Sustainability and Risk

By joining AGPOM, members can inherently improve their overall control of risk. Additionally, for corporations operating in complex supply chains in a globally-connected economy effective risk management can be the difference between success and failure.

Great value lies in the connection between sustainability and risk. AGPOM seeks to unlock that value for members pursuing green and other modern behavior practices by offering a variety of tools and resources designed specifically for uncovering this hidden value. 

The number of buildings going green continues to grow as owners and managers recognize the inherent benefits to sustainable building and property management practices. These efforts drive both environmental and financial gains including:

  • Lowering operating costs and increasing asset value.
  • Increasing comfort, health and safety for occupants.
  • Conservation of energy and water.
  • Long term reduction in overall business risks.

One of the most effective ways to minimize risk is to build in sustainability practices and engage in a greener lifestyle. Buildings and managers that enforce green standards benefit from higher employee productivity, reduced absenteeism, improved product safety and lower energy bills. All of which contribute to the overall management of company-wide risk; risk that includes not only bodily injury and property damage, but business profitability risks, environmental risks and geo-political risks. Often the claims experience of property owners and managers is directly related to green building behavioral initiatives.

The following examples are excerpts from Evan Mills, Ph.D. with the University of California – From Risk to Opportunity

Nearly 80 technologies and practices have been identified that can lower greenhouse gas emissions while reducing the direct risk of property damage from mechanical equipment breakdown, professional liability, builders’ risk, business interruption, and occupational health and safety. 

  • Many risk-management benefits have been associated with green buildings ranging from improved indoor air quality to enhanced disaster resilience. The disaster-resilience link is particularly pertinent… e.g. the ability of facility-integrated solar power systems to avert business interruptions following outages on the electricity grid or the resistance of foam insulation (as opposed to less-efficient fiber-based products) to water-logging after floods.
  • Commissioning of building envelopes has been noted to not only support improved indoor air quality and energy savings, but also to reduce moisture damage following severe hurricanes.
  • Another win-win opportunity is the reduction in rooftop “ice dams” caused by excessive heat loss. Energy-efficient construction mitigates the ice dam hazard (a major source of insurance claims in northern climates) while reducing the greenhouse-gas emissions associated with heating energy use.
  • A clear example pertaining to fire safety is the elimination of fire hazards with energy-efficient lighting solutions that give off less heat. FM Global has recognized this in its promotion of fire-safe and energy-efficient compact fluorescent replacements for halogen lights.
  • Actuarial “cause of loss studies” demonstrate that the number one cause of loss in buildings is electrical fires. This is closely followed by plumbing leaks, building envelope issues and HVAC problems. All of these building systems are made greener and safer as green features are incorporated into the building.

To learn more check out our Risk and Sustainability Resources for examples of how these important property management pieces fit together.