Thinking Globally, Building Locally

(This article was originally published in the November '10 issues of Merchant Magazine and Building Products Digest.)

The green building movement is rooted in big thinking, but the USGBC is beginning to think small and local. Their mission is to transform the built environment – that’s thinking big with over 125 million buildings in the US, most of which are energy and water hogs. Considering that buildings account for a third of the US carbon footprint, success is of global importance. After over a decade of leading the commercial building revolution, USGBC has become a transformative force with a valuable brand. But there still remain 120 million less than efficient residential buildings, which is where action must now be focused. This is why the USBGC is putting considerable effort into boosting residential green building in concert with local leaders, which is good news for LBM dealers.

In residential building, there was already a green building movement well under way by the time LEED for Homes arrived on the scene two years ago. Local and regional residential programs have existed for years in progressive cities like Austin, Texas, whose Austin Energy Green Building program was the first in the nation. LEED for Homes shares many similarities with these programs, even though each reflects its own local conditions, both in terms of content and approach. In addition, there are alternatives to LEED, including EnergyStar, NAHB’s program, the new, (to the US,) PassivHaus approach, the International Living Building Institute, the NauHaus Institute, and a host of natural building organizations.

Given these realities, I really like the USGBC’s collaborative approach. They recognize that they’re part of a budding community of green building leaders and that there’s more than one way to build a green home. So, rather than attempt to impose their rating system, they launched the LEED for Homes Affiliate Program with the pragmatic aim of forging working relationships with many green building organizations and local green building leaders, thereby promoting the broader movement in the context of local needs.

“We’re market oriented and are looking to support and promote what’s working in each community,” Nate Kredich, USGBC’s VP for Residential Market Development, told me recently. For example, they’ve been working with North Dallas Green Built and the NAHB, developing educational materials for production builders, dealers and distributors. They’re even helping to produce a “mini GreenBuild” in the area. (By the way, USGBC’s GreenBuild is November 17-19.) In Minnesota, they’ve joined a coalition with Minnesota GreenStar, with its new-build and remodeling rating systems, and Minnesota Green Communities, which advocates for healthy, affordable housing. They’ve also launched the Green Home Guide (www.greenhomeguide.com), a website to help connect homeowners, builders and dealers with trusted information, and with each other.

In terms of economic clout, green residential building is only just finding its feet and, in any case, current economic conditions have strangled most building of any kind. But when homes start to be built again, it’s likely a great percentage will be guided by a national or regional program. “We recognize that for green home building to scale rapidly, it’s important that everyone in the value chain understand the rating systems and are well-connected with their local green builders,” said Kredich, emphasizing the value of education. They’re reaching out to support interested independent dealers, like Shaw Stewart in Minneapolis, as well as the big chains. With many more new green residential products and materials coming to market in 2011, it should be easier for proactive dealers and distributors to rise with the green home building market. If that’s true, then the USGBC’s big thinking could very soon be taking root in a community near you.

Making Energy Efficiency a Growth Engine

(Published in the September '09 issue of Merchant Magazine and Building Products Digest.)

It’s been said that there are no certainties in life except death and taxes, but I propose that there is at least one more – energy efficiency. At least, in the realm of residential construction and the retail supply chain there is no doubt that both market and government requirements for energy efficiency will continue to grow for the foreseeable future. There are several drivers, and suppliers who understand them can shape their retail strategies and tactics to maximum benefit.

Let’s start with the macro-economic trends. Regulations are toughening energy efficiency requirements in building codes and making green building guidelines mandatory. Nascent energy retrofit programs will likely continue for years, supported by rebates and other incentives. Carbon regulations coupled with supply and demand issues ensure that the long-term trend for fossil fuel prices is rising. Home buyers are seeking, and will continue to seek, more energy efficient homes, and home builders are learning that energy efficient homes are easiest to sell and at premium prices. Lastly, product manufacturers will continue to rollout technology innovations that make it easier to build energy-efficient homes and retrofit existing ones. The upshot of all this is that there will be a growing number of pros and homeowners looking for options that contribute to energy efficiency.

For dealers and distributors, the obvious strategic play is to position the firm as an authority on energy efficiency. The key to making this work is finding ways to build energy efficiency knowledge into the fabric of the organization, and this requires an investment in people. Involve everyone at the beginning. Identify key management and staff, send them to training, and make them responsible for creating a plan for including additional staff, identifying key products appropriate for your region, creating effective merchandising programs, and reaching out to key customers. While LEED seems the obvious choice, I recommend having a look at the Passive House Institute, (www.passivehouse.us), which promotes the most innovative approaches to energy efficient building design.

While there are a growing number of product and material innovations, it’s important to choose products that work in your region and clearly demonstrate that you’re on the leading edge. Energy lost through windows is enormous, so why not stock the most efficient options and make them the centerpiece of your merchandising effort? Serious Materials, (www.seriousmaterials.com,) a Silicon Valley producer of insanely efficient windows, is a good place to start.

With organizational knowledge in place and innovative products on the shelf, the next step is connecting with customers. Signage in your store and yard should be a given, and the overall message hierarchy should emphasize staff expertise, low cost of ownership, rapid payback, rebates and incentives. There should also be plenty of opportunities for customers to educate themselves, therefore hangtags, booklets, kiosks, and other ways of offering customers more “drill down” are key. Most product manufacturers will gladly help with this task, so don’t be shy about asking them to contribute. Finally, host energy efficiency workshops led by your most capable staff and invite local weatherization and retrofit firms, (keep in mind there are a growing number of non profits doing this work, too,) as well as city leaders, green building experts and, of course, your best customers.

From new home construction to home improvement projects, the leading priority is, and will continue to be, energy efficiency. Dealers that invest the energy in making themselves experts, will have created a growth engine that will carry them through the next business cycle and beyond.