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The greening of business

Leadership

7 min read

Companies large and small are embracing new green practices, because reducing energy consumption makes good economic sense in addition to being environmentally responsible. Going green can lower energy and tax bills, enhance marketing campaigns and bolster a company's public image.

Wal-Mart CEO Lee Scott says he wants the retail giant to be "a good steward for the environment&quot.   Home Depot has been named 'EnergyStar Retail Partner of the Year' by the U.S. Environmental Protection Agency (EPA).

Popular efforts to reduce energy usage include buying cars with improved gas mileage, using public transportation, installing compact fluorescent light bulbs, turning thermostats down in winter and up in summer. While these measures are effective, other important actions can be taken which can reduce your business' energy consumption, and provide cash rebates and tax incentives.

Reduce your carbon footprint

Residential and commercial buildings rely heavily on electricity for lighting, heating, cooling, computing and powering appliances. This electricity is largely generated by power plants burning fossil petroleum fuels, natural gas and coal.

Your carbon footprint includes the volume of CO2 added to the atmosphere by your usage of these fossil fuels, either directly from electricity use, or by indirect activities like transportation of raw and delivered goods.

Consider these statements from U.S. EPA:

  • "The process of generating electricity is the single largest source of CO2 emissions in the United States, representing 38 percent of all CO2 emissions."
  • "The main source of direct CO2 emissions is the burning of natural gas and oil for heating and cooling of buildings."

And this is from the U.S. Department of Energy (DOE):

  • "Our nation's 81 million buildings consume more energy than any other sector of the U.S. economy, including transportation and industry."

Cooling is big

Energy used to cool offices is a big factor for many commercial buildings. Usage will naturally vary depending on building type, condition and geographic location, but a natural question arises: “If I add more insulation to the ceiling and walls, will I save energy?” The answer is often “No.”

In commercial buildings the effect of more insulation can be to more efficiently trap heat from lights, computers, monitors, appliances and people, thereby raising the amount of energy used by the cooling system. And in cases where adding insulation does save some heating energy, it is often not cost-effective. Similarly, sealing air leaks around doors and windows can save heating energy, but won't reduce air-conditioning costs by much.

Conservation from the ground up

The best position from which to reduce your business' carbon footprint is the design stage of new building construction. At this early juncture, all major systems can be optimized for energy efficiency, including building design, orientation on the ground, window area, glass type, skylights, lighting controls, shading, shell insulation, plumbing and the heating, ventilating and air conditioning (HVAC) system.

Architects also have a new mandate from the American Institute of Architects (AIA). The AIA's High-Performance Building Position Statement says, “Promote integrated, high performance design, including resource conservation resulting in a minimum 50 percent or greater reduction in the consumption of fossil fuels used to construct and operate new and renovated buildings by the year 2010, and promote further reductions of 10 percent or more in each of the following five years.”

Building designers can also use Building Information Models (BIM) in their design efforts. A BIM can allow accurate simulation of a building's energy use hour-by-hour for its entire useful life, providing an excellent predictive energy usage summary. Additional BIM information is available at AutoDesk, Green Building Studio and wikipedia.

If you're not designing a building, you can still reduce your business's energy usage by installing efficient systems.

Measures to take

  • The single best improvement is to incorporate automatic daylighting controls. This cuts the lighting energy used and adds less heat, so the air-conditioning system uses less energy.
  • Use windows and skylights to bring natural sunlight to illuminate building interiors. Allowing natural sunlight into work areas is a proven mechanism that saves money, increases productivity and gives a heightened sense of well-being.
  • Use lower ambient-light levels and higher-efficiency desk lamps at work stations.
  • Install high-performance windows with solar heat-gain coefficient (e) <= 0.32 and U-factor <= 0.35. If your company is in a hot climate, low-e glass is preferred for non-north facing windows. If the windows can't be replaced, consider application of low-e film to windows getting direct sun.
  • If the building doesn't have one, install a cool-roof coating. A good time for this is when the roof needs a new membrane as part of regular maintenance.
  • Install an efficient water heater, one with efficiency-rating >= 0.90.
  • Check refrigerators, cooking equipment, computers, monitors, printers and other equipment for energy usage, and replace as necessary with EnergyStar-rated appliances
  • Use water-saving plumbing fixtures.
  • Install an efficient HVAC system. HVAC systems are expensive, so upgrade other systems before the HVAC. With other measures installed, your energy needs will be decreased, allowing for a smaller, less expensive HVAC system. Estimate efficiencies of HVAC systems with the Efficiency Finder.

Federal tax incentives

Businesses are eligible for federal tax credits for buying hybrid vehicles, constructing energy-efficient buildings and improving the energy efficiency of commercial buildings.
New non-residential buildings can receive a tax deduction up to $1.80 per square foot if annual energy consumption is reduced by 50% compared to the American Society of Heating, Refrigerating, and Air Conditioning Engineers ASHRAE 2001 standard. Partial deductions of $0.60 per square foot are available for improving building subsystems.

State incentives

California has recently made clean air a priority by passing the Global Warming Solutions Act of 2006. Signed by Governor Arnold Schwarzenegger on 27 Sept 2006, it establishes the first state-wide law in the country that enforces limits on greenhouse gas production with penalties. Schwarzenegger said, "We simply must do everything we can in our power to slow down global warming before it is too late. The science is clear. The global warming debate is over."

The California Public Utility Commission's Solar Initiative Program will provide cash incentives worth $2.1 billion to property and business owners that install photovoltaic arrays that meet requirements. (See details at Go Solar California.) 
Also in California, Pacific Gas & Electric (PG&E) is offering their customers rebates for installing more energy-efficient systems in their homes and businesses.
Other states also offer tax incentives for constructing high-performance buildings.

Enhanced marketing

Companies that make major investments in energy-efficiency measures and appropriately document the upgrades may be able to use logos from the U.S. Green Building Council 'Leadership in Energy Efficiency and Design' LEED program and the EPA's EnergyStar program in their marketing collateral and web content. This by itself lends credibility to a company and can boost their sales.

"About 40 percent of the American public currently recognizes the EnergyStar label. In regions that have active energy efficiency programs, this recognition is at 60 percent or more. About half of those who have made a recent EnergyStar purchase have reported that they were influenced by the label." EnergyStar Report August 2003

EnergyStar ratings are generally easier to obtain than high LEED ratings, but both organizations (and logos) are well-known and well-respected. More than 3,200 buildings nationwide have earned the EnergyStar, and use, on average, about 35 percent less energy than average buildings.

Entrepreneurial opportunity

New entrepreneurial opportunities abound in the field of alternative energy, and new jobs will be created to service this industry. Beverley Darkin, a research fellow at London's Chatham House think tank says, "If you are going to take action to tackle climate change, it will not necessarily reduce economic growth, just give you different economic growth."

Sir Richard Branson, CEO of Virgin Atlantic Airways, announced in September 2006 that he would invest a decade's worth of profit from his travel businesses (~$3 billion) into alternative energy research efforts. Hailed at the time as an act of philanthropy, it may well prove to be another shrewd investment.

Additional resources

Share Your Comments

  • Are you actively working to reduce your business' carbon footprint?
  • Have you benefited from any federal or state tax energy reduction incentive programs?
  • Is energy conservation a concern in your business environment?
EMyth Team

Written by EMyth Team

We share free resources and stories from our clients, Coaches and team members about how to build a business that serves your life. Our posts will give you updates on our business insights and free educational content.

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