GBLB Discusses Greening of Corporate America with Ari Kobb of Siemens

GBLB sat down with Ari Kobb, Director of Green Building Solutions and Co-Chair of Sustainability Committee for Siemens Building Technologies Division to discuss the Siemens/McGraw Hill Construction Study on the Greening Of Corporate America.  The study is available for download here.

GBLB: What did Siemens intend to accomplish with the study?

AK: We did the first study in 2006, published in 2007, and our main driver was to see the extent to which green and sustainability was being adopted and embraced by corporate America versus the public sector, because we viewed public sector as mandate driven. We thought the private sector drives the market. They make things more accessible when they embrace it. When the lightbulb goes off, they will develop more products, the service providers will be there, it drives market growth. When we did the 2006 study, the tipping point of sustainability and green buildings would be 2009-2010. We redid the study in 2009 because we thought the market had moved significantly, and we wanted to prove out some trend information. With the emergence of a corporate sustainability officer, we wanted to see what role this played. At the end of the day, we wanted to get away from the "if sustainability is significant" to the part where sustainability is driving the market.

Siemens did the study because we are a thought leader in the industry, we want to be associated with the green topic. At the same time, we embarked on our own internal sustainability movement. The data supports both our continued investment and growth in the green area and our own internal journey to becoming more sustainable. The timing was perfect. We started our own sustainability program in 2007, and at the same time, our customers both institutional and commercial were going green, the timing was right on that aspect.

GBLB: Who did you interview?

AK: We interviewed 203 executives from the C-suite of revenue over $250 million—CEO, COO, CFO, Chief Sustainability officer or someone in this position. This is a change from 2006, because there was no one in that position in 2006.

GBLB: What did you find?

AK: The main thing we found was that corporate America has moved attitudinaly toward embracing sustainability as part of corporate strategy. You are not going to be able to be a Stage 1 or Stage 2 company because of benefits the C-suite sees in sustainability. The alignment between efficiency and sustainability is being identified at the highest levels. We have seen an increase in Stage 4 and Stage 5 companies. Stage 4 and 5 combined increased from 18 to 37%, Stage 4 increased from 15 to 30—it doubled. Stage 3 has stayed the same.

This is an attitude study—we gave them a definition, and asked them to place their company. This measures the attitudes of the highest levels of the organization—it may reflect where they want to be. What we are seeing now 1/3 of the market seeing themselves as a Stage 4 and Stage 5.

Most companies have a dedicated sustainability role—61% have a dedicated sustainability staff.

When we looked at what was driving the sustainability efforts, we found that everyone (almost 80%) view a drop in costs as an outcome of sustainability efforts. A convergence of sustainability as an efficiency and cost-savings tool. Greater productivity was also perceived as an outcome of sustainability. Customer retention and attraction and employee retention and recruitment were also seen as benefits of sustainability. The concept is that there is a drive in the market to differentiate by providing more sustainable products, and also being driven to be more sustainable internally by their customer demands. An example is suppliers to major universities. They like green products. They are looking to the market to develop new green products, and they are also asking what their suppliers are doing to go green. In this economy, if this sliver is what will win you the job, you’ll do it. RFQs are beginning to ask how sustainable the suppliers are. 73% say perceived customer retention and attraction benefit.

There are a lot of people coming into the market who have grown up greener, who have a more ingrained understanding and expectation that where they go to work is in the green space, and is green as well. The two have to be connected.

This study was done in the depth of the recession. Over 60% said sustainability initiatives were continuing or growing. The pace may have slowed down, but it hasn’t gone backwards. It is one of the few bright spots we have seen. You can’t stop it. Even the Stage 1 companies will continue along the sustainability path.

GBLB: What is Siemens doing as a result of the study?

AK: We are distributing the information to show that the market has moved—the time to debate the value of embracing sustainability is over. Now, let’s all take it to the implementation level to satisfy what the market wants. The C-Suite are saying that the products, services, solutions are available in the marketplace. The time to say “is this going to take off” is over. The alignment with corporate strategy, profit motive, efficiency tied to conservation is there at the highest level of corporate America. The real question is whether enough is going on. Would you have expected to see more products, more services, etc.? Over 50% studied were providing sustainable products and services to marketplace, over 50% are also seeking sustainability initiatives from suppliers.


Update on AHRI v. City of Albuquerque

By: Patrick J. Bello, LEED AP, Drexel University Earle Mack School of Law, Class of 2012

As previously posted, on October 3, 2008 in AHRI v. City of Albuquerque, District Court Judge Martha Vazquez issued a preliminary injunction against the City of Albuquerque prohibiting the city from implementing its initial green building regulations because it would require more stringent HVAC energy efficiency regulations than those currently set forth in the Energy Policy and Conservation Act of 1975 (EPCA).

In essence, Judge Vazquez determined that accepting the AECC would mean that builders could be penalized for using federally acceptable standards, and thus the federal EPCA requirements were found to preempt the new State regulations.

In response to and in compliance with the injunction, the City of Albuquerque has since passed the 2009 Interim Albuquerque Energy Conservation Code (IAECC). Led by the Sierra Club and the Southwest Energy Efficiency Project (SWEEP), the IAECC was passed and took effect in December 2009. The Code was drafted so that the areas of regulation at issue in AHRI v. City of Albuquerque remain unchanged at the federal minimums, but maintains other previously enacted energy-reduction legislation and raises standards for additional energy efficiency components such as the building envelope, windows, and lighting in order to stay on track with the City’s energy reduction goals. The IAECC meets the current “Architecture 2030 Challenge” to achieve a 30% overall improvement above and beyond the 2006 International Energy Conservation Code (IECC) baseline.

 In a brief telephone interview with the City of Albuquerque Attorney John Dubois, much light has been shed on the present situation. To date the IAECC has been met with success. The City does in fact meet their planned efficiency goals for attaining the projected 30% energy savings, and they have done so without making any changes to HVAC standards. However, according to Mr. Dubois, without the ability to incorporate restrictions and regulations on HVAC components the IAECC is a “dead end.”

In other words, the City has “squeezed” most of the possible additional energy reductions from various aspects of the building, including lighting, roof reflection and windows, but given the fact that HVAC energy usage encompasses a major component of the energy consumption of any building (whether new construction or renovation) the City will not likely be able to move beyond that 30%, thus putting a stoppage to continued energy reductions in the future.

The IAECC is meant only to be a temporary fix while litigation continues. The City has complied with Judge Vasquez’ preliminary injunction, but upon resolution of the case the IAECC will automatically end. If the City of Albuquerque is to prevail, the original Energy Conservation Code will be reinstated. If AHRI is to prevail, the IAECC will still be taken out of effect, and new standards in further compliance with the decision will be reexamined and implemented.

At present, the litigation is on hold pending Judge Vasquez’ decision to either grant AHRI’s motion for summary judgment, or to allow the case to proceed. Everything is fully briefed and ready to go, and according to Mr. Dubois the decision could come in “any day.” The City is hoping to get the opportunity for discovery and a trial because it still fervently believes that the regulations under litigation are not in fact preempted by the federal standards.

Just to clarify one last commonly misconstrued point following this case, is that the oft quoted idea that the City was “unaware” of federal preemption issues upon the passage of its Energy Conservation Code is actually inaccurate. By the time of the final bill, the City had in fact already made certain changes to address the preemption issues. The Code that is actually under litigation was initially passed with some inconsistencies and points requiring clarification, but the City gave itself a wide berth before the Code would take effect. The drafters gave themselves the time to review the Code and were in fact aware of the preemption argument when they chose to move forward. The reason for doing so is because all standards and requirements in the original Code are “performance based.” Buildings need only meet certain levels of energy efficiency, the manner in which these standards are achieved is not prescribed by the Code. Specific equipment is not mandated, and there are various different ways of achieving the goals. At the time the Code was passed, and still today, the City of Albuquerque strongly believes that the Code is not preempted by federal law and it is sticking by this belief.

NY Times Editorial On Regulatory Supplementation to LEED

The New York Times had an interesting Op-Ed today on how municipalities can supplement LEED by requiring follow-up energy tracking. 

Carbon Neutral Paris? Oui. Carbon Neutral Madison? Non.

What a difference the pond makes. 

The E.U. passed strict energy efficiency regulations Tuesday, requiring all new buildings constructed in Europe after 2020 to be virtually carbon-neutral.  The goal, according to Reuters, is to reduce the 36% of GHG emissions attributable to Europe's building stock:

"With buildings accounting for 36 percent of the EU's greenhouse gases, improving their energy efficiency is also crucial for meeting the EU's climate change goals," said Turmes.

Contrast this approach to yesterday's veto by Wisconsin's governor of a bill aimed at making a percentage of public buildings green. The Milwaukee Journal-Sentinel reported:

The measure had directed all state building funds to be used for certifying at least 15% of total gross square footage of working space in state-owned and leased buildings to meet green building requirements.

The reason for the veto? In a letter, Governor Doyle stated that the requirement would:

[R]esult in all current maintenance projects being delayed indefinitely.  In the future, the commitment of all these funds for this single purpose will also sharply curtail the state's ability to build new buildings or maintain its existing facilities. 

I find it difficult to reconcile these two regulatory actions.  On the one hand, Europe has determined that it is not only feasible, but necessary to build its entire building stock to a near carbon neutral level, and Wisconsin has determined that it cannot even make 15% of its public buildings green.  What will the competitiveness of Wisconsin--indeed, the entire United States--be if it is saddled with a portfolio of underperforming building stock contributing to greenhouse gas emissions.

Value Engineering Energy Efficiency--The Kerry Lieberman Bill

Last week, Senators John Kerry and Joseph Lieberman debuted the American Power Act, their Senate compromise energy bill which was supposed to be nominally bipartisan, until Lindsey Graham decided to back out at the last minute. Among the compromises that Kerry, Lieberman and Graham appear to have made is to gut energy efficiency provisions from the Act.

Technically, provision for energy efficiency, and the building code, it is still nominally there, in Section 1603 of the draft bill, on page 199 for those of you following along at home. However, it looks nothing like the versions in Waxman-Markey and prior senate versions. In the Kerry-Lieberman version, states are allocated between 2.5% and 1% of all green house gas emission allowances. Of that allocation, .5% must go to Indian Tribes. With the remainder, the states may use for a variety of programs, including energy efficiency, renewable energy and transportation. Specifically:

1) Energy efficiency purposes, including implementation of programs related to—
(A) building codes that improve energy efficiency;
(B) energy-efficient manufactured homes;
(C) building energy performance labeling;
(D) low-income community energy efficiency improvements; and
(E) energy efficiency retrofits of existing buildings.

(2) Renewable energy purposes, including—
(A) deployment of technologies to generate electricity from renewable energy sources; and
(B) deployment of facilities or equipment, such as solar panels, to generate electricity or thermal energy from renewable energy resources in and on buildings in an urban environment.

(3) Cost-effective energy efficiency programs for end-use consumers of electricity, natural gas, home heating oil, or propane, including, if appropriate, programs or mechanisms administered by local governments and entities other than the State.

(4) Enabling the development of a Smart Grid (as described in section 1301 of the Energy Independence and Security Act of 2007 (42 U.S.C.14 17381)) for State, local government, and other public buildings and facilities, including integration of renewable energy resources and distributed generation, demand response, demand-side management,and systems analysis.

(5) Providing the non-Federal share of support for surface transportation capital projects under—
(A) sections 5307, 5308, 5309, 5310, 5311 and 5319 of title 49, United States Code; and
(B) sections 142, 146, and 149 of title 23, United States Code; except that not more than percent of allowances distributed to each State pursuant to this section shall be used for the purposes described in this paragraph.

The distribution among the states will be based on a complex formula:

(A) 1⁄3 of the allowances shall be divided equally among the States.
(B) 1⁄3 of the allowances shall be distributed ratably among the States based on the
population of each State, as contained in the most recent reliable census data available from the Bureau of the Census of the Department of Commerce, for all States at the time the Administrator calculates the formula for distribution.
(C) 1⁄3 of the allowances shall be distributed ratably among the States on the basis of
the energy consumption of each State, as contained in the most recent State Energy Data
Report available from the Energy Information Administration (or such alternative reliable
source as the Administrator may designate).

Essentially, Kerry Lieberman took the best, easiest and cheapest means of reducing greenhouse gas emissions—through energy efficiency—and gave them the very short end of the stick, meanwhile allocating the vast majority of federal resources to cap and trade. Is this a good compromise?

Little Energy Bill Likely To Include Energy Efficiency Code

Kerry and Lieberman are due to unveil their long awaited--and until Lindsay Graham's recent exit, nominally bipartisan--cap-and-trade bill this week.  But in a less heralded move, Harry Reid indicated that he could do a smaller energy bill which would likely include national energy efficiency codes.  According to EENews (subscription required):

The "smaller" proposal Reid referred to centers around legislation (S. 1462) the Senate Energy and Natural Resources Committee approved last June. The bill, which won the votes of four Republicans, would impose a national renewable electricity standard, overhaul federal financing for "clean energy" projects, establish a suite of efficiency measures, mandate new federal electricity-transmission siting power and allow wider oil and gas leasing in the eastern Gulf of Mexico.

So, even if cap-and-trade fails, this year may be a big one for federalizing green  building regulations. 

In The Department Of Doublespeak Department--We Cannot Deal With The Environment Because We Have An Environmental Problem

I don't often post twice in one day, but this came across my desk and I simply had to comment. 

I have written extensively about the progress of the Climate Bill in Congress.  Today, Lindsay Graham, Republican participant in the Kerry-Lieberman-Graham effort to put forward a bipartisan Senate version of a climate bill announced that he would not participate in developing climate legislation because of the BP oil spill.  According to the New York Times:

“In addition to immigration, we now have to deal with a catastrophic oil spill in the Gulf of Mexico which creates new policy and political challenges not envisioned in our original discussions. In light of this, I believe it would be wise to pause the process and reassess where we stand.”

What? Let me see if I understand this correctly--we have a huge environmental problem, so we cannot deal with our...huge environmental problem? Does anyone see this as a cynical pretext for actually having to particpate in putting forward a  bipartisan effort towards getting a climate bill passed? 

GBCI Poised To Modify LEED Challenge Process

USGBC/GBCI had its first challenge of a LEED decision.  According to the Green Real Estate Law Journal:

a group of local residents have filed a 125-page complaint with USGBC that challenges the award of LEED Gold certification to the Northland Pines High School, which was completed in the fall of 2006 and earned formal certification under LEED for New Construction Version 2.0/2.1 on May 10, 2007.

GBCI reviewed the challenge and recently upheld the certification. 

Now, GBCI is considering modifying its challenge process.  The revised challenge process will be more formal, and is likely to remove the opportunity for the project to cure any deficiencies in achieving the LEED certification which exists in the current form of the appeals process. I will keep you apprised as more details emerge.

CORRECTION:  This post originally stated that GBCI was modifying the "appeals" process, not the "challenge" process--The Appeals process is what a project team uses to approach GBCI if they feel a credit, prerequisite, or MPR was decided incorrectly. The Challenge process is the mechanism whereby a third party, or GBCI, can initiate an investigation regarding the proper satisfaction of such program requirements. It has been corrected.