BY AARON FAIRCHILD, CEO
The last two weeks has been a whirlwind of intentional conversations with like-minded, social purpose organizations. The B-Corps Champions Retreat and the following week of SOCAP17 were both intense conferences of shared themes and desired outcomes. A couple things linger in my mind from these social impact conferences:
So how far have we come? My first year at SOCAP was 2009. That was the same year when I first learned about B-Corps companies at the Sustainable Industries Journal forum from Stephanie Ryan of B-Lab. It was directly after SOCAP09, in November of 2009, that Green Canopy bought its first project and our work to build the company began full-tilt and relentless. The first years of Green Canopy were about survival and getting the organization right. Today we have the capacity to expand the scope of our community beyond the Pacific Northwest region. In 2013, we certified as a B-Corps, but my first B-Corps retreat was two weeks ago. This was followed up by SOCAP17, my first year back since 2009. In the eight-year span between first learning about B-Corps companies and SOCAP, and today, this community has grown significantly and become a legitimate investing force and philosophical approach.
When looking at the lifespan of contemporary impact investing in the SOCAP17 booklet, the movement is younger than many of us, just turning 40 years old. If we are investing for this generation but also for generations to come, then we are in the infancy of a multigenerational movement determined to continue to grow, learn and transform global society and economy. We are on the early side of the impact investment lifespan for sure. We have a long way to go and the urgency of the issues we are addressing with our labor and capital create impatience on behalf of just about everyone in this community. Throughout both conferences it felt like most people were understandably feeling the impatience of our youthful movement. Like we just want to be older and more mature than our short 40-years will allow.
And then when we couple our youthful impatience with the urgency our work demands, impatience compounds. Which, perhaps, is the reason so many conversations at both conferences discussed the importance of personal, emotional, and spiritual growth in the practice of social entrepreneurship and impact investing. If the antidote to anger is patience, then the lack of patience leads to anger. The importance of love in our work requires patience, yet patience decidedly lacks urgency. Perhaps in order to productively hold this dichotomy through the transition to a new paradigm, a focused determination that allows for grace and patience when organizing with a sense of urgency requires each of us to develop increased mindfulness within swirling storms.
Celebrating our collective “wins” and taking stock of our successes happened throughout both conferences as well, and from my perspective there is a lot to celebrate in the progress we have collectively made in just the last eight years. When I first learned about B-Corps companies in 2009, there were 205 certified B-Corps, in 28 states and in 54 industries. Today there are 2,310 certified B-Corps, in 50 countries and in 130 industries. SOCAP has tripled in size and become an international affair. It is drawing investment firms representing more capital than most people seemed to think possible just a few years ago. Bringing values into our investment analysis continues to seem obvious once seen; like suddenly being able to see a number hidden within the page of little colored dots. The more people’s eyes identify that opportunities to make money work for positive change are hidden in plain sight, the more obvious it becomes that when we direct our resource toward changing the world for better, the world indeed gets incrementally better.
I am entirely grateful to be part of this community and movement, and I look forward to continuing with the dual edge of graceful patience and urgency, toward building and investing in the future we believe in.
"Transparency, accountability are no longer fringe ... We are seeing a surge of leaders who want to have a platform to influence the greater good." -Bart Houlahan, B Corporation | SOCAP17
Pioneers like Thomas Edison have been excited for decades about the use of solar power. “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that,” Edison anticipated. Starting this Fall, the first of many Green Canopy's Net Zero Energy homes will be available on the market in Seattle - with a commitment to offering these high-performance homes at a price that is on par with code-built new construction homes.
Green Canopy is a mission driven Portland and Seattle infill homebuilder. The Company has always built resource-efficient homes to a standard far beyond building code requirements, keeping our communities and planet in mind. In order to serve their mission, it is important to continually be changing, improving, and innovating. The Company has been conscious of this, and it is now advancing yet another significant step forward.
Zero Energy Bills, Less Negative Impact on the Environment
Net Zero Energy homes are revolutionizing green housing. Every Net Zero Energy home is modeled to produce as much power as it consumes over the course of a year using solar energy. They typically look like other modern and minimal homes except that they come with an abundance of benefits many people don’t realize. The thought of buying a house that is modeled to cover the electricity bill is cool, particularly in hot housing markets that feel hard to keep up with, like Seattle and Portland. By soaking up the sun’s rays these homes generate enough electricity to power the home over the course of the year. Solar panels on each roof are among the many applications that make this possible.
Higher Level of Comfort and Less Expensive to Own
Net Zero Energy homes are also more comfortable because their high-performance envelopes (the wall, roof & floor systems) are ultra-efficient; The cold spots and drafts common in simple code-built homes tend to disappear. Furthermore, the advanced appliances and ventilation systems help to ensure evenly displaced temperatures throughout. Due to the intense efficiency and solar power generation, these homes cost much less to operate, offering homeowners, even in the PNW temperate climes, hundreds if not thousands of dollars in savings in their electrical bills.
Understanding the Challenges and Breaking Through
As one would expect, building Net Zero Energy homes require a dedication to mastery. Most importantly, the roofs must be designed large enough to fit all the solar panels needed to offset the amount of energy needed. Additionally, most housing envelopes aren’t efficient enough so achieving net zero energy isn’t possible in most existing homes in the PNW climate. For example, the average Seattleite’s home has roughly 1,500 square feet and three floors and consumes about 28,000 kilowatts per year. To fit around 100 solar panels needed to offset the energy consumed by the average heat-leaking, Seattle house, it’s roof would need to be four times larger. However, if a 1,500 square foot Net Zero Energy home consumed </= 8,000 kilowatts a year instead, it would require roughly only 32 panels for the net annual energy consumption to be zero. Getting to this level of efficiency and performance requires a thoughtful and dedicated approach. To accomplish it, Green Canopy had to recalibrate several of its processes and checklists relating to feasibility, designs, estimating and purchasing, and project management.
Other builders have risen to the challenge over the years. However, a search on the Northwest Multiple Listing Service, revealed only five (5) of the tens of thousands of homes sold over the last 20 years have claimed to be a Net Zero Energy home. Though custom homeowners have built more Net Zero homes, they very rarely enter the market for sale. The building science and technology needed to make Net Zero Energy homes possible has finally caught up to the times. As a result, these homes will likely be available to buy at a far greater rate than over the last 20 years, and Green Canopy is set on blazing the trail to help transform the market as quickly as possible.
Green Canopy itself has built several certified Platinum LEED for homes, Earth Advantage Platinum homes, Built Green homes, and Net Zero “ready” homes in the past. Net Zero “ready” homes are efficient enough to be Net Zero if the homeowner installs solar panels—the most obvious and expensive part— after buying the home. Additionally, on occasion, a home will be built to offset the electricity use but not the natural gas used for heating, cooking or domestic hot water heating, so the homeowner stills pays for non-renewable energy.
Net Zero homes are the future of home construction and ownership, and Green Canopy is determined to accelerate their arrival on the market. Evidence indicates that Seattle and Portland homebuyers are early adopters, technologically savvy, educated people who care and think about the environment and their long-term, financial investments. The Company’s commitment is to offer Net Zero Energy homes not just to higher-end markets but also to markets that young families and first-time buyers can afford, priced on par with new construction, code-built homes. “We aren’t looking to offer our homes outside of the current market’s range for homes,” Co-Founder, Sam Lai, states. “In every market area, there are run-down homes with single-pane windows and oil heat furnaces that sell for less than average. Likewise, code-built, new construction, well-designed homes with high-quality systems are selling for higher than the average at each price point in the market. We believe our Net Zero Energy homes will demonstrate enough benefit and value to homebuyers that they will be excited to experience the lifestyle, while being able to acquire them within the market range.”
The New Standard
Green Canopy’s first Net Zero Energy home represents the future for the Company as it rotates its entire pipeline to build only Green Canopy Net Zero Energy homes in the coming months and years ahead. This wouldn’t be possible if it weren’t for the dedicated team and partners such as Evergreen Certified, Van Wyck & Porter, and Northwest Electric and Solar. This is also made possible due to the Green Canopy design, purchasing, and project management teams that are so efficient the Company is able to maintain cost control far beyond industry standards. The Green Canopy team is a highly motivated and passionate group that follows a tight, quality-control system performing more than 50 quality inspection checklists throughout the time of construction. This ensures that Green Canopy’s homes are quality built, focused on craftsmanship and sustainability both inside and outside the walls.
For these reasons, Green Canopy Homes is proud to now be able to call themselves today and moving forever forward, Net Zero Energy homebuilders. "Our vision is to help make Net Zero Energy homes the new standard and broadly accessible across the income spectrum." – Aaron Fairchild, CEO.
Green Canopy is a Portland and Seattle urban infill homebuilder, developing environmentally advanced and thoughtful homes for sale to a broad range of communities and income levels since 2009. It is a certified B-Corp company with the impact investing community making up 100% of shareholders in support of the movement. Their mission is to inspire resource-efficiency in the residential market, with a vision to transform homebuilding and urban communities across the nation.
I have often cited Daniel Goleman to explain a consumer’s desire to make an impact with his or her invested dollar. In Ecological Intelligence, Goleman explains that consumers will always buy what they perceive to be a less toxic or more environmentally friendly product given price parity with a competing product. While the consumer may not be buying the perceived “better” product to make a positive impact in the world, they are likely buying it because they view the product healthier or better for their family.
This consumer behavior pattern offers a direct analogy for financial investors. It goes without saying that investors invest capital to generate a return. If an investor can invest in an opportunity that generates a similar risk-adjusted rate of return to competing investment opportunities yet the investment will also deliver outcomes that better align with their values, then the investor will likely choose to invest their capital in such a value-aligned opportunity.
Enter Green Canopy. Our mission is transformational; our company was deliberately created with the mission to inspire resource efficiency in residential markets. We have two impact product offerings for consumers to buy.
Our primary impact product is our homes. We build homes that are more environmentally sustainable than what is required by city code and have third party audits verifying our homes meet or exceed a local or national green building standard. In other words, a Green Canopy home is healthier for the planet, consumes less energy to operate (we guarantee that), and is simply a better home than the comparable code-built home. The kicker: we price our homes for sale on par with other homes on the market. We have to price our homes competitively with other homes because if we don’t, buyers would choose to acquire the less expensive yet comparably located and sized home. So buyers of our homes acquire a Green Canopy home at a competitive price that delivers outcomes that align with their needs and values.
Our second impact product is our real estate fund offerings. We currently manage two debt funds that generate competitive returns for investors. If it were not for these funds, we would not have enough debt financing to build more environmentally sustainable homes at our current scale. Investors in these funds buy membership units that are designed to generate competitive rates of return and deliver outcomes that align with their values.
I believe the United States has entered a relatively new era where the general market is looking for values-aligned solutions. I witness this daily in both of our product offerings. However, most consumers and investors remain price sensitive and will continue to be so. This is where many people believe the government and foundations can play a role. However, I don’t believe it is incumbent on the government or others to subsidize product offerings, or for that matter the market to simply accept the market-price mismatch.
Entrepreneurs innovate. The role of being an entrepreneur is to figure out how to bring new product to market in such a way that the market is willing to pay for it. Government incentives and infrastructure are helpful catalysts and support structures for market change. But the role of efficiently bringing new product to market is ultimately the role of entre- and intra-preneurs.
Additionally, foundations, the government and other mission-driven sources of capital can aid in providing lower cost of capital to kick-start product offerings and help stimulate demand (think of the Bullitt Center or the ZHome development). However, values alignment should not be seen as an impediment to bringing socially and environmentally impactful product offerings to market—it should be used as a competitive advantage. Sound business people focused on values-based product offerings will continue to innovate within the cost/price constraints of the market and ultimately bring more and more highly sought after product to meet consumer demand. Impact alignment and the balance between supply and demand are really just a matter of time and innovation.
Contributed by: Aaron Fairchild, CEO of Green Canopy, Inc.
"The current fight over how we should pay for affordable housing, and who will fund it, is beating on the wrong drum."
Social and environmental impact investing and businesses continue to capture the interest and imagination of the Pacific Northwest, part of a broader global trend. Local early adopters affiliated with Element 8, Impact HUB Seattle, Seattle Impact, Mission Investors Exchange and other institutions and individuals have forged impact investment paths that many others now find themselves traveling. It’s exciting to see the local impact investing ecosystem and communities flourish. However, a market imbalance persists with more impact investor dollars available than the limited number of qualified investment opportunities can absorb. Fortunately we’re seeing signs that the supply of impact investment opportunities is starting to catch up with demand from impact investors.
Green Canopy is an example of an impact-investor funded company that has been fueled by local early adopters. The company operates in a commodity industry: designing and building single family homes. However, we have been fortunate to attract thoughtful, impact-motivated equity and debt investors, due in large part to our mission, vision and values focused on achieving long term positive environmental and social change while simultaneously pursuing solid financial results.
Since 2011 Green Canopy has acquired nearly 90 projects; steadily building a community of homeowners, real estate agents, employees, shareholders and fund members that share our passion to inspire resource efficiency in residential markets. Importantly, we pursue our mission while being uncompromising in achieving key sustainability metrics, paying our employees a fair wage, selling our homes at fair market prices and generating long term shareholder value. Green Canopy has an opportunity to demonstrate it is not only possible, but highly rewarding for all involved to create and operate under a business model predicated on shared, blended value creation.
Similar opportunities are emerging across a wide spectrum of investment strategies that seek to satisfy growing consumer and investment demand for highly impactful market-driven solutions. As Seattle continues to attract tens of thousands of employees each year to fill quality jobs at companies like Amazon, Nordstom and Microsoft, our entire region feels the benefits. And yet, we are all faced with the unintended consequences of the additional infrastructure needed to support increased demand for critical services, including affordable workforce housing. The current fight between the City and the Coalition for Sustainable Jobs and Housing over how we should pay for affordable housing, and who will fund it, is beating on the wrong drum. Neither side seems to be asking the right questions or putting forth a broadly acceptable or effective solution for quickly increasing the supply of affordable workforce housing.
One example of an alternative solution is Bellwether Housing’s recently launched Seattle Futures Fund. Bellwether has successfully developed and managed affordable workforce housing in Central Seattle for 35 years. However, as affordable housing has become an increasingly rare commodity in the communities Bellwether serves, the organization has had to innovate how its projects are financed; necessity = the mother of innovation. Through the Seattle Futures Fund, Bellwether believes it will more rapidly scale the number of units available to house social workers, teachers, baristas, police officers, firefighters, government workers, data center workers and others that serve our communities. A potentially wonderful, local example that attracts private capital as part of the solution to develop housing that is affordable and accessible to our urban working families.
As a community, we must collaboratively develop innovative, smart, market-driven solutions to problems that impact a wide range of constituents. Hopefully, a greater supply of viable impact investment opportunities for investors to assess, like Bellwether’s Seattle Futures Fund, will be forthcoming in the near-term. In the meantime, we would encourage investors and entrepreneurs alike to continue viewing our social and environmental problems through the lens of impact opportunity.
Contributed by Kyle Mylius, Board of Directors for Green Canopy, Inc. & Aaron Fairchild, CEO of Green Canopy, Inc.
“He heard me on Seattle’s local NPR affiliate. He saw our ad, and he was determined to work for Green Canopy, learn our business, prove himself and show what he is capable of. He got the job."
Contributed by Aaron Fairchild, CEO of Green Canopy, Inc.
Ryan Nieto came into the office looking like a modern “Urban Jesus”. The moniker stuck. Thick long brown hair, beard, tats… full on Portlandia meets Seattle. He was working as a mechanical HVAC installer, installing air-conditioning systems at QFC grocery stores. He wanted to work for us as a laborer.
He said he saw the ad on our website. It wasn’t adding up for me. He was making good money as a mechanical installer and wanted to take a cut in pay and responsibility to work for Green Canopy. “Who was this guy?” I was thinking.
As it turns out Ryan is a veteran of the Marine Corps in Iraq. He is an avid bouldered/climber and outdoor enthusiast. He has the millennial mindset that the Green Canopy culture warmly embraces. And most importantly he leads with his heart and his mind. Which is another way of saying he follows his heart as his mind works the calculations. Love that. He came in bold into the office, eyes on fire and twitching, a vestige of hard times spent in a war zone. He heard me on Seattle’s local NPR affiliate. He saw our ad, and he was determined to work for Green Canopy, learn our business, prove himself and show what he is capable of. He got the job.
Green Canopy is the only for-profit homebuilder (that we are aware of) in all of America that was intentionally and deliberately started to combat and lessen the negative impacts of climate change and resource scarcity via in-city homebuilding.
We are run by a group of commited contractors, bankers, designers and most importantly, business people who are breaking the typical homebuilder mold and working hard to build an inspirational brand that helps to leave the world better off. We are funded by a similar minded base of over 40 shareholders and counting… We are lucky to have shareholders that are dedicated to investing their money where their values are for the sake of future generations. We are propelled by the Real Estate Agent community that understands their roll in residential real estate can be used to create transformational change for the better by promoting Green Canopy’s mission and vision of the future.
“We are banking on the success of Portland to fuel expansion outside the Pacific Northwest region and into other markets across the country."With Green Canopy all started up and on solid footing in Seattle, it is time to take the most important step in our company’s short existence: expand and prove that our model can organically grow like a bamboo shoot into new markets. We are so excited to take this critical next step and expand to Portland! Portland is more important to the future success of Green Canopy than anything we are currently working on. We are banking on the success of Portland to fuel expansion outside the Pacific Northwest region and into other markets across the country.
And we are lucky.
As a city, Portland shares what is at the heart of Green Canopy. Green Canopy, like Portland, is brimming with purpose-seeking, millennial minds. As the show Portlandia famously put it, “Portland is the place where young people go to retire.” …Retire from the top down, do-as-your-told, speak-when-spoken-to, non-purposeful J. O. B. economy, to engage in the purpose driven economy where merit prevails over tenure, mentoring over micro-managing, and critical consumption over wanton consumption. Thank God that a city so dedicated to getting the new economy right, with local brands long dedicated to local, conscious, and sustainable living such as Powels Books, Ecotrust, Clean Energy Works, and so many more, represents the future success for Green Canopy.
Over the course of the last three years, Ryan has taken 10 old, run-down, drafty homes and miraculously transformed these into resource efficient, certified green, and the highest in quality rebuilt homes to inspire generations of future residents. Working out of the Ecotrust building in the Pearl, Ryan will be responsible for applying his hard earned homebuilding magic to manage the inspirational transformation of old homes to new, and building brand new homes designed to inspire and create awareness of the benefits of resource efficiency.
Ryan is Green Canopy is Ryan. We share the same mission, vision and values and are hopeful that these will resonate in Portland. So nearly three years on, Urban Jesus, is heading to the City of Bridges. Don’t expect him to walk across the Columbia and Willamette Rivers to get there, or go into business transforming water to wine… his assignment is much more terrestrial and perhaps mundane in nature. We don’t have a divine goal of saving humanity, but we are humbly trying to make the world a little better place through our work. Here we come…
Post contributed by Aaron Fairchild:
The same day that I received an email from a friend saying that he thought G2B Ventures just might be too early in the space and ahead of the market, I read an article in the Harvard Business Review about how, “smart companies now treat sustainability as innovation’s new frontier." There were a few articles in the September 2009 issue relating to green and sustainability. The lead article says that companies won’t grow unless they throw themselves entirely at green initiatives. I am in the thick of establishing the Efficient Real Estate Investment Fund, so naturally I tend to side with HBR over my thoughtful friend. Frankly, it is just amazing to observe how far we have come in the green and sustainability business world. We couldn’t have done what we are attempting to do in green real estate 5 years ago, but today it just makes sense.
When Harvard is saying the business world MUST go green to grow, you've got to think G2B is in the right space and at the right time, not just because we are doing good for the environment and society, but because we can make money at the same time.
The Green Canopy blog is written by our CEO and Culture Curator, Aaron Fairchild, as well as our staff and a few very special guests.