by Shane Henson — April 25, 2012—Sustainably built and operated buildings aren’t just good for the environment, they are good for business too, say University of Notre Dame management professors Edward Conlon and Ante Glavas. The professors recently conducted a study, The Relationship Between Corporate Sustainability and Firm Financial Performance, that found that business performance in Leadership in Energy and Environmental Design-rated (LEED) buildings exceeds that of non-certified properties. LEED, an internationally recognized mark of excellence from the U.S. Green Building Council, provides building owners and operators with a framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.
The first-of-its-kind study compares the financial performance of 93 LEED-rated bank branches with 469 non-rated branches owned and operated by PNC Financial Services Group, using consumer deposit and loan data collected between 2008 and 2010.
Conlon and Glavas says PNC was an ideal candidate for such a study for several reasons: it owns and operates the highest number of newly constructed LEED buildings in the world, so it could provide a statistically significant sample of third-party-validated green buildings; all branches provide the same products and services; and the products themselves are not tied to environmental concerns.
The study found that:
- PNC’s LEED-rated facilities opened 458 more consumer deposit accounts and had more than $3 million more in consumer deposit balances per facility per year over non-certified properties.
- LEED-rated facilities also opened 25 more consumer loan accounts and had almost $1 million more in loan balances per facility per year. The data also shows that financial performance at LEED-rated facilities increases at a greater rate than at conventional facilities.
- After controlling for other variables that influence performance (such as consumer net worth, employee demographics, market demographics, branch size and age, and advertising spend), the sales at LEED-certified branches increased by $461,300 per employee compared to non-certified locations.
- Utility costs per employee in LEED branches were significantly lower than in the non-certified buildings at a reduction of $675 per employee.
- LEED-rated facilities also opened 25 more consumer loan accounts and had almost $1 million more in loan balances per facility per year. The data also shows that financial performance at LEED-rated facilities increases at a greater rate than at conventional facilities.
