The business case for green building

A recent report released by the World Green Building Council offers building developers, owners, investors and tenants a comprehensive review of the costs and benefits associated with sustainable building projects.

The report, The Business Case for Green Building, makes the case that sustainable design is not just good for the planet, it’s good for business too.

“While green buildings have well-documented environmental benefits, we have made a conscious decision to focus this report on the economic and social benefits of green building,” the authors said in the report. “The green building movement has matured over time, and a deeper understanding of the ‘triple bottom line’ value of green buildings has emerged, shifting the emphasis from ‘planet’ to ‘people’ and ‘profit.’

Consequently, the conversation is now geared around how green buildings deliver on economic priorities such as return on investment and risk mitigation and on social priorities such as employee productivity and health.”

The report breaks down the business benefits of building green into five categories: design and construction costs, asset value, operating costs, workplace productivity and health, and risk mitigation. It states that while green projects do tend to cost more than traditional projects initially, the actual costs are generally not as high as they are perceived to be, and the additional up-front costs of green buildings are often recouped in the long term by way of reduced energy costs, water usage and other factors.

From an asset standpoint, the report concluded that certified sustainable buildings enjoy increased marketability and can command higher rents and sale prices. Because green buildings typically use less energy and water, they also cost less to own and operate and can sometimes achieve additional savings through property tax reductions, rebates and reduced insurance rates.

Sustainable design can also reduce operating costs in a workplace environment through improved employee performance and health, according to the report. Components of green design, including increased natural lighting, materials containing minimal toxins, appropriate outdoor air ventilation and open spaces all contribute to healthy indoor environments and have been found to lessen employee sick days and improve productivity.

As with any building project, there are risks and potential rewards associated with investing in a sustainable building project and the report highlights several, including regulatory compliance, supply and demand, and the economic viability of locations and designs in a changing climate.

The report advises investors to research the implications of potential regulations and climate change and factor them into sustainability risk assessments. Additionally, the report’s authors urge investors to consider the growing demand for green buildings and compare the value of green buildings to traditional buildings when considering those types of investments.


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