Study Finds Green Buildings Improve Company Financial Performance and Lower Operational Costs

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Notre Dame Directly Links Corporate Sustainability to Financial Performance in Study of Paladino-Developed PNC Pioneering Green Branch® Bank Branch Program

PNC’s LEED rated facilities opened 458 more consumer deposit accounts and had over $3 million more in consumer deposit balances per facility per year over non-certified properties.

A new study by University of Notre Dame management professors Edward Conlon and Ante Glavas shows that business performance in LEED® (Leadership in Energy and Environmental Design) rated buildings exceeds that of non-certified properties. The first-of-its-kind study compares the financial performance of 93 LEED rated bank branches with 469 non-rated branches owned and operated by PNC Financial Services Group, using consumer deposit and loan data collected between 2008-2010.

“This is the first study we have seen linking what have traditionally been considered intangible benefits of green building – employee satisfaction and brand reputation – to corporate financial growth metrics,” said Tom Paladino, whose firm Paladino and Company collaborated with PNC to develop the pioneering Green Branch® bank branch program. “The implications of the study findings are enormous. Owners and occupants of green buildings can now be expected to experience measurable business benefit beyond simple operational efficiencies.”

The Findings
The recently published study (“The Relationship Between Corporate Sustainability and Firm Financial Performance”) found that:

PNC’s LEED rated facilities opened 458 more consumer deposit accounts and had over $3 million more in consumer deposit balances per facility per year over non-certified properties.
LEED rated facilities also opened 25 more consumer loan accounts and had almost $1 million more in loan balances per facility per year. The data also shows that financial performance at LEED rated facilities increases at a greater rate than at conventional facilities.
After controlling for other variables that influence performance (such as consumer net worth, employee demographics, market demographics, branch size and age and advertising spend), the sales at LEED certified branches increased by $461,300 per employee compared to non-certified locations
Utility costs per employee in LEED branches were significantly lower than in the non-certified buildings at a reduction of $675 per employee.

Conlon and Glavas comment PNC was an ideal candidate for such a study for several reasons: it owns and operates the most newly constructed LEED buildings in the world so it could provide a statistically significant sample of third-party-validated green buildings, all branches provide the same products and services, the products themselves are not tied to environmental concerns, and the Green Branch® program is completely voluntary and not a response to government or industry regulations.

Please click here to download and view the study.

Cost-Effective Approach to LEED Certification
Paladino has served as PNC’s sustainability advisor for more than ten years. The Green Branch® bank branch program was developed in collaboration with PNC, the U.S. Green Building Council (USGBC) and Gensler, a global architecture and design firm, as a way to streamline certification over a large portfolio of new, same-type buildings. The pioneering program eventually became the basis for USGBC’s LEED Volume Certification Program. Paladino currently manages a number of similar programs for other clients, and finds that investment in a streamlined certification program such as PNC’s typically realizes payback within 5-10 locations, making it cost effective for most businesses.

These study findings independently validate a post occupancy study performed by Paladino in 2007 and presented at Greenbuild, which showed that PNC’s green bank branches outperformed the conventionally designed branches in areas of worker satisfaction, retention and comfort, as well as energy and water efficiency.

The LEED® green building certification program is the nationally accepted benchmark for the design, construction, and operation of green buildings.

About Paladino and Company
Paladino and Company, Inc. (http://www.paladinoandco.com) is an internationally recognized sustainability and green building consulting firm that helps organizations align business growth with the long term health and vitality of the planet. The firm’s specialized team of architects, engineers, and business analysts work collaboratively with building owners and their teams to create high performance green buildings and companies, resulting in environmentally responsible development and reduced total cost of ownership.

About PNC Financial Services Group
The PNC Financial Services Group, Inc. (http://www.pnc.com) is one of the nation's largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. Follow @PNCNews on Twitter for breaking news, updates and announcements from PNC.

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Michele Brown Ruegg

Maggie Santolla