June, 2004

Profit from the Green Building Revolution

All across America, home builders are greening their businesses. Here's how you can profit from the Green Building Revolution.

By Dan Chiras

All across America, home builders are greening their businesses. This growing cadre of "green builders," including some of the nation's premier custom and production home builders is forging the way for a brighter future for all of us. They're not just incorporating energy efficiency measures, which has been the mainstay of green building for many years. They're using a wide array of healthy, environmentally friendly building products--commonly referred to as "green building materials"-- creating potentially lucrative opportunities for America's lumber and building material suppliers.

The new builders are not tilting at windmills. They are tapping into a rapidly growing demand for green-built homes - a demand that many experts think will rise exponentially in coming years.

What is Green?
Just what is a green building material?

The term green building materials refers to a growing list of products and materials used to build, furnish, and power homes, helping create shelter that is good for people, the planet, and the economy. To make the list, these materials must meet at least one of the criteria shown in the sidebar. The more criteria a product meets, the greener it is!

One characteristic of a green building material is that it is produced and sold by socially and environmentally responsible companies- that is, businesses that treat their employees and customers well, exert a positive influence in the community, and engage in environmentally sustainable practices in all aspects of the business: in the office, the factory, and the field.

Next on the list of essential criteria for green building material is embodied energy. Embodied energy is the amount of energy required to extract or harvest the raw materials that are used to manufacture building materials, process them to create finished products, and transport both raw materials and finished materials during the various stages of the production-consumption cycle. The lower the embodied energy, the better.

As a rule, materials made from recycled waste have a lower embodied energy than materials manufactured from virgin resources-often much lower. Besides requiring less energy to make, building products manufactured from recycled materials put valuable waste to good use, reducing the harvest or extraction of virgin materials, habitat loss, landfilling, energy consumption and pollution.

Materials produced from locally available resources also have a much lower embodied energy than those manufactured from virgin materials at facilities thousands of miles from a building site. So, buying locally manufactured products can have just as much benefit as buying a recycled product shipped from a manufacturer thousands of miles away.

Durability is yet another green building criterion to consider when selecting green building materials. The more durable a product is, the longer it will remain in service-the lower its environmental impact. Recycled steel roofing, for instance, outlasts asphalt shingles-saving energy, materials, labor and money. "Some durable, environmentally friendly roofing products such as Ecoshake shingles made from recycled vinyl and wood fiber comes with 50-year warranties. In addition, because this product resists fire and hail, many insurance companies offer substantial discounts- up to 28 percent-for homes on which they've been installed," says David Adamson, a green building materials and marketing consultant who has successfully introduced a variety of green building products to the mainstream markets in Colorado.

Many building products are reusable, too, or can be recycled after their useful life is over. Steel roofing, for instance, can be recycled, adding to its effective life span.

Green building materials and products also are non-toxic to those who manufacture and install them as well as those who live with them. You may want to consider stocking a full line of paints, stains, finishes, and adhesives that contain no volatile chemicals and other toxic substances that could outgas into indoor air.

To promote environmental sustainability, windows, doors and appliances in homes should be efficient as possible. Combustion appliances that burn efficiently and prevent indoor air pollution are important components of a green-built home.

Greenscape
Green building is on the rise. There's no question about it. In fact, it's one of the fastest growing trends in America.

The rising tide is floating many boats, too. McStain Neighborhoods in Boulder, Colorado and Bigelow Homes in the Chicago area-two leaders in green building-are prospering in the market niche they've carved out over the past decade. Their homes sell quickly, and provide safe, environmentally friendly shelter at little additional cost. They're not alone, though. Numerous green building consultants and green architects are now making a living working exclusively in the field.

Further adding steam to this movement, many cities, states, utilities, and home builders associations are promoting green building. "Today, there are more than 35 green building programs throughout the country sponsored by municipalities, utilities and home builder associations," according to David Johnston from the green building consulting firm, What's Working, with offices in California and Colorado. Chances are your community has one or is in the process of developing one.

Green building programs such as those in Austin, Texas; Denver, Colo.; Atlanta, Ga; and Scottsdale, Ariz. establish voluntary standards. In order to receive green certification for homes they build, builders and developers must meet a certain number of criteria in areas such air sealing, insulation, windows, lighting, efficient design, building materials, durability, indoor air quality and water use.

Further growth in green building is likely to occur as a result of an initiative launched by the National Association of Home Builders. "They have made green building one of their top priorities and are developing a nationwide program in 2004," says Johnston, who has pioneered this idea and helped many cities and organizations develop their programs.

Yet another driving force is the U.S. Green Building Council, a national nonprofit organization. With 4,000 members from every sector of the building industry, including architects, manufacturers, builders, and building supply outlets, the USGBC promotes buildings that are environmentally responsible, profitable and healthy places to live and work. USGBC has developed a green building certification program for professionals in the commercial building sector, known as Leadership in Energy and Environmental Design or LEED. Architects and building professionals are flocking to USGBC seminars to train for LEED certification. USGBC also sponsors an annual conference, now attended by thousands of people throughout the country.

"USGBC is now in the process of developing a residential LEED program," notes Johnston. This new program should encourage even more builders to "green" their operations and create many more opportunities for increased sales among manufacturers and retail outlets.

"I think the health benefits of green materials is going to prove to be the biggest driver, particularly with the rapidly increasing incidence of asthma and other respiratory problems," remarks Alex Wilson, an expert on green building who heads up BuildingGreen, Inc., a company in Brattleboro, Vt. that offers a wide range of resource materials on green building.

Products Galore
A decade ago, green building was stymied by the lack of product; there were only a handful of green building materials on the market. Today, the number is approaching two thousand and expanding rapidly.

"There are really two types of green products on the market today: so-called "conventional" products that are becoming greener all the time, and innovative new products, such as those made from recycled materials," says BuildingGreen, Inc.'s Alex Wilson.

"Many building product retailers already sell products from the first group," he adds. This includes low-VOC paints, stains, and finishes and a variety of user-friendly insulation products. "The VOC levels in paints, stains, varnishes, caulks, and adhesives have dropped significantly in recent years," says Wilson. "And I don't think you can buy fiberglass insulation with a recycled content less than 30 percent. The entire industry has moved in that direction."

The second group represents largely untapped retail potential.

Readers can learn about the cornucopia of green products GreenSpec: The Environmental Building News Product Directory and Guideline Specifications, a publication of BuildingGreen, Inc. GreenSpec-and the other books listed in the accompanying sidebar-contain brief descriptions of each green building product and contact information for manufacturers.

For a briefer introduction to the field of green building materials, you may want to read "Navigating the Maze of Environmentally Preferable Products" published in Environmental Building News (November 2003), also published by BuildingGreen, Inc.

For the latest detailed information, be sure to check out BuildingGreen's online version of GreenSpec, the BuidingGreen Suite. This handy resource lists 1,750 green building materials and products. You can browse BuildingGreen's Suite by CSI designation (for example: 06000: Wood and Plastics); homebuilder category (for example, Foundations), green attribute (for example: post-consumer recycled material); or by LEED credit (for example: IEQ Credit 4 - Low-Emitting Materials), or US EPA CPG recycled content recommendations. Listings are updated every 30 days or 90 days. This resource also contains direct links to manufacturers' websites.

Detailed product reviews and new product announcements are available in the monthly publication, Environmental Building News, another publication by BuildingGreen, Inc. Back issues are available on their EBN Archives CD, which includes the issues published dating back to 1992.

Opportunities Galore Although opportunities abound for building materials suppliers, this group is "the furthest behind in providing products for homeowners and commercial builders," comments Johnston. In fact, green building products are primarily sold by a handful of small retailers such as Planetary Solutions in Boulder, Colorado; Eco-Wise in Austin Texas; Environmental Construction Outfitters in New York City; and Environmental Building Supplies in Portland, Ore. These outfits sell directly from local retail outlets and online to the general public and contractors.

These small, but vital suppliers of environmentally and health- conscious homeowners and builders offer a wide range of products. Building for Materials Health Center in Carbondale, Colo., for example, offers approximately 1,200 products from low- and no-VOC paints stains and finishes to ecologically and sustainably harvested lumber to solar tube skylights and natural plasters.

Most conventional building supply outlets also offer some green building materials, such as energy-efficient windows and doors and nontoxic insulation products. For building supply outlets that want to tap into this growing green building market, there are many opportunities. "Those companies that have developed a green product line have benefited greatly by becoming market leaders and differentiating themselves in their local markets," says Johnston.

Hayward Lumber in Monterrey, Calif., for instance, is committed to "mainstreaming" the supply of green building materials. This family-owned, full-service building materials supplier has been serving the professional builder community on the Central Coast of California since 1919.

Hayward is an $85 million dollar a year business with five building supply yards. They were the first independent building materials supplier to employ a full-time staff devoted to servicing the needs of green builders. Hayward carries the largest inventory of certified framing lumber and plywood in the state of California. They also carry ACQ and borate-treated wood, formaldehyde-free MDF and particle board, recycled plastic decking, reclaimed or salvaged wood, and energy-efficient windows and skylights.

Hayward even manufactures trusses made from certified, sustainably-managed wood. Although their trusses cost 5 to 10 percent% more than products made from conventionally harvested forests, the company works to keep the margin narrow as part of their commitment to bringing environmentally preferable products to the mainstream market.

A more recent entrant into the green building supply is Truitt and White Lumber in Berkeley, California. Truitt and White has supplied the Bay Area's home improvement and residential construction industry since 1946. They have recently begun supplying an assortment of green building materials including nontoxic adhesives, environmentally friendly siding, and formaldehyde-free insulation products. Their website (www.TruittandWhite.com) highlights these products and describes the many benefits of green building.

How to Get Started
"Retailers can profit from trends in green building, if they understand them and clearly communicate them to customers," says Wilson. "I think there is significant opportunity to build up a market, especially for healthy building products."

How do you tap into this growing and potentially profitable market?

Start small. "Carry the most widely used products," says Johnston, "such as FSC lumber, engineered trim, formaldehyde-free medium-density fiberboard and particle board, agricultural particle board (made from wheat straw using a nontoxic binding agent), environmentally friendly deck products such as Trex decking made from recycled plastic milk jugs (LDPE plastic) and reclaimed hardwood waste, formaldehyde-free fiberglass insulation, low-VOC paints, solvent-free adhesives, and others."

Don Sather, who runs Big Horn Home Improvement Center in Silverthorne, Colo. not only sells a number of green building products but also used many of them in building the company's super-energy efficient green-built retail outlet agrees with this advice. He also suggests that hardware departments of building materials suppliers stock compact fluorescent light bulbs, programmable thermostats, nontoxic caulking, weatherstripping, water-efficient plumbing fixtures, dual-flush toilets and nontoxic cleaners. All the products listed above are available through normal distribution channels and are generally competitively priced."

"My strongest recommendation," advises Wilson, "is to educate yourselves. The building products industry is changing rapidly and suppliers should invest in keeping up-to-date with trends and developments."

One of the best ways to start is by reading books and magazines on green building and studying green building materials directories (see sidebar 3). Then consult with local green builders to determine their current and future demands. You'll gain valuable knowledge while building relationships that could translate into steady, long-term sales. Study successful operations like those of Truitt and White, Hayward Lumber and Big Horn Home Improvement Center.

Home building supply outlets can contact local municipalities to learn about green building programs and tailor their product offerings to these programs, even highlighting materials and products that help builders score points. Attend green building workshops and seminars.

To reduce costs, order in bulk. You'll need to actively market green building products. Highlight them on the shelf with appropriate signage, including green labels that draw customer's attention to the products. Be sure to list the features and benefits of each product. Truitt and White, for instance, post a Truitt and White Green Approved logo on their line of green products. "Educate employees as well on the merits of green products and why given products are considered green as compared to others," advises Sather. "They will then discuss this with contractors and consumers in the ordinary course of business."

Be sure to highlight green building products in ads on TV and in the newspaper, especially around Earth Day. "Newspapers are interested in green issues and are receptive to doing articles on products, technologies, and businesses initiatives," notes Sather.

Seminars open to the public and to builders by local green building experts or local officials associated with the community's green building programs could help bolster sales. "Take advantage of manufacturer and distributor product reps to present products to contractors, builders associations, the media, and others," Sather advises.

Calculating Costs
But what about cost?

In this intensely competitive industry cost is king and many a good idea is abandoned because it costs a bit more than conventional materials.

Although green building materials may cost more "they're generally higher quality than the conventional products they replace. Ultimately, it is never cheap to build quality homes," reminds Adamson.

"We must decide if we want cheap or we want true quality," he adds. However, remember that many products save homeowners money over the long run in reduced replacement costs, higher performance, durability, and greater efficiency

Green building products are better for people and the planet than many conventional building products and can reduce human suffering and slash health care costs. "Green building can be expensive," remarked a person at one workshop, "but so's cancer."

For an effective campaign, suppliers need to alert consumers to the whole picture, and they will need to train employees, teaching them the benefits of green building materials, to help get this message across.

Green building materials is an area on a meteoric rise. "Suppliers who pursue this strategy sincerely, who have an authentic interest in helping to build a better world will impress customers, employees and sell higher margin products," Adamson concludes. The opportunity is there and it's waiting for committed companies.

[Sidebars] Green Building Material Criteria

• Produced by socially and environmentally responsible companies
• Produced sustainably-harvested, extracted, processed, and transported efficiently and with minimal impact
• Low-embodied energy
• Locally produced
• Made from recycled materials
• Made from natural or renewable materials
• Durable
• Recyclable
• Nontoxic
• Resource-efficient
• Reliant on renewable resources
• Nonpolluting

Green Building Material Resource Guides City of Austin Green Builder Program. Sustainable Building Sourcebook. Austin: City of Austin Green Builder Program. Available on- line at www.greenbuilder.com/sourcebook.

Hermannsson, John. Green Building Resource Guide. Newtown, Ct.: Taunton Press, 1997.

Holmes, Dwight, Larry Strain, Alex Wilson, and Sandra Leibowitz. GreenSpec: The Environmental Building News Product Directory and Guideline Specifications. BuildingGreen, Inc.: Brattleboro, Vt., 1999. On-line version also available.

Spiegel, Ross, and Dru Meadows. Green Building Materials: A Guide to Product Selection and Specification. New York: John Wiley and Sons, 1999. The newest entry into the green building materials books.

Books on Green Building Daniel D. Chiras, The New Ecological Home: A Complete Guide to Green Building Options. White River Junction, VT: Chelsea Green, 2004.

Johnston, David. Building Green in a Black and White World: A Guide to Selling Homes Your Customers Want. Gabriola Island, B.C.L: New Society Publishers, 2004.

U.S. Department of Energy. Green Building Guidelines: Meeting the Demand for Low-Energy, Resource-Efficient Homes, Available from the Sustainable Buildings Industry Council, 1331 N. Street, NW, Suite 1000, Washington, D.C. 20005. Tel: 202-628-7400.

Magazines on Green Building Environmental Building News, published by BuildingGreen, Inc.122 Birge Street, Suite 30, Brattleboro, VT 05301.

Environmental Design and Construction. Business News Publishing, 755 W. Big Beaver Road, Suite 1000, Troy, MI 48084. Tel: 248-362-3700.

Dan Chiras is a green building and solar design consultant and author of numerous popular articles and books on green building, including The New Ecological Home, The Solar House, The Natural House, and The Natural Plaster Book.