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EXECUTIVE SUMMARY OF THE

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EXECUTIVE SUMMARY OF THE

    Valuing the Future of Sustainable Products, Buildings & Vehicles

    EXECUTIVE SUMMARY

    April 24, 2003

    Purposes of this Special Report

    This report documents economic benefits of sustainable products, buildings and vehicles, and identifies their added value and methods to calculate this value. Actual financial results are used from sustainable buildings and products in the marketplace. The following uses of this Special Report are recommended:

    Identifying the value of sustainable buildings, products, vehicles, and investments

    Providing the basis for training on sustainable strategies and product selection

    Developing, advertising, and purchasing sustainable products and vehicles

    Measuring increases to shareholder value and profitability

    Calculating economic benefits

    Sustainable Building Defined: a sustainable building is energy and environmentally efficient, providing economic, environmental and social benefits over the whole building environment, while protecting and improving the needs of future generations.

    Sustainable Product & Vehicle Defined: a sustainable product and vehicle provide

    environmental, social & economic benefits over their life cycle from raw materials extraction to final disposition, while protecting and improving public health, environment, & future generations.

    Most importantly, sustainable products, buildings and vehicles result in healthier people, communities, and natural environment. Since consumer product companies and building owners use many buildings and products, they have a larger than usual opportunity to increase their market share and profitability by adopting sustainable building and product practices. For example, independent market surveys show that over 20% of the Cooperative Bank’s (UK) customers opened bank accounts for the Bank’s ethical and environmental policies, the latter being the most frequently cited by far. This is important to the bank since its brand value is between 15% and 18% of its pre-tax profit.

Summary of Sustainable Building Economic Benefits

    Sustainable buildings are more profitable than conventional ones due to reduced operating costs, higher value and occupancy rates, and increased occupant health and productivity. Operating costs are reduced 50%; for example, a 100,000 ft? US Green Building Council LEED? certified building saves:

     $80,000/yr in energy costs through the use of 10 different efficiencies

    $93,000 through waste reduction, keeping 186 tons out of the landfill

    $44,000/yr for avoided wastewater treatment from water conserving equipment

    $53,368/yr through the use of energy efficient appliances and lighting

    The total savings per 100,000 ft? building annually is $177,000. If a corporation or local government has 25 100,000 ft? buildings, it can save over $3 million/yr. through sustainable buildings. Savings on this scale are best achieved by using the LEED? green building rating system and sustainable product selection tools like BEES and other ISO compliant life cycle assessment (LCA) tools. LCA is the evaluation of a product’s environmental impacts and benefits over its life, from raw materials extraction to final disposition, as required for sustainable products communications by US and international law.

    On average, sustainable buildings increase occupant productivity by 5%. The greatest value of a building is the productivity of its occupants. US Green Building Council, EPA, & DOE’s Sustainable Building Technical Manual documents that a $14/ft savings is gained from a 6%

    productivity increase from utility and personnel costs for a typical 100,000 ft? building, equaling $1.4 million/yr., or $35 million/yr. for 25 100,000 ft? buildings.

    Projected Stimulus to the Economy by 70% Commercial Green Building Market PenetrationEnergy Savings: $36 billion/yr

    Construction Waste Reduction: $6.7 billion/yr

    Water Pollution Savings form

     Water Conservation: $20 billion/yr

    Energy Savings from appliances

     & Lighting: $24 billion/yr

    Added Value from Increased

     Occupant Productivity: $632 billion/yr

    Increased Retail Sales: $800 billion/yr

    Emission Reductions’ Market Value: $ 1.1 billion/yr

    Total $1.5 trillion/yr value addedAvoided pollution control costs through sustainable buildings have been monetized using EPA published costs of pollution control: 1) Air pollutants- $208.60/ton; 2) Water pollutants - $11.27/ton; 3) Solid waste - $104.01/ton; 4) Hazardous waste - $24.01/ton; 5) Leaking underground tanks- $3,958.60/tank; 6) Pesticides -$1.35/pound of active ingredient; 7) Toxic chemicals - $.16/pound; 8) Climate change gases - $24/ton. Additionally, there are in situ

    pollution damage costs to human health and environment not included in these figures.Economic Benefits of Sustainable Products, Buildings & VehiclesSustainable products, buildings, and vehicles can be more profitable than conventional ones and more beneficial for purchasers. Greater profitability for sustainable products and vehicles result from the following advantages:

    Reduced liability

    Fewer regulatory constraints

    Faster product to market time

    Improved corporate good will, resulting in competitive advantage

    Documented public demand due to global health and environmental benefits

    Reduced costs for raw materials and manufacturing

    Improved employee health and safety

    Increased worker productivity through lower time for liability, compliance

    Enhanced social equity

    Increased sales margins

    Documented public demand translates into improved conditions such as:

    Reduced climate change and acid rain

    Improved ambient and indoor air quality

    Water conservation and improved water quality

    Increased pollution prevention

    Increased waste reduction, reuse and recycling

    Improved human health and environment

    Preservation and restoration of ecosystems and wildlife habitats

    Sustainable Product, Building, & Vehicle Value Added Calculation Spreadsheet. Economic

    benefits can be calculated using the spreadsheet in section 3 of the Institute for Market

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Transformation to Sustainability Draft Economic Benefits Standard, from which the data in this

Report were taken.

3

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