9 ways sustainability drives profit

Chris Hummel

October 23, 2014

GreenBiz

 

Today most executives recognize that sustainability must be integrated into their organization's core strategy — not to say that they necessarily understand why. In fact, too many are still content wearing some kind of sustainability PR badge just because the "About Us" section of their website gives sustainability a one-paragraph mention.

For their sake and ours, here are nine reasons why all of us might want to redefine how we approach sustainability.

1. Lower costs

Sustainability drives profitability. For example, Intercontinental Hotels says it is saving $30,000 a month at two San Francisco hotels by micro-managing peak power. Watch for companies using the uninterrupted power supplies in their data centers to do the same thing. They might even rent spare capacity on their UPS to utilities — UPS as a profit center, anyone?

2. Increased revenue

CBRE, the world's largest commercial real estate services firm, surveyed San Diego and found that green buildings commanded 18 percent higher rents ($2.42 per square foot versus $2.02 per square foot) and higher occupancy rates (88.3 percent vs. 84.3 percent) than conventional buildings. Other surveys show similar results.

3. Higher capital value and ROI

In real estate, higher rents and lower turnover translate directly into higher capital values (PDF) that can average 10.9 percent for new buildings and 6.9 percent for older ones. It also helps you control your utility bill.

4. Leveraging broadband investments

As part of a smart-grid upgrade to make its electrical system more efficient, municipal utility EPB installed a 1-gigabit fiber optic network that reaches more than 172,000 homes and businesses in Chattanooga, Tenn. By building one network for both grid and Internet traffic, EPB was able to leverage its investments and construction costs, and provide local residents along with businesses such as Volkswagen and Amazon with some of the fastest Internet service in the country. This project will become a model for many communities.

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