One evening as I sat on my back porch relaxing with a stack of magazines and listening to NPR, I heard a phrase that I had never heard before: greenwashing. In light of the rise in government and private interest in green building — and the ensuing marketing — my initial thought was that this phrase was destined to enter into our mainstream vocabulary eventually.

Later, I discovered that greenwashing is already in the dictionary, defined as “the practice of promoting environmentally friendly programs to deflect attention from an organization's environmentally unfriendly or less savory activities.”

In commercial real estate, where ecobrokers are coming into vogue and green building consultants are no longer called tree-huggers, I wonder how this phrase will be applied. Will savvy real estate investors and tenants simply buy into a project just because it's labeled green? Do we really believe that just because a product is called “fat free” that we're going to have slimmer waistlines?

Quantifying green

Not long ago, I received an e-mail with the subject line “China's First Green Mall Opens in Shenzhen.” This project boasts access to public transportation, optimal energy performance, a green roof and skylights to harvest daylight rather than electricity. Like many new green projects, the earthy design elements, including gardens and green space, seem to complement the environmentally friendly nature of the project as a whole.

Unfortunately, the e-mail provided no data quantifying the project's environmental impact. And short of numbers, commercial real estate reporters can only obtain a vague understanding of a subject that, in the end, still requires more research.

In contrast, InterContinental Hotels International (NYSE:IHG) recently announced a new initiative called “Chase the Extraordinary,” a road tour in which IHG executives, including Chief Operating Officer Tom Murray, are driving across the country in a 2007 Ford Escape Hybrid to pump up the employees about the program's benefits.

The road tour covers 30 states and 12 countries, but what's most relevant to investors is that the first initiative calls for the replacement of 250,000 incandescent light bulbs. The new energy-efficient compact fluorescent lights will be placed in 200 IHG managed hotels in the Americas. These CFL light bulbs last up to 10 times longer than standard lights and typically save at least $30 each over a lifetime — or about $7.5 million total.

The environmental impact, according to EnergyStar, a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy, is an annual reduction of 50 million pounds of carbon dioxide emissions, or the equivalent of taking 17,000 cars a year off the road.

In spite of the best efforts of developers to bring sustainable projects to the marketplace, I doubt that the vocal environmentalists will be the final arbiters of what is green and what is not. My bet would be that the federal government will eventually have the final say.

How much is enough?

In February, I read about New Resource Bank, a start-up lender in San Francisco. The lender had just launched a program to offer financial incentives for green building projects. For projects that meet U.S. Green Building Council criteria, developers can receive a 1/8% interest rate discount on green projects and up to 80% loan-to-value on green projects versus the typical 75% for non-green projects.

Not longer after that, Bank of America, the second largest bank in the U.S. by assets, launched a $20 billion initiative to fight global warming by making loans to develop green technologies and reducing its own carbon footprint. It also offers a credit card that, when used, triggers bank spending on environmental projects that cut greenhouse gas emissions.

Not to be outdone, the largest bank in the U.S. by assets, Citigroup Inc., announced plans to commit $50 billion to environmental projects over the next 10 years.

Were environmentalists quaking with delight, trying to steady their herbal tea perched atop a stack of old back issues of Mother Jones magazine? According to the Wall Street Journal, not particularly. Apparently, $50 billion to environmentalists is just a nice start.

I predict that 20 years from now, green building will be refined to the point that buildings consume almost no energy. And buildings will no longer be harmful, but in fact will pump aerosol vitamins through the duct work to actually improve tenants' health.

In that same perfect future, I predict some developers will still employ the lesson of fat-free advertising to their projects. But it might be best left to the consumer to decide if a manual door knob actually makes a project green.

Sibley Fleming is managing editor of National Real Estate Investor. She is also the author of seven books. She can be reached at sibley.fleming@penton.com.