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Building management Article | 2-minute read

How a LEED green building certification can help your business

Green building is a hot trend that is changing the face of construction in Canada and around the world.
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Building or retrofitting to a green standard such as LEED (which stands for Leadership in Energy and Environmental Design) typically leads to substantial reductions in energy, water and maintenance costs, less absenteeism and improved employee productivity. And it’s not as costly to build green as you might think.

“Many people think LEED is extravagantly expensive,” says Craig Ryan, BDC’s Director of Corporate Social Responsibility.

“It’s actually only modestly more expensive and you get the money back faster than people realize,” Ryan says.

LEED is expanding quickly

LEED is the most widely used green-building standard in Canada and globally. And it is expanding at an extraordinary pace.

Over 1.2 billion square metres of commercial and institutional building space have been certified by LEED worldwide. Another 160,000 square metres are being certified every day.

Public Works and Government Services Canada and more than two dozen Canadian municipalities (including Montreal, Vancouver and Ottawa) have mandated that all of their future buildings meet LEED standards.

BDC has also embraced LEED. Two new branches have obtained LEED certification, and 80 to 90% of materials and furnishings used in office improvements reflect LEED criteria. BDC also lends money for LEED construction and renovation projects.

Meet strict standards

Here’s how LEED works. To get certified, new buildings or retrofitted existing buildings must meet strict requirements in their site planning, water efficiency, energy use, material selection, indoor air quality and design features.

To get basic LEED certification, a new project typically costs about 2% more to build than a conventional building, according to a 2011 U.S. study in the Journal of Sustainable Real Estate.

Costs are quickly recouped

The extra cost is typically recouped in a few years due to various LEED-related savings, Ryan says. Studies show:

  • LEED-certified buildings use 25% less energy and 11% less water than conventional buildings, according to a 2011 U.S. government review of federally owned facilities. The buildings also had 19% lower maintenance costs and 27% higher occupancy satisfaction.
  • LEED buildings are also more attractive to tenants. Their occupancy rate is 6% higher than other buildings, and they rent for an average of 60% more per square metre, according to data cited by the U.S. Green Building Council, which created the LEED standard. The buildings also have greater market value, selling for 60% more.
  • Employees also respond to improved indoor air quality and design. After a green retrofit, 87% of companies reported increased workforce productivity, while 81% saw improved employee retention and 75% noted better worker health, according to a 2008 Deloitte survey.

Ryan notes another benefit—better chances of getting financing from a bank. An entrepreneur who pursues LEED certification is usually doing so as part of a solid, well-thought-out vision for the business—qualities bankers like to see in a company.

“Bankers will perceive LEED certification as a sign of a well-managed company that has a clear strategic plan and good reporting.”

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