Should green-leaning companies undertake the effort and expense to become LEED-certified or would they be better off simply adopting the program's eco-friendly practices? That depends on the company and what precisely it hopes to gain from its green initiatives.
For those not familiar with the program, LEED stands for Leadership in Energy and Environmental Design. Developed by the U.S. Green Building Council (USGBC), the program recognizes facilities—anything from offices and hospitals to DCs and private residences—that meet specific standards in five key areas: sustainable site development, water efficiency, energy and atmosphere, materials and resources, and indoor environmental quality.
To achieve certification, companies designing new facilities or renovating existing structures submit their plans to the Green Building Certification Institute, which administers the LEED program. Certification is based on a performance credit system that awards points based on an action's potential environmental benefits. Gaining certification basically entails accumulating enough points from a checklist of possible green choices. For instance, when it comes to building construction, points might be awarded for the use of eco-friendly materials, having a water conservation plan in place, and minimizing energy consumption. Based on the points earned, a facility may qualify for one of four certification levels—Certified, Silver, Gold, or Platinum.
For organizations seeking to burnish the corporate image, LEED provides an opportunity to have their green claims validated by an outside party. "The benefits of LEED are that you get a third-party observer who will confirm [that you've carried out your design plan] and the promotional value you get from it," explains Gary Hisel, senior design manager for Gray, a distribution facility design-build company based in Lexington, Ky. Often, the choice to pursue LEED certification is tied to a company's commitment to cut its carbon footprint. "It usually aligns with a corporate value that drives them to fulfill that value with a LEED building," notes James Kirkland, a senior project manager for H&M Construction Co., a commercial builder in Jackson, Tenn.
While LEED recognition carries a great deal of prestige, the process of obtaining a certification is not cheap or easy. "It's not for the faint of heart," observes Richard Murphy, president and CEO of Minneapolis-based Murphy Warehouse Co. His firm is a fourth-generation third-party provider of warehouse services that operates 13 facilities, some owned and some leased. All of the company-owned facilities are LEED certified, with three having attained Gold certification. Murphy says the certification process has cost his company $80,000 to $100,000 per facility. For him, it's a worthwhile investment. As Murphy sees it, it's not just the right thing to do from an environmental standpoint, but it also sets his firm apart.
"As a 3PL, we have to work with clients," Murphy explains. "Our customers have their own green initiatives that they can't meet if their partners can't help them. We want them to say to us, 'What you do green helps us with our corporate goals and that is why we choose you.'"IT'S ALL IN THE DETAILS
For companies that decide to seek LEED certification, consultants agree that the groundwork should be laid in the earliest stages of the planning process, as it is much harder to go back and make changes later. "You are going to get the biggest bang for the buck at the planning level. That is when the most opportunities are open to you," says Don Derewecki, senior engineer at St. Onge, a supply chain engineering and logistics firm in York, Pa.
The project's point people should also be prepared with a strong business case. "Working toward a LEED certification is the right thing to do," says Lou Cerny, vice president of Sedlak Consultants, a supply chain consulting firm in Highland Hills, Ohio. "It is good citizenship to have a green facility; however, the majority of decisions [when building a facility] are actually based on business reasons."
Often as not, that means decisions come down to money. "Managers want to see some economic benefit," says Dean Starovasnik, practice director, distribution engineering design for Peach State Integrated Technologies, an Atlanta-based engineering and consulting firm.
While green projects can bring significant savings in the long run, their return on investment (ROI) often compares unfavorably with the returns on nongreen expenditures. That can make them a tough sell—particularly to publicly traded companies, which typically seek a return on investment of three years or less. "It usually takes a corporate culture that is willing to extend the ROI out a few more years," Starovasnik observes.
GOING GREEN ONE STEP AT A TIME
While obtaining a LEED certification gives a company a certain cachet, it's not for everyone. Many companies are deterred by the time, cost, and effort involved. But that doesn't mean they have to give up on their environmental dreams. Though they won't receive formal accreditation for their efforts, they can still pursue a green program on their own. As Michael Stewart, project engineer at St. Onge, puts it, "They [might decide they] want to be more energy efficient, but they don't need that LEED plaque on the wall."
"A lot of things can be done to make a building more efficient [outside of] LEED," adds Dale Harmelink, executive vice president at Tompkins International, a supply chain consulting and implementation firm.
So how do you go about making your DC operations more sustainable? Whether you intend to apply for LEED certification or not, there are many actions you can take to reduce the operation's environmental impact. Here are some things to consider:
To keep heated or cooled air from escaping through loading dock doors, install dock seals. Murphy Warehouse Co. takes the added step of placing insulated blankets on the steel dock plates when not in use in order to reduce air leaks. As a result, the company's docks are now 10 degrees warmer during frigid Minnesota winters. The use of large circulating fans also helps even out temperatures within buildings—pushing warm air down in the winter and reducing reliance on air conditioning in summer.
Whether you opt to take the LEED certification route or not, going green can bring big payoffs. All of these efforts to reduce waste, save energy, and generally adopt sustainable practices can make a huge impact on your business and on the planet. Richard Murphy sums up his mission this way: "Are we changing the world with what we are doing? We are trying."