The Business Case for Sustainability
June 11, 2008
1
Ameristar Hotel
St. Louis, MO
The Business Case for
Sustainability – Speakers
Moderator:
– Doug Gatlin, Vice President of Market Development, U.S.
Green Building Council
Panelists:
– Greg Kozicz, PhD, CEO & President, Alberici Corporation
– William Hepburn, Director of Image Management, General
Motors
– Gary Laundroche, Director of New Business Development,
Bloom General Contracting, Inc.
– Tim Carey, Director of Sustainability & Resource Management,
PepsiCo-Chicago
2
Enhancing Project Value with
LEED Certification
Doug Gatlin
VP, Market Development
USGBC
June 11, 2008
3
4
5
44%
Owner Demand:
Believe
sustainability
initiatives
help attract
employees
67%
See green
building as a
market
differentiator
43%
Expect growth
opportunities from
sustainability
Will green at least
16% of their real
estate by
2009
82%
6
McGraw Hill Greening of Corporate America Smart Market Report 2007
7
WHAT IS THE LEED SYSTEM?
8
LEADERSHIP in
ENERGY and
ENVIRONMENTAL
DESIGN
A leading-edge
system for
certifying
the greenest
performing
buildings in the
world
Scores are tallied
among five credit
categories:
1. Site Planning
2. Water Efficiency
3. Energy Performance
4. Material & Resource
Use
5. Indoor Environmental
Quality
Five additional credits
can be earned through
Innovation in Operation
and Upgrades
9
Alberici Corporation
Headquarters
Greg Kozicz, Ph.D
CEO & President, Alberici Corporation
Vincent Metals
St. Louis, MO
11
Sustainable Design and Construction
Environment
People
Workers enjoy a
healthier indoor
environment.
Green
Building
Bottom Line
The reduction in operating costs
positively impacts the bottom line for
businesses.
13
Green buildings use less
resources and reduce the
impact on the natural
environment.
The Business Case –
Cost and Cost Savings

Cost Inflators

Cost Savings

14
–
Construction
–
Renovation
–
Operation and Maintenance
Building Valuation
Traditional Design and Construction
• Energy-inefficient mechanical systems.
• Sealed buildings with no connection to natural light.
• Building products with no regard to embodied energy.
• Wasteful water fixtures
15
The Business Case
Environmental Benefits
Operational Reductions

16
–
Waste
–
Water
–
Energy

Community Relations

Corporate Citizenship

Company Reputation
Ten Benefits of Sustainable Design
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
17
Recover Higher First Cost – If Any
Design for Cost Effectiveness
Boost Employee Productivity
Enhance Health and Well-Being
Reduce Liability
Create Value for Tenants
Increased Property Value
Incentive Programs are Available
Benefit Your Community
Achieve More Predictable Results
Thank you!
18
General Motors
Dealer Facilities
Bill Hepburn & Gary Laundroche
Example:
LaFontaine Buick – Pontiac - GMC – Cadillac





20
Located in Highland, Michigan
63,000 SF facility
Pursuing a LEED “Gold” certification.
Would be one of the first Gold certified dealerships in USA
Dealers are independent businesses.
Short Term Goals

Assist our dealers:
– Reduce energy use & cost
– Develop a competitive advantage in the market place
– Market & sell vehicles to environmentally conscious
consumers
• Expect an increase in sales
– Improve image in the community
• Part of solution – Not part of the problem
• Stimulate local economies with regional materials
– “Do the right thing”
21
Long Term Goals

Assist our dealers:
– Reduce negative impact on the environment
– Reduce long term lifecycle cost
– Reduce the impact of spikes in energy cost
– Help the local community
– Be a good corporate citizen
22
Barriers to Success

Decision to go for LEED certification made too late in process

Project team including Architect, Contractors and Suppliers lacked
LEED knowledge and experience at onset of project
– Steep learning curve & sub education needed
– Additional coordination efforts needed

General perception cost of construction would be considerably higher
– Industry executives recently estimated 13-18%* incremental
cost

Perception more difficult to build

General belief LEED is cost prohibitive
* As reported by Market Barometer, Turner Construction
23

Business Case for
Sustainability
Economic Benefits:
– Reduced utility cost 2-30 %*
– Improved employee productivity 2-16%*
– Reduce total lifecycle cost over 20 years**
– Sales & marketing benefits
– Tax deductions & energy credits

Health & Community Benefits
– Easier community permitting & less red tape
in some cases
 Environmental Benefits
* As reported by US Green Building Council (USGBC)
** As reported “The Cost of Green Revisited” Davis Langdon, July 2007
24
Best Practices & Lessons
Learned

Make decision to go for LEED certification early in
process
– Before site selection
25

Assemble a team of LEED accredited
professionals with experience in designing
& building “Green” buildings

LEED is about more than “Green” – it’s
about sustainability for generations to come
Sustainability
at PepsiCo
Tim Carey
Profile of PepsiCo
Global Food and Beverage Company
 Over $35 Billion in Revenue, more than $6 Billion in
Profit

– 17 billion-dollar brands

Major Operating Sectors
– PepsiCo Americas Foods
• (Frito Lay, Quaker Foods and Snacks)
– PepsiCo Americas Beverages
• (Pepsi Cola, Gatorade, Tropicana)
– PepsiCo International
27
Our Evolution
Phase I – Environmental:

Reduce environmental impact by improving PepsiCo’s operational effectiveness and eco-efficiency

Strengthen corporate environmental governance mechanisms

Enhance external communications and transparency
Phase II – Social:

Through engagement, address key social issues local and global. AIDS/HIV, child labor, safety
Phase III – Integration:

Full integration of the three legs of sustainability into all decision making
Phase 3
Phase 2
Maturity
Phase 1
Social
Environmental
1990s
28
Integration
2000
2010
Environmental Platforms
Energy and
Water
Resource Conservation
2010 Goals = 30% reduction over 2004
To date savings: PepsiCo-Chicago
-- 1 billion gallons water
-- 520,000 equivalent bbl’s of oil
-- 386 million KWHs
Technology Development
- Faster product lines
- On-Site Bottle Delivery
- Waterless Rinsing
•
•
•
•
World Class Conservation
Largest LEED Bev Sites in World
Largest Energy Credits in World
Energy Star “Partner of Year”
• (4) LEED Sites
- Facility Efficiency
- Process Innovation
- Sustainability Education
29
LEED Certification
Future
Blue Ridge Gatorade Plant, 2nd Largest Food /Beverage
LEED Site in the World – LEED Gold – April 2007
Future
PepsiCo Chicago Headquarters will
be the first PepsiCo office to achieve
LEED Certification – JUL’08
Tolleson, AZ Gatorade Plant
LEED GOLD – AUG’07
30
Pryor, OK Gatorade Plant, Largest
Food/Beverage LEED site in the World –
April 2008 -- LEED GOLD
Central Florida Gatorade DC
LEED GOLD – ca 2009
Example Projects – Facilities
Photovoltaics—Fullerton Warehouse

Capture Sun’s energy 
convert to electricity
31

Warehouse will be off-grid
during peak hours (11AM to 3PM)

Start-up May 2008

Target savings ~1,000 barrels of oil/year
Example Projects –
Manufacturing
Nearly 63mm Gallons of Juice Storage
Tropicana Unit Train backhaul program
Modified storage and transportation methods
–
–
–
–
32
Significant decrease in operating costs
Reduced electrical consumption
Reduced waste water discharge and treatment costs
Significantly reduced GHG emissions