CoreNet Global, an international association of workplace and corporate real estate executives, and Jones Lang LaSalle, a leading real estate service provider, queried more than 2300 attendees of CoreNet Global Summits on four continents and learned that a large majority of companies around the world view sustainability as critical to their business and are willing to pay a premium to help their companies become more sustainable. CoreNet Global Summits in London, Melbourne, Denver and Singapore took the watershed survey called, "Sustainability Perceptions and Trends in the Corporate Real Estate Industry."
"As a result of this survey, it’s crystal clear to us that a focus on sustainability has become important to the Fortune 500 and similar companies around the world," says Eric Bowles Vice President and Director of Research for CoreNet Global, citing that for an overwhelming 79 percent of respondents, sustainability is a near-term business issue that’s important today, or will be in the next one-to-two years.
"These findings reinforce what we are hearing from clients every day: more and more companies are recognizing the business case for sustainability, and their corporate real estate departments are charged with making it happen to a large extent," said Ben Breslau, Vice President, Director of Occupier Research at Jones Lang LaSalle.
According to the survey, most companies are willing to pay for sustainable real estate solutions. According to the findings, 77 percent of the respondents are willing to pay a premium for sustainability and 22 percent expect to pay the same. Many companies still don’t realize that the cost of sustainability has come down. A large proportion of respondents thought sustainable designs were more expensive that they really are. Studies indicate that designing buildings energy efficiently, or building them to LEED&Reg; certification, will cost about 1 to 5 percent more than conventional construction, and the incremental cost is falling. Respondents’ perceptions varied widely:
- 52 percent say premiums will be 5 percent or more to build in a sustainable manner; 22 percent of them believe green buildings will cost 10 percent more than conventional building
- 38 percent said sustainable buildings will cost 1-5 percent more, and 1 percent say it’s actually less expensive, while 8 percent said those buildings will cost the same.
Despite the opportunity to apply techniques to make buildings more environmentally friendly, respondents to the CoreNet Global/Jones Lang LaSalle survey found obstacles to sustainability that have hindered widespread adoption:
- Only 17 percent said that there is good, or widely available, sustainable real estate solutions in markets where their companies need to locate offices.
- 42 percent reported patchiness and said the supply chain is good in some markets but not others.
- 41 percent view overall availability as limited or minimal.
While sustainable building is becoming more critical the world over, its intensity varies from continent to continent. According to the results:
- 61 percent of respondents in Europe feel sustainability is a critical business now
- 53 percent feel that way in Australia, while
- Only 44 percent of respondents who attended the Denver Global Summit feel that sustainability is critical now
"We have passed the tipping point for sustainability, and the question is no longer about whether sustainable design should be considered. The question will be, how do you explain why you chose not to have a sustainable design," says Bowles of CoreNet Global.
"Sustainability is not a passing fad. It’s a business imperative from Australia to Hong Kong and from the U.S. to Germany," adds Jones Lang LaSalle’s Breslau.
Sustainability is also in the minds of residential home buyer s as well. A new survey conducted for the National Association of Home Builders (NAHB) confirms that a desire for greater energy efficiency drives consumers to choose a green-built home.
"New technologies, advances in building science and materials for insulation, windows and other components mean that homes are significantly more energy efficient than they used to be," said NAHB President Brain Catalde, a Southern California home builder. "Still, it’s time to take that next step. The NAHB National Green Building Program does that – and more."
When 800 registered voters were asked how important certain items would be in their decision to either purchase a new green home or remodel their current home to be more green, nearly two-thirds (64 percent) of consumers polled said that "reduced energy costs" would be the most important. The second-highest scoring reason, at 55 percent, was "because it would be healthier." And 49 percent of those surveyed say it’s "the right thing to do for the environment."
"That’s a pretty strong showing for altruism," said Neil Newhouse, partner with Public Opinion Strategies. "But cost is the overriding concern. That’s something that all green players -- builders, regulators and advocates -- need to keep topmost in their minds."
Catalde agreed. "A big reason why home buyers choose energy efficiency as a motivator is because heating and air conditioning bills can really empty our wallets," he said. "For the same reason, affordability is a prime motivation for the NAHB National Green Building Program. Our builders want to provide credible, cost-effective green building, so more home buyers’ money can go to green features, not green program fees."
To be certified under the NAHB program, homes must meet energy-efficiency levels that are at least equivalent to Energy Star®, the federal Environmental Protection Agency program that has enjoyed great success in the marketplace. Since 2000, 750,000 homes have earned the Energy Star label, indicating that they are at least 15 percent more efficient than required by current energy codes.
"When a green home doesn’t look or feel significantly different from one built using more traditional construction methods, when builders have the tools and resources to build them without significant materials or labor cost increases, and when consumers readily accept the finished product, then green has arrived -- and that’s why the NAHB National Green Building Program will bring green to the mainstream," Catalde said.
The NAHB National Green Building program will link dozens of successful state and local voluntary green building programs with a national online scoring tool for builders and verifiers and extensive educational resources. "A flexible, regionally appropriate approach is preferable to a unilateral approach that does not take into account local issues, architecture, or geographic differences," Catalde said. "This program opens up the opportunity for all our membership to build green."
Note: CoreNet Global members manage US $1.2 trillion in worldwide corporate assets consisting of owned and leased office, industrial and other space. With 7,000 members representing large corporations around the world, CoreNet Global operates in five global regions: Asia, Australia, Europe, Latin America and North America, including Canada.
Jones Lang LaSalle (NYSE: JLL), the only real estate money management and services firm named to FORTUNE magazine’s "100 Best Companies to Work For" and Forbes magazine’s "400 Best Big Companies," has approximately 160 offices worldwide and operates in more than 450 cities in over 50 countries.