The Military Engineer l No. 66565 Measuring SROI By Stephane Larocque and Lidia Berger, LEED AP The Sustainable Return on Investment process can assist in the development of a green business case that provides a full accounting of the triple bottom line bene?ts of a project. Sustainability W hen President Barack Obama signed Executive Order (E.O.) 13514—Federal Lead- ership in Environmental, Energy and Economic Performance, a new empha- sis was placed on transforming the U.S. economy via intensi?ed investments in a green economy. Government entities seeking stimulus or other future fund- ing are now required to articulate their case using metrics that provide a full accounting of the triple bottom line— social, economic and environmental— impact of their projects. While the importance of these is- sues is widely recognized, agencies are challenged to integrate sustainability into their missions and operating deci- sions. Few public of?cials have found a standard way to identify, quantify and evaluate environmental and social vari- ables. Some have turned to Life Cycle Cost Analysis (LCCA), a ?nancial method of project evaluation in which all costs arising from a project are considered. An LCCA primarily demonstrates whether the operational savings of a project are suf?cient to justify its addi- tional investment cost. The Sustainable Return on Investment (SROI) frame- work is an enhanced form of LCCA, one that incorporates risk analysis and goes further by providing a triple bottom line view of a projects economic results. Monetizing Impacts The key feature of the SROI process is that it monetizes the social and en- vironmental impacts related to a given project. The SROI analysis also provides the equivalent of traditional lifecycle cost metrics, which are called Financial Return on Investment (FROI) metrics A Sustainable Return on Investment analysis found that the energy-reduction efforts included in the design of the Fort Belvoir Community Hospital will result in 27.6 percent reduction in energy usage, saving the post almost $500,000 annually. Image courtesy of HDR
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