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How LEED Certification Transformed Industrial Development Standards

Today’s businesses aren't pursuing LEED certifications to the extent that they did in the past because sustainable development is now a given — it’s demanded by the market.

Q1 2019
Way back in 1993, Rick Fedrizzi, David Gottfried, and Mike Italiano met up — most likely at a coffee shop somewhere — and soon thereafter, the seeds were planted that would eventually grow into the U.S. Green Building Council (USGBC) and its laudable offspring: Leadership in Energy and Environmental Design, or LEED.

Nearly a decade later, when I first started with Cushman & Wakefield in 2002, the buzz around LEED was in full bloom. No, it wasn’t fully understood, but it was a popular topic of conversation. Granted, that was 17 years ago, and my recollection of just how loud the buzz was is a little iffy. But I do remember we had to add the following question to our typical fact-finding checklist used during kickoff meetings with new clients: “Does your firm have an interest in pursuing LEED certification for the pending project?”

Back then, it wasn’t at all unusual for our client point-of-contact to look at me wide-eyed, with a clear look of “huh?” on their face. So, I’d give them the rundown, show them the points card, explain how all the points add up to this or that, and talk about the impact of a healthy workplace, the solid PR they would get, and how they’d end up having a very official plaque displayed in their lobby. Some would get it, others got it but didn’t want to foot the bill, and some simply kept the “huh?” look on their faces. Nonetheless, the popularity of LEED-certified buildings continued to grow, which was a positive sign for the industry and the environment.

When my focus shifted from mostly office work to mostly industrial projects, I wondered if my LEED days were done for good. After all, a LEED industrial building seemed much more ambitious at the time. But to my surprise, many of the very large, very complex projects I’ve managed since 2004 have been LEED-certified. As is always the case, the reasons vary from firm-to-firm; some choose to pursue certification because their board or executive team has goals surrounding sustainability, while other companies are more interested in having the local news crew out to applaud their environmental vision.

Regardless, over the last few years, my gut has been telling me that the focus is shifting. I’ve noticed an uptick in “certifiable projects,” that is, projects that are designed to LEED standards, but the paperwork or fees were never submitted for the official plaque. It seems that code, municipalities, and architect and engineering firms have adopted LEED design principles as the basis from which they start their projects. In other words, the industrial design and building industries have evolved to the point where the principles of LEED are no longer new. They are expected.

According to the USGBC Green Building Economic Impact Study, it was estimated that LEED-certified buildings in the U.S. would save $1.2 billion in energy, $149.5 million in water, $715.2 million in maintenance, and $54.2 million in waste, between 2015 and 2018. Building occupiers can support their sustainability goals and save money by meeting the standards. According to the USGBC Green Building Economic Impact Study, it was estimated that LEED-certified buildings in the U.S. would save $1.2 billion in energy, $149.5 million in water, $715.2 million in maintenance, and $54.2 million in waste, between 2015 and 2018. LEED set the standard, and the rest of the industry has followed in suit, whether or not they are receiving the certification.

So, to test my observations, I reached out to my counterparts in research at Cushman & Wakefield and asked them the question: Is the percentage of LEED-certified industrial buildings going up, going down, or staying about the same? Their responses suggest my gut instinct is still a reasonable barometer. And no, it has nothing whatsoever to do with the size of my gut. Just sayin’.

To be clear, the data I got back is taken from the total number of industrial buildings of 10,000 square feet or larger in the U.S. that were built between 2013 and 2018. Specifically, the numbers show:
  • In 2013, there were 634 industrial buildings constructed. Of those, 16 were LEED-certified: 2.5%.
  • In 2014, there were 954 built. Of those, a whopping 54 were LEED certified: 5.7%.
  • In 2015, there were 1,266 built; 61 were LEED-certified: 4.8%.
  • In 2016, 1,433 were built and 43 were LEED-certified: 3%.
  • In 2017, 1,647 were built — a sweet year for guys like me! Of those, 49 were LEED-certified: 3% again.
  • But now, watch this. In 2018, there were 1,492 built. Of those, 12 were LEED-certified: 0.8%. Wow, right?
So, in this sample size of five years, we went from a high of 5.7% to a low — just four years later — of 0.8%. Some might conclude from those numbers that the industrial industry doesn’t care about the planet or the people and critters who live here, but in my opinion, that is the wrong conclusion. Instead, based on my work with the firms building and the people occupying these buildings, the market now has an ingrained culture that expects that LEED — and now in some cases, WELL — are table stakes, that sustainable design is a given, and it is in fact expected.

Granted, the sample size of five years may not show the entire picture as clearly as a 20-year study might, so we plan to keep an eye on the data and report back if there is a meaningful change going forward. But unlike those who conclude the declining percentage is a bad thing, I think there is a silver (no LEED pun intended) lining to that cloud. Buildings under construction today are far more environmentally-friendly and energy-efficient than those of the past. They pollute less, send less material to landfills, and use less water, while having more solar panels, bike stands, public transit options, and natural, local plants. And finally, recycling is more prevalent in these buildings than in buildings built just 10 years ago. The difference is measurable.

So, to me, the takeaway is this: in years past, businesses wanted the LEED plaque because it said to the public and to their employees, “We care about the environment and have the certification to prove it.” But today, they don’t have to go out of their way to prove anything because the market expects — check that, the market demands — sustainable design to begin with. To me, that is true progress — progress that Fedrizzi, Gottfried, and Italiano initiated and should be proud of.

This article originally appeared on Randy Thompson’s Industrial Blog at Cushman and Wakefield

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