GreenBuildingElements.com recently posted a blog titled “Are There Any Risks in Building Green?”   The post mentions a survey conducted by the Marsh Green Building Team finding two things that play into builders’ reluctance to construct green projects: financial concerns and legal concerns.

Examining the Legal Risks

We’ll talk about the legal concerns (& have in the past), which the post summarizes as follows:

The idea of jumping into a supposedly “green-built” project, and then failing to reach LEED certification levels expected by others, is unnerving to think about. There’s also the worry in many constructions that standards of operation and new design features – especially those not covered by the insurance market – will fall short because contractors won’t be willing to take on those things.

Let’s face it – ordinary construction projects present enough legal challenges.   Throwing in unfamiliar green certification process programs and novel green technologies increases risk.   Here are some of the risk factors mentioned by the Marsh Green Building Team report:

• Not obtaining the LEED certification expected;
• Determining the appropriate standard of care used by green builders and professionals;
• The competence of team members, subcontractors, laborers in green building technologies and requirements;
• Untested contract language;
• Concerns about contractors taking design responsibilities not covered by insurance.e

Managing Risk

The existence of risk should not stop owners, builders and designers from participating in a green building project.   As the Marsh Team analyzes and the Green Building Elements post discusses, there are many possible solutions for the legal risk factors identified.

Plus, as anyone in the construction industry knows, risk is absolutely everywhere.  A builder is in the business of managing and mitigating risk…and it’s possible to do this with green building.

• Address Concerns in the Contract:   “Green Contracts” are largely untested, but that is no reason to not draft green contract language.   Before a project begins, have a lawyer experienced in green building projects draft language regarding the roles and responsibilities of each party in a green certification process, and properly allocate risk and liability for green building tasks.
• Do Not Greenwash.  If you haven’t heard the term ‘Greenwashing,’ and you’re in the green business…it’s time to read up on it.   A builder or designer or supplier can avoid a lot of risk on a green building by simply avoiding vague and misleading advertising or labeling of services/products.
• Insure.   Finally, it all goes back to insurance.   Insurance is a familiar product in the construction industry, and while policies protecting builders and designers from green building exposure is new…it is out there.   Talk to an attorney and/or your insurance agent about these products.

Around Southeast Louisiana, the green craze is in full swing.  With Global Green’s Green Building Directory (with 400 “green” vendors), press from the Make It Right Foundation, and a host of other things contributing to the green momentum in the area….we asked the question last week:  How much of it all is Greenwashing?

The Greenwashing topic has been subject to some press lately, as Earth Day approaches with the usual proliferation of “green” claims.   Further, just last week, green marketing, industry and government officials participated in a workshop in Arlington, VA to discus how to make green labels more credible.

To put things simply, there simply aren’t any real enforceable standards.

The newly revised FTC’s “Guides for the Use of Environmental Marketing Claims” are a good starting point, but it has no enforcement mechanism [read our summary of the guide].

Isn’t This A Consumer Problem?  Not a Builder Problem?

Short answer:  No.  It’s has huge applicability to the builder world.

As a matter of fact, Joel Bittle at GreenBuildingElements.com published a great article on this subject last year:  How Not to Greenwash Your Building Product.

His full article can be read here, but here is a summary – a list he prepared of 7 things to keep in mind when writing out what green building credits your product may satisfy:

1. Make sure your product satisfies at least one green building requirement
2. Do not claim credits that do not apply to your product or to the current building project;
3. If you are not unique, don’t try to sell yourself as unique;
4. Don’t claim that yours is a local product if it’s not harvested/extracted or processed locally;
5. No product is a LEED certified or LEED qualified product;
6. Your manufacturing practices do not affect LEED credits;
7. Don’t sell yourself short.

So what is the future of greenwashing?

There are a few organizations trying to combat Greenwashing.   Check out the GreenWashingIndex.Com for example, or Consumer Report’s GreenerChoices.Org.  Moreover, there are constantly reports on how to evaluate green products – like this report from BuilderOnline.com.

The future of greenwashing is a bit uncertain.   On the one hand, if the advertising continues to work, the advertisers will continue to greenwash.  On the other hand, if it stops working, the problem of decreasing green choices surfaces.

Many argue that simple enforcement is needed.

While regulatory penalites are not a clear and present danger for “greenwashers,” there is certainly the danger that they will be sued civilly for the misrepresentations.  This can be especially relevant when a greenwashed product or service negatively affects a construction project seeking LEED certification.

For this reason, builders and construction service providers should be more dilligent than the average joe, as the potential damages associated with messing up a LEED accrediation can be significant.