The Case for Green Building in a Maturing Market

by | Oct 27, 2010

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The motivations and factors leading to the implementation of green building practices can be quite diverse relative to a client’s overall facility and organization objectives. In the recently completed Opening the Door to Green Building study (a market perception study conducted by the Northeast Ohio Chapter of the USGBC and Sustainable Rhythm), participants were asked “How well do you think the case for green building is being made around the following concepts?” The concepts focused on the market, competitive advantage, energy costs/return on investment and environmental concern. The strongest resonating arguments in the market were for energy efficiency by a wide margin

Interestingly though, this has not yet translated to a strength in the case for long-term return on investment (ROI).  This could be due to the fact that too much emphasis is placed on upfront efficiencies during the design process and not enough data being made available to illustrate long-term benefits.  Nearly 40% of all participants responded that they were “not sure” or “no” to another question, “In your opinion is there a significant ‘return on investment (ROI) difference between green building and standard building products and practices?” While in response to the question, “What kind of information would you like to see more of on green building from your vendors?”, 75% of respondents identified “return-on-investment” as the most desirable content information for enabling decision-making, including 100% of Building Owners and 89% of Facility Managers.

One respondent described this concisely when referring to ROI and making the case:

“All of the above need to be presented and considered together in a manner that will promote corporate and developer acceptance to the level of ‘I got to do this’ so that lenders and financiers will pay higher up-front cost necessary to do green right. This must happen in the near term so that costs can be brought to a competitive level relative to common, ordinary building products and systems designs.”

Probably one of the more controversial cases for green building is the political and environmental hot button of “climate change.”  The comment section of the survey indicated some regret that the green building movement is perceived as being too related to the core belief of “climate change.”

Two respondents described their frustrations with the connection:

“Stop promoting climate change and carbon footprint. There are good reasons for sustainability; those two are not good reasons.”

“The green building sector needs to stop the selling job of ‘social responsibility’/GHG reduction/brand development and focus more on $$$ and energy efficiency and cost reductions.”

The environmental case is split fairly evenly from “not well” to “very well” throughout the responses while the regulatory requirements that either have been implemented or are being considered scored fairly weakly (19-20%) in how well the case is being made. This is an area that needs improvement as 44% of Building Owners and Facility Managers responded that it was “likely” to “highly likely” to the question “In your opinion, how likely is it that “green-building”-related regulatory/policy activities will affect your buildings/facilities?”

Green building as a catalyst to increase workplace health and productivity is perceived as the weakest case with 45% responding that it not being made “not well” or “rarely well”.  Though an increasing amount of research data is being gathered over the last five years (Occupant Satisfaction with Indoor Environmental Quality in Green Buildings, 2006, Center for the Built Environment, University of California Berkeley and Do Green Buildings Make Dollars and Sense? 2009, University of San Diego and CB Richard Ellis Group, Inc (CBRE) and the recent Effects of Green Buildings on Employee Health and Productivity 2010, Amanjeet Singh, MS, Matt Syal, PhD, Sue C. Grady, PhD, MPH and Sinem Korkmaz, PhD of Michigan State) on health and productivity benefits, these arguments are clearly still lacking the actual performance data connection to make an impactful argument.

The recent surge in green building implementation will not be measured on a comprehensive scale for a few years. With the USGBC’s Building Performance Initiative underway and other quantitative research in progress on the benefits of building green, the maturity of the market place should result in more compelling business cases for building beyond energy efficiency cost savings. Until that data become more readily available, the market entry point of energy efficiency will continue to serve as the open door to green building.

About the Opening the Door to Green Building Study:

In March and April 2010, the Northeast Ohio Chapter of the USGBC and the marketing consulting firm, Sustainable Rhythm conducted the Opening the Door to Green Building Communication Study to analyze the market transformation. This analysis, one of the first of its kind, engaged over 200 perspectives in the building industry to examine issues of the overall market, the perception of the financial investment, the role of certifications and finally how the benefits of green building are being communicated among building design and construction professionals. Sustainable Rhythm is currently conducting similar research in Alberta and North Carolina.

Participant breakdown:

–Owners/Facility Managers/Real Estate – 17% including Owners, Facility Managers, Corporate Real Estate Executives, Real Estate Developers, and Tenant Leasing Agents.

–Service Firms – 59% including Architects, Interior Designers, Landscape Architects, General Contractors and Trades, MEP Engineers, Civil Engineers, Structural Engineers, LEED Consultants, Commissioning Agents, Legal/Accounting Insurance Professionals and other Services.

–Products Companies – 17% including building materials and systems companies.

–Government/Advocacy – 7% including code officials, government agencies and non-profit advocacy groups.

Jeffrey Anderle is owner of Sustainable Rhythm, a company which provides speaking, advising and consulting services in the sustainable building industry to help product, professional-service and community clients identify market entry, penetration and expansion opportunities. Applying primary and secondary research, trend watching, in-depth market knowledge, stakeholder engagement and strategic communications expertise, Sustainable Rhythm partners with clients to deliver low environmental impact, high ROI best-in-class solutions to the marketplace.

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