Adoption of Voluntary Environmental Standards: The Role of Signaling and Intrinsic Benefits in the Diffusion of the Leed Green Building Standards

Abstract

We examine the role of signaling and of intrinsic benefits in the adoption of the individual elements of the voluntary LEED (Leadership in Energy and Environmental Design) standards for green buildings. We use goodness-of-fit tests on data for all 442 LEED certified buildings and find that neither signaling nor pursuit of intrinsic benefits can independently explain the observed adoption pattern, but that a combination of the two factors can. We also find tentative evidence that the adoption decision is made sequentially: organizations first choose a level of certification (consistent with signaling), and then choose how many LEED elements to adopt given their chosen level of certification (consistent with pursuing intrinsic benefits). We relate our findings to some open questions in the literature on diffusion of technology and draw implications for the design and the future development of similar voluntary standards and eco-labels.

How Exposure to ”Role Model” Projects Can Lead to Decisions for More Sustainable Infrastructure

“…So, seeing a role model perform well may increase an observer's perceived probability of successfully reaching a similarly difficult level or goal. Rating systems like Envision provide a benchmark for design teams to measure performance, which is an important construct for signaling goals, values, and intentions of the designers [18,19]. Modifying these rating systems to include how other project design teams were able to accomplish high levels of sustainability can motivate designers to meet similarly high goals.…”

Marking Their Own Homework: The Pragmatic and Moral Legitimacy of Industry Self-Regulation

“…They designed a flexible scheme that offered firms control over which technologies to implement to earn a green building label and therefore meet the pragmatic legitimacy expectations of their immediate stakeholders. This flexibility encouraged builders to strategically target the cheapest and least environmentally impactful building features, or to target the lowest acceptable tier of LEED certification, which offers very little material improvement to the environment from the building (Corbett and Muthulingam 2007).…”

Predicting Appraised Value of Parcels of Harris County, Texas Using LEED Criteria for Public Transportation Access

“…They might want to communicate something about their practices to the outside world, including regulators, customers and the public. On the other hand, adoption may be driven by the pursuit of elemental benefits, meaning that the organization anticipates actual economic and/or environmental benefits that are a direct result of the standards, regardless of perceptions of the outside world (Corbett and Muthulingam 2007).…”