Study shows green companies report higher revenue
Using Leadership in Energy and Environmental Design (LEED)-certified buildings increases the revenue that is generated by bank branches even when they are offering the same products and services, according to a study from the University of Notre Dame.
The study, co-authored by management professors Edward Conlon and Ante Glavas and titled "The Relationship Between Corporate Sustainability and Firm Financial Performance," looked at 562 PNC branches and found that PNC employees who work in LEED-certified branches are more productive and engaged in their work.
Conlon and Glavas are not yet certain if it is due to the fact that LEED buildings are more attractive to visit or because their workers are more satisfied, and consequently provide better service, but the professors noted that sustainability equals a big difference to the bottom line of a company.
LEED bank branches saw that the difference per employee came to roughly $461,300, after controlling for other variables, such as consumer net worth, employee and market demographics, size and age of branch and marketing budget.
According to the authors, the findings show a growing body of research that outlines how social responsibility and sustainability do not have to be sacrificed in the name of profit. Companies should be able to achieve revenue or job growth while also making a positive environmental and social impact.
"It’s a significant finding, and it surprised me," said Conlon, an associate dean and Sorin Society Professor of Management. "We compared the amount of money deposited at LEED and non-LEED branches, and we found more money has been deposited in the LEED branches. We divided the amount by the branches’ total number of employees to come up with a per-employee dollar amount."
The authors noted that PNC represented a company that would be easy to study, as it has built more than 100 LEED-certified buildings, which is currently more than any other business.
This study supports the nationwide movement for more energy efficient buildings. The EPA recently announced its list of cities with the most energy-star certified structures, as this ranking serves a study for progress in the sector, according to a release.
Philadelphia, which currently ranks 15th on the list, is home to the Greater Philadelphia Innovation Cluster for Energy Efficient Buildings (GPIC), which is a Department of Energy-designated innovation HUB to enact change in the sector.