Impacts of Sustainable and Green Building on the Real Estate Industry

Sustainability and Green Building

The built environment is a sector with a large consumption of energy estimated to be about 40% of the global energy use. The sector also accounts for about 30% of greenhouse gas emissions.
In the recent past, the industry has experienced significant transformations following the introduction of the Sustainable and Green Building practices.
This is necessitated by the increase of environmental concerns and the urgent need to address climate change across the globe. In this regard, developers, investors and all other players in the real estate industry are inclined to embrace the sustainable and green building practices with a focus of creating a sustainable and eco-friendly future.
Some of the impacts of sustainable and green building practices are:

Sustainable buildings are designed to optimize energy efficiency by minimizing the amount used in the buildings and integrating alternative sources such as natural lighting and renewable energy sources, such as solar panels.
Water efficient systems and fixtures are also used to reduce water consumption and hence the utility expenses. These practices offer significant long term cost benefits to both the developers and occupants.

The sustainable and green building practices aims to minimize the environmental effects of construction and operation activities of buildings.
The practice includes lowering energy and water consumptions, proper waste management, and use of eco-friendly materials in construction among others. This ensures reduction of carbon emissions and other pollutants of the environment thereby enhancing sustainability and safety.

Most consumers/occupants of buildings are today highly cautious of the choices they make with regard to potential environment impacts. Sustainable and green buildings provide a number of benefits to consumers including cost cutting, healthy and sustainable environment.
Moreover, the green spaces and easy access to nature within such developments significantly contribute to the overall well-being of occupants. This has increased the demand for sustainable buildings and pushed developers to prioritize eco-friendly practices and incorporate green building certifications, such as Edge into their projects.

Investors are highly prioritizing sustainability and eco friendliness of the products in which they invest. Green and sustainable buildings do not only align with most investors’ values as far as environment is concerned but also presents a lower risk to their investment portfolio.
Notably, the inclusion of environmental, social, and governance (ESG) concept into investment decisions is gaining momentum, and real estate developers acknowledge the need to apply this concept to attract investors and raise capital.
By incorporating sustainability, the real estate industry enhances its reputation even as the world aims to address environmental challenges such as climate change and resource depletion.

Sustainable and green building practices introduce a new generation of the real estate industry.
It is changing and reshaping the whole process of development project including planning, design, construction, operation and maintenance of future developments.
The focus on environmental impacts, cost savings, investor preference and even the market demand calls for the adoption of sustainable practices.
Arguably, as the real estate industry evolves with time, sustainable buildings which is one of the ways aimed at achieving the SDGs will be the new standard.
Sources: UNEP, Deloitte, ProptechOS and Sterling Real Estate Advisory