and legal & economic aspects of going green · – shall, for 5 years make available to the ftc...
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Corporate Sustainability as a Profit Centerand Legal & Economic Aspects of Going Green
and
MEYERS, ROMAN, FRIEDBERG & LEWIS28601 Chagrin Boulevard, Suite 500
Cleveland, OH 44122Phone: (216) 831-0042
Fax: (216) 831-0542
AFFINITY CONSULTANTS, INC.P.O. Box 513
222 North Canal StreetCanal Fulton, OH 44614Phone: (330) 854-9066
MRFL©2010
Nicholas Zingale, Ph.D.
February 18, 2010
SustainabilityThe Triple Bottom Line (TBL)
Economic Performance
Environmental PerformanceSocietal Performance
Sustainability
Sweet Spot
Excellence exists at the Sweet Spot
Facility & Building Envelope
Governance, Legal, Management & Operations
Design & Product Innovation
GREENWASHING:
How to Protect Yourself
and Your Company from the Threat of Federal Charges
MRFL©2010
WHAT IS GREENWASHING?
• Green-wash (green’wash’, -wôsh’) –verb: the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.
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WHAT IS GREENWASHING?
• The Federal Trade Commission (FTC) has developed Guides for the Use of Environmental Marketing Claims –otherwise known as “The Green Guides.”– The Green Guides provide guidance to
marketers as to the types of claims they may make, and what proof is required to make such claims.
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GENERAL ENVIRONMENTAL BENEFIT CLAIMS
• Example: – “Environmentally-Friendly” Product
Packaging
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SPECIFIC ENVIRONMENTAL BENEFIT CLAIMS
• Example: – “Biodegradable” Paper Towels
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THE CONSEQUENCES OF GREENWASHING
• June, 2009 – FTC brought charges for false and unsubstantiated claims that products were “biodegradable” against:- Kmart Corp.; - Tender Corp.; and- Dyna-E International
• Kmart Corp. and Tender Corp. settled with the FTC.
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THE CONSEQUENCES OF GREENWASHING
• Dyna-E International did not settle, and on December 15, 2009, the FTC issued a Decision and Order with severe consequences.
• The Order stated that Dyna-E and/or its President, George Wheeler :– shall not represent that its products or packaging are “biodegradable.”– shall, for 5 years make available to the FTC all advertisements,
labeling, packaging, and promotional materials, and any tests, reports and studies relied upon for any representations.
– shall notify the FTC of any changes in business for the next twenty 20 years.
– Wheeler shall, for 10 years, notify the FTC of any change in his personal address or employment.
MRFL©2010
HOW TO PROTECT YOURSELF AND YOUR COMPANY
• Green Insurance
– Certain insurance companies, including AIG, are offering insurance policies to offset the expenses associated with Greenwashing, including the costs of bad press companies will get from being accused of Greenwashing.
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HOW TO PROTECT YOURSELF AND YOUR COMPANY
• Third-Party Certification
– Obtaining third-party certification doesn’t ensure that the FTC cannot bring Greenwashing Charges, but it does provide some assurance of the validity of green marketing claims.
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GREEN BUILDING
• Green Building – What is it?
• Why should you care?
• What should you look for? (a few legal considerations)
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“GREEN” BUILDING- What is it?
• EPA definition – “The practice of creating structures and using practices that are environmentally responsible and resource-efficient throughout a building’s life cycle from siting to design, construction, operation, maintenance, renovation and deconstruction.”
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“GREEN” BUILDING • Some common characteristics of a high performance
building:- Energy efficient
- Efficient water use
- Reduce waste
- Better indoor air quality
- Use and reuse of materials
- Sustainable building policy
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“GREEN” BUILDINGThird Party Certification
• LEED (Leadership in Energy and Environmental Design)
• Green Globes – LEED competitor
• Energy Star (for buildings)
• ASHRAE Building EQ
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“GREEN” BUILDINGGovernment Regulation
• Federal
• State
• Local ordinances
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“GREEN” BUILDING
Distinguish between:
• Design and Construction
• Operations
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WHY SHOULD YOU CARE TO BE GREEN?
• Triple Bottom Line – People, Profit, Planet
• Reduced Operating Costs– According to the USGBC, average
“Green” building consumes 26% less energy and has 13% lower maintenance cost to average commercial building
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WHY SHOULD YOU CARE TO BE GREEN?
• Greater Building Value?– Higher ROI and resale– Higher Appraised value? - not there…
yet
• Higher Tenant Demand – Higher rents – Lower vacancy
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WHY SHOULD YOU CARE TO BE GREEN?
• Marketing Purposes– Sustainable Building– Tenants or owner occupied – sustainability
as corporate policy
• Worker satisfaction and productivity– Sick building syndrome– Satisfied workers = productive workers– Talent recruitment and retention
• Higher initial building costs
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WHAT SHOULD YOU LOOK FOR?• Design and construction - Integrated
Project Delivery (“IPD”)– collaborative approach – owner,
architect, contractor and others– Paradigm shift from design-bid-build
– Multi-Party Agreements – Who is responsible when there is a problem?
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WHAT SHOULD YOU LOOK FOR?
• Green Leases– Tenant Buildout requirements– Operating Expenses– Separately metered utilities– Compliance with sustainability policies– Responsibility of certification– Cost of operating efficiency improvements– Remedies for violation
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WHAT SHOULD YOU LOOK FOR? (cont.)
• Hazard Insurance – Green endorsements are available.
• Compliance with laws – Review your local codes
• Commercial Loans – Do banks care about this?
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TAX INCENTIVES – ENERGY EFFICIENT BUILDING IMPROVEMENTS
• Section 179D – First Year tax write-off
– Interior lighting, HVAC, hot water systems, building envelope, leasehold improvements
– First year deduction is capped at $1.80 per square foot
– Improvements must result in hypothetical 50% reduction in energy usage.
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BUSINESS TAX CREDIT (ITC) FOR RENEWABLE ENERGY SYSTEMS
• 30% ITC for solar, fuel cells and wind property.
• 10% ITC for geothermal, combined heat and power systems, and microturbine property.
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OHIO TAX EXEMPTIONS & FINANCING
• Ohio Air Quality Development Authority
– Exemption from personal and real property, corporate franchise, sales and use
– Solar, Photovoltaics, Landfill Gas, Wind, Biomass, etc.
• State Energy Program
• Home Weatherization Assistance Program
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RESIDENTIAL ENERGY EFFICIENCY
• Tax Credit for energy efficiency improvements
• 30% of cost up to $1,500 for both 2009 and 2010
• Exterior windows, skylights, storm windows and doors, exterior doors, metal or asphalt roofs, insulation, HVAC, water heaters, biomass stove
• 30% of cost (no upper limit) – for geothermal heat pump, solar water heating, photovaltaics, small wind systems
MRFL©2010
TAX CREDIT FOR PLUG-IN VEHICLES
• Tax credit of $2,500 to $7,500 (based on capacity of battery system)
• Credit for purchase of plug-in hybrid electric vehicles, hybrid gasoline-electric, diesel, battery-electric, alternative fuel and fuel cell vehicles
• Manufacturer certificate specifying credit amount
MRFL©2010