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Green Buildings: 
Better for the Environment and Better for Business

The climate change issue is heating up and the level of regulation is rising. Many cities, including San Francisco, New York and Washington D.C., are requiring that new construction projects go green. As the country moves farther down the road of green development everyone wants to know, can green building save money and the environment? The U.S. Green Building Council commissioned a report to evaluate performance of LEED® for new construction building projects and to compare their performance to a standard building. The report was published in March 2008 and the news for green building is good.

The report concludes that LEED buildings are out-performing standard buildings in a number of areas. LEED buildings show overall energy savings and higher LEED certification levels are showing energy improvements over lower certification levels.[1] The study also found some areas needing improvement. There were some projects that performed poorly when compared to the modeled standard indicating the green design has further to go. The report also suggested that the methodology to compare “standard” to “green” be further evaluated. The bottom line is that energy efficiency is happening through green design.

The news gets better. In another study, the CoStar Group concluded that green buildings are outperforming standard buildings in occupancy, rental rates and sales prices.[2] Together, a combination of lower operating costs, better rental values and increased asset price show that green buildings are catching the attention of the marketplace.

With all this investment in green building, the insurance industry is responding with new green coverage endorsements. The offerings include homeowner and auto policies as well as sustainable manufacturing with green upgrade and certified green building coverage. Fireman’s Fund says that sustainable businesses present fewer risks and are better risks to insure.[3] The new endorsements are an obvious outreach to the green marketplace rewarding green practices and insuring for replacement with green upgrades.

In addition to green building design, greenhouse gas emissions-reporting is already mandated in many parts of the world including locations close to home. California requires that high mass emitters begin reporting in 2009 for 2008 carbon dioxide emission. 

It is undeniable, green regulations are here and gaining in number. The business world will need to know how to adapt. If you are interested in more information on how these regulations may affect you, please contact us.

For more information, please contact Paul Nuti at (925) 403-6200.

[1] Energy Performance of LEED Buildings, NBI/USGBC, 2008 U.S. Green Building Council.

[2] CoStar Study Finds Energy Star, LEED Bldg. Outperform Peers, Andrew C. Burr, CoStar Group, March 26, 2008

[3] Fireman’s Fund Adds Green Coverage for Manufacturers, Insurance Journal, May 14, 2008