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The Business Case For Green Building

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A comprehensive new report from the World Green Building Council (WorldGBC), Toronto, highlights a large number of compelling benefits from green buildings for different stakeholders throughout the life cycle of a building.

The report, The Business Case for Green Building: A Review of the Costs and Benefits for Developers, Investors, and Occupants, examines whether or not it’s possible to attach a financial value to the cost and benefits of green buildings. Today, green buildings can be delivered at a price that is comparable to conventional buildings, and investments can be recouped through operational cost savings and, with the right design features, create a more productive workplace.

“This report synthesizes credible evidence from around the world on green buildings into one collective resource, and the evidence presented highlights that sustainable buildings provide tangible benefits and make clear business sense,” said Jane Henley, CEO of WorldGBC. “From risk mitigation across a building portfolio and city-wide economic benefits to the improved health and well-being of individual building occupants, the business case for green building will continue to evolve as markets mature. Indeed we have already seen this momentum grow globally.”

Key findings of the report include:

  • There has been an overall trend toward the reduction of design and construction costs associated with green building as building codes around the world become stricter, supply chains for green materials and technologies mature, and the industry becomes more skilled at delivering green buildings.
  • Buildings with better sustainability credentials will have increased marketability as investors and occupants become more knowledgeable about the environmental and social impacts of the built environment. Additionally, there is a demonstrated link between the green characteristics of buildings and the ability of these buildings, in some markets, to more easily attract tenants and to command higher rents and sale prices.
  • Green buildings save money through reduced energy and water consumption 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.
  • An emerging body of evidence suggests that the physical characteristics of buildings and indoor environments can influence 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.

The report concludes that, by greening the built environment at the neighborhood and city scales, the green-building industry can deliver on large-scale economic priorities such as climate-change mitigation, energy security, resource conservation and job creation, long-term resilience, and quality of life.

November/December 2019

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