When people think about the benefits of green buildings, low energy bills usually springs to mind. But the Green Building Council of Australia has crunched the numbers to prove there’s a much broader range of quantitative and qualitative benefits to green buildings.
“The numbers speak for themselves,” GBCA chief executive officer Davina Rooney told her online audience at the TRANSFORM event this week.
The industry body used the virtual conference to release a new report containing the most up-to-date data on the business case for Green Star ratings.
It showed that Green Star-rated office buildings are still considered a premium product at the point of sale, with rated offices in CBDs having a 4.3 per cent higher capital value per square metre than non-rated buildings.
The operational savings across all building types are immense. For an energy-intensive warehouse, for example, it’s possible shave an average $1.11 a square metre each year in operational savings when compared with non-certified warehouses – savings of around $24,000 a year in a 20,000 sq m warehouse.
Green buildings also attract sticky tenants. The vacancy rate for Green Star ratings is less than half non-rated CBD office stock. Green Star buildings also have a 25 per cent longer average weighted lease expiry.
Government tax and finance benefits
Other financial benefits include reaping tax concessions (the Australian government incentivises environmentally efficient buildings by reducing the withholding tax rate to 10 per cent for “clean buildings” in Managed Investment Trusts), attracting finance (such as sustainability-linked loans), and future proofing assets.
“There is an increasing stranded asset risk for companies that are not transitioning with the economy towards a sustainable future. The survivors in the long term are more likely to be green than brown,” Gilbert + Tobin special counsel Louise McCoach said.
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The humans inside green building also benefit. A 52 per cent average productive gain is reported from improved ventilation, access to daylight and well-designed lighting. Furthermore, human-centred design results in a $5752.63 profit gain per employee.
In Green Star rated hospitals, patient recovery rates increase by 8.5 per cent and the need for pain medication decreases by 22 per cent.
In educational facilities, a 25 per cent improvement in test scores has been found, as well as a saving of $12 a metre due to teacher retention.
People in green buildings also score a whopping 288 per cent for strategic thinking on cognitive tests than in conventional buildings.
There is, of course, the environmental benefits that help businesses align with their ESG requirements and other sustainability goals.
On average, Green Star rated new buildings produce 55 per cent fewer greenhouse gas emissions than standard practice new buildings, use 66 per cent less electricity, 51 per cent less water and send 96 per cent less waste to landfill during construction than standard practice.
If you still needed convincing, the cost of Green Star ratings has dropped over time. The average cost of Green Star has dropped from 2.9 per cent of a project budget in 2016 to 2.5 per cent in 2019
Green Star now covers 500 million sqm of floor area in Australia.