People, Profit and Peak Performance in Green Building

Tuesday, March 4th, 2014
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The evidence is clear. Green buildings slash energy costs and greenhouse gases, deliver better quality assets on conventional budgets and generate higher returns on investment.

However, while the vanguards in the global property and construction industry – many of those Australian companies – have embraced green building, the laggards continue to drag their heels.

Why is this?

I think it’s because we’ve been unable to monetise the ‘value’ of green building in real estate terms. There are a number of complex reasons for this, but three are of great significance:

  • Lack of hard science: Attributing specific benefits, such as healing rates in hospitals, to a single design attribute is almost impossible to prove. Other building factors such as fresh air rates and toxicity of products also play a role in boosting productivity and performances. As a building is a complex set of elements working together to create an indoor environment, there is no hard science that can win over the skeptics!
  •  Common metrics: How we capture information about what makes a space better – whether it’s healthier or more productive – is still up for debate, and we currently don’t have any widely-accepted methods.  As a result, we are unable to calculate the value of the better space.
  • Human behaviour: Building science is devoid of people – as soon as we introduce the uncertainty of how people will act in a space, all assumptions can be void. Will people leave the lights on? Will they open the window while the heating is on?  Will they keep the blinds closed?  These behavioral realities make this subject a complex and inaccurate science.  Is it any wonder engineers don’t like it?

Despite these challenges, it has been estimated (Kats 2003) that about 70 per cent of the financial value associated with building green is derived from the productivity and health benefits.

At Green Cities 2013, the WorldGBC released its Business Case for Green Building, which presented the hard data of why green buildings are healthier and more productive places for office workers.  A productivity increase of up to 11 per cent, for instance, can be achieved simply through improved ventilation; a massive 23 per cent improvement in productivity can be achieved through good lighting.

With 85 per cent of a company’s costs spent on salaries and benefits, even modest improvements to staff health and productivity can have a dramatic impact on organisational profitability.

In school environments, green building design has been found to enhance student performance, decrease student and teacher sick days, and reduce teacher turnover.  One landmark study of green schools in the United States found students progressed 26 per cent faster in reading and 20 per cent faster in maths when compared with their counterparts in non-green schools.

And in healthcare settings, sunlight and views of nature can reduce average length of stay by up to 41 per cent, and lessen the need for pain medication by 22 per cent.

The story is similar in our homes.  A range of studies have underscored the synergy between homes and health.  Asthma sufferers have reported 63 per cent more symptom-free days after green retrofits improved the indoor environment quality of their homes.

So, here’s the million dollar question: if up to 70 per cent of a building’s whole of life value comes from improved productivity and health benefits, then why are we not monetising this to make the case for green building a no-brainer?

The first step is to establish a common way of measuring the previously unmeasurable.  The WorldGBC has embarked on an ambitious new project to do just that – and aims to provide best practice guidance on the type of green building features – such as daylighting, ventilation and indoor office environments – that enhance productivity and performance.  This report, which we hope to release later in 2014, will help industry, organisations and governments to make better investment decisions about their buildings.

Jane Henley - Chief Executive Officer, World Green Building Council

Jane Henley
Chief Executive Officer World Green Building Council


Jane Henley will be exploring how to monetise productivity and performance at Green Cities 2014, from 18-19 March in Melbourne.  

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