Will Europe stay competitive in the global green building market?

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A story of global transformation is taking place within the buildings sector. Green building has become a truly international market trend, led by companies, municipalities and others who have realised, in the immortal words of Ray Anderson, that ‘comply’ is not a vision.

This year’s ‘World Green Building Trends’ report shows that projects aiming beyond simple building code compliance to achieve new green building standards have now reached a significant share of firms’ work in many regions. Moreover, the number of firms that are working predominantly on such green projects is expected to rise significantly over the coming years to 2015.

At the centre of this global transformation is the coalition of 98 Green Building Councils around the world that make up the World Green Building Council. These not-for-profit GBCs work with the full array of stakeholders in the built environment, from architects to engineers, product manufacturers to investors, and even cities and governments, to drive sustainability.

There are now 36 GBCs working together across Europe to improve green building practices, industry education and public policy. Most green building activity in the region has so far been driven by market leaders adopting voluntary green building standards such as such as BREEAM, DGNB, HQE and LEED, as there is still relatively little regulation on sustainable buildings.

The reasons companies are voluntarily working with such standards are not simply environmental – they’re economic. As the recent report ‘The Business Case for Green Building’ demonstrated, design and construction costs for green buildings are falling as the supply chain gains experience, and a building’s value and operating costs can benefit significantly from being more sustainable. Sale premiums for green buildings compared to comparable similar non-green properties have been found to be as high as 30 per cent in some studies.

But despite growing evidence of the benefits to the financial bottom line, many companies are still not building green. This is precisely where policy and regulation play a role in driving the market towards better practice, and Europe’s regulators are starting to look at where the sector needs to go next.

In terms of mandatory standards, EU laws such as the Energy Performance in Buildings Directive and the Energy Efficiency Directive have already set some ambitious targets for EU countries. These include constructing only nearly zero-energy buildings from 2021 and creating long-term national strategies for mobilising investment in energy efficient renovation by April 2014. These laws and policies are focused on energy efficiency, which has been at the centre of the better buildings debate so far.

However, European policy makers have recognised that wider sustainability is key to the long-term economic competitiveness of the European construction sector, both at home and abroad. They are now looking at driving forward a wider agenda focused on performance in areas such as water efficiency, waste, embodied energy and an approach that focuses on the lifecycle environmental performance of the building.

A potentially game-changing public consultation on sustainable buildings was recently launched to help decide the direction that the EU’s sustainable building policy and regulation needs to move in. As well as looking at whether things like whether Green Public Procurement should become mandatory, and whether Environmental Product Declarations should become the norm, one of the options assessed is the potential need for an EU assessment framework on sustainable buildings.

This topic is one that is going to be hotly debated over the coming months in terms of whether there needs to be one, what this should look like and which parts of the property sector it might focus on. Many argue that this should be formed of a series of ‘common indicators’ for the EU (e.g. waste, indoor air quality, water etc.) and harmonised calculation methodologies for performance in these areas. EU countries could then set their own benchmarks or schemes to improve performance in these areas, though the likelihood is that if the sector does not move towards the EU’s resource efficiency goals quickly enough, mandatory EU legislation could be on the table in the future.

Much work has already been done in this area, but the dialogue so far has been limited to relatively small groups of specialists. Important work which could help inform the basis of any EU framework includes the work of CEN/TC 350, SB Alliance, SuPerBuildings and Open House. However, it is precisely the limited dialogue around this work which could lead to significant issues if industry does not engage more widely with this debate.

We know from reports like ‘The Business Case for Green Building’ that pushing the market towards greener practice can strengthen economic performance. Nevertheless, much environmental regulation is not structured appropriately for the market because the market fears that it will have negative economic impacts and so does not collaborate with policy makers on its design.

This moment in time represents an important challenge for Europe’s construction sector, and it essentially has two choices. Option 1 is to collaborate with policy makers to transform the market to perform more sustainably and competitively through a process of gradual change, under clear and well-designed policy. Option 2 is to do disengage, and eventually be forced towards more environmentally sustainable practice under regulation that may be detrimental to business. 

Within the Europe Regional Network of GBCs we believe the former is the better option, so in the coming months we will be in dialogue with the European Commission and other important stakeholders about what the future for Europe should look like. At this stage, it’s in the hands of the construction sector to decide. 

Will Europe stay competitive in the global green building market?