Green Building Sees Growth, But Fewer Firms Pursue LEED

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By Erin Weaver

Three new surveys indicate that green building remains strong despite the uncertain global economy, with designers and builders anticipating an increasing number of green projects. McGraw-Hill Construction (MHC) has released two reports: “2012 World Green Building Trends” surveyed building-related firms in 62 countries, while “2013 Dodge Construction Green Outlook” focused on the expectations of U.S. firms. Turner Construction’s “Green Building Market Barometer” surveyed 718 executives of U.S. firms.

The reports indicate increasing demand for green building, with 81% of U.S. executives believing that the public expects them to institutionalize sustainability, according to the Dodge report. Worldwide, the MHC trends report found that firms’ top reasons for green projects were largely economic, from client and market demand to lower operating costs; this marks a shift from 2008, when the top reason given was “doing the right thing.” Overall, says United Technologies Corporation president Geraud Darnis, the new emphasis on value “confirms that we now see more pull than push for green buildings.” Firms not identifying any of their work as green still cite doing the right thing as the primary driver in green building and expressed concern with payback on upfront costs.

The green building market has grown tremendously, from $10 billion in 2005 to an estimated $85 billion in 2012, with expectations of exceeding $200 billion by 2016, according to the Dodge report. Globally, 51% of firms told Turner Construction they expect about two-thirds of their projects to be green by 2015—nearly double the percentage reporting that expectation in 2008. Green homes account for approximately 20% of the U.S. residential market—a percentage expected to increase by a few points each year, according to the Dodge report—and one-third of U.S. residential builders expect to be “fully dedicated” to green building by 2016.

Globally, the MHC trends report found that 63% of firms have new green commercial construction planned by 2015, with 83% of firms in Brazil—a construction hotspot—reporting such plans. Green renovation work is expected by 50% of firms worldwide, up to approximately two-thirds in Singapore and the U.K.

Health-related factors such as indoor air quality were among the benefits of green building cited as most important, with 55% of global firms naming occupant health as a top factor—an increase from 29% in 2008, according to the MHC trends report. In fact, the authors of the Turner survey observe that “when environmental factors influence the decision to incorporate green features, these are typically improvements to the indoor environment” rather than the global environment: only 37% of executives felt it was very important to reduce a building’s carbon footprint. In the MHC trends report, among factors traditionally considered “environmental,” 72% of firms named energy use reduction as the top reason for green building, while 25% favored reduced water consumption—up from 4% in 2008.

There has been a decline in U.S. firms reporting it very likely that they would seek LEED certification, from 61% in 2008 to 48%, according to the Turner survey. Firms not considering it likely cited perceived costs and difficulty of the LEED certification process, although many reported that they were somewhat likely to seek certification under other systems, such as Energy Star. The authors of the Turner survey speculate that, as companies become more knowledgeable about green building, they are moving away from reliance on LEED as a guide: 52% of firms indicated a preference for their own internal standards.

 

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December 31, 2012