According to a new study by University of Notre Dame management professors Edward Conlon and Ante Glavas, business performance in Leadership in Energy and Environmental Design (LEED)-rated buildings exceeds that of non-certified properties. The study, which is billed as the first of its kind, 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 and 2010.
‘Unlike most previous research, the investment examined in this study was unrelated to local, state, or federal environmental regulations and was unrelated to any concerns about regulatory compliance,’ said Conlon and Glavas in their study.
According to the study, 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. The 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 study found that sales at LEED-certified branches increased by $461,300 per employee compared to non-certified locations. Utility costs per employee in LEED branches were also significantly lower than in the non-certified buildings, at a reduction of $675 per employee.
The full study is available online.