Building green has historically been seen as more expensive and less profitable for developers, but the true profits captured by using environmentally friendly techniques should get the attention of serious investors. The Leadership in Environmental and Energy Design (LEED) certification program, created by the U.S. Green Building Council (USGBC) that standardizes and rates the overall sustainability of a building, is of particular note.

The LEED certification program has created standards of design and development for new construction, existing buildings, commercial buildings, residential homes and neighborhoods. It awards points based on site selection, water and energy efficiency, materials used and indoor environmental quality, including air quality.

For the new construction rating, buildings are awarded points on a 69-point scale and classified as certified (26 to 32 points), Silver (33 to 38 points), Gold (39 to 51 points) or Platinum (52 to 69 points).

Some of the financial benefits of investing in a LEED-certified building are more obvious than others. Installing energy and water efficient appliances saves on utility bills, a directly observable savings. Other benefits, such as the profits incurred from extra productivity in a workplace with better air quality, according to a study by the USGBC, are less observable, but just as important.

“If you can build a high-performing structure that saves the owner money, while also being better for the environment and also better for the people using the building, it just makes sense,” Ashley Katz, communications coordinator at the USGBC, said in an e-mail interview. “We need to build with the future in mind and we need high quality buildings that last, that are safe, that are healthy and that are also good for the bottom line.”

Solar panels on a roof
Energy efficient buildings save costs and sell for more than conventional buildings Studies have been undertaken to assess the total savings created by using sustainable design and construction. While there are ranges of returns because of the inherent differences among regions of the country, and uncertainty in quantitatively measuring externalities—the effects of an activity that aren’t taken into account in its price—it is clear that there are significant savings and returns associated with green building.

LEED-certified buildings have higher rental rates and lower vacancy rates than comparable conventionally built buildings. Green buildings generate 3.5 percent higher occupancy rates, 3 percent higher rental rates and have a 6.6 percent improved return on investment, Katz said. Additionally, green buildings see an average increase of 7.5 percent in building values compared to conventionally constructed buildings, according to a study by McGraw-Hill Construction.

These findings are shored up by anecdotal evidence from across the country. For instance, a LEED Gold residential apartment building in New York City,...

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