The Business of Healthy Buildings
The world is changing around us, and buildings are at the epicenter of that change. The decisions we make today regarding our buildings will determine our collective health for generations to come. We shape our buildings and afterward our buildings shape… our health, our business, and our planet. Of the 10 mega-changes shaping the world right now, buildings are at the center of them all.
Healthy buildings represent one of the greatest health— and business— opportunities ever.
The Global Mega-changes Shaping Our World, Our buildings, and Us.
1. Changing Populations
We are living on a planet of over 7 billion people, a number that is rapidly moving to 9 billion. And, as a group, we are getting older. Driven by advances in global health that have significantly extended the average human life expectancy, the shape of age distribution of the human population is changing dramatically.
2. Changing Cities
The global population is on the move. For the first time in history, more of us live in cities than do not.
3. Changing Resources
The capacity to meet our global demands is strained by limits on our nature capital. The constant release of pollutants and the overuse of natural stocks and space mean that our current overconsumption of resources is not sustainable.
4. Changing Climate
Buildings play a key role in climate change. Approximately 80% of global energy comes from fossil fuel combustion, and as consumers of 40% of that energy, buildings influence our health by indirectly contributing to it.
5. Changing Role of the Private Sector
One may assume that it’s the core function of government to recognize the threat posed by mega-changes and to plan ahead. Yet there is no escaping the inability of governments to handle this. Political stalemates and gridlock prevent us from making long-overdue investments in infrastructure.
6. Changing Definition of Health
Companies are recognizing that there is value in not just disease avoidance strategies for their employees, but also health promotion strategy. It’s great PR and HR strategy, and to many companies this is central to their core values, but the main driving incentive is economic.
7. Changing Buildings
Buildings are like humans; they need to breathe. But over the last 40 years, we’ve cut off their air supply. Starting around the time of the energy crisis in the late 1970s, we did our best to tighten up buildings and reduce ventilation rates in an effort to conserve energy. The result of sealing up our buildings created a buildup of indoor pollutants and with it, the birth of a phenomenon known as Sick Building Syndrome.
8. Changing Work
Driven primarily by the digital revolution, the nature of how and where employees work is changing. More companies are offering flex time and work-from-home options. How do you protect these workers? How can you study and help workers if we don’t even know where they are and if their environments even meet all of the Occupational Safety and Health Act requirements?
9. Changing Technologies
New sensor technologies are making the invisible visible, allowing us to see, in real time, how buildings and indoor environments fluctuate from minute to minute. IoT and AI are making it possible for buildings to understand and adjust to improve occupant experience and health.
Why Are We Ignoring the 90%?
We spend 90% of our time indoors, in our homes, offices, cars, and an assortment of other places like restaurants, stores, gyms, and airplanes. For all this time spent indoors, we tend to focus much more on outdoor air quality than on our indoor air quality.
90% of true operating costs are spent on the people inside buildings.
However, we focus on the easier-to-measure other 10%, rent and utilities. This 90% represents a massive financial opportunity going forward. The indoor environment matters for health and wealth.
The Indoor Environment’s Three-Pronged Assault on Our Health
1. The dirty secret of outdoor air pollution
The majority of your exposure to outdoor air pollution can occur indoors. There are a lot of factors – infiltration factors – that determine just how much outdoor air pollution enters a building. On average, a review of infiltration factors shows that a stable median estimate for commercial buildings and homes is ~50%. Knowing how much air pollution from outside is inside, and knowing how much time we spend inside, we know the majority of exposure to outside air pollution happens inside.
2. Indoor Sources
In addition to outdoor air pollution penetrating indoors, we also face indoor sources of air pollution. Frequently referenced estimates from the Environmental Protection Agency say indoor levels of some contaminants can be three to five times higher than outdoors. Buildings have been tightened up to limit how much fresh air gets in, in our efforts to save energy. Then, after we trap ourselves in these airtight chambers and become appalled at the odor we start to notice, we use sprays, candles, and scented cleaners. And then we douse ourselves with personal hygiene products so we smell good, and we have building materials and furniture that introduce pollutants in our sealed-up buildings and homes. The products we use in our offices, homes, and cars, and all the activities we perform there, all contribute to this indoor cocktail that our bodies are constantly absorbing and ingesting.
3. What is your neighbor doing?
Even if you do your best to stop outdoor pollutants from penetrating inside and you’re careful of what’s happening in your space, there’s another thing to be concerned about, and that’s your neighbors. In commercial office buildings, your “neighbor” can be the building next door. Instances of one building’s ventilation exhaust feeding almost directly into the adjacent building’s air intake system are common. Restaurant exhaust billows into an adjacent building’s air intake system and there are even buildings whose air intakes are right at street level by idling cars and parking lots.
Putting the Building to Work For You
How do you attract the best and the brightest, and how do you retain them? Then, once you’ve hired them, how do you give them the opportunity to perform their best? It turns out that your building has a role to play in all of this, acting as a differentiator for recruitment and retention and optimizing employee productivity.
The person who manages your building has a bigger impact on your health than your doctor. And this person just may have as big an impact on your bottom line as your CFO.
What specific actions can we perform to start putting our building to work for us? The answer is literally right under our noses.
When workers were in an optimized indoor environment, meaning high ventilation rates, low VOCs, and low carbon dioxide, we found a dramatic improvement in higher-order cognitive functions.
Putting the Building to Work for You
How do you attract the best and the brightest, and how do you retain them? Then, once you’ve hired them, how do you give them the opportunity to perform their best? It turns out that your building has a role to play in all of this, acting as a differentiator for recruitment and retention and optimizing employee productivity.
The person who manages your building has a bigger impact on your health than your doctor. And this person just may have as big an impact on your bottom line as your CFO.
What specific actions can we perform to start putting our building to work for us? The answer is literally right under our noses.
Itemized impacts of healthy building decisions.
Click the buttons below to see their impact on a business.
Baseline Company Assumptions
| Number of Employees | 40 |
| Average Salary | $75,000 |
| Payroll as % of revenue | 50% |
Full Productivity and Health
| Baseline | OpExImpacts | Payroll Effect: Health | Productivity Boost: Health | Baseline + Healthy Buildings | |
|---|---|---|---|---|---|
| Revenue | $6,000,000 | 3% $180,000 | $6,180,000 | ||
| Payroll | $(3,000,000) | -1% $30,000 | $(2,970,000) | ||
| Rent | $(300,000) | 10% $(30,000) | $(330,000) | ||
| Utilities | $(30,000) | $(1,600) | $(31,600) | ||
| Other Expenses | $(1,000,000) | $(1,000,000) | |||
| Net income before taxes | $1,670,000 | $1,848,400 | |||
| Taxes (30%) | $501,000 | $554,520 | |||
| Net income after taxes | $1,169,000 | $1,293,880 | |||
| Changes: | 10.7% |
Energy Savings
| Baseline | OpExImpacts | Baseline + Healthy Buildings | |
|---|---|---|---|
| Revenue | $6,000,000 | $6,000,000 | |
| Payroll | $(3,000,000) | $(3,000,000) | |
| Rent | $(300,000) | $(300,000) | |
| Utilities | $(30,000) | -20% $6,000 | $(24,000) |
| Other Expenses | ($1,000,000) | ($1,000,000) | |
| Net income before taxes | $1,670,000 | $1,670,000 | |
| Taxes (30%) | $501,000 | $501,000 | |
| Net income after taxes | $1,169,000 | $1,173,200 | |
| Changes: | 0.36% |
Absenteeism Savings
| Baseline | OpExImpacts | Payroll Effect: Health | Baseline + Healthy Buildings | |
|---|---|---|---|---|
| Revenue | $6,000,000 | $6,000,000 | ||
| Payroll | ($3,000,000) | -1% $30,000 | $(2,970,000) | |
| Rent | ($300,000) | $(300,000) | ||
| Utilities | ($30,000) | $(30,000) | ||
| Other Expenses | ($1,000,000) | $(1,000,000) | ||
| Net income before taxes | $1,670,000 | $1,700,000 | ||
| Taxes (30%) | $501,000 | $510,000 | ||
| Net income after taxes | $1,169,000 | $1,190,000 | ||
| Changes: | 1.80% |
Productivity Boost
| Baseline | OpExImpacts | Payeoll Effect: Health | Productivity Boost: Health | Baseline + Healthy Buildings | |
|---|---|---|---|---|---|
| Revenue | $6,000,000 | 2% $120,000 | $6,120,000 | ||
| Payroll | ($3,000,000) | -1% $30,000 | $(2,970,000) | ||
| Rent | ($300,000) | $(300,000) | |||
| Utilities | ($30,000) | $(30,000) | |||
| Other Expenses | ($1,000,000) | $(1,000,000) | |||
| Net income before taxes | $1,670,000 | $1,820,000 | |||
| Taxes (30%) | $501,000 | $546,000 | |||
| Net income after taxes | $1,169,000 | $1,274,000 | |||
| Changes: | 9.0% |
Creating and Capturing Value
Healthy building strategies are good business strategies. For many 21st-century “knowledge worker” businesses, people costs are by far the largest single portion of their income statement. Office rent may be second, and the two of them together might account for 90% of the cost of those firms.
We argue that a work environment that helps people to improve their health, productivity, and creativity provides more bottom-line benefit than does scrimping on ventilation, filtration, material selection, and the incremental energy and operating costs.
The way we see it, one of the most accessible ways to influence the health of people around the world is to influence the design, operation, and maintenance of the billions of square feet of enclosed space where we live, work, learn, play, pray, and heal. We think that the key to making this theory of change operational is to show that it’s a “win for all” scenario; that acting in your own self-interest can influence others to do the same, and that, building by building, we can begin to improve the health of all people, in all buildings, everywhere, every day.
A Healthy Building Strategy
The healthy buildings movement will require a new, holistic approach that jointly looks at a range of factors and systems, forcing interactions among various fields of expertise.
The 9 Foundations of a Healthy Building distills 40 years of research on the key determinants of health in a building. And, the CoBE calculator, built with purpose by Harvard researchers, helps to quantify the health benefits of energy efficiency measures in buildings.
Clear and actionable core elements of healthy indoor environments
Built with purpose by Harvard researchers to quantify the health benefits of energy efficiency measures in buildings.
A forensic investigator of "sick buildings" and director of Harvard’s Healthy Buildings Program teams up with a CEO-turned–Harvard Business School professor to reveal the secrets of a healthy building — and unlock one of the greatest business opportunities