As sustainability continues to gain momentum, business leaders need to address how this movement will influence the way they run their organizations. Doing so can lead to immediate savings in power and other costs, and boosts the market value of the property.
“It’s a change in culture versus something that’s just an on-and-off switch,” says Greg Martin, partner and National Real Estate & Hospitality Practice leader at Moss Adams.
Smart Business spoke with Martin about what’s happening in the field of sustainability and how an accountant or adviser can help.
What’s happening with sustainability today?
Sustainability and Leadership in Energy and Environmental Design (LEED)-certified buildings have been talked about for some time. Early sign of sustainability in practice started out simply with hotel properties putting out signs about reusing towels or unplugging phone chargers. Then, many moved on to using low-flow showerheads or locally sourcing food. That sentiment has crossed over into the expectations of commercial building tenants, many of whom got the idea, at least in part, from attending conferences in energy-efficient hotels.
From a real estate perspective, more and more tenants in a commercial office building want to see sustainable practices followed in their workplaces. Those companies that can show they are concentrated on green living can use that as a competitive advantage. Eventually, sustainability will be part of our everyday psyche, so you want to take advantage of these competitive strengths when you can.
How does going green translate to the bottom line and profits?
It’s expensive to put energy-efficient measures in place, such as those that limit water or power consumption. But in doing so, you can significantly reduce your operating costs from day one and possibly attract sources of capital — some investment groups will only invest in properties or companies that have sustainability policies and procedures in place.
A number of studies found increased operating incomes and higher market values and returns for sound sustainable properties versus non-sustainable properties. A green label such as LEED or Energy Star raised market rents and values of commercial space, including a 16 percent increased sale price, according to a 2010 University of California, Berkeley study of 10,000 U.S. office buildings. A Davis Langdon study estimated upfront costs for high-sustainability design can be $1.50 to $3 per square foot, but those outlays also can bring up to 14 percent reductions in energy costs. In addition, PNC Bank put together a study of their LEED-certified branches compared to non-LEED branches, and found LEED branches had more income, deposit accounts opened and consumer loans.
As more data becomes available on the returns, cash flow and market appreciation of sustainability, we’ll likely see more and more benefits from following these types of policies and practices.
How can an accountant or adviser help with sustainability reports and programs?
CPAs are getting involved in reporting on whether companies are meeting sustainability policies and procedures. Often, an independent and objective CPA will look at the data provided by the management of the company on what they have done in the area of sustainability, referring it back to the company’s policies and procedures. The CPA basically concludes whether they are in agreement or not with management’s assertions. It lends another level of credence and credibility by generating a report based on benchmarks.
Another value-added service that’s gaining momentum is our sustainability consulting group, which consults with companies on setting up green policies and procedures as well as a process to monitor how companies are doing against their goals.
Is this a newer aspect of sustainability — showing that you are accountable?
It’s catching on. Is there some set of rules that say, ‘Thou shalt,’ like the SEC says that public companies shall present audited financial statements? Not really — it’s a best practice. It shows how the company is serious enough that they are going to bring in a credible, objective, independent party to verify what they have represented to others.
Sustainability is not a fad. Ignoring it is not going to make it go away. And because it’s here to stay, it will only continue to gain importance.
Greg Martin is a partner, National Real Estate & Hospitality Practice leader at Moss Adams. Reach him at (415) 677-8277 or email@example.com.
Insights Accounting & Consulting is brought to you by Moss Adams
The notion of becoming environmentally sustainable is a popular and increasing trend among businesses today — a trend that can have a meaningful impact on your business financially and from a socially responsible perspective as well. So it’s really not a question of should you go green with your payroll, it’s really a question of when.
Smart Business spoke with Mark Strippy, Executive Director at Heartland Payment Systems®, about the benefits of a Web-based payroll solution.
Is now the time for your business to go paperless with its payroll?
According to the American Payroll Association, every year more than 146 million workers in America receive a paycheck. That's more than 3.5 billion paychecks per year. By providing paperless payroll you reduce or eliminate the production of paper reports and direct deposit vouchers — helping your business save in paper waste, water and energy.
Other benefits of Web-based, paperless payroll to help you save resources and gain efficiencies include:
- Direct deposit, payroll cards and online pay statements mean you never have to make a special trip to your other business locations to drop off paychecks.
- You can submit your payroll data according to your schedule — whether it is early in the morning or late at night — through a Web-based payroll system. And you can submit it from anywhere.
- Payroll reports are available when you need them, not when the courier shows up. Reports can be emailed to your CPA and bookkeepers — creating additional efficiencies and security.
- Online pay statements allow your employees to keep track of their earnings 24/7/365.
- Direct deposit is a secure, convenient way to pay your employees, giving them immediate access to their funds on payday — even if they’re on vacation.
Plus, by using a Web-based green payroll solution, you won’t have to archive paper copies of payroll reports, W2 checks or vouchers. All data is stored online and should be protected by the payroll company’s data security policies and procedures.
Most payroll companies today charge additional fees for printing and delivery costs. However, Web-based access to the employer/employee data should be free (or provided at a significantly reduced price) compared to payrolls that are delivered via courier — so there will be savings by switching to this greener option. And you can reinvest that savings back into your business for other improvements.
Remember, too, greening a business shows that the owners care about people and the environment. By reducing waste and energy, a business demonstrates that it is socially responsible.
If you’re ready to make the switch to more environmentally friendly payroll — that also saves you money and time — you need to make sure the payroll company/service that you use is able to provide a secure Web-based set of tools to provide you and your employees access to standard payroll reports, and a report writer for customized reports. The employees must have access to an employee self-serve (ESS) Web application with the ability to enter and modify demographic information as well as to review and print payroll specific information.
Today, “green” is everywhere. By greening your payroll you can turn a responsibility into an opportunity to gain efficiencies, save money and provide a perk for employees.
Now is the time.
Heartland Payment Systems, Inc. (NYSE: HPY), the fifth largest payments processor in the United States, delivers credit/debit/prepaid card processing, gift marketing and loyalty programs, Web-based payroll, check management and related business solutions to more than 250,000 business locations nationwide. A Fortune 1000 company, Heartland is the founding supporter of The Merchant Bill of Rights, a public advocacy initiative that educates merchants about fair credit and debit card processing practices. The company is also a leader in the development of end-to-end encryption technology designed to protect cardholder data, rendering them useless to cybercriminals. For more information, please visit HeartlandPaymentSystems.com, MerchantBillOfRights.com, CostOfABurger.com and E3Secure.com.