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Connecting Green Building Outcomes to

Enterprise Sustainability ProgramsAIA Pittsburgh Registered Provider #A217

Course #CGB_BP15

E. Mitchell Swann P.E., LEED AP

F. CIBSE, C.Eng

Principal MDCSystems®

www.MDCSystems.com

Copyright E. Mitchell Swann & MDC Systems

Program Overview

Green, or high-performance design, has become a target norm for almost

any sizable capital project for most world-class business enterprises. The

reasons for this focus can vary from broad-based environmental concerns to

establishing a positive public persona to a more laser-like focus on bottom

line impacts on the balance sheet. However, it is sometimes difficult to

translate what a new brick-and-mortar office building or plant really means

to overall corporate value and sustainability. Energy and resource savings

can be carried cleanly to the bottom line, but there are other impacts that

may not be readily captured and recorded. Properly assessing and capturing

the impacts of green buildings in procurement, execution, and operations

on enterprise-wide sustainability metrics is essential to successfully

measuring and monitoring a program’s real performance and value. This

program will identify multiple impacts of green buildings on overall

sustainability and how those impacts relate to key performance indicators

as a part of an overall enterprise sustainability program.

Learning Objectives

� Identify “sustainability” features other than energy and

resource savings that can impact balance sheets.

� Identify impacts of green buildings on overall sustainability

initiatives.

� Identify some metrics that can be used to track those

impacts in procurement, execution, and operations.

� Identify how those metrics relate to key performance

indicators as a part of an overall enterprise sustainability

program.

Bertrand Russell

A hallucination is a fact,

not an error;

what is erroneous is a judgment

based upon it.

What is… Sustainable Development?

“…meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

� Brundtland Commission Report, 1987 (“Our Common Future” -United Nations World Commission on Environment and Development)

What does it look like?

Sustainability Metrics

Will we ever get there?

The sweet spot…

A brief history of….

Sustainability metrics:Measured Economic Welfare (MEW) – J. Tobin & W. Nordhaus: “Is growth obsolete?” (1972)

Index of Sustainable Economic Welfare (ISEW) – H. Daly & J. Cobb (1989)

ISEW = personal consumption + public non-defensive expenditures- private defensive expenditures

+ capital formation+ services from domestic labor- costs of environmental degradation- depreciation of natural capital

Triple Bottom Line(abbreviated as TBL or 3BL)

an accounting framework with 3 parts:social, environmental & financial

aka “the three Ps”people, planet and profit

Interest is growing in the for-profit, nonprofit & government sectors.

TBL framework used to evaluate organizational performance (CSR).

The phrase "triple bottom line" coined by John Elkington in “Cannibals with Forks: the Triple Bottom Line of 21st Century Business” (1997)

Genuine Progress Indicator (GPI)…is an alternative metric to gross domestic product (GDP) as a measure of economic growth.

GPI is designed to take a more complete picture of a nation's economy by incorporating environmental and social factors which are not measured by GDP.

Some models of GPI decrease in value when the poverty rate increases.

GPI factors in resource depletion, pollution, and long-term environmental damage – making the externals internal.

Quantifying $$ value of environmental & social externalities is difficult.

Convergence

And those can be broken down further…

…depending upon what you do and where you are.

What about

“Enterprise Sustainability”?

Some

Enterprise Sustainability Considerations

o Social Trends

o Stakeholders

o Industry Normso Competitiveness

o Risk Managemento Mitigation

o Innovation

� Brand Reputation

� Market “Good Will”

� Shareholders

� Workforce

� Customers

� Suppliers

� “best in class” – benchmarking

� Liability – Active & Trailing

� Regulatory Policy

� Processes and Products

� “Industrial Ecology”

Lots to consider….…but avoid analysis paralysis (blinded by the science)

Identify

the

KEY Performance Indicators.

Key Performance Indicators

Choosing the right KPIs is a key ingredient to success.

Choose KPIs….

1. …that are measurable.

2. …that regularly change.

3. …that are industry specific (where possible).

4. …only a few KPIs.

5. …that are meaningful to your stakeholders.

6. …that connect to the core business strategies.

7. ...that are really key.

the analysis can get complicated

.

but the philosophy is pretty simple.

So about those green � buildings?(or high performance)

Where do they fit in?

What are some “Green Building” Objectives

� greater efficiency

� Energy

� Resources

� lower life cycle cost

� Total Cost of Ownership

� Operations

� Maintenance

� “Cradle to grave”

� “cradle to cradle”

� healthier environment

� IAQ/IEQ

� waste management

� increased productivity� “enhanced wellness”

� better performance

Why

do owners

build

buildings?

To do things they cannot do

in their existing buildings,

in their homes,

or in a parking lot.

Some sample TBL categories

…focused on the facilities perspective.

How do they merge?

the tangibles

� Lower Costs

� Operations

� Maintenance

� Healthier Indoor

Environment

� IAQ/IEQ

� Improved productivity

� Reduced Waste

the intangibles

� Reduced Risk

� Lessened Liabilities

� Reduced exposure to

� price shocks

� supply shock

� Carbon tax futures

� Reduced Environmental

Remediation Costs

� Extended infrastructure life

Some “Green” Sustainability Issues(Key Performance Indicators)

� Energy

� EUI, Energy/Unit output

� Water

� Gals per unit output

� Production Materials

� Hazardous, toxic

� Natural Resources

� Indoor Environments

� Lost hours per unit out

� Sustainable Products

� Operating Costs

� GHGs, Sourcing

� Reliability

� Quality

� Regulatory

� Exposure, releases

� Feedstocks, supply chain

� Productivity, liability

� Compensation ratios

� Marketplace demand

How do we ‘know’ it’s green?

Rating Systems

USGBC’s LEED Categories v3.0

Elements of Green

So why do it?

What are the outcomes?

Some Broad Performance Outcomes

How do

enterprise platforms

reconcile with

“green building” platforms?

The Triple Top Line and Green Buildings

Standards are catching up…

ISO 14000 – Environmental Management

ISO 26000 – Social Responsibility

ISO 31000 – Risk Management

ISO 50001 – Energy Management

…and this one is new

ISO 27005 – Risk Management

ISO 31000

What does it cost?

36

The

Cost

of

Green

from Sustainable Facilities: Institutional compliance and the Sino-Singapore Tianjin Eco-city Project (2009) by S. P. Low, (National University of Singapore (NUS), J. Y. Liu, (Tianjin University, Tianjin, China), P. Wu, (NUS) Emerald Group Publishing Limited

Where is this all headed?

Remember the process

Natural Systems:

wetlands,

forests,

carbon cycle,

hydrologic cycle,

nitrogen cycle,

etc.

Public Investments:

Infrastructure,

Schools,

Public R&D,

etc.

Sustainable ROIthe value of things that cannot be bought

Sustainable ROI

How does Sustainability affect business valuation?

Cost avoidance is a gain. Risk reduction is a plus.

The business of sustainability: McKinsey Global Survey Results – October 2011

So

how

does

this

play

out in

$$$

and

sense

The business of sustainability: McKinsey Global Survey Results – October 2011

The business of sustainability: McKinsey Global Survey Results – October 2011

Metric focus by sector

Other stuff…..

New Business Models

Overlap to the Center

Design for Sustainability -- Cradle to Cradle -- Design for Disassembly

Convergence

In the long history of humankind,

those who learned to collaborate

and improvise most effectively have

prevailed.

Thank you!

E. Mitchell Swann P.E., LEED AP, F. CIBSE, C.Eng

Principal MDCSystems®

(01) 610.640.9600 x19

swann@mdcsystems.com www.MDCSystems.com

This concludes The American Institute of Architects Continuing

Education Systems Course

.

Licensed Professional Engineer: Pennsylvania, New Jersey, New York, Connecticut, California, Michigan, Illinois, Georgia, Kentucky US Green Building Council LEED Accredited Professional

Mr. Swann has over 20 years of extensive experience on both domestic and international projects in the areas of management consulting and problem solving, engineering design, project and construction management, forensic engineering and construction claims analysis. Mr. Swann’s career includes the analysis, evaluation and design of complex systems across a wide range of industries and buildings types including commercial, institutional and industrial facilities, hospitals laboratories, pharmaceutical manufacturing, microelectronic operations and data centers. Mr. Swann has chaired technical committee within national and international organizations and been a contributing author and editor for a number of technical publications and journals. He is a frequent speaker both nationally and internationally and is a listed member of the speakers’ bureau in the Distinguished Lecturer program of ASHRAE. He has recently presented on Green Building issues in Abu Dhabi, Dubai, Delhi, Detroit, Chicago, Seattle, New York City, Indianapolis, Kansas City, Virginia and Delaware. He is a contributing author to the ASHRAE “Green Guide – The Design, Construction and Operation of Sustainable Buildings” and co-author of the ASHRAE Survival Guide to Design|Build Project Execution.

Professional Affiliations: American Bar Association, American Society of Heating, Refrigeration, and Air Conditioning Engineers, International Society of Pharmaceutical Engineering, US Green Building Council, Defense Research Institute

Other Activities:Pennsylvania Environmental Council - BoardThe Engineer’s Club of Philadelphia – Board of DirectorsEnterprise Heights CDC - Board ChairDrexel University - Alumni Board of GovernorsNational Association of Asian American Professionals (Philadelphia Chapter) – Board of DirectorsNational Society of Black Engineers Greater Philadelphia Chapter – President Emeritus

E. Mitchell Swann, P.E., LEED APswann@mdcsystems.com Principal and Partner MDC Systems, LLC

MDCSystems®

Providing Expert Project Delivery Solutions Worldwide

MDC Systems is a project and construction management consultancy with over 40 years of experience serving a wide array of clients and industries both nationally and around the globe.

MDC has worked on projects as diverse as residential property developments to pharmaceutical plants to highway excavation and construction.

MDC concentrates its services in primarily four areas:

program management, project management consulting, forensic engineering and construction claims consulting.

One of the key facets of MDC’s professional staff is our expertise in the technology driven issues that are so frequently at the heart of today’s complex

projects.

MDC’s construction claims consulting practice combines all of the skills

inherent to our other service offerings and deploys it for our clients when and where projects don’t go quite as smoothly as everyone had hoped. MDC is an

industry leader in the area of construction schedule development and analysis including delay, acceleration, interruption and extended duration. MDC pioneered

the court tested and approved Time Impact Analysis methodology for scientifically analyzing construction schedules and the impact of events upon their execution and completion.

www.MDCSystems.com

MDCSystems® Summary of ServicesProgram & Project Development

including…

� Performance Assessment & Benchmarking

Project Modeling including…

� “What if…” Scenario Analyses

� Variability/Sensitivity Analyses

� ‘Out of Bounds’/”Go – No Go” Limits

Project Planning including…

� Feasibility Studies

� Master Scheduling including…

� Resource & Constraint Analysis

Project Monitoring including…

� Schedule Compliance

� Cash Flow & “Burn rate” projections

� Resource Utilization

Consulting Services including…

� Sustainability/Green Buildings

� Peer Review

� Practice Management

Forensic Analyses including:

� Building Systems:

� Architectural incl. Building Envelope

� HVAC/Mechanical, Electrical & Piping

� Structural

� Instrumentation & Controls

� Design Errors & Omissions (Standard of Care)

� Differing Site Conditions

Forensic Project Management ®

� Schedule Analysis

� Delay, Disruption, Suspension & Acceleration

� Labor Productivity & Inefficiency

� Scope Definition and Change

� Termination - Default or Convenience

� Procurement - Bid/Award Transparency

Forensic Accounting including…

� Valuation of Damages

� Overhead & General Conditions

� Business Interruption & Lost Profit

Selected Recent Assignments Engineering Consulting and

Technical Analyses:

� Analysis of Moisture Migration and RH Control in a Microelectronics Product R&D Facility (Colorado).

� Analysis and Improvement of Energy Consumption at a “Green” School (Pennsylvania)

� Peer Review & Design Supervision for a Radiant Heating/Cooling Floor System (New Jersey)

� Peer Review of Schematic Engineering Design Effort for Hospital Complex (Qatar)

� Analysis of Formaldehyde Outgassing from Construction Materials (Pennsylvania)

� HVAC System Failures in Pharmaceutical Packaging Facility (New Jersey)

� Analysis of Process Technology Failure at Waste Treatment Plant (New Jersey)

� Analysis of Piping System Joint Failures at a Hospital central Plant (New Jersey)

� Analysis of Destructive Vibration\Harmonics on Large Industrial Compressors at a Chemical Plant (Louisiana)

Project Management, Execution & Construction Claims :

� Excess Rock Excavation Claim on a Highway Project - Unforeseen Conditions (New Jersey)

� Electrical Contractor Inefficiency Claim on Multi-Prime Project (New Jersey)

� Electrical Usage Charge Dispute Between Landlord & Tenant (New York)

� Schedule Delays and Change Orders on multiple Airport Projects for Major Equipment Supplier (various)

� Schedule Delays and Associated Cost Overruns for Underwater Pipeline Project (Ireland)

� “Standard of Care” Defense - Design of a Food Processing Facility (Pennsylvania)

� “Custom & Practice” – Specifications Development and Bid Transparency Issues (California)

� “Standard of Care” Defense – Design and Documentation of a Pharmaceutical Plant using 3D Modeling (Texas)

� “Standard of Care” Plaintiff – Delay and Cost Overruns for a Pharmaceutical Plant using 3D Modeling (Singapore)