Does the Future of LEED Lie in Software?

When it comes to the large “trophy” buildings, LEED is almost common. LEED plaques are found in the lobbies of epic buildings touting breathtaking views and in the world’s most iconic urban skyscrapers.

Indeed, at this level, USGBC has succeeded in achieving the “Triple Bottom Line” by increasing public awareness of green building, by saving energy, electricity and water, and by making buildings more profitable for their owners.

But is LEED topping out at the high end of the market?

According to a recent study by CBRE and the Maastricht University, in the U.S. commercial building market, there are now more than 26,000 ENERGY STAR-rated buildings, some 3.8 billion square feet, and nearly 23,000 LEED certifications totaling approximately 2.9 billion square feet.

The study reports that at the end of the fourth quarter of 2014, 13.1% of the commercial building stock now has an ENERGY STAR label, LEED certification, or both.

However, this is compared to 13.8% at the end of 2013, which is a slight overall decrease.

Also, this decrease in certified space is due entirely to a decrease in ENERGY STAR labels.

CBRE and Maastricht evaluated all the commercial office buildings in the 30 largest markets in the U.S. and found that ENERGY STAR certifications dropped from 10.8% in 2013, to 9.7% in 2014, or more than a full percentage point.

LEED is Still Growing, but Slowing

However, USGBC’s LEED program continued to expand in 2014.

The study found that 5.3% of all commercial office buildings in the largest markets are now LEED certified, up from 5.1%.

This represents 20.3% of total commercial office space, up from 19.4%, and includes newly constructed buildings (“LEED NC” or “LEED C&S”), as well as buildings certified under the “Existing Buildings” (“LEED EB”) program.

However, even with more than 13.8 billion square feet in over 72,000 projects participating in LEED across 150+ countries and territories, LEED remains primarily a high end phenomenon.

Does the Future of LEED Lie in Software?

The growth of LEED may slow unless USGBC finds additional ways to connect with the most common types of commercial buildings.

Smaller buildings, those under 100,000 square feet, represent over 95% of the commercial building market.

As can be seen in this chart from the Rocky Mountain Institute (RMI) below, the vast majority of commercial buildings are much smaller, under 10,000 square feet.

However, one of the interesting findings of the CBRE/Maastricht research report was that only around 4% of buildings under 100,000 square feet are certified as either LEED or ENERGY STAR.

Green Building is Eating the World

Back in 2011, Marc Andreessen famously wrote that “software is eating the world”. It is doing so because the best software is affordable (often free), while designed to be both viral and scalable.

With Rick Fedrizzi recently announcing that he will step down as president of USGBC, it would not surprise me to see the arbiter of LEED seek out someone with ties to Silicon Valley to lead the organization’s next chapter of growth.

As it evolves, USGBC should stick to the logical, bulletproof fundamentals of green building, while embracing the intrinsic value of web-based software, to make LEED and green building easier and more affordable for smaller buildings.

In essence, USGBC should transform itself from primarily a certification and credentialing non-profit organization into a software non-profit organization.

This is because an affordable subscription-based software as a service (SAAS) model, perhaps inspired by the LEED Dynamic Plaque, could make it easier for these smaller buildings to go green while monitoring their progress.

By developing solutions, such as software, for smaller buildings USGBC has an opportunity to make an impact for decades to come.