The first in series – The Economic Lens

I’m an LA native, and what’s more rare is that my parents are natives as well. You’d think I know my city, but lately I’m seeing it as if it’s new to me. In reality, it is I who is new. Most of my career I’ve been an educator, in the business of inspiring others and fanning sparks that become their life-long dreams. A few years ago, I wrote a book with Dr. Dick Jackson, Designing Healthy Communities, and now I’ve got a new passion, one that I’m exploring with you. I’m curious about how people are working together to create connected cities that work, which is also the theme of the upcoming MGBCE. I’m inspired and I want to know more.

Over the past month, I reached out to over a hundred thought-leaders in the green building community, across industries, representing small and larger organizations. For those who responded, and I had the opportunity to talk about the challenges and opportunities on their horizons. This series highlights some of the emerging themes and unique perspectives from these informal conversations and informational interviews.

You can join the conversation by contacting me directly or leaving your thoughts here.

Today’s Snapshot: The Economic Lens
When I was at UC Santa Barbara I got to take a class from the economist, Milton Friedman. I finished a minor in economics at Bennington College with a focus on funding for the arts, a great foundation for my careers as a choreographer and dancer, as well as a teacher and school district administrator. Loved that part of my life.

So when I spoke with thought-leaders recently about the challenges and opportunities inherent in their work, I heard a variety of topics, but one theme that tied these conversations together was looking at sustainability through the lens of economics. What I heard overall was a tone of optimism—that business is going to do well in the foreseeable future. I heard a resounding message that sustainability initiatives are driven by economics and most companies already investing in sustainable practices aren’t going to change their business plans or the economies that drove these decisions simply because of the current political context. What I heard is, it’s about business continuity and realizing an attractive bottom line. The questions I heard were about what strategy to try, not whether to try. What follows are a few of the ideas that emerged from my conversations.

It’s cheaper to get your annual physical than end up in the hospital so why don’t we use this thinking to maintain our existing buildings? I heard that under the pressure to show profitability, maintenance is often deferred. There will most likely be more existing buildings than new ones at any given time. Deferring maintenance on these structures eventually becomes a considerable risk. [While I’m looking at my own deferred maintenance / to-do list around my house, I realize that I budget my time and attention differently when an issue is cosmetic than when it’s structural.] Budgeting for existing structures can evaporate with competing priorities, unlike new construction that is earmarked for specific systems. Maybe the industry can get creative. I’m wondering if financing for the long-term health of a building could look like health insurance with preventative and critical care proportioned? If so, conservation measures could be budgeted. I believe there is a huge, untapped potential for sustainable practices locked up in maintenance and operations of existing buildings.

Create a buzz the market is willing to pay for and weave this into a story that drives up occupancy and sales. I heard different viewpoints about the costs associated with new CalGreen requirements and what to do. Some said that new construction with a ‘hip’ environmental flavor might attract tenants willing to pay a bit more, but in the long run, this bumps against existing tenants who want their costs to stay the same. Some said tenants take less space under a lease renewal rather than keep their same space and pay more for it. [My grandfather used to tell me he could get a cup of coffee for 5-cents, but we live in today’s world and the cost of living rises more likely than falls. It’s a ‘get used to it’ sort of thing.] When tenants feel squeezed, we can help by highlighting what tenants can do to manage their operating costs. Some sustainable best management practices actually help with this. [A simple example is switching out fluorescent lights for LEDs, bringing down energy costs.]

Get a handle on operations costs using available resources. Realize the benefits of sustainable practices. Purchasing and installing systems is expensive. Building managers should know about resources available at little or no cost, but they might need reminders. Utility companies might offer an energy audit that provides baseline information. Identify zero-cost practices that have value for specific properties. These get people onboard. When people see their bottom line moving in the desired direction, they figure you’re on to something and may ask for more suggestions. Then it may be time to look at infrastructure partnerships or revolving loans for existing buildings.

Cal Tech’s revolving loan program finances local sustainability initiatives and returned 15% on investment, saving them millions on water and energy bills. People choose those sustainable practices that speak to them. When you tell people you can save x by doing y, and back it up with unquestionable metrics, you’ve got a conversation people want to listen to. Spreadsheets are powerful tools to communicate potential and realized cost savings.

Customers are price savvy. What I heard is, industries with limited budgets for interiors focus on look and price more than the environmental impact of producing an object, simply because they aren’t thinking about it. One idea I heard was, what if price sheets with sustainability features were linked to each item in the online catalog? I wonder if the effort it would take to create such sheets would affect which products are purchased? Some say “no, it’s all about the cost out the door,” but what if it could influence purchasing decisions? Would it be worth the complexity of creating such a data-focused tool and keeping it up to date? This sounds like a research project waiting to happen!

Stepping back to see the full picture:
I’m listening and absorbing. I’m seeing how sustainability principles and innovative technologies are emerging as the solutions—for individuals, businesses or whole communities—to persistent economic challenges, whether they be maintaining the integrity of existing buildings, managing costs in operations, finding ways to attract new customers or retain existing ones. There are simple, authentic, elegant solutions to water and energy use, waste reduction, and procurement. I’ll delve into some of these a bit more down the line as the series continues.

Our USGBC-LA community is focusing on work that connects to our personal passions. Creating sustainable organizations is an organic process, often inspired by curiosity, education or policy change. Those elements that build resilient organizations and individuals resonate beyond the walls of our own organizations, infecting our neighborhoods in so many wonderful ways. If there is an epidemic on the verge of taking our nation into a new reality, there is great opportunity, and this is it.

What are you thinking about? What are you doing about it? What are you concerned about? Where do you go for answers? More often than not, I think we turn to each other and we talk. We attend conferences, like MGBCE on April 20th and professional mixers. We engage. So, welcome to the conversation.

This is only the first snapshot based on conversations that started in January 2017.

  • Thank you to those whose ideas, innovations and unique perspectives are embedded in this Snapshot on Sustainability:
    Brian Falls, Palisades Capital Partners
  • Chris Forney, Brightworks Sustainability
  • Daniele Horton, Verdani Partners
  • John Barton, SEIU
  • John Marler, AEG
  • John Onderdonk, Cal Tech
  • Kevin Devine, Brookfield
  • Maya Henderson, Kilroy Realty
  • Mike Bennett, Office Depot
  • Sara Neff, Kilroy Realty
  • Steven Ashkin, The Ashkin Group

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