Dr. Green Laws or: How You Should Stop Worrying and Love Sustainability Regulations

War is too important to be left to politicians. They have neither the time, the training, nor the inclination for strategic thought,” – Brigadier General Jack D. Ripper, “Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb”

I can’t speak for General Ripper’s “precious bodily fluids” but the 1951 policy to fluoridate the U.S. public drinking water supply is widely considered an economic boon. The 18 percent to 40 percent reduction in childhood cavities saves far more money in dental costs than the 95 cents per person it costs on average to add fluoride to our water. And based on my last trip to the dentist, he doesn’t seem to be hurting for business.

What does this mean for your business? You should smile more about the ever increasing wave of real estate sustainability requirements going into effect nationwide. The political wars being fought over regulation may have narrowed the popular view of regulation to a four-letter-word, but rather than fight green regulations you are better off making them part of your business model.

The real estate industry generally enjoys a love-hate, hate relationship with environmental regulations – ask any developer how long it takes to get a shovel in the ground in California and you’ll know what I mean. But green laws do not have to be a burden on your business and, in fact, they can be a means to help drive the long-term profitability of your real estate investments.

The key is to integrate regulatory compliance efforts with your voluntary sustainability initiatives. Many organizations treat these challenges separately with mandatory regulation compliance, which is focused on more immediate risk aversion, while voluntary efforts are more aspirational in nature and more long-term in terms of time horizon.

According to Andrea Gardner, senior technologist for sustainability at CH2M Hill, voluntary sustainability initiatives and corporate compliance efforts frequently are managed in different departments resulting in programs that may be duplicative or even at odds with one another, which can reduce the quality of both. By adapting voluntary green initiatives to the same standards as company regulatory compliance efforts, companies can establish clear objectives, measure progress and evaluate successes and failures.

“Ultimately voluntary action will be more beneficial than penalty-driven compliance,” Gardner said during a recent webinar hosted by GreenBiz.com. “Voluntary programs can drive ingenuity, innovation and compliance-focused programs inhibit innovation.”

This not only creates a means for measuring return on investment, but also integrates sustainability practices into the culture of a company. It grows sustainability beyond “corporate social responsibility” into “creating shared value,” a concept that is expanding in the business world.

This approach also helps broaden the analysis beyond simply how much does it cost to green a business or facility and how much money is saved by reducing energy and water consumption. Instead, integrating your voluntary environmental initiatives with your regulatory compliance efforts can better prepare your properties for the challenges of future energy and water price and availability fluctuations. It also can improve your tenant attraction and retention efforts along with your ability to attract top talent as people are increasingly concerned about their environment. Most importantly, you create a means to help your business improve its position in the marketplace and grow its profitability.

“With respect to the energy mandates, really the intent is that you print out a report and tell Big Brother about your energy use,” said Lisa Colicchio, director of operations and sustainability forCB Richard Ellis. “In the end, when you are trying to make these investments, then you are driving down your total energy use and you are making that building more competitive.”

So as green regulations continue to be debated, learn to embrace sustainable laws as a means to drive your long-term business strategy in an ever-changing real estate marketplace.

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Michael Gottlieb
The Green Report
Van Nuys, CA
Michael Gottlieb is Managing Partner for Advanced Green Solutions, which provides low-cost, high-quality services to help commercial property owners, managers and tenants advance their sustainability objectives and add value to their real estate assets. AGS provides MilliCare Textile and Carpet Care services in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties. Prior to founding AGS, Michael was an award-winning reporter, editor and columnist for Gannett Corp., Times Mirror, Tribute Corp. and the Daily Journal Corp. Most recently Michael was Editor of the California Real Estate Journal, Executive Editor of 8 small business publications located throughout California and an Associate Editor for the Los Angeles Daily Journal, California's leading daily legal newspaper where he oversaw real estate and biotechnology coverage among other areas. Michael also is a noted speaker and writer on real estate matters and is active in the California commercial real estate community.