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Building Performance Management

Productivity Gains from Energy Efficiency

Improving the energy efficiency of a building can result in gains in worker productivity in addition to generating energy cost savings. Salary expenses are generally a high proportion of a commercial entity’s costs. Even a small percentage gain in productivity, multiplied by the number of employees, can result in considerable savings. 
 
Comfort plays a key role in productivity. The built environment affects comfort through temperature, indoor air quality, lighting, acoustics, physical space, and humidity.[1] A new green building, or an energy efficiency retrofit of an existing building, often improves many occupant comfort factors.Productivity gains from Energy Efficiency
 
Productivity gains are rarely factored into the financial return on investment (ROI) calculations for energy efficiency upgrades. This is largely because productivity gains are difficult to quantify for today’s office work, which is often knowledge-based, rather than task-based. Measuring the productivity and quality of time spent thinking, planning, or problem solving is inherently challenging because of the large number of variables that affect the health and productivity of building occupants. 
 
Despite these challenges, many studies have attempted to quantify the productivity benefits of a more energy efficient building. These studies consistently indicate that the productivity gains from increased energy efficiency are significant.
 
More research is needed to enable accurate estimates of productivity gains from energy efficiency improvements. Much of the research on such productivity gains is 10 to 20 years old, but some newer studies continue to verify the findings of increased productivity from energy efficiency. 
 
Facility Improvements and Worker Productivity
 
A number of recent studies have analyzed how facility improvement measures affect productivity.
 
Lighting
Studies show that better light and more natural light can improve office worker productivity, improve health and well-being in medical facilities and improve school achievement. The Center for Building Performance and Diagnostics at Carnegie Mellon identified 12 studies linking improved lighting design decisions with 0.7 – to 23 percent gains in individual productivity.[2] These studies measured productivity gains through increases in reading comprehension, letter processing speed and a range of other tasks, as well as reduced absenteeism. Another study compared two groups of people, one exposed to daylight, the other to artificial light, over several work days[3].  People who had daylight were significantly more alert at the beginning of the evening, and subjects who were exposed to artificial light were significantly sleepier at the end of the evening. On top of sleepiness, the study found that cortisol levels drop significantly under artificial or poor lighting conditions.
 
Temperature and Temperature Control
Indoor office temperature is a key determinant of productivity. A meta-analysis of studies of temperature and productivity found that performance increases with temperature up to 21-22°C (69-71o F) and that performance decreases with temperature above 23-24°C (73-75o F).[4] At 30°C (86o F), performance is only 91.1 percent of the maximum. This indicates that energy efficiency improvements that also help maintain indoor temperatures in the optimum range may result in significant productivity gains. 
 
Cornell University tested different office temperatures at a large Florida insurance company found that when temperatures were low employees made more mistakes than at optimal room temperature[5]. The problem is not just that people who are cold feel uncomfortable; it is that they are distracted. People who are cold use substantial energy to keep warm and have less energy to go toward concentration, inspiration and focus.
 
Individual temperature controls may augment productivity gains because not everyone is optimally productive at the same temperature. ASHRAE has standards for recommended indoor operating temperatures that meet of 80 percent of building occupants’ needs,[6] but that means the other 20 percent may not be happy with the temperature. The Center for Building Performance and Diagnostics identified eight studies linking individual control of workstation temperature with 0.2 to 3 percent gains in overall productivity.[7] Productivity was measured through insurance claims processing speed, occupant satisfaction, typing speed and accuracy, increase in creative thinking, and decrease in error rate on addition tests. Some of these studies also demonstrated significant energy savings because of smaller HVAC zone sizes, occupancy sensors, and broadband setpoints.
 
Acoustic Control
Noise can cause productivity losses in certain types of work. An increase in insulation and an upgrade of windows can result in a quieter working environment by blocking outdoor sounds, while also improving the energy efficiency of the building. The Center for Building Performance and Diagnostics identified 14 studies linking quieter working conditions with 1.8 to 19.8 percent gains in individual productivity.[8] 
 
Indoor Air Quality
Indoor air quality can be negatively affected by chemicals like volatile organic compounds (VOCs), airborne bacteria, dust, and mold. Solutions include good building ventilation, air filtration, cleanliness and the purchase of low-VOC furniture and carpets. Improved ventilation, air filtration and cleanliness of duct systems can also result in energy efficiency gains if designed correctly. 
 
There is a relationship between the percentage of people dissatisfied with indoor air quality and the measured decline in performance. The size of the effect on most aspects of office work performance appears to be as high as 6 to 9 percent.[9]
 
The Center for Building Performance and Diagnostics identified 15 studies linking improved ventilation with 0.6 to 7.4 percent gains in individual productivity.[10] Measures included improvement in typing, reduction in sick leave/non-attendance, reduction in pollution, and reported productivity. Ventilation was improved through provision of task air, provision of increased outside air, and removal of primary pollutants. Improved air quality does not always come with lower energy costs unless it includes high-performance natural ventilation, improved economizer/heat recovery ventilation or improved ventilation effectiveness. 
 
Working Space
 
The amount of workspace a worker is given also affects productivity. Studies by the International Centre for Indoor Environment and Energy at the Technical University of Denmark show that 10 square meters of work space for individual office workers and eight square meters for individual call center operators is viewed as sufficient. The lead researcher, Dr. Pawel Wargocki, noted that the most important driver of employee satisfaction was “the amount of space, regardless of occupants' gender and age, type of office [single office, shared office or cubicles] and distance from a window."[11] However, the study showed that employees’ preoccupation with space does not tend to affect efficiency at work; instead, it has an impact on employee self-esteem and is a status symbol. The efficient use of space and increased worker density in an office space has potential to generate significant energy savings per worker.
 
Measuring the Productivity Impact of Comprehensive Energy Efficiency Retrofits
 
Most recent studies have been tenant self-assessments of their own productivity gains when they move from a standard building into a green building or a building that has undergone an energy efficiency retrofit. A few interesting recent reports include:
 
In May 2009, CBRE and the University of San Diego surveyed 534 managers of tenant companies that moved from standard buildings into in buildings with ENERGY STAR labels or LEED certifications. Of these, 42.5 percent agreed that employees were more productive, and 45 percent agreed that workers were taking fewer sick days since moving. They perceived an average productivity increase of 4.88 percent among those who reported increased productivity. Fifteen to 25 percent also perceived higher employee morale, less turnover, and greater ease of recruitment.

  • A McGraw-Hill survey completed in 2009 showed that nearly half of all tenants who move into a green space did so in part because they anticipated productivity gains.[12] 

  • A 2009 Michigan State University study, “Life Cycle Cost Analysis of Occupant Well-being and Productivity in LEED Offices,” found that groups moving to LEED office buildings missed less work and put in almost 39 hours more per person annually. According to the study, the total bottom-line benefits from gains included fewer allergic reactions and reduced stress. The study showed that indoor air quality, daylighting and views to the outdoors correlated with the highest post-move increases in employee satisfaction.[13]

  • A study conducted in 2007 with two tenant companies that moved into a 5 Green Star rated building in Australia found a 39 percent reduction in average sick leave days per employee per month, a 9 percent improvement in the average typing speed of secretaries, and a 7 percent increase in lawyers’ billings ratios, despite a 12 percent decline in the average monthly hours worked by the lawyers.[14]

  • A 2003 report to California’s Sustainable Building Task Force, which involved 33 green building projects, recommended attributing a 1 percent increase in productivity and health to LEEDCertified and LEED Silver buildings, and a 1.5 percent gain in LEED Gold and Platinum levels.[15]

 
Conclusions
A strong body of literature demonstrates that substantial productivity gains can accrue from comprehensive energy efficiency improvements as well as individual efficiency components.  Studies have measured these gains both quantitatively through performance data and qualitatively through tenant surveys. Uncertainly lies in estimating the magnitude of the productivity gains for any one specific energy efficiency retrofit project. A standard methodology for estimating and verifying productivity gains from energy efficiency could have great benefits for building owners, occupants, and energy service companies, all of whom could then incorporate productivity gains into their evaluation of the value of an energy efficiency retrofit.

 

Updated July 2013 originally published July 2011

Related Articles:
Multiple Studies Document Green Buildings Add Value >>
High-Performance Tenant Build-out: Timely Investment in Efficiency >>
Reducing Enterprise Carbon Intensity - Doing the Math >>


[1] Lomonaco, C. and Miller, D. “Environmental Satisfaction, Personal Control and the Positive Correlation to Increased Productivity.  Johnson Controls.  1997.

[2] Loftness, et al.  “Linking Energy to Health and Productivity in the Built Environment.”  Center for Building Performance and Diagnostics, Carnegie Mellon, 2003. 

[3] Munch, M. et al.  “Effects of Prior Light Exposure on Early Evening Performance, Subjective Sleepiness and Hormonal Secretion.  Behavioral Neuroscience. Vol 126, No. 1, 196-203. 2012.

[4] Seppanen, O. et al. “Effect of Temperature on Task Performance in an Office Environment”. Lawrence Berkley National Laboratory, Helsinki University of Technology.  July 2006.

[5] Hedge, A. et.al.  “Linking Environmental Conditions to Productivity.”  Cornell University Dept. of Design and Environmental Analysis.  Slideshow presented at the Eastern Ergonomics Conference and Exposition, New York, 2004.

[6] American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) Standard 55 - 2010 "Thermal Environmental Conditions for Human Occupancy".

[7] Loftness, et al.  “Linking Energy to Health and Productivity in the Built Environment.”  Center for Building Performance and Diagnostics, Carnegie Mellon, 2003. 

[8] Gurtekin-Celik presentation.  “Building Investment Decision Support”, Center for Building Performance and Diagnostics, Carnegie Mellon, 2003. 

[9] Wyon, D.P. (2004). The effects of indoor air quality on performance and productivity. Indoor Air. 14, 92-101.

[10] Loftness, et al.  “Linking Energy to Health and Productivity in the Built Environment.”  Center for Building Performance and Diagnostics, Carnegie Mellon, 2003. 

[11] “Perfect settings: The impact of environmental factors on job performance and worker productivity”  http://www.fmlink.com/article.cgi?type=Magazine&title=Perfect%20settings&pub=FM%20World&id=44254&mode=source

[12] “Green Building Retrofit & Renovation.”  McGraw Hill Construction, 2009. 

[13] Singh, A. et al. “Effects of Green Buildings on Employee Health and Productivity” American Journal of Public Health.  July 15th, 2010.

[14] “Employee Productivity in a Sustainable Building.” A Study commissioned by Sustainability Victoria and the Kador Group.

[15] Kats, Greg, “The Costs and Benefits of Green” A Report to California’s Sustainable Building Task Force, Capital E Analytics, October 2003

Luis Morejon
Deutsche Bank
Hi Marie:
Great paper!
Always interesting to read the direct relationship between the FM services and the productivity of employees. Specially in green buildings, not always properly valued by decision makers.
Please, keep me on the loop!
All the best.
Luis
2/25/2014 2:35:44 AM
 

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