We enjoyed some much-needed time off last week. Thanks for the break!
Today is Earth Day and the acronyms are everywhere. We’ll be exploring USBGC, LEED, IWBI, WELL, and ESG along with some lesser-known merit badges along the way.
The US Green Building Council was created in 1993 to promote sustainability in building design, construction, and operation. It later partnered with 7 other national councils to form the World Green Building Council. USGBC also partners with Green Buisness Certification Inc (GBCI) which essentially prints the certifications behind LEED credentialing. Leadership in Energy and Environmental Design (LEED)is a set of ratings designed to help Building Owners & operators with environmental responsibility. These ratings, after being woven through Washington DC, now include tax credits, zoning allowances and exceptions, expedited permits, and access to other features and benefits.
Critics have pointed out that LEED is a design tool rather than a performance measurement tool focused on modeling rather than consumption. That’s why we’re seeing the sensor world of SaaS providers pitching bolt-on PropTech solutions and design-driven expenses behind LEED specs. This, of course, contributes to cost overruns and project delays.
In general terms, trends are waning from LEED building certification, citing “LEED Brain” and overall shortcomings in delivering energy-efficient buildings. There are some interesting critics out there including Auden Schendler’s now ancient 2005 article “LEED is Broken; Let’s Fix It” and the Washington Examiner’s findings from an in-depth study of water, power, and greenhouse gasses per square foot calling the rating “meaningless.” We’ll leave it up to you to pass your own judgment - but nobody at Orion Growth has certification, yet we’ve all had involvement with LEED projects.
Now that we’ve covered some of the legacies of ‘green’ building - let’s explore more current trends.
ESG is an acronym that stands for Environmental, Social, and Corporate Governance. This one isn’t as easy to peg down origin as it’s more of a concept than a group, affiliation, or council and its purpose is being adopted by various types of organizations. Traditionally, ESG attempts to evaluate the extent to which a corporation works on behalf of social goals to maximize profits for shareholders. That’s an important distinction - corporations maximize profits for the benefit of shareholders. More recently, there’s evidence of non-profits, DAOs, municipalities, and higher-education institutions adopting these methodologies to drive benefit over profit. MCSI, a global ESG rating agency uses the term from an investment perspective, a movement that has grown from corporate social responsibility into a global phenomenon representing more than US$30Trillion in assets under management. An interesting company, Sustainalytics, has emerged as an engagement tool for investors. They’re watching HOW companies are choosing to engage in ESG methodologies and publishing risk ratings, action plans, impact solutions, and screenings among other climate-based and social metrics.
This leads us to the last certification of Earth Day 2022….IWBI’s WELL accreditation.
The International WELL Building Institute also relies on The GBC for third-party certification. WELL standard v2 has been in place since 2018 and aims to follow similar types of design tools as LEED, but also offers a level of technology to monitor and report KPIs like indoor air quality, movement, light, community, and innovation. WELL begins to intersect, at least at a conceptual level, with PropTech while enabling and qualifying the ESG goals that remained slightly analog with LEED.
It’s complicated, but not forever.
Right now, like many legacy systems and organizations, these objectives are disparate. Before long, and with the advent of web3 tools, organizations will increasingly adopt smart contracts, thereby enabling an immutable record of transactions associated with environmental, social, and governance decisions. This data will be open book to the most progressive companies - thereby allowing them to embody ESG rather than simply having an ESG statement. Proof of Work or Proof of Stake mechanisms will prevent corporate veils and misleading data from entering the various communication channels. Horizontal or less hierarchal firms that commit to ESG by building it into their operating systems will see far more engagement than top-down mandates.
There’s only one Earth. Let’s go make it better. Here is a link to the Global Alliance for Buildings and Construction 2020 Report. There’s a ton (CO2e) of useful information for you.
“I only feel angry when I see waste. When I see people throwing away things we could use.” - Mother Teresa
“Live in each season as it passes; breathe the air, drink the drink, taste the fruit, and resign yourself to the influence of the Earth.” - Henry David Thoreau
“Design firms of the world should be working from the woods, not the cities” - Chris Moeller
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