By Kavya Dhir, G&A Institute Sustainability Analyst
With climate change at the forefront of today’s environmental, social, and governance (ESG) discussion, and corporate ESG disclosures in focus, companies are being held more accountable for their overall environmental impact.
These impacts include the carbon footprint of their operations — such as office space, business travel, and packaging of consumer goods.
For office buildings, third-party certifications such as the WELL Building Standard (WELL) managed by the International Well Building Institute (IWBI), and, Leadership in Energy and Environmental Design (LEED) managed through the US Green Building Council (USGBC), have ushered in a new era of sustainability transparency and accountability.
Green building standards have served as a foundation for more than two decades to make buildings become more energy efficient, less polluting, and healthier for their inhabitants. The USGBC was created in 1993 in the boardroom of the American Institute of Architects (AIA), with representatives from over 60 corporations and organizations.
Today, investment firms and property businesses are raising the bar for “green.” This includes increased greenhouse gas emission reduction targets and supply chain management regulations. Further, these organizations and individual assets are being expected to back up their ambitions with real-world performance data.
Green building standards should be promoted by real estate professionals to work to ensure that the advantages are widely recognized and implemented.
What is a Green Building?
According to the World Green Building Council (WGBC), the definition of a green building is: “a building that, in its design, construction or operation, reduces or eliminates negative impacts, and can create positive impacts, on our climate and natural environment.”
Here is a brief overview of the ESG issues that are involved:
Environmental – Energy, water, and material are three essential environmental components that have a significant influence on the natural environment over the lifespan of any construction.
According to the WGBC definition, the ultimate goal is not just to optimize resource use so that harmful impacts are reduced, but also to ensure that the building itself contributes positively to the natural environment.
Examples of positive impacts are if a building use recycled and reusable materials, has a greywater system that collects and uses rainwater, or has solar panels which feed excess energy back to the grid.
The societal pressure to adapt to meet the goals of The Paris Agreement on climate change has grown considerably. There is also pressure on the construction and real estate sectors to contribute significantly. In the future, making a good contribution to climate protection would include adhering to tight requirements including reducing the net primary energy need in the planning and construction of new buildings by 20% as compared to the ‘lowest energy level.’
Social – A building is designed for occupants; therefore, it must consider their health, comfort, and safety. In office buildings, asking building management if they have engaged in any Indoor Air Quality (IAQ) certifications is a simple way to determine whether the facility has inadequate air quality which may trigger headaches, respiratory irritation, nausea, and allergies. Natural lighting has physiological effects that may be measured. The synchronization of the body’s internal clock – known as circadian rhythm, can be aided by exposure to adequate quantities of natural sunshine.
Governance – Facility managers must design metrics to monitor the health of a building in order to demonstrate effective governance in building operations, maintenance, and management. Furthermore, construction companies and operational managers should be obliged to set quantifiable objectives and demonstrate efforts in advancing the industry toward a beneficial influence on the environment to quantify how a building may do better.
To be considered to be really “green,” a building must serve as a link between people and nature. The ESG of buildings described above aren’t designed to oversimplify the industry’s complexity; rather, they’re meant to raise awareness and start dialogues about acceptable reporting standards. Investors are becoming more demanding in terms of accurate, transparent, and timely account of asset-level performance. The future of ESG reporting in real estate development will move far above entity-level disclosures.
About the Author
Kavya Dhir is a G&A Institute Sustainability Analyst. Her role consists of conducting materiality assessments, gap analysis and benchmarking research. A researcher and a lifelong learner at heart, Kavya is a LEED GA, WELL AP and holds a bachelor’s degree in Civil engineering and a MSc. In Design and Energy Conservation.
She is involved with many organizations, including ASHRAE, U.S Green Building Council, UN Green (R)evolution and ISHRAE.
She is an optimist who looks towards a future in which our built-environment and energy production exist in harmony with us and the natural world. Kavya has experience with projects which integrate concepts of net-zero energy and carbon, high performance HVAC and healthy buildings, and general sustainability early in the building design process.
Kavya is committed to accelerating the transition to a more sustainable environment with a continual focus on establishing the integrated bottom line: environmental stewardship, economic inclusion, and social equity.
Contributor, G. (2021, June 21). Synergies Between LEED, WELL Certifications And ESG Programs. Facility Executive Magazine. https://facilityexecutive.com/2021/06/synergies-between-leed-well-certifications-and-esg-programs/
Dolya, A., Romanin, P., Weise, D., Lupia, F. P., Villani, L. A., & Hemmige, H. (2022, January 11). Boosting ESG Performance in Today’s Energy Supply Chains. BCG Global. https://www.bcg.com/publications/2022/boosting-esg-performance-framework
A Performance-Based Future for Real Asset ESG Reporting. (2019, February 28). GRESB. https://gresb.com/nl-en/2019/02/28/a-performance-based-future-for-real-asset-esg-reporting/
What is green building? (2020). World Green Building Council. https://www.worldgbc.org/what-green-building