggest hindrances of building Green is the misperception of the overall cost vs. the benefits," said Schwagerl. "Hearst recently opened a $500 million, 46-story glass and steel tower in Manhattan, the city's first LEED(R) Gold certified occupied Green building, and it only cost 2 percent more than a traditional building."
Loftness shared a variety of statistics on what is known as the "softer side of Green:" the life cycle costs, productivity improvements, and increased health and wellness of the inhabitants of Green buildings. "The research unequivocally shows that secondary savings on Green buildings are enormous and should be taken into account in all building decisions," said Loftness.
Wall Street has also taken notice as Green issues are being considered in company investment decisions. Dan Winters reported that investors are increasingly focusing on Environmental, Social and Governance (ESG) issues in underwriting decisions as intangibles make up as much as 40 percent of a company's valuation. And that's not all, "a group of 230 investors who represent close to 31 trillion dollars in the marketplace, have signed on to the Carbon Disclosure Project requesting the top 1600 companies worldwide to report their greenhouse gas emissions across their entire supply chain. This is but one of several initiatives that has the potential for significant financial impact on company perception and overall market valuation," said Winters.
As the leading Green builder in the industry, with 195 Green projects completed or under contract, Turner Construction has taken the helm by urging their own competitors to consider the future when advising clients. "Turner is positioned to be the driving force behind this initiative. We jump started Green construction at a major industry meeting, and have spent many resources, both internally and externally, educating, researching and promoting Green," said Leppert. "If we understand the barriers and are committed to educating our clients about the benefits of Green, we are able to give something back to the environment."