MORE GREEN BUCKS ARE AVAILABLE

July 10, 2012 on 8:56 am | In Charts + Statistics, Fascinating Information, Funny...Money, Green, Property Maintenance, Uncategorized | 3 Comments

By Jodi Summers

Heads up to the accounting department > you may think your company has a green policy, but many businesses are missing key green financial opportunities. The reason? A lack of communication / collaboration between tax and sustainability departments.

Here’s the rub > 28% of tax directors believe their company has a sustainability strategy or is developing one, compared to 90% of CSOs recently surveyed by Ernst & Young LLP. Get on it before you CEO finds out. Think RSIO > Reduce, Switch, Innovate, Offset

“Reducing energy consumption and carbon emissions, switching to alternative energy and fuel sources, innovating for cleaner technologies and offsetting carbon emissions – all of these efforts have tax considerations,” said Paul Naumoff, Global and Americas Leader of Climate Change and Sustainability Services and CleanTech Tax Services. “Companies with tax departments that aren’t taking sustainability efforts into account are missing an opportunity.”

Apparently, many businesses are leaving green of money saving opportunities on the table. Only 16% of companies with an environmental sustainability strategy have their finance departments actively involved, according to the Ernst & Young survey titled “Working Together: Linking sustainability and tax to reduce the cost of implementing sustainability initiatives.” The survey featured responses from 223 senior executives at companies. Of the survey respondents, 19% were Chief Sustainability Officer (CSOs), while 81% were tax directors or their equivalent.

All cushy with their positions, employees are not keeping up to speed with state and local green incentives, as more than 37% of survey respondents are unaware of incentives for sustainability initiatives. Sure, more than 80% of finance department are aware of federal tax deductions for energy efficient buildings and incentives for renewable energy, but when it came to state tax credits and incentives, awareness levels hovered around 50%…and a meager 17% noted that their companies actually use available green incentives. In other words, companies are spending a lot more money than they need to spend.

Ernst & Young LLP notes that a company can effectively internally communicate sustainability initiatives and identify incentive opportunities throughout the organization by framing the discussion in broad categories:

· Reduce consumption of natural resources and carbon emissions.

  • Switch to alternative energy and fuel sources.
  • Innovate and develop new clean technology and less carbon-intensive or lower-emitting products and services to meet the demands of the transforming economy.
  • Offset carbon emissions.

Opening up a corporate dialogue using RSIO framework allows companies to better identify incentives and tax credit opportunities related to their sustainability initiatives > improving their return on investment.

Some national examples of incentives include:

Reduce

· Federal: IRC Section 179D: An energy efficiency tax deduction for commercial buildings can help reduce the cost of green building strategies and help building owners minimize energy consumption and improve energy efficiency.

  • LEED Buildings: Businesses can make use of the framework provided by the Leadership in Energy and Environmental Design (LEED) to achieve specific environmental sustainability metrics in their building construction. LEED incentives are currently offered by 5 states, 18 counties and over 69 cities and towns. These include property tax abatements, income tax credits, and non-monetary benefits such as expedited permitting.

Switch

· Federal: IRC Section 45 & 48: For facilities that produce and sell electricity generated from certain renewable resources, Section 45 provides an annual credit per kilowatt hour of energy sold to an unrelated person or company for each of the first 10 years of operation of a renewable energy facility.

Innovate

· Federal: The U.S. Department of Energy’s (DOE) Funding Opportunity Announcements: DOE provides grants for energy efficiency and renewable energy projects.

Offset

· Companies looking to invest in developing countries can leverage Clean Development Mechanisms (CDMs), which, as defined in the Kyoto Protocol, allow companies to invest in projects in developing countries that can be shown to measurably reduce greenhouse gas emissions. After a CDM project has been implemented, project participants receive Carbon Emission Reduction (CER) credits. Companies in industrialized countries can credit the CERs earned through their investments in CDM projects toward their emission targets, sell their CERs to buyers in other industrialized countries or trade them on global carbon markets.

In California, check with Sacramento and local governments to find benefits specific to our area. Sites like www.ey.com/climatechange are a recommended place to start.

**

http://www.prnewswire.com/news-releases/companies-missing-opportunities-to-see-green-with-sustainability-efforts-143302926.html

http://www.socalgreenrealestateblog.com/?p=2071

http://www.socalofficerealestateblog.com/?p=2103

http://www.socalindustrialrealestateblog.com/?p=1244

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http://www-935.ibm.com/services/us/gbs/thoughtleadership/images/sustain_hero-930×300.jpg

http://cdn.miragestudio7.com/wp-content/uploads2/2007/10/sustainability_moving_houses_recycling_building_panda_logo.jpg

http://cdn.psfk.com/wp-content/uploads/2011/04/Mattels-Sustainability-Strategy-Design-It-Make-It-Live-It.jpg?fedaf9

http://www.oodlesalootle.com/long-green.jpg

3 Comments »

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  1. Environmentally conscious real estate leases faster and at better terms than traditional buildings, yet it is extremely difficult for property owners to finance green upgrades. A recent McGraw-Hill survey concluded that building owners looking for finances to pay for energy retrofits for their properties are often are forced to rely on their personal resources rather than outside funding.

    Granted, there are some options green loans, but the routes are not traditional. The government and utility companies are doing their share to facilitate green loans. Out of the box choices may include ESCO (energy service company) financing, energy service agreements, government loan programs, PACE (property assessed clean energy) programs, and on-bill utility financing.

    Comment by CoStar Group, Inc. — July 16, 2012 #

  2. If you ignore home values, middle-class household wealth has flat-lined since the 1980s, according to data from the Fed and the Census Bureau.

    While it’s not music to anyone’s ears that average Americans are perhaps no richer than they were 25 years ago, the fact that we are not much poorer might also seem a wonder to some. After all, the country just weathered the greatest economic calamity since the Great Depression.

    The idea that the “golden years” of the 1950s, when the post-World War II economy steamed full speed ahead, were the halcyon days of America’s middle class is a myth.

    At least, if prosperity is measured by wealth, median household wealth is 15 percent higher than it was in 1970 and median income has doubled since 1960.

    Comment by AOL Real Estate — July 17, 2012 #

  3. The Living Building Challenge, as it’s known, is gaining stature as the most stringent green building standard in the world. But since its inception in 2006 the challenge has only fully certified three buildings and partially certified two others, raising the question of whether it will be a trendsetting project in the world of green design, or little more than an elite initiative with faint real-world impact.

    One of the core distinguishing features of the Living Building Challenge is its performance-based accreditation: While other environmental standards pre-certify buildings based on conformance of design specifications with best practices, the Living Building Challenge approves buildings only after a rigorously documented 12-month occupancy phase.

    Comment by Yale Environment 360 — July 18, 2012 #

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