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 DETAILSFor 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:
- Site selection and facility construction: When choosing a location for your facility, look for a site that won't require extensive site alteration or construction of a lengthy road to reach the building. As for building materials, use local products that don't have to be transported long distances to reach the site, saving fossil fuels. Wherever possible, select eco-friendly building materials or, better yet, recycled materials. Collect and sort construction waste by category, and introduce the materials into the recycling stream.
- Landscaping: When choosing plantings for the building site, opt for natural grasses that don't require regular watering. Natural grasses reduce storm-water runoff and require significantly less maintenance than traditional lawns (think less mowing and less mower exhaust). Murphy, who began his career as a landscape architect, says that "cut" grass is 7.3 times more expensive than native grasses. He has saved almost $1 million on two facilities in two years using native grasses and flowering plants. Adding trees also helps limit water runoff, and the trees provide a more attractive visual buffer for neighbors who would otherwise stare at dock doors.
- Employee well being: Such amenities as an onsite gym, shower facilities, and walking trails on the property will go a long way toward promoting healthy lifestyles. Similarly, providing bicycle racks and parking spaces for hybrid and electric vehicles helps underline a company's commitment to employee fitness and air quality.
- Air quality/water conservation: To minimize indoor air pollution, choose nontoxic paints and floor coverings. Promote water conservation by using waterless urinals and low-flush toilets. Adopt cleaning practices that limit the use of water, and choose cleaning solvents that are environmentally friendly.
- Energy management: To reduce energy loss, install insulated wall panels. If the facility includes automated storage areas, don't cool or heat these sections unless the product requires it. In addition, consider painting the facility's roof—white in hot climates and black in colder climates—which will either reflect or trap heat from the sun.
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.
- Facility lighting: The use of energy-efficient lighting can produce big savings over time. Costs for technologies such as LED have dropped significantly in recent years, allowing companies to recoup their investments more quickly. For instance, Richard Murphy expects a payback on the LED fixtures installed in several of his warehouses in just over four years. As an added bonus, he won't have to touch the bulbs for 17 more years, saving many man hours usually spent replacing lamps. An alternative to LED is fluorescent lighting such as T-5. Compared with LED, fluorescent lighting offers a more favorable ROI (less than three years) but it requires bulb replacement every three years. Adding motion sensors to turn off lights when no one is present also saves a great deal of energy.
- Energy/power production: Some facilities have taken to creating their own power. For instance, gas wells on site may provide heat. For his part, Murphy installed solar panels on his facilities to collect additional power and to feed batteries that are used for emergency lighting. It's important to bear in mind that solar and wind projects currently have a very long return on investment. Most of the facilities that have gone down this path have relied on government incentives to help fund the installation and offset the lengthy payback period.
- Material handling equipment: Choose equipment with an eye toward energy efficiency. For instance, MDR (motor driven roller) conveyors significantly reduce energy consumption and can power down when there's no product present to convey. Efficient battery management and fast charging can help reduce a lift truck fleet's power consumption. Alternative fuels for lift trucks, such as hydrogen, are also gaining ground, albeit slowly. Designing the facility to lessen long lift truck runs can reduce energy consumption as well as wear and tear on the vehicles.
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."
