When it comes to sustainability initiatives, just how important are green building certifications? The answer comes straight from Deloitte’s Global and US Real Estate Industry Leader, Bob O’Brien. According to him in a recent interview for the 2015 Commercial Real Estate Outlook, “… there is an increase in awareness and implementation of sustainability initiatives aimed at energy, water, and waste efficiency as indicated by a growth in green building certifications. The combined demands of occupiers, investors, and regulators are such that tangible benefits can be derived from embedding sustainability into the full investment process. Going forward, adoption, measurement, and reporting of sustainability initiatives will be a business imperative, given the broader benefits on rental growth, yield premiums, total occupancy costs, asset values, and marketability.”
In other words, investors now consider sustainability as a significant value add to real estate transactions. Properties granted with these green building certifications have proof of their track record to see their green strategies and practices through, therefore adding to their overall value.
The credibility of green building certifications comes with several benefits, such as:
- Government incentives – Different kinds of incentives like tax deductions are available only to organizations that meet a certain criteria (e.g., 50 percent savings in projected annual energy costs). Each state has its own set of incentives, which can be found on DSIRE (Database of State Incentives for Renewables & Efficiency).
- Marketing buzz – Organizations can add their green building certifications to their list of credentials to attract more customers and investors, and also to draw interest to their projects. People are apt to support organizations that fight for a cause, especially a timely one like environmental awareness.
- Anti-greenwashing – Some organizations have opted for greenwashing, which is the practice of falsely presenting a green image through the dissemination of false information. They have gotten so good at it that it has become difficult to distinguish the truth from fiction. However, green building certifications differentiate legitimate organizations from the rest.
- Forward-thinking design – In their desire to get certified (and to maintain said certifications), organizations are actively thinking of ways to achieve their sustainability goals. This helps them to be more innovative with their ideas, which leads to improved efficiency in their building designs.
With these benefits, investing in getting green building certifications should automatically be a worthwhile cause, but this is not the case for smaller organizations. LEED, the most popular certification program for green buildings, is costly and difficult to qualify for as it requires buildings to be built with green materials right from the start. For organizations with existing properties, this calls for major renovations.
Fortunately, there are other respected certification programs like Class-G that focus more on an organization’s current practices and strategies. Through these programs, organizations that are already doing things right don’t have to start from scratch – just to get the recognition they deserve.