The presentation will explain how Cost-Benefit Analysis and Life-Cycle Costing can be used to calculate the Triple Bottom Line results of any project. The Sustainable Return on Investment (SROI) process quantifies the non-cash benefits and externalities of your project in dollar terms, as well as the traditional cash benefits.
Although LEED has entered the mainstream, the industry still faces challenges related to justifying first cost investments. Practitioners often have difficulty in quantifying and demonstrating the wide array of costs and benefits that will accrue to the owner and to society through the sustainable strategies that will be employed on the building.
Most professionals in the AEC industry rely on rough financial tools to quantify green building first costs and to show sustainable strategy benefits to the building owner. There are shortcomings with relying solely on tools like payback period and net present value. Green building decisions require the forecasting of future costs and benefits and these are subject to uncertainty. This uncertainty is not captured in a single point analysis like payback period.
By combining economic assessment with probability analysis, the project team can accurately demonstrate the likelihood of achieving the benefits related to a given sustainable strategy. These benefits can be directly related to the project and the building owner’s goals, and they may also accrue to society in the form of reductions in carbon emissions, air and water pollution, and reduced impact of material selections. |