The mission of the International WELL Building Institute (IWBI) is ambitious: to advance human health in buildings, communities and organizations. This is achieved through the WELL Building Standard (WELL), a roadmap developing over ten years and backed by scientific research. The IWBI takes several steps to work towards its mission that extends across 10 core concepts, in order to certify healthy buildings, conduct studies, offer WELL solutions, and provide knowledge resources.
In a 2021 paper called “Investing for Health: Examining the ROI of Healthy Buildings,” the IWBI shared evidence regarding the connection between investments in healthy buildings and a company’s organizational performance and return on investment (ROI). It was determined that an organization is better positioned to achieve long-term growth, sustainability, and success when it incorporates healthy building practices into its environmental, social, and governance (ESG) strategy.
Further insight into indoor air quality (IAQ), health-related trends in the workplace, the relationship between healthy building investments and ROI, and why organizations should incorporate these investments into their ESG strategies are discussed below.
Understanding the Serious Health Effects of Poor IAQ
In its 1989 indoor air quality (IAQ) report submitted to the United States Congress, the Environmental Protection Agency (EPA) stated that Americans spend an average of 90% of their time indoors, whether it’s in a school, home, or at the office. 31 years later people’s health is still compromised indoors.
The report also notes that indoor air pollutants are two to five times more concentrated indoors than outdoor air pollutants, and highly concentrated indoor pollutants are the main cause of poor IAQ. The EPA suggests that indoor pollutants become more concentrated due to:
- The widespread use of synthetic building materials
- The lack of proper ventilation
- Use of household cleaners, paints, personal care products, combustion sources, fireplaces, central HVAC systems, and humidification devices
- Various types of volatile organic compounds (VOCs), including those from newly installed carpets, vinyl flooring, or upholstery
- High temperature and humidity levels
- Excess moisture
- Radon, mold, pet dander, and pesticides
- Other outdoor air pollutants
Poor IAQ in a home or office can lead to indoor air pollution (IAP), a serious threat to human health both physically as well as mentally, with an even more aggressive impact on children. In 2020 alone, the World Health Organization (WHO) estimated that household air pollution accounted for 3.2 million deaths globally – 237,000 were children under five years old.
Short and long-term exposure to IAP can contribute to or cause numerous harmful health effects, including:
- Premature death in people with heart and lung disease
- Nonfatal heart attacks
- Aggravated asthma
- Respiratory or other types of infections
- Lung cancer
- COPD
- Eye, nose, and throat irritation
- Headaches, nausea, and loss of coordination
- Decreased respiratory function
The role of IAQ is becoming increasingly prevalent, especially in the modern workplace globally. Aside from IAQ, other factors that can positively or negatively impact employee well-being in the workplace are lighting, HVAC systems, temperature, noise, and accessibility.
Rising Demand for Healthy Workplaces
For years, many companies have acknowledged the benefits of maintaining appropriate IAQ, however, more recently an increasing amount of employees have also grown increasingly aware of the potential negative effects of poor IAQ and IAP.
Heightened awareness has resulted primarily from the COVID-19 pandemic. Since 2020, the ongoing global health challenge has prompted more people to think about their health, the health of their loved ones, and the health of their colleagues or employees more seriously. As a result, consumers and employees alike are increasingly demanding that public spaces and private workplaces prioritize human health and well-being.
Directly linked to this demand, consumers and employees are encouraging organizations to focus on ESG initiatives. Combating climate change, reducing inequalities, contributing to a fairer society, and working towards sustainable business practices are all examples of these initiatives. In fact, research suggests that around 55% of customerswould pay more for a company’s products if it’s committed to social and environmental good, and 64% of millenials will not accept a job from a company that doesn’t have strong sustainability practices, demonstrating that increased profits are merely only benefit to a company when investing in healthy buildings.
Healthy Buildings Benefit Organizational Performance & ROI
In addition to maintaining a positive reputation and meeting employee, stakeholder, and consumer demands, the IWBI report discusses the valuable financial benefits and ROI companies reap by investing in high-performance, healthy buildings.
Below is a list of the ROI of healthy buildings with relevant report findings:
- Combined ROI: The combined ROI per person and per building or space can be $3,395 per employee and $18.65 per square foot annual profit. In the long term, the net present value (NPV) over 10 years is $23,584 for each employee & $129 for every square foot.
- Energy Savings: One building in a recent case study performed by Pacific Northwest National Lab had a 10-year energy savings NPV of an estimated $44,000 and a 10-year productivity NPV of an estimated $2,163,000.
- Rent Premiums: According to an MIT data analysis, healthy buildings earned higher effective rents (between 4.4% and 7.7%) than nearby buildings without healthy building standards.
- More Frequent and Longer Leases: The MIT Real Estate Innovation Lab found that adoption rates double when a space has additional health-related amenities. Additionally, buildings with these features had an average lease term of 88.3 months, as opposed to 75.3 months for controlled spaces lacking health-related attributes.
Below is a list of organizational performance indicators present in healthy buildings:
- Lowers Absenteeism: Implementing a comprehensive employee health and wellness program can reduce absenteeism rates. The American Society of Interior Designers (ASID) headquarters, which is WELL Certified (Platinum level), reported a 19% decrease in employee absenteeism over a multi-year research period.
- Reduces Health Care Spending: In a four-year study, Johnson & Johnson’s Health and Wellness Program sparked noticeable decreases in health care costs. The company saved approximately $225 annually per participating employee.
- Improves Employee Engagement: ASID raised its employee presenteeism score from 77.7 to 90, indicating that average employee engagement increased.
- Lowers Turnover Rates: Since moving into WELL Certified spaces, CBRE Toronto and Vancouver report that its employee turnover rate fell by almost a third.
- Yields Better Value for Investors: In a six-year simulation period, one study of 45 companies with high scores on a health and wellness assessment appreciated by 235%, compared to the overall S&P 500 Index average appreciation of 159%.
These lists speak for themselves. Companies investing in healthy building initiatives benefit from short- and long-term operational and financial improvements.
The Building Community Can Help Companies Realize the Impact of the Healthy Building Movement
On paper, pursuing healthy building certifications, adding health-related features, and prioritizing health and well-being is simple. However, the building community knows it’s challenging to convince companies and their C-suite executives to get on board with these goals.
Here are some possible ways the community can help companies recognize the benefits and positive effects of healthy building practices:
- Outline the benefits listed above and highlight the financial and organizational performance changes other companies realized after adopting healthy building practices.
- Encourage company leaders to review testimonials, contact the IWBI for more information, attend relevant conferences, and identify ways to prioritize employee health and well-being.
- Consider asking executives to survey employees. Surveys will provide valuable insights into how employees feel about their work environment, how it impacts productivity and engagement, if they have health concerns, or if the company cares for their well-being.
Since each investment can impact a company’s bottom line, executives need to be convinced of the short- and long-term benefits: in this light, the building community should create viable business cases with hard data to encourage companies to pursue healthy building certifications or take on similar initiatives.
A Final Message: Consider Healthy Building Investments
The days when offices could perform well without considering the quality of their workspaces have been replaced with a refreshing change in perspective. As health and wellness are two top concerns for the modern consumer and employee, leaders should also make employee health wellness a crucial component of the organization’s ESG initiatives.
There are numerous benefits companies realize after investing in healthy building strategies, as is clearly shown by the 2021 IWBI report. As the healthy building movement continues to grow, more data will emerge to show organizations why they should create healthier spaces for their employees and consumers.
