Q&A: Skanska’s Beth Heider Discusses WGBC Study

In April, the World Green Building Council released The Business Case for Green Building study, which highlights why green building means good business and helps tackle the misperception that green building means more money. Green Building News spoke with Beth Heider, senior vice president of Green Markets at construction firm Skanska, to discuss the study and further explain the cost benefit and asset value of the report.

Q: What does the report mean for the green building industry?

Heider: There have been a number of green building reports in the past on the cost of green. The Business Case for Green Building is an important report because it really focuses on decision makers and targets folks that make the commitment to green building. In the past, often times the analysis has been more focused on the design community, perhaps information exchange. This is really looking at the broad value that green building can bring to investors, occupiers and other stakeholders. The other thing is that it draws cases from all over the world and integrates the findings of a number of different studies. Not only does it look at what the cost drivers are, but also what the return on investment is and what the impact on productivity could be. It has a much broader view than the past ones that have just focused on one dimension.

Q: Why do you think people believe green building is more expensive?

Heider: In the very beginning, the decision to build green, or that LEED was the metric of choice, wasn’t made until fairly advanced in the design process. When you decide on green features later on in the process or attempt to get energy scores by adding components later on, then it does cost more.

The beautiful thing that has happened in the arc of the last 12 years is that it’s been widely recognized that in order to build thoughtful green buildings, you have to bring the entire project team together early on in the process. The first thing you have to do is to make smart fundamental decisions.

In about 2000, GSA committed an uptick in their funding to incorporate green features, and when I came on board with Skanska in 2002, GSA had adopted LEED metrics. I was talking with our colleagues at GSA and we looked at another study to get to LEED certified; in 2003, we realized it could cost no more. We found that if you were really clever about what you elected to do, there could be no additional savings. The point is that the decisions you make about what strategies to incorporate into a building is what drives the cost; you can get as high as a LEED Gold certification for no more cost.

Q: How can explaining these misconceptions about green building help advance the industry?

Heider: I think that one of the most important things that this study in particular does and that the industry is beginning to explore is that a lot of the early discussion is ‘What does it cost?’ You have limited funds to make an investment, so sometimes there aren’t opportunities to add green building elements, but the key is changing the cost argument from initial costs to lifecycle values. Clients such as universities, corporations or governments that will occupy a building for a long time have to consider what initial investment means in terms of lifecycle benefits.

Skanska, for example, built a new 24,000-square-foot headquarter space at the Empire State Building to LEED Platinum. The company’s policy is to build all office space to LEED Gold or better. There was a discussion of whether or not LEED Gold was good enough. They told us that we could build to LEED Platinum, but it couldn’t cost anymore, so we changed the cost argument. The company then told us we could build it to LEED Platinum, but the team had to make it payback over the 15-year lease. Skanska spent a quarter of a million more, and it was paid off in five years. It will save Skanska half-a-million dollars over the life of the lease.

Additionally, to get to LEED Platinum, 16 of the 44 points that we achieved were in indoor air quality. What we found was a reduction in sick leave between 16 and 18 percent. We have Skanska people in the office working or in the field working that would have otherwise been home sick, which is an indicator of productivity.

Q: What kind of value does getting a green building certification such as LEED bring to a building as opposed to simply building it to those standards?

Heider: Full disclosure, I was the 2012 chair of the board of directors of the USGBC. I don’t mean this to be a hard sell; I actually believe this. When you go to college and you graduate, you’re given a certificate. Essentially the university is saying you’ve gone through all the classes and completed to our satisfaction the required courses. People don’t take college classes and say they have a degree.

I think that certification schemes that are thoughtfully created with a terrific amount of industry consensus like LEED show that you’ve demonstrated through the points you are trying to pursue that you have [achieved certification]. One of the things that USGBC is going to look at is ongoing performance. At the USGBC’s mid-year meeting, there were lots of discussions about what the future looked like and how to continue to build value for the organization. I think the ability not only provide tools and recognition but to encourage ongoing performance is where the USGBC is going with the certification program, and I think it’s important. The market is maturing. Lots of architects and owners know what’s important in terms of improving the energy performance of their portfolio, but how do you know whether or not it was actually achieved? I’m hopeful that in the future, the operation and maintenance of a building continues to inform the investments and the entire stakeholder community so they can make more transparent choices about what buildings they choose to occupy.

Q: What are the easiest ways for green builders to save?

Heider: I think that even though I embrace LEED as an important market transformation tool, the first thing you need to do is understand what the goals and objectives are for the building. If you’re in a location where energy and water costs are high and you have the ability to invest in efficiency measures up front that will pay back very quickly, you’re going to want to take a look at that. The most important thing is to look at the purpose of the project and then at the LEED strategies to get there. Take a look at picking a property that provides you access to public transportation, the ability to take advantage of natural light and one that is easier to insulate. Then, look incrementally at solutions to reduce operating costs in the most appropriate way for your particular location. I would prescribe a thoughtful strategy that takes into consideration what the opportunities are in terms of the site you selected.

Green building really is good business. If you look at it through the lens of what the return on investment is, both in terms of financial savings and the health and prosperity and productivity of your staff, then there’s an incredible value argument to be made here. A focus on initial costs without taking that into consideration is really short sighted.