I just read an article published today on the Harvard Business Review blog that misses the point about businesses, specifically banks and other financial institutions, engaging in sustainable building practices. The article focuses on how companies should be less focused on environmental sustainability and more focused on financial sustainability given the nation’s disfavorable attitude toward banks today.
What the article fails to regognize is that sustainable building, when done right, is financially responsible and sustainable! Green building techniques have returns on investment associated with them, and some can be extremely favorable, especially when combined with utility and government incentives. Banks often operate on razor-thin margins and invest in financial instruments that have paltry returns when compared to sustainable building efforts that have similar risk and terms. Energy saving measures undertaken at the time of construction are also a hedge against rising utility costs (operating expeneses). In addition to immediate tax advantages like credits, corporations also benefit from accelerated depreciation on many green building upgrades.
The authors suggest that banks have a role to play in environmental stewerdship in the respect that they should make loans for customers to build green. Suggesting that the bank itself shouldn’t be built with energy savings in mind while encouraging it to loan money for customers’ sustainability projects doesn’t make sense.
I wholeheartedly agree that the banking industry as a whole has lost the trust of the American people, and that many are probably attempting to engage in sustainable building efforts as a marketing tool (greenwashing). However, failing to recognize sustainable building as a financially sound investment pursuit does a disservice to financial institutions that are doing the right thing for both the environment and their shareholders.