“We’re not leading with a ‘we have a carbon goal’, we’re not leading with a ‘we have a green goal’, we are leading with a ‘we have a money goal’ – not measured based on sacrifice and principles, but it is based upon achieving good results for intelligent investment.”

 

I looked through a few of the recommended links and saw a company that caught my eye in the Rocky Mountain Institute Link. RMI’s “Reinventing Fire” program “offers actionable solutions for four energy-intensive sectors of the economy: transportation, buildings, industry and electricity. They choose champions in each category for various reasons. Malkin Holdings, owner of the Empire State Building won the category for buildings.

On a slow night this summer I decided to stroll down to the Empire State Building because I had never been there before. I was most interested in getting to the top so that I could soak up the views from 1250 feet above New York City. Unfortunately, a couple thousand other people had the same idea as me at the same time. Although the wait took about an hour, the line wrapped through several different floors of like a museum. Early exhibits explained some of the history behind the building, but the majority of them explained the recent green renovations to the 80-year-old building.  The statistics they showed were very impressive, particularly because it had never really crossed my mind that a standing building could have such an impact on the environment and have the ability to improve by so much.

The “green renovation” cost around $100 million. RMI was one of several consultants who worked to analyze the overhaul.. Improvements to the building over the past few years include:

  • Total overhaul to the HVAC system (Heating, Ventalation and Air Conditioning)
  • Energy efficient windows
  • Electronic readouts to make users aweare of their personal energy consumption
  • Maximized “daylighting”
  • Tenant demand ventaliation control
  • Occupant sensor Controls

The overhaul decreases the building’s energy consumption by around 38%, saving around $4.4 million per year. A video on RMI’s site explains how the motivation was more investment based than solely the societal good of “going green”. “We’re not leading with a ‘we have a carbon goal’, we’re not leading with a ‘we have a green goal’, we are leading with a ‘we have a money goal’ – not measured based on sacrifice and principles, but it is based upon achieving good results for intelligent investment.”

These comments raise an interesting question – Is green as appealing when the motive is financial reward and not “societal good”?

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4 responses »

  1. Paul Martin says:

    The comment that they have a “money” goal is interesting, because at a saving of $4.4 million per year, it would take over 20 years to amortize the $100 million that the renovation cost. I wonder what exactly the investment is? I’m assuming they expect this renovation to last much more than 20 years into the future. I thought one of the particularly interesting improvements of those listed is the electronic readouts on individuals’ energy consumption. I know I would be much more conscious of energy if I knew exactly how much I was using in a given day. As far as your final question goes, while it might not be as “appealing” to see a company pursue green initiatives as the result of financial motivation, at the same time I can’t really fault them. Especially when it comes to the renovation of an existing building.

    • I agree with the idea that 20 years to break even on the investment seems to be a bit of a lengthy timeline while using “investment” as the rationale. I wonder if rising energy costs and tax exemptions for going green are factored into the $4.4 million. At the same time, real estate has an infinite lifespan. Maybe they view the 20 year horizon as relatively short for how long the building will likely be standing.

  2. Marko says:

    Interesting blog. I think that going green can be appealing even when the motive is only financial reward. It’s easier to gain public support and acknowledgment when you are doing “societal good” but saving energy (heating, ventilation and air conditioning) can also be perceived as the eco-friendly move. Considering Paul’s concern about 20 years break-even point on investment, I think its not to uncommon to see such a big time-frames for the investments of this type. Windows and ventilation systems are types of building equipment that are not replaced often. I would not be surprised if many of windows stayed the same since 1931 when the Empire State Building was completed.

    • I agree. It is similar to the “Thinking Straight About Sustainability” aritcle By Epstein that we were assigned for class. In it he claims that “they (companies) act in socially responsible ways because they believe it’s ‘the right thing to do.’ Yet programs put in place for this reason are vulnerable because they are subject to the whim of shifting priorities, changing corporate leadership and financial cycles.” Essentially, the only rational way for businesses to implement sustainable changes is to actually have a financial incentive as well.

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