Jane Henley

7 March 2013 — It’s no longer just about saving the planet, sustainable buildings make clear business sense, a new report says.

The report, The Business Case for Green Building: A Review of the Costs and Benefits for Developers, Investors and Occupants, was released by the World Green Building Council and produced in partnership with PRP Environmental and sponsors Skanska, Grosvenor, and the Abu Dhabi Urban Planning Council/Estidama.

The report’s summary says there is “an increasingly compelling business case for green buildings”.

“The evidence presented highlights that sustainable buildings make clear business sense – it’s not just about saving the planet.

“These benefits range from risk mitigation across a building portfolio and citywide economic benefits, to the improved health and well-being of individual building occupants.

“Moreover, green buildings can now be delivered at prices comparable to those for conventional buildings and these costs can be recouped through operational costs savings and, with the right design features, through more a more productive workplace.

“Design decisions made at the start of a project will impact the long-term value of the building and its return on investment, meaning a whole-life cost/value approach is needed, from design through building operation.

“While there is a growing evidence base for all of these findings, the information being gathered is concentrated in certain regions and climates. In order to effectively transform the global marketplace, there is a need for more data and for more case studies from around the world.

“This presents an excellent opportunity for businesses to partner with each other, and with academia and government, to better understand the financial implications of a more sustainable built environment.

“We need the right data to spur better financial decision-making. A key illustration of this point is where, due to a lack of financial metrics, many businesses have ignored the potential to improve indoor environments and are now missing a major opportunity to use buildings to leverage broader organisational success.”

“What is clear is that there is mounting evidence that in many markets across the world, part of being a better quality building means being a green building.

“In premium markets, in particular, green is increasingly expected by tenants and owners – it is just part of what good ‘quality’ means.

“This report lays out the best business case evidence we have available today and provides insights into what these findings mean for industry as well as next steps we can take from here.

“It also shows how governments can leverage green building policies to support local economies and meet their long-term goals. With this foundation, we call on the private and public sectors to use their collective knowledge and strength to move the green building agenda forward, knowing that it benefits people and the environment – and their bottom lines.”

WorldGBC chief executive officer Jane Henley said the report “synthesised credible evidence from around the world on green buildings into one collective resource”.

“The evidence presented highlights that sustainable buildings provide tangible benefits and make clear business sense.”

Key findings included:

  • As investors and occupiers become more knowledgeable about and concerned with the environmental and social impacts of the built environment, buildings with better sustainability credentials will have increased marketability. In fact, studies from around the world demonstrate a pattern of greener buildings being able to more easily attract tenants and to command higher rents and sale prices;
  • Research shows that building green does not necessarily need to cost more, particularly when cost strategies, program management and environmental strategies are integrated into the development process right from the start;
  • Green buildings have been shown to save money through reduced energy and water use and lower long-term operations and maintenance costs. The energy savings alone typically exceed any cost premiums associated with their design and construction within a reasonable payback period;
  • Research shows that the green design attributes of buildings and indoor environments can improve worker productivity and occupant health and well-being, resulting in bottom line benefits for businesses;
  • Sustainability risk factors can significantly affect the rental income and the future value of real estate assets, in turn affecting their return on investment. Regulatory risks have become increasingly apparent in countries and cities around the world, including mandatory disclosure, building codes and laws banning inefficient buildings.

WorldGBC president and chair, and US Green Building Council chief executive officer and founding chair, Rick Fedrizzi, said the report underscored that green buildings played “a fundamental and cost-efficient role in tackling some of the immediate challenges of our times”.

“The WorldGBC is proud to continue to play a leadership role in the explosive growth of global green building industry as we all continue to create a world that will give people better, brighter, healthier spaces to live, work and play.”

The full report can be downloaded here.