In ‘Going Green,’ Companies Can Face Surprising Risks

2022-04-25 06:58:07 By : Ms. Vana Yi

Workers install photovoltaic solar panels on the roof of a department store. (Photo by Robert ... [+] Nickelsberg/Getty Images)

Sustainability measures like adopting renewable energy technologies, improving energy efficiency, and reducing one’s emissions are not only laudable for a global organization; they’re critical for our planet’s future. But like any major transformation, going greener introduces risks the business must understand, quantify, and manage.

Because of the inherent benefit of sustainability measures, these risks can be overshadowed. These risks are also above and beyond the climate related financial risks regulators are already pressuring companies to disclose.

There are two broad types of added risk with financial implications: property damage and hidden greenhouse gas emissions. Thus, there’s is a two-part method for avoiding these adverse unintended consequences. The first part is weighing the risk of fire or extreme weather on the sustainability measures being considered for facilities and grounds. The second part is to look at sustainability impact over an entire life cycle, not just in one good year.  

Fire is still the primary cause of property damage and business interruption for commercial and industrial operations. A fire caused by, say, a solar panel wiring problem will not only be a financial and reputational hardship; it will produce greenhouse gases, and may pollute local environments. The impact goes far beyond the fire itself, however. The reconstruction process, from raw materials through return to operations, will require the emission of additional greenhouse gases during manufacturing, transportation, and installation. These emissions are referred to as embodied carbon – emissions that are embedded in the property of a business. This concept can help ensure that new sustainability measures don’t create new problems.

Under-addressed risks from fires and natural hazards actually increase total greenhouse gas production over a facility lifecycle. Insufficient fire protection increases carbon emissions by 1-2% over the life of a standard office building when you consider the probability of a fire, the need for disposal of damaged material, and reconstruction, according to this engineering study. For a facility exposed to extensive fire hazards, e.g., a heavy manufacturing facility with extensive combustible materials, insufficient fire protection can increase carbon emissions by 14% over its lifetime. Natural hazards such as extreme coastal winds can increase carbon emissions by 1-2% over the lifecycle of a typical industrial building.

The Influence of Risk Factors on Sustainable Development

As these findings indicate, sound sustainability measures require assertive risk management. In some cases, the consensus codes and standards that are seen as the “minimum requirements” to reduce these risks simply can’t keep up with the pace of innovation. Hence, companies need to seek out proven standards and well-qualified design firms and installers that exercise the latest and best available proven guidance to avoid adverse surprises. Increasing sustainability doesn’t have to mean sacrificing resilience.

Sustainability-related projects and what to watch

Here are some sustainability initiatives and the potentially unrecognized risks they contain:

Solar panels, most of which now use photovoltaic (PV) technology, are vulnerable to electrical fires from improper design and/or installation. Panels are often backed with combustible plastic and when positioned on rooftops, can accumulate other combustible debris between the roof and back of the panels, increasing the potential of a rooftop fire. Maintaining a clean and clear zone around and behind panels is especially important in areas prone to wildfires. Recent improvements in the National Electrical Code in the U.S. have significantly reduced solar-panel risk. Some areas of the world, including Australia, are still working to implement improved standards. If a rooftop fire does occur, firefighting a solar-panel fire is tricky because the system may stay electrically charged. Again, recent guidance and safer systems are now coming into common practice.

In addition to being a fire risk, solar panels are vulnerable to wind due both to the uplift forces that can cause damage to the panels and support structure as well as nearby projectiles carried by the wind. Ground-mounted systems are particularly vulnerable, as shown by the extensive damage to the utility-scale solar installations from Hurricane Maria in 2018.

All solar panels are vulnerable to hail damage. For locations in a hail zone, such as those shown by this U.S. hazard map, extra measures may be needed to ensure a durable PV panel and/or one that can be reliably covered or repositioned to avoid hail impact.

Green roofs that include plants, grass, and sometimes trees (also called vegetative roofs) are popular as employee spaces and expressions of a company’s sustainability posture, but require special design, installation, and maintenance considerations. A number of design standards are available, and weight should be the first concern. Green roofs can be heavy, especially when soil is waterlogged from hard rainfall and doesn’t have time to drain or dry. Wind forces on rooftop materials, which are greater than those at ground level, also need to be considered as part of a good design to avoid damage to rooftop equipment or surrounding structures. A sound engineering review should always be performed as a first step in any project. Once in place, if not adequately maintained, desiccated plants are extremely combustible, presenting yet another fire hazard.

Insulation. In one of the most tragic cases of the past decade, the 24-story residential Grenfell Tower in London was adorned with new insulated cladding for energy efficiency and aesthetic reasons. The highly combustible cladding – and lack of automated fire sprinklers – were later attributed for the uncontrolled 2017 fire. The key to avoiding these risks is to use materials that are certified to meet flammability requirements, and/or are used in assemblies that have passed realistic fire tests as well as automatic fire sprinklers in the interior as a minimum.

“Woodscrapers.” Traditionally, tall buildings are made of concrete and steel, but architects have recently begun developing a number of concepts that use compressed laminated timber. The resulting edifices are sometimes called woodscrapers, mass timber, or tall wood. The vulnerability of these structures to fires is still being evaluated. Large wood beams tend to char instead of burn, which may allow them to maintain a level of structural integrity. But delamination of the timbers due to poor quality glue and/or assembly can degrade their fire performance, as was seen in 2018.

Joints, including metal brackets that cause charring in depth, pose further challenges. Recently, these structures have been accepted in international building codes, with provisos to require encapsulation of exposed wood with gypsum board. These measures detract from the visual appeal of the large wood timbers that make these structures an attractive sustainability statement. Codes also wisely require automatic fire sprinklers. The combination of char damage and water damage leaves a number of open questions regarding repair and re-occupancy. If a significant part of one of these structures is damaged by fire and water, the entire sustainability benefit is lost.

Wind turbines, once smaller and clustered lower to the ground on rural ridges, now top 300 meters in height. Turbines see hundreds of cases of structure collapse annually, according to a 2018 paper. A look at four decades of collapses indicated that strong wind was the most common cause of failure, and the most severe losses were concentrated at either the early or late stages of designed service life. Although newer turbine tower and blade designs are more stable and reliable, “the chain of design, manufacturing, construction, operation and maintenance needs further enhancement and cohesion,” the researchers wrote.1 Beyond the need to design for extreme winds, wind turbines also require good lightning protection and measures to prevent ignitable liquid fires in the generator nacelle at the hub of the blade. The larger the turbines, the greater the potentially adverse impact to sustainability goals.

The extra “green” mile to make a company sustainable is moving from a “nice to have” to a “must have,” yet taking modest extra measures to mitigate risk will make the benefits real. Fortunately, as insurance claims experience indicates, cost-effective and robust design, construction, and maintenance can virtually eliminate the added risks – and ensure that a company’s sustainability goals meet, or exceed the expectations of the firm, its shareholders, stakeholders, and employees.

[1] Wind Turbine Tower Collapse Cases: A Historical Overview: