The myth that eco-design is ‘only’ about protecting our planet for future generations is beginning to break down. More and more people are pointing to the mountains of evidence that it also benefits business right here and now.
While our work is motivated by passion for sustainability, this post is focused purely on business profitability. Because while you may personally care about the planet, the fact is most business decisions are still taken on what happens to the bottom line.
Our seven key benefits of eco workplace design start with the obvious reduction in utility and waste costs and go on to less well known human resources and strategic advantages. Together they outline a very strong business case for eco workplace design.
1. Lower energy and water bills
Cutting utility bills is one of the most well known benefits of eco-design.
Energy efficiency features like high levels of insulation, south-facing orientation to maximise passive solar gain, air-tight building fabric, double or triple glazing and LED lighting all reduce the energy needed to heat and cool the workplace to a comfortable level. Duel-flush toilets, low-flow taps, efficient appliances and design which encourages behavioural change cut water consumption.
Using the most efficient appliances and equipment available also reduces electricity demand.
The average electricity bill for a UK business is around £2,500 per year for 20,000kWh. Research shows that taking basic measures like installing smart meters, using A+ efficient appliances and turning everything off when the workplace is vacated, can save 10-20%. With a major retrofit or when designing a space from scratch, zero-carbon – and zero energy bills – is perfectly feasible with passivhaus design.
Energy costs and possibly carbon taxes are forecast to increase, so it’s smart to pay attention to energy use even if it’s a relatively small part of your running costs right now.
2. Lower waste disposal bills
By making changes to behaviour, suppliers and design you can cut the amount of waste you generate, and increase the percentage of the remaining waste that is reused (or ‘upcycled’) by others or is recycled and composted.
Landfill tax is £2.65/tonne or £84.40/tonne (depending on type of waste) and goes up every year, meaning you will save money on waste disposal. In most cases reducing waste also reduces the amount of energy and materials/supplies you’ll need to buy. All this boosts efficiency and therefore, your profit margins.
3. Reduced absenteeism
Points 3 to 5 are about making your workforce more effective, and have traditionally been sidelined in the green buildings debate, until recently. Actually they are far more exciting from a financial perspective, because most businesses spend most of their outgoings on staff and a relatively small amount on utility bills.
With the upswell in popularity of biophilic design, there’s been impressive progress on quantifying the financial benefits of design that connects people with nature.
Absenteeism – staff taking time off due to illness or personal problems – is 2.5% in the UK, meaning each employee is absent for an average of 5.7 days per year (not including planned holidays). At average salary rates, this costs you £410 per employee per year – which quickly adds up. If you have 20 staff, that’s £8,200.
Now the really interesting part: a ground-breaking study by the University of Oregon in 2011* found that 10% of absenteeism can be attributed to a workplace disconnected from nature. In other words: biophilic design can reduce your absenteeism costs by 10%.
It needn’t be complicated or high-tech design either. The study found the strongest indicator was the windows. Large well-placed windows with views to grass and trees that bring in plenty of daylight were by far the most important factor. As 47% of office workers in Human Spaces’ international survey complain about having no natural light at work, windows could be a simple and effective place to start.
4. Higher staff productivity
The culture of ‘presenteeism’ means that even when people turn up to work, they may not be very productive.
Sleepiness, headaches, colds, asthma, stress or lack of motivation can all damage productivity levels. There isn’t a figure available for the UK, but in the US employers lose on average £773 per employee per year to unproductive presenteeism. For a business of 20 staff that’s £15,460.
As most non-industrial businesses spend most of their budget on salaries, even small improvements in productivity can make a significant difference to profit margins.
Again, daylight and natural views are key. A study on an American call centre found workers successfully handled 6-7% more calls in a given time when they had views to the outdoors.
Constructing the windows and losing a bit of space to rearranging workstations cost them a one-off $1000 per caller and they enjoyed productivity savings worth almost $3000 per caller per year. Clearly a very strong investment.
5. Better staff retention and recruitment
Attractive workplaces with clean air, daylight, indoor greenery and outdoor views make employees feel happier, more motivated and more valued at work. All these things make staff more likely to enjoy their jobs and stay with your company, while also attracting others to you.
According to a major international study, 33% of office workers say workplace design would influence their decision to work at a company. If you’re trying to attract the most skilled and passionate people in your sector, workplace design is an effective tool to communicate your company culture and values.
Don’t underestimate the importance of keeping your employees engaged and motivated. Replacing a staff member costs £30,000 on average, according to a 2014 study by Oxford Economics, due to logistical recruitment costs and loss of output while the new employee gets up to speed.
And you should be familiar with how important talent acquisition is to stay ahead of your competitors. The construction of a flashy new skyscraper-office for Bank of America in New York – which is LEED Platinum and incorporates Biophilic Design throughout – was specifically commissioned to attract the best talent.
6. Stay ahead of regulation
If yours is a large business, you already need to comply with ESOS – effectively a mandatory regular energy audit. There’s definitely some policy uncertainty stemming from a new prime minister and the complex Brexit negotiations.
However, the long term trend is for energy, water, waste and other environmental regulations to get more strict with time. Within the context of the UK Climate Change Act 2008 and the global Paris Agreement 2015, it can be expected that environmental standards will rise.
Playing catch-up is costly and poses reputational and legal risks. Why wait to get caught out? It’s much better to over-achieve now: if standards go up you’ll be prepared, and until then you can capitalise on your achievements as a marketing tool.
Also, carbon pricing could easily be on the horizon, and if you’ve already optimised energy efficiency throughout your operations then you’ll make double savings – from reduced bills and reduced tax.
7. Branding and PR
Environmental awareness is steadily growing and brands which can position themselves in the green market can command higher prices and better customer loyalty. A major study over 60 countries in 2014 showed 55% of people are willing to pay more for a more sustainable product.
Going the extra mile to create a healthy and green workplace is a fantastic way to generate positive media coverage and buzz around your business – making your marketing team more effective and coming across as far more trustworthy than self-promotion.
The design of your office (shop, restaurant, studio, etc) is an effective communication tool to strengthen your brand. Bank of America’s new NYC green office block says they’re willing to pay whatever it costs to secure the world’s best candidates.
Google’s indoor trees and plants, games rooms and relaxation pods says they’re a youthful, fun and cutting-edge company. What does your office say about your business?
As well as enhancing employee loyalty and team cohesion, you can also communicate with your target customers. When you have a green office to be proud of, take photos and videos regularly to share on social media, in your email newsletters, in press releases and guest blog posts. Values like environmental stewardship and healthy living are easy to write in a mission statement – you need to live these values for real to win your target customers’ trust. Eco design for the workplace is a perfect way to achieve that.
Here’s a SlideShare deck as a summary of our 7 points.
These 7 reasons outline a strong business case for eco workplace design. Are you convinced? Which point was most convincing? Did we miss an important reason? Let us know your thoughts at @KoruArchitects on Twitter.
* Elzeyadi, I. “Daylighting-Bias and Biophilia: Quantifying the Impacts of Daylight on Occupants Health.” In: Thought and Leadership in Green Buildings Research. Greenbuild 2011 Proceedings. Washington, DC: USGBC Press. 2011. Cited in Economics of Biophia report.