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Benefits of green buildings far outweigh the costs
Buildings with better sustainability credentials will have increased marketability and property value in the long run.
Prepared by Aveshen Moodley Head of Environmental Sustainability at Absa Corporate Real Estate Solutions.
Over the past few decades, there has been a misconception that it costs an exorbitant amount to construct a green or sustainable building and that organisations certify them only to enhance their own reputation. This is not greenwashing and could not be further from the truth for the green building industry. There is mounting and compelling evidence the world over that green buildings have multiple benefits, especially when it comes to providing the effective means to achieving some of the important global goals - such as addressing climate change, building sustainable and thriving communities, and engendering economic growth.
Although it is true that green buildings are marginally more expensive to construct, this is far outweighed by the wide range of benefits of having them. Studies have shown that it costs anything up to 5% more than conventional construction. However, it always helps to ensure that green building features are incorporated into the design process to lower these costs. In other words, these should be built into the development process from the beginning, particularly when cost strategies, programme management and environmental strategies are being developed.
With the growth and innovation of various green industries and businesses, sustainable building materials can be sourced locally, with a net positive impact on the environment. Retrofitting solutions at a later stage can end up costing more than double when included in upfront design.
It is important to note that while green buildings may cost slightly more to develop, as property investors and space occupiers develop an understanding of the environmental and social impacts of the built environment, buildings with better sustainability credentials will have increased marketability and property value in the long run. There is a growing pattern of greener buildings being able to more easily attract tenants and to command higher rentals and sale prices.
Green buildings have been shown to reduce operating costs by 8% on average. Most savings are achieved through reduced energy and water use and lower long-term operating and maintenance costs. The energy and water savings alone typically exceed any cost premiums associated with their design and construction within a reasonable payback period of under five years in comparison to a 20-25 year life of a building. These natural resources are depleting and in most cases, operational resilience needs to be incorporated into development strategies. Constant monitoring of the plant environment is required to maintain its optimum design criteria.
Studies indicate that most people spend about 90% of their time indoors. As such, the quality of indoor environments plays an increasingly important role in overall human health and wellness. Biophilic design or the innovative way of designing the spaces in which we work and live draws inspiration from nature, creating a connection to the outdoors using natural objects, elements, materials and forms. Research shows that biophilic and sustainable designs can improve worker productivity, satisfaction and engagement, and occupant health and well-being, resulting in bottom line benefits for businesses.
Climate change risk factors can significantly affect the rental income and the future value of real estate assets, in turn affecting their return on investment and potentially rendering the asset as stranded or unavailable for use. Scenario analysis should be included in the design principles to meet the operational resilience. While we cannot necessarily afford to design buildings for a 1-in-500-year scenario, the frequency of these scenarios are on the increase and need to be monitored.
The United Nations Sustainable Development Goals (SDGs) are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. The principles of the green building industry align with many of the SDG targets. As more people move to cities in search of financial opportunities, we will see at least two dramatic changes – aged infrastructure unable to support the influx of people resulting in degradation and the birth of sustainable cities where people work, play and live a fulfilled life.
Sustainable cities will see the development of mixed-use precincts that provide its occupants with the flexibility of the 21st century. Implementing the SDGs in land, construction, real estate and investment requires a life cycle approach. This can be defined in the following three interlinked phases, namely: development, real estate use and recovery phases as illustrated in the graphic below.
Courtesy of RICS: Advancing Responsible Business in Land, Construction and Real Estate Use and Investment - Making the Sustainable Development Goals a Reality
However, a key challenge in building a sustainable precinct will be the development of a cohesive ecosystem with an integrated infrastructure plan that bonds public, private and government partnerships. Technology will be a key enabler to integrate these various roles these stakeholders.
We will be representing Absa at WEF Africa 2019 with a pop‐up Dome and event venue that will be erected on a plot of land adjacent to the Cape Town International Convention Centre and most delegate hotels. Our venue will serve as Absa’s base for the duration of the WEF Africa 2019 meetings and will provide us with an immersive destination for guests interested in our business.
We are particularly proud to host our guests from Africa and the rest of the world in a low-emission pop‐up venue. The Absa event venue at WEF Africa 2019 was built using key sustainable practices that are available today at little to no extra cost.
In the development phase, we used sustainable, low-environmental impact and re-useable materials to construct the main Absa stand. This includes low-volatile organic compounds (VOCs) paint, sustainable carpets and wooden pallets. The use phase incorporated various suppliers that have each brought their own version of a low-emission event. These include locally sourced food and beverages, biodegradable cutlery and crockery to green cleaning products and rest rooms.
Although we were unable to get away from diesel generators, we have offset the carbon emissions from the entire week with the support of Wonderbag and Basa Mogogo, which are verified carbon emission offset projects in South Africa. The recovery phase will see the majority of the materials recycled, composted or upcycled into other products for events, including composting food waste, biodegradable single-use cutlery and crockery and recycling waste and wooden pallets.
At Absa Group, we are aware that buildings account for a large share of greenhouse gas emissions over their life cycle and, as such, we have seen the value of having green buildings in our own portfolio. Green or sustainable buildings cannot only reduce or eliminate negative impacts on the environment, but they have a positive impact on the environment by generating their own energy and increasing biodiversity. Some of these benefits include energy and water savings, reduced waste, improved indoor environmental quality, greater employee comfort and productivity, reduced employee health costs and lower operating and maintenance costs.
We are launching our 2030 Environmental Action Plan that includes certified green space, among others, as a target. These targets will encompass scenario analysis due to physical and transition risks considered within climate change, and position us to transform to a low-carbon economy. We understand that there is an environmental impact at the cost of doing business and we endeavour to reduce that environmental impact. Never before has the threat of irreversible damage been so close or so clear. We need to take action and change the way we live to save the planet.
Moodley is Head of Environmental Sustainability at Absa Corporate Real Estate Solutions.
Absa Group Limited | Incorporated in the Republic of South Africa | Registration number: 1986/003934/06 | Authorised financial services and registered credit provider (NCRCP7) | JSE share code: ABG | ISIN: ZAE000255915