JULY 2008 NEWSLETTER ARTICLE

Green Payback is Better Than Ever
by Bernie Pisczek, CSI CDT

Back in the days of LEED 1.0, critics were quick to point out that building to the then-new U.S. Green Building Council standards could add as much as 40 percent to the project costs. That stigma of “green costs more,” has plagued the industry ever since. But that’s not the case anymore.

Although it’s still admirable to want to save the planet, more and more companies, municipalities and homeowners are embracing green to save their bank account balances. Programmable thermostats, compact fluorescent light bulbs (CFL’s) and similar energy saving devices used to pay for themselves in 8 to 10 months. But with electric rates up more than 30 percent and more increases to come through fuel surcharges, the payback period has been cut almost in half.

On a recent business trip I noticed more airport signs proclaiming the facility’s new “green” policies. Included were things like fewer shuttles between the remote parking lots and the terminal; fewer trams running from the terminal to the boarding areas; and higher temperatures inside the buildings. I was even instructed by the pilot of my Airtran flight to close the cabin window shade before leaving my seat in order to conserve energy. According to the International Air Transport Association, jet fuel prices have risen by 90 percent over the past year, so I can understand that Airtran’s motivation extends well beyond concern over the carbon footprint of Flight 351.

Stories like this are becoming more common. The La Crosse Wisconsin School District adopted some basic green measures and is reporting savings in the millions of dollars with some schools saving as much as 33 percent on HVAC costs. The City of Pittsburgh is replacing fleet vehicles with hybrids and flex-fuel SUV’s with the projected hope of saving $2,000 per vehicle per year.

With this pervasive mindset, it easy to believe the statistics recently released by the U.S. Green Building Council, the World Business Council for Sustainable Development and several other industry sources, which project that the number of commercial buildings and businesses, including government and other municipal entities, that will adopt green standards this year will increase between 500 and 800 percent over the numbers reported for 2006. 

The bottom line here is that more and more decision makers are motivated to save energy, reuse materials and improve the air quality in the office, not because it’s the environmentally responsible thing to do, but because it will save money. As further proof, a report by the Grocery Manufacturers Association and PricewaterhouseCoopers indicates that companies that embrace green practices and share sustainability data generally experience higher gross margins and return on sales, higher return on assets, and stronger cash flow. While it may not be the most noble of intentions, it still achieves the same end result.

From a marketing perspective, a slight shift in your sales approach could very well yield a significant increase in sales. Let your customer know that, in addition to helping the environment, choosing to use your product now can also help improve profitability through lower labor costs, less energy use, and whatever other benefits you can promote.

Decision makers tend to procrastinate when making the decision to “go green,” but when you make the point that there are now more compelling financial benefits, it might just be the thing that earns you the sale. Start talking about return on investment along with environmental benefits. Point out that the sooner they make the switch, the more they will save in the long run.

In a business climate that offers very little good news, this is a huge opportunity for the manufacturers and distributors of products and services that save energy, require less labor, produce less waste and/or conserve water and other resources. If you’re reading this newsletter, then this means you!

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