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.

If you were to survey green building critics, it’s safe to guess most will argue that the cost to build green do not outweigh the benefits.

Indeed, many have suggested that the cost of building green (especially gaining LEED certification) is significantly higher than building to ordinary standards.   Others argue that LEED certification can be achieved through an everyday budget.

Regardless of where you fall on this issue, everyone should agree that green building projects have certain specifications, and bidding contractors must project the construction costs responsibly.

And so, one of the most challenging components of a constructing a green building may be the process of bidding it.

Since green building work is just starting to take hold in the construction industry, many contractors and subcontractors are working on little-to-no experience on green projects.   And sometimes the data behind green building techniques and products are thin (see greenwashing).

On Wolfe Law Group’s Construction Law Monitor, we published a 2-part article on the Bidding Process and Change Orders:   Bidding Errors and Change Orders: Avoiding a Nightmare [Part One and Part Two].

How do we suggest you avoid Bidding Error nightmares?   Spend time with the Contract Documents pre-bid.

With green building projects, this is more true than usual.

When preparing your green bid, here are some example thoughts that should be considered:

• If the project is being certified with LEED or another standard, who will be responsible for the submittal process?   Who will be responsible for monitoring the construction process?
• Contact vendors who will be providing the project’s materials, and review the data they have to back-up their performance and environmental claims.   It would be a pity to plan on using one product, and being forced to later use a more expensive substitute.   See this article on how to shop for green building materials.
• If the builder is anticipating a tax credit, do you understand the requirements to qualify for the credit?   Will this increase your construction costs?

A successful green building project starts where successful ordinary projects begin:  during the bidding and contracting period.

Whether your green building project will increase costs, or not, understand the green building expenses associated with your project, and avoid bidding errors and change order nightmares.

Anyone familiar with green building or the LEED Certification process should know that great emphasis is placed on the reflectivity of open spaces.

Under LEED Credit SS 7.1, for example, parking lots and open spaces must have a reflectivity (SRI) of at least 29 to qualify for credit. Similar, roof installations must contain a percentage of vegetation or reflectivity to achieve credit SS 7.2.

The idea of pavement and roofs being white, instead of black, in other words, isn’t new.

However, in the news this week is a rather radical proclamation by a scientist at Lawrence Berkeley National Lab in California, who opine that painting rooftops whiter will cause enough sunlight to bounce back into space and cool the planet. They also aver that it will save in energy costs, as the planet – and individual homes – will stay cooler.

Contractors in Louisiana might want to take note of the study, as the state has generally hot summers and year-long weather. There may soon be a market in taking residential and commercial roof installations, and coloring them white.

Marketing the sale of a “white roof” or “white roof coating” has already begun actually.  See this Craig’s list ad, and Spray Foam Louisiana’s website for cool roof systems.

Of course, with any type of green construction, it will be important to insulate your company’s offering from liability. The idea of a “white roof” lowering energy costs for individual homeowners is just that: an idea, and there are many other variables (insulation, roof type, etc.) impacting the energy costs of a home of business.

One of the dangers with “green building” is the promises that come along with the construction offers. Selling your service by highlighting energy savings and performance enhancements is legally problematic if the service doesn’t result in savings and efficiency.

If your company is engaged in a service that promises energy savings, be aware, and speak with an attorney about how you can protect yourself from potential liability by smart contracting.

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.

There seems to be an unusual level of “green” activity in the New Orleans area this weekend, and with a particular focus on green building.

These events build on the Green Building momentum in Louisiana, in addition to recent national news that there’s a possible silver lining to Hurricane Katrina in that the New Orleans construction industry is largely avoiding the global recession.

Here are some highlights from this weekend’s events:

1)  Gambit Weekly magazine had a “Green Building Guide” insert in this week’s edition, co-sponsored by Global Green USA and South Coast Solar providing the city with a green building products and services directory [PDF Version of Global Green's Vendor List].

2)  Louisiana Bucket Brigade is presenting Louisiana’s first ever Earth Day Festival, featuring musical performances on the city’s first Solar Powered Soundstage (April 5, 2009).

3)  New Orleans City Park is having their annual Spring Garden Show (April 4-5, 2009).  For the first time, however, the garden show will present the city’s first “Green Fair.”   According to the Live Green Orleans blog, the fair at City Park’s Botanical Gardens will be the largest Green Fair in Louisiana’s history.

Does New Orleans Need to Worry about “Greenwashing?”
While the green building and green attention is good for New Orleans and Louisiana, the rising profile of “green” living in the city may be cause for concern that the green label will be abused by businesses and marketers.

What is Greenwashing? The term’s wikipedia entry defines it as follows:

Greenwash (a portmanteau of green and whitewash) is a term used to describe the practice of companies disingenuously spinning their products and policies as environmentally friendly, such as by presenting cost cuts as reductions in use of resources.[1] It is a deceptive use of green PR or green marketing.

The problem itself is not new, and the FTC even has a Guide “For The Use of Environmental Marketing Claims.”  In 2007 and 2008, there were reports that the FTC was stepping up its enforcement efforts against untruthful environmental advertising in the wake of increased green claims.

The specific FTC regulations of environmental marketing claims will be discussed in a separate blog post, but for the time being, we’ll just bring up the topic as it relates to the tsunamic of “green” marketing by construction industry firms in the New Orleans area.

While green building is certainly a hot area for the construction industry, there are dangers to making green claims for the sake of good PR and increased business.

In Gambit Magazine’s Green Building insert, Global Green USA’s Matt Petersen wrote the following about its “Green Building Guide:”

On behalf of the entire staff and Board of Directors at Global Green USA, I am pleased to present the first ever Green Building Guide.  The Guide is designed to help you find the green products and serves that will make it easier for you to save money on rising energy bills, improve the indoor air quality and health of your home and do your part to held rebuild a more resilient, greener New Orleans.

That’s a tall order for the 400 vendors listed in the Green Building Guide.

While the Guide is likely a good thing for Louisiana consumers and builders, its important for everyone involved to remember that environmental claims must be substantiated.  More on exactly how later…