Waste is not a word anyone wants to hear these days, especially investors. Rising energy costs, the decreasing value of the dollar in the international market, and the threat of global warming have helped to bring the sustainability of building operations to the forefront for many organizations. More and more, companies are looking at the “triple bottom line” when weighing potential real estate investments and considering the economic, environmental and social impact of those investments. The focus on facilities energy consumption also has been driven by the impact on the bottom line, as the cost of heating and cooling alone has doubled in many cases in just the last couple of years.
According to a report from the World Business Council for Sustainable Development, buildings are responsible for at least 40 percent of energy use in most countries. And as construction grows, that percentage will continue to rise. Action is essential because buildings can make a major contribution to tackling climate change and energy use. Progress can be realized immediately because the knowledge and technology exist today to reduce energy use in buildings.
This growing issue has created an opportunity for building owners and facility managers to gain support, not only for investments in long-term energy cost saving measures but also for broader-based sustainability initiatives. By looking beyond energy consumption to address the range of issues that affect a buildings’ environmental footprint, facility managers can make a significant impact on the long-term viability of the built environment within their organization.
Americans consume 26 percent of the world’s energy, making the U.S. the largest energy consumer. In 2005, 86 percent of that energy came from fossil fuels that contribute to greenhouse gases, producing 23 percent of carbon dioxide emissions worldwide. All businesses have a carbon footprint that marks their contribution to greenhouse gas emissions. That footprint consists of the total quantity of emissions that a business produces from its daily operations. Electricity usage, employee commuting and air travel are among the activities that contribute to a business’ carbon footprint.
The Environmental Protection Agency has defined the country’s total system emission rate at 1392.45 pounds of carbon dioxide per megawatt hour. So reducing the energy consumption and use of fossil fuels for electricity generation becomes essential in reducing the carbon footprint.
To address this important issue and encourage organizations and individuals to make sustainable changes, there have been federal and state incentives for implementing green programs. Many organizations have begun to see the tangible benefits of these initiatives. For example, in Massachusetts, businesses may take a credit against the state excise tax for the purchase and installation of a solar water-heating system. Organizations are increasingly taking advantage of utility rebate programs and purchasing the growing number of products and services that support green initiatives.
The movement toward mainstream adoption of sustainable building practices is reflected in the growth of this market. In 2005, green building products and services in the United States represented a $7 billion market. This year, the total market value is expected to increase to $12 billion. The U.S. Green Building Council’s membership has quadrupled in the past five years to include more than 8,000 organizations.
Energy represents the largest operational expense for most facilities – 30 percent for a typical office building – and an assessment of current energy usage and efficiency is a starting point for many organizations on the road to enhancing building sustainability. The result of such an assessment can lead to the identification of a variety of potential programs in the short and long term to reduce energy consumption. Those programs may range from the installation of less power-hungry fluorescent bulbs to the retrofitting of equipment that takes advantage of new technologies to heat or cool facilities more efficiently.
As a leader in the field, Texas Instruments, a designer and manufacturer of analog, digital signal processing and chip technologies, undertook numerous initiatives that have had a huge impact on their triple bottom line. In 2005 and 2006, 223 new resource conservation projects were initiated. The initial investment of $9.7 million resulted in annual savings of $7.7 million for a payback period of just 15 months.
Texas Instruments’ energy conservation measures were relatively simple initiatives: the installation of energy-saving compact fluorescents and LED exit signs; reducing bends in piping, which reduces the amount of energy required in transporting materials through them; and thermal storage of chilled water for cooling plants created during off-peak hours to reduce power use during the day.
The impact of all of Texas Instruments’ initiatives over 12 years has resulted in the reduction of 2.4 million pounds of nitrous oxide emissions and 1.5 billion pounds of carbon dioxide emissions – the equivalent to planting 207,000 acres of trees. Texas Instruments’ water management efforts have enabled some of the sites to recycle more than 50 percent of their used risewater irrigation, as well as other uses. Among other initiatives, Texas Instruments, along with other companies, has agreed to collectively reduce absolute PFC emissions by 10 percent by 2010.
Taking Action
Another example of potential savings comes from Ford Motors, the first two-time winner of EPA’s Energy STAR award, which set out to increase efficiency and reduce green house gas emissions. In 2006, Ford improved energy efficiency in the country by 5 percent, resulting in savings of approximately $25 million. Since 2000, Ford’s domestic facilities have improved energy efficiency by 25 percent, equivalent to the amount of energy consumed by 220,000 homes.
The big players in the financial world are not falling behind, either. Credit Suisse’s New York City headquarters installed an innovative chilling system consisting of 64 neoprene ice storage tanks. Previously, the 2.2 million-square-foot building had a peak demand over 10 megawatts – enough to power 2,000 homes. Water chillers used to run only during peak daytime hours, gobbling up a great deal of energy, but after the new system was put in, the peak energy usage was reduced by over 900 kilowatts, saving about $1 million per year.
Another example: Google has taken on generating power for itself by installing the largest solar-powered electrical system of any company in United States history. The solar panels will have a generation capacity of 1.6 megawatts, enough to supply about 30 percent of projected use at the administrative complex. Carbon dioxide reduction from the project is projected to be 3.6 million pounds per year, or about the equivalent of 4.3 million car miles per year.
In Massachusetts, EBSCO Publishing has installed a photovoltaic array on the roof of their historic mill building on Union Street in Ipswich. The system is among the largest installations on the North Shore. The 192 solar panels generate enough electricity to power 50 average homes – clean energy of 41,300 kilowatt-hours annually and a carbon dioxide reduction of 37,170 pounds.
Massachusetts Institute of Technology has begun a series of initiatives to make the campus more sustainable and is developing long-term strategies under the green building guidelines. MIT launched a Web-based “environmental virtual campus,” which will serve as a regulatory training tool for colleges and universities. MIT has also started an expanded recycling program, including paper, glass, aluminum, computer equipment and wood. MIT increased the overall recycling rates from 10.5 percent to 20.3 percent. A water conservation project was launched that will reduce water use by 32 million gallons per year.
The commercial real estate industry is well-positioned to make a significant impact on climate change by designing, building and operating more energy efficient and sustainable buildings. And like Texas Instruments, Google, MIT and others, a significant change can be made in the carbon footprint. But the footprint size will only shrink due to forces from several directions such as building technologies advancing, corporate and public institutions continuing to take sustainability seriously, and governments and citizens acting locally and thinking globally.
