A new global report by McGraw-Hill Construction, in partnership with the World Green Building Council, forecasts a clear expansion of sustainable building practices worldwide – so there’s no longer any justification for fence-sitting, JOHN POWER reports.
Free market economies and regulatory regimes appear to be heading in the same ‘green’ direction as far as sustainable building is concerned, but to date this convergence has been anecdotal at best, propagandist at worst.
At last a truly global study has been released that gives empirical weight to claims that green building and retrofitting activities are indeed blossoming – and will continue to flourish in coming years.
The 50-page report entitled ‘Global Green Building Trends’, released in September 2008, presents and interprets the opinions of more than 700 building professionals from 45 countries, including Australia.
The report demonstrates that ‘green building’, though subject to regionally specific definitions and emphases, is indeed a global phenomenon, regardless of cultural differences or wealth.
The first half of the report examines present and predicted green building trends according to geographical zones (Europe, North America, Australia/New Zealand, etc) and subsequently centres attention on more general international themes of market intelligence, building practices and renewable energy outlooks, and green building product use and identification.
Green building activity is seen as a growth sector in the world’s US$4.7 trillion (2007 figure) construction industry, with Asia representing the world’s fastest-growing regional construction market (China is expected to expand at more than nine percent per year until 2010).
As the report states, “In the expansive global construction marketplace, green building represents a growing share of total output. As demonstrated by research conducted in this study, a majority (63 percent) of industry professionals perceive that green [building] contributes at least five percent of their domestic output. Further, 32 percent perceive that green makes up over 10 percent of domestic construction activity.”
Within our local Australia/ New Zealand zone, 75 percent of surveyed respondents expect the office sector to remain the most active green building sector over the next five years. Meanwhile, 69 percent of respondents expect the fastest-growing (and second most active) sector to be government over the next five years.
Report proponents Harvey Bernstein, vice president industry analytics – alliances and strategic initiatives at McGraw-Hill Construction; and Andrew Bowerbank, executive director of the World Green Building Council, outlined the document’s principal findings in late September at the World Sustainable Building conference (SB08) in Melbourne.
After SB08 Facility Management magazine posed the following questions to Bernstein and Bowerbank about the report’s main findings and its challenges to the worldwide building sector:
FM magazine: Much of the report articulates trends relating to new building developments. But, as raised at the SB08 conference, the retrofit market remains a tough nut to crack. In your opinion, are market forces sufficient to motivate widespread green refurbishments of existing buildings, or is regulation the only real motivator of fast-paced reform?
Andrew Bowerbank: I believe that it has to be a stepped process. Industry leadership is a necessary initial step of market transformation. A historical reference can be seen in the technological advances of the auto industry (i.e. the adoption of fuel injection engines over carburettor began with industry leadership and was eventually regulated by governments).
Before regulations are put in place there has to be confidence in the marketplace. Without an educated and confident marketplace it is very easy for confusion and apprehension to stall progress. Regulations can stall marketplace transformation by forcing action before the marketplace is confident and ready. With that said, the current state of environmental affairs calls for immediate action and therefore we need to be aware of the fact that regulation will have to play a role sooner than later.
Harvey Bernstein: I would say there is a need for both. There is a trend where corporate leaders see competitive advantage of their building stock being green – it’s a way of reducing operating costs, demonstrating responsible action to the public and shareholders and creating more productive, better workplaces for their employees. And there are groups like the US Green Building Council (USGBC), which is trying to create tools and mechanisms to help tackle this problem. USGBC is being creative in how it provides information on LEED (Leadership in Energy and Environmental Design) through its existing buildings program and application of its LEED credits. This is the kind of voluntary assistance that may help spur this; however, what we’ve seen is that regulation does have an impact, and there are a slew of mechanisms government at all levels can use to increase the pace of that transformation.
FM magazine: As far as the uptake of green products is concerned, the report notes that building automation systems are likely to be the fastest-growing product sector.
In your opinion, are some developers uncertain about the most appealing ‘green’ features to promote to their markets, and therefore cautious about committing significant investment to individual types of product installations (i.e. are some developers ‘dabbling their toes’ into a broad mix of green building features in the hope that ‘some’ of these features may appeal to customers, potentially passing up bolder product selections that may achieve greener results)?
AB: Yes, there is cautious acceptance of new technologies amongst developers; however, in various markets (i.e. Canada, US, Japan and major parts of Europe) we see examples of high-end, collaborative demonstration projects that are working hard to bring the construction sector in line with the manufacturing centre to address these issues. Technologies have already emerged that are appropriate, cost-effective and reliable. I think this trend will continue to improve as organisations are seeing value in helping to regulate the manufacturing sector towards a certification system(s) for green building products.
HB: I think it depends on what you consider ‘greener results’. We are seeing very high sophistication in automation systems and other products related to energy efficiency. This isn’t very surprising – there’s an obvious, measurable result of reduced energy consumption – or ways of measuring reduced energy consumption. But there are also building types like schools, hospitals and homes where green products are being put in related to moisture control, finishes and furnishings. This is because of the potential health benefits. But at the same time, all our other green building research this year (residential and commercial sectors) has shown that architects, builders and contractors select products they have used before for the most part, and they show brand loyalty when trying new products. So, I think the bigger challenge isn’t necessarily those most appealing, but rather a trust in how a product will perform. Therefore, the more rapidly these come to market and the early adopters integrate them into buildings, the more uptake we will see from the broader market.
FM magazine: The key obstacle to global green building is identified as higher (perceived or actual) first costs. What steps are your organisations taking to address this perception?
AB: Perception of higher cost is solely based on the youth of the marketplace and the need for architects, engineers and other green building professionals to gain the education and confidence necessary for green building to become business as usual. In the short time-frame of the past five years we have seen cost premiums anywhere from five to 20 percent come down to zero added costs and, in some, cases actual savings by building green. At this point, any added costs incurred by professionals who have a good grasp on green building are usually the result of high-end technologies (i.e. renewable technologies such as solar and wind). Part of the role of WorldGBC, through its member Green Building Councils, is to provide the education that sector professionals need to bring down their overhead costs and lessen the amount of time required to go from design to project completion.
HB: We educate through independent market research. What we do is shed light on what the industry is thinking and then map that against what others are doing in terms of measurable results. Though first cost is still identified as a high obstacle, in our longitudinal surveys that have tracked these questions over time we are showing that the percentage of people who think costs are an obstacle is going down. On the other end, building owners are reporting higher returns on green buildings – actual and perceived – which points to a shift in how the industry is looking at these numbers. We partner with a number of non-profit educational associations who are aggregating measurable data to provide a more holistic measure to the market of how the actual costs match up (or don’t) with the main market.
FM magazine: The report highlights the need for an independent third-party green product certification scheme. Are you aware of any initiatives that are being considered (either global or regional) to create such a scheme?
AB: Yes, there are a number of initiatives out there. From a Canadian and US perspective there are several organisations attempting to develop and regulate third-party processes for product certification. Many of these organisations are already beginning to work with GBCs around the world; however, we must recognise that it is a very large sector and it will take some time for the leaders working in this area to achieve market acceptance. It will be hard to get to the point where all green building products are certified under one system. I think that an important step the market must take is to define how products should be categorised (i.e. technology, materials, natural resource management, etc.). Only time will tell if there will be consistency in the marketplace in terms of green building product certification.
HB: There are a number of different initiatives underway – by government, non-profit and for-profit organisations. The problem is that there is no single voice in the market to cover all types of building products, so a fragmented market exists. Plus, it is not easy since defining a green door is different from a flooring system and different from a green plumbing system. We have been sharing information to the broader community that the industry is clamouring for this kind of reliable, objective voice to create this kind of service, but niche markets are what seem to be in place now.
The report ‘Global Green Building Trends’ is for sale, along with the rest of the SmartMarket report series and other market intelligence publications, at the Analytics online store. Visit www.analyticsstore.construction.com.
Members of the Green Building Council of Australia (GBCA) are eligible for a 25 percent discount through WorldGBC’s partnership with McGraw-Hill Construction. They can get the discount code by contacting the GBCA.