Hey, Designers!

You know when you’re in a meeting with a client and they ask, “Why does sustainability matter?” and you’re put on the spot and suddenly can’t remember anything, even your own name? Yeah, I’ve been there! I’ve heard many times that it would be helpful to have talking points in your back pocket for precisely that situation. 

When I was a designer, I relied on three strategies to get my client engaged and excited about sustainability. I’m sharing them here, and hope they’ll come in handy the next time you need a quick fact or two to reinforce the value of sustainability in design.

Strategy 1: It’s the Right Thing to Do

First and foremost, designing and constructing sustainable, healthy buildings is the absolute right thing to do. The construction industry (which includes real estate, infrastructure, and industrial buildings) drives 13% of the entire global GDP: and it represents 39% of global carbon emissions annually. It has a ton of impact. Every little thing we do matters.

Talking Point: The negative impacts of the construction industry disproportionately affect communities of color. It’s up to all of us in this industry to design spaces that are healthy in order to create an equitable world.

We have more than 85,000 different chemicals available in the world, and in the USA, only fewer than ten have been banned. The choices we make have affects on our ecosystem, our bodies, and our children’s bodies. John Oliver recently had an amazing segment on PFAS (per- and polyfluoroalkyl substances), which are just one of many types of chemicals that are widely used in building products that are known to cause serious health problems, especially in children. The production and use of these chemicals are especially harmful to people of color. The EPA released a study in 2020 that found that, “people of color are much more likely to live near polluters and breathe polluted air,” and that, “results at national, state, and country scales all indicate that non-whites tend to be burdened disproportionately to whites.” This is an equity issue, one that the building industry must reckon with. Specifying healthy products is not just good for the end-user, it has benefits up the supply chain. 

It is our duty as designers to address this fundamental inequality in our industry, and we can do it. The decisions we make in our specifications make huge impacts and have ripple effects. You and your clients can make a huge difference!

Talking Point: Employees who work in “green buildings” are healthier, happier, and more productive.

Numerous studies have shown that employees are happier (less turnover), healthier (take less sick leave), and are more productive (get more done) when they are in a space that has good air quality, less off-gassing, views of nature, and have some control over their lighting and temperature. When employees are happy and productive, it’s good for the bottom line (more money talk below).

Strategy 2: Sustainability, not just for breakfast anymore 

I affectionately call this the FOMO (Fear of Missing Out) argument. Sometimes, clients think sustainability is just a buzzword or a trend that will fade so they don’t need to pay attention to it. While that may have been a fair concern back when I started in this industry back in (mumbles year), study after study shows that sustainability is here to stay. Showing clients just how many other people in the world are tackling this issue drives home the point that it’s not just a fad. 

Talking Point 1: According to McKinsey, sustainability is one of nine major shifts in the construction industry and they say that, “Companies that can adjust their business models stand to benefit handsomely, while others may struggle to survive.”

In mid-2020, McKinsey released their report titled “The Next Normal in Construction” in which they listed nine industry-disrupting factors they predict will fundamentally shift how the construction industry works. Sustainability is one of these nine shifts. In the report, they write, “While sustainability is an important decision factor already, we are only at the very beginning of an increasingly rapid development.” In fact, when they surveyed executives across the building sector, “more than 75 percent of respondents agree that these shifts are likely to occur, and more than 60 percent believe that they are likely to occur within the next five years.” 

Talking Point 2: More than 200 private sector companies have signed the Climate Pledge, and over 10 US states have signed onto the Paris Agreement.

Sometimes clients are worried they’ll be the only ones talking about sustainability and don’t want to stick their neck out. You can assure them that they are in good company. More than 200 companies have pledged to become net-zero carbon by 2040, including Salesforce, Mohawk Group, HP, Selfridges, Procter & Gamble, CBRE, AECOM, Alaska Airlines, Visa, PepsiCo, and more. Your client can align with global brands like these when they set ambitious sustainability goals of their own.

Strategy 3: Money, Money, Money

Sometimes, it really does just come down to money. Fortunately, the stats are in our favor and we are seeing big market shifts that are showing that sustainability means (terrible pun alert!) going green in many ways. 

Let’s start by talking about The Market in general, which is seeing a surge in interest and focus on sustainability, climate change, and sustainable products. Then, we’ll dig into some statistics specific to green buildings that you can cap it all off with.

Talking Point: Both consumers and shareholders expect companies to be engaged in combating climate change.

According to the NeilsenIQ group, “90% of millennials are willing to pay more for products that are environmentally friendly, 80% are willing to pay more for products with a social sustainability story.” The market is shifting, and consumers are favoring companies that prioritize sustainable practice. It’s not just consumers, it’s also shareholders. According to BlackRock CEO Larry Fink (BlackRock represents more than $7 trillion in assets), climate change has become, “a defining factor in companies’ long-term success,” and recently announced that BlackRock will begin flagging companies not engaged in getting to net-zero carbon for removal from their investment portfolio. 

It’s not just BlackRock: The Economist magazine released a climate and business report in September of 2020 and stated frankly, “Companies that fail to tackle climate change face a backlash.” When it comes to sustainability, there is now a top-down bottom-up shift when it comes to sustainability: consumers and shareholders are holding companies accountable. Wherever your clients exist in this market, you can help them stay on top of this monumental shift!

Talking Point: Building owners and design professionals may be held legally liable if building occupants get sick because of exposure to materials in the building.

As we begin to better understand the direct correlation between the chemicals in building materials and the effects on building users and inhabitants, building owners and designers may start to be held liable, similar to the fire codes and ADA regulations we follow. On August 9 2018, the American Institute of Architects (AIA) wrote a letter to EPA regarding the Asbestos New Use Rule where they stated “historically, architects and other design professionals involved in a construction project strive to avoid liability for hazardous construction materials such as asbestos, lead, PCBs, mercury, etc. Recent lawsuits and regulatory citations have pinned responsibility on design professionals and building owners who seemingly had nothing to do with the exposure that caused, or could cause, a crippling illness.” [our emphasis added.] 

Not only that, but the AIA goes on to say “Companies involved in any facet of a demolition, a renovation, or even a current construction project that fail to grasp this salient fact expose themselves to litigation from injured parties as a result of contact (real or perceived) with hazardous materials. As there is no statute of limitations, lawsuits can, and are, being filed decades after project completion.” The old adage of “an ounce of prevention is worth a pound of cure” is definitely true here, and it’s better to be safe than sorry when it comes to the products we specify in buildings.

Talking Point: Green buildings attract talent and can charge higher rent

As we come out of this pandemic and more people shift to working remotely, commercial real estate is going through a fundamental shift. Attracting tenants has become even more cutthroat, and spaces with healthy and sustainable features are faring much better. According to The Business Journal: “When it comes to the future of the office, quality has prevailed. While the office sector across all classes is seeing higher-than-normal vacancy rates, Class B or C space is making up a growing share of what’s vacant in many markets.”

Similarly, companies and building owners are using sustainable features to attract and retain talent. Joseph G. Allen and John D. Macomber of Harvard recently published the book Healthy Buildings: How Indoor Spaces Drive Performance and Productivity, and they project that “offices with the premier health story will get the premium rent and get the tenants, and the offices with a lagging health story will lag” and that “many elite companies already use their building’s efficiency or grandeur to send a signal to customers and workforce talent.”

Talking Point: Stats, stats, stats

Let’s wrap things up with a lightning round of stats you can use when you just need a number to throw out!

• The number of real estate owners reporting greater than 10% increase in the asset value of their property has doubled from 16% in 2012 to 30% in 2018.
• In a survey of 71 different studies about green buildings, researchers found that:
  • Rental Income increased on average 6.3%, but could be as high as 23%
  • Occupancy Rate Increased on average 6%, or as much as 17% 
  • Sales Price increased on average 14.8%, or as much as 43%
• In a study of 22 GSA buildings, researchers found that their green buildings (in this case LEED certified) had 20% lower maintenance costs. They also found that “green” retrofits reduce operation cost by almost 10% after only a year.
• Booz/Allen/Hamilton, with USGBC, estimates that green buildings constructed between 2015 and 2018 saved a total of $2.4 Billion in energy costs.

What you can do now: 

• Specify healthy products: you can find a list of Red List Free products here to get started!
• Encourage clients to integrate healthy, sustainable products into base specifications and purchasing policies.  
• Ask every manufacturer if they have a Declare label, or any type of material ingredient disclosure, and prioritize working with those who do. (I hear from manufacturers every day that say, when designers ask, they listen!)
• Ask your reps if they have a lifecycle assessment and know the carbon, energy, waste, and water impact of their products.
• Specify low carbon products, which you can find using the EC3 tool, the Sustainable Minds database, the Mindful Materials database, or the Ecomedes database.
• Living Product Challenge certified products are net-zero carbon, and have a positive impact on the world!

Learn More: 

Interested in hearing more strategies behind “selling” sustainability? Join ILFI and firms MCG Explore Design & MSR Design at our next Living Future Member event: Designers, make it work (sustainably) – to discuss their methods and experiences for incorporating sustainability into every project. Not an ILFI Member? Join today!

Stop me if you’ve heard this one before: what’s the return on investment for going green? 

Don’t worry, you’re not alone! We hear it all the time. Fortunately, the business case for going green has never been clearer and “going green” now means doing something that is good for the environment and for your wallet. This didn’t use to be the case, so what has changed? It’s a combination of forces coming together, including pressure from investors and shareholders, pressure from consumers, and a larger shift in ideology by younger generations who are wielding more power in the marketplace. There has never been a better time for a company to transform their practices to embrace sustainability than now, and companies who do will see the biggest benefits.

Let’s start with the money. In the past, one of the biggest stumbling blocks has been the perception that designing, manufacturing, and shipping sustainable products is more expensive than traditional methods of production. On top of that, this was coupled with a perception that investors and shareholders weren’t interested in investing in sustainable practices, especially since they were seen as more expensive. This is perhaps the most fundamental shift we see in the marketplace: that these perceptions are now actively being challenged and rebutted. 

In his 2020 letter to investors, BlackRock CEO Larry Fink wrote that “with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward.” BlackRock is the world’s largest investment firm, managing over $7 trillion worth of assets. For their CEO to dedicate his entire annual letter to climate change represents a fundamental shift in the market. Not only that, but in January of 2021 he reiterated this message, this time with data to back it up. BlackRock found that during the first quarter of 2020, during the initial Coronavirus market dip, 94% of indexes with sustainable companies outperformed parent benchmark indexes (similar types of companies without explicit sustainability goals).

And it’s not just BlackRock: in their September 2020 Special Climate Report, The Economist stated bluntly “companies that fail to tackle climate change face a backlash.” Note the report does not say “will face a backlash,” but is in present tense. According to The Economist, the backlash against companies not directly addressing their contribution to climate change is happening now.

What accounts for this shift? It comes down to risk management. The Coronavirus has demonstrated that companies who do not have a handle on their supply chains and manufacturing processes will suffer financially during periods of instability. Just as the Coronavirus has disrupted supply chains, the effects of climate change such as significant weather events (hurricanes, wildfires, etc) will similarly disrupt supply chains at an increased pace if we don’t swiftly and properly address climate change. Manufacturers who do not have a complete understanding of their supply chains or have not adapted their supply chains to account for these events will become riskier financially in the face of climate change. 

Not only will companies who do not address their contribution to climate change be vulnerable financially to supply chain instability, The Economist also predicts they will be vulnerable to expensive litigation. They report that there is increasing scientific evidence directly linking extreme weather patterns (the types that threaten current supply chains) to fossil fuel consumption and greenhouse-gas emissions. Companies who are found to be heavy polluters and carbon emitters will increasingly be targeted with litigation holding them accountable. The Economist goes so far as to say that “if cases follow the same route as those against Big Tobacco, the costs could be high.” Similar to Big Tobacco, if science has made the direct link between greenhouse-gas emissions and climate change, and large companies are found to be emitting large amounts of greenhouse gasses, there is a big chance they will be held financially liable. 

Investors such as BlackRock have taken notice of these market trends and are now informing their shareholders that they will take the sustainability of a company into consideration before investing. Larry Fink went a step further in his 2020 letter, saying “in the absence of robust disclosures, investors, including BlackRock, will increasingly conclude companies are not adequately managing risk.” For these investors and shareholders, addressing climate change is now a good business practice because it reduces the potential for disruptions that will affect their bottom line. Sustainability disclosures have come into focus for two reasons, then: one is that they provide a framework for companies to evaluate their supply chains, and two, that they provide evidence they are taking sustainability seriously.

It’s not just investors taking this seriously, the number of consumers that make sustainability a priority is growing rapidly. NielsenIQ, the consumer intelligence firm, reports that sustainable products (such as organic products or products with natural ingredients) make up 22% of total sales, and between 2014 and 2017 sustainable product sales grew by 3% while the sales of conventional products dropped by 4% in that same time. NielsenIQ went so far as to call 2018 the “year of the sustainable consumer” which will soon turn into the “decade of the sustainable consumer.”

Driving this market shift are Millennials and GenZ. The NielsonIQ survey finds that 90% of Millennials are willing to pay more for products that are environmentally friendly or use sustainable ingredients, and 80% are willing to pay more for products that claim some kind of social sustainability practice. We can joke all we want about Millennials and avocado toast, but as The Economist points out, by 2035 they will have more wealth than baby boomers. By then they will be the leaders of architecture and design firms and their spending habits will undoubtedly be reflected as they specify products for their projects. What’s more, NielsonIQ finds that Millennials are much more willing than Baby Boomers to abandon a brand that has not made a commitment to sustainability and find a brand that has made a commitment (53% of Millennials vs. 34% of Boomers). Manufacturers will find it harder to rely on simple brand loyalty to get onto projects, and will instead need to directly address their customers’ preference for sustainable products. In his 2021 letter, Larry Fink states this explicitly: “companies ignore stakeholders at their peril – companies that do not earn this trust will find it harder and harder to attract customers and talent, especially as young people increasingly expect companies to reflect their values. The more your company can show its purpose in delivering value to its customers, its employees, and its communities, the better able you will be to compete and deliver long-term, durable products for shareholders.” 

When it comes to working with companies that claim to be sustainable, investors and consumers are in alignment: they want proof. Gone are the days that consumers and investors will simply “take your word for it” and companies can issue vague statements and promises. Your clients and investors want transparency and they want data. That is where the International Living Future Institute comes in. Our two pioneering certifications, the Declare label and the Living Product Challenge, offer manufacturers a framework to disclose what is in your products and manufacturing process so consumers can prioritize working with the companies already walking the walk.

The Declare Label is like a nutrition label for products: it tells consumers the chemical ingredients that make up a product down to 100 parts per million. It also screens the chemicals in the product against the Red List. The Red List was developed by ILFI and includes worst in class chemicals – those that pollute the environment, those that stick around in the atmosphere and environment for a long time, and chemicals that are harmful to humans. The Red List is singular in that it addresses the toxicity of a chemical to folks who are around the production of a material as well as the end user. A product that has a Declare label that shows it to be Red List Free contains none of these chemicals – a remarkable accomplishment and the label gives manufacturers a way to prove to consumers they are taking sustainability seriously. 

The Living Product Challenge builds on the Declare Label by creating a revolutionary framework for manufacturers to create restorative products. It fundamentally reimagines the way products are designed and manufactured, and gives consumers and investors the information they are asking for. In addition to disclosing the chemical ingredients (Living Products are required to be Red List Free!), it also discloses the impacts of the manufacturing process. With easy-to-read graphics, the label shows how much carbon, energy, and water was used to make a product as well as how much waste was generated during production. Unique to the Living Product Challenge is the concept of Handprinting. While investors and clients are asking to see data regarding your Footprint (how your manufacturing process contributes to climate change and emissions), consumers are also very interested in social justice initiatives your company is involved in. 

The Living Product Challenge is the only certification that gives companies a way to report the measurable positive effects they are having on their communities. We call this Handprinting and they can be created anywhere and everywhere in our communities, the only requirement is that the Handprints be real and measurable and there are myriad ways to create them. Some Living Product manufacturers have invested in the energy retrofit of a school, installed rainwater catchment systems in a nearby community, or protected a key ecological habitat. There is no limit to the potential of businesses and their employees to create positive impacts, and such impacts can count as Handprints as long as they can be measured. This gives consumers the whole picture of your company: not just the negative impacts, but also the positive impacts you’re making in the world, which consumers care about just as much as the ingredients that make up your product.  

When it comes to addressing the needs of your investors, shareholders, and consumers alike, ILFI has you covered. The Declare Label is the only certification on the market that combines material transparency with material health, and the Living Product Challenge is the only disclosure that combines material transparency, life cycle disclosure, and handprinting (social equity) in one label. 

As companies start to address their contribution to climate change, the first step is to understand what your contribution is to begin with. Some companies don’t even know what chemical ingredients make up their products, or what their supply chain is like. The Declare Label helps you understand that and communicate it to your customers. When it comes to carbon emissions, The Economist reports that most companies don’t even know how much carbon their manufacturing process produces, making it impossible to know how to improve. The Living Product Challenge offers companies a way to perform an audit on all their emissions. It’s a twofer: not only does it help you understand your supply chain and emissions, you can use the label to provide the disclosure your investors and customers are asking for. 

When it comes to addressing climate change, companies have a huge part to play. It seems overwhelming and while it will be incredibly challenging, there are equally large opportunities for enormous benefits, not just for the planet, but for your business. Investors and consumers are asking for disclosure and pushing for radical change, and will reward you handsomely if you take action now. The Economist said it best in their Special Climate Report: “De-carbonizing the economy holds many risks but it also offers plenty of opportunities. Firms that get ahead of their rivals will reap the biggest benefits.” Get started today with Declare and Living Product Challenge and start reaping those benefits!

Cover image: Humanscale products are Declare-labeled and certified under the Living Product Challenge. Image courtesy of Humanscale