Save $Green By Training Building Managers

CDC sustainable building

Does the Responsible Developer spend money in recession to realize the many benefits of green buildings?  One very familiar developer says Yes!

President Obama may now be a Responsible Developer because earlier this month he agreed that in order to obtain the cost savings of green buildings, you had to spend money to properly maintain them.  This news was well received by the IAPMO (the code and trade association that develops plumbing, mechanical and solar codes).  Accordingly, Obama signed into law new legislation that provides training to federal building managers to ensure that taxpayers realize the benefits of the intended energy cost savings in green buildings.  Interestingly, the bill did not provide extra funding.

The 2010 Federal Buildings Personnel Training Act will give the General Services Administration a year and half to identify the core skills needed to manage these ever increasingly sophisticated buildings and to make sure the managers get standardized and certified training.

One of the new bill's sponsors, Representative Russ Carnahan, co-chairman of the congressional high-performance building caucus, stated that "Sustainability and energy conservation isn't just about the air we breathe or the water we drink.  It's about saving money for families, businesses and taxpayers."

Of course this pay-to-save sentiment is not entirely new.  Three years ago, at an annual meeting of public owners in Seattle, an attendee commented that they had been given more than adequate new construction budgets for green, energy efficient buildings, but had been given inadequate budgets for training and maintenance.  He felt that the lack of funding for maintenance would lead to reduced energy savings, costly repairs or claims.   

The Responsible Developer, even in tough economic times, realizes that the only way to achieve the intended cost savings of green and more efficient buildings is to properly manage and maintain them.  She and he also know that the same maintenance is also good risk management because it may prevent indoor air quality and property damage claims.  Other bloggers like Greg Zimmerman (Facilitiesnet) have wisely noted that responsibilities must be clearly spelled out in Green Building Contracts to avoid claims.

So Developers and Owners, you can be Presidentially Green and save money in the long run by providing better training of your managers and giving them the money to maintain your buildings.

 

Green Building Gains and Risk Management Improvements

Environmental Leader reports that in five years the total US green building market value is projected to increase from $71.1 billion to $173.5 billion. This represents a Compound Annual Growth Rate (CAGR) of 19.5%. The commercial green building segment of this market is expected to increase from $35.6 billion to $81.8 billion. According to the report, this surge in green building has the potential to create 2.5 million American jobs, about a 30% increase in jobs within the construction industry.

This remarkable surge of green building activity will be accompanied by a surge in the risks associated with green building. As discussed in some of our prior blogs, the key to managing these risks is to contract carefully and make sure that expectations are defined and responsibilities for those expectations are specifically assigned to the parties in the contract documents. To address some of these risks, the insurance industry offers some niche coverage for green building projects. For example, Chartis Insurance offers "green reputation coverage", designed to address the threat or reality of adverse publicity when a building fails to meet green industry standards. Coverage includes access to crisis consultants and a range of other services to mitigate adverse publicity. Chartis also offers "green indoor environment coverage", providing coverage for bodily injury claims resulting from specialized equipment and products used to improve air and water quality in green buildings.

Similarly, Fireman's Fund recently began offering a five percent discount to policyholders with Energy Star buildings, and offers "green financial incentive coverage" for policyholders that paid for green improvements to their property with help from a tax incentive or financial grant and then suffered a loss when the building did not achieve the targeted rating and the policyholder is obligated to return the benefit received. These coverages are described in more detail in an article from Rueters.

Careful contracting and thoughtful insurance coverage will help reduce the risks and enhance the benefits of green building for all contracting parties and end users as green building in public and private construction continues its exponential growth.