This article originally appeared in the 10 September 2015 edition of Finweek.
Buildings are responsible for around 40% of the world’s end-use energy consumption and are among the main contributors to climate change. Energy efficiency and financial rewards aside, awareness and perceptions around environmental issues have changed and the once inefficient built environment is following rapidly as more buildings are becoming green.
Advantages of green buildings include energy and resource efficiency, a reduced carbon footprint and the ability to provide sustainable solutions for energy, water and waste. Over and above being the environmentally responsible choice, they also offer significant monthly cost savings.
How green are SA’s buildings?
Aside from two international properties, the Green Building Council of South Africa (GBCSA), which promotes and facilitates environmentally sustainable building practices, has awarded Green Star certification to 121 buildings in the country, 25 of those in the last three months alone (see graph below). It’s a far cry from the single certification in 2009.
At 63%, 4-star certifications are by far the largest. “4-star, rated as South Africa Best Practice, is by no means an entry-level rating. It’s extremely good and a tough mountain to climb,” explains Brian Wilkinson, CEO of the GBCSA. Just over 8% of green buildings have been awarded GBCSA’s highest rating, a 6-star certification. This world-class certification ranks alongside a LEED Platinum (US Green Building Council’s highest certification for sustainable building) or any other rating system’s top buildings.
USA, Canada and China hold the top three spots on the green building rankings while Sweden is 10th, with around 2.54m green square metres, just ahead of South Africa’s 2m green square metres, Wilkinson tells Finweek.
The commercial sector has responded to energy challenges by demonstrating its commitment to sustainability and resource efficiency, with the bulk of the country’s green buildings belonging to this sector.
Boasting the largest portfolio of green buildings of any company in South Africa is Growthpoint Properties, the country’s largest real estate investment trust (REIT).
Growthpoint is not only acting as a responsible steward by embracing green building principles, but is doing well because these buildings are worth more, tenants are happy in them and they have lower operating costs.
“This is the beauty of green. It is the opportunity to simultaneously do good [environmentally] and do well financially,” says Wilkinson. That interconnection between environmental responsibility and financial reward is driving the green building movement in the commercial space. In addition to being able to command higher rentals, Emira Property Fund expects savings of up to 50% in water and electricity and operating costs by redeveloping its Knightsbridge property in Bryanston from an inefficient 1980s non-certified building into a state-of-the-art green P-Grade 4-star Green Star building.
The residential sector
The pace of creating environmentally sustainable buildings within the residential space has been slow.
“We have awarded a green building rating to three residential projects, and they were all apartment buildings,” confirms Wilkinson.
Private homeowners, already dealing with shrinking budgets and less likely than the commercial sector to take a long-term view, are often put off by initial investment costs of greening a home. But an ineffectual electricity grid, spiking energy prices, increased municipal costs, rising interest rates and stagnating salaries are likely to be key drivers in going green.
Come early November, GBCSA is launching EDGE (Excellence in Design for Greater Efficiency) a green building ratings system specifically designed for residential properties. Given that this “light” green building rating system is very easy to implement and requires no extensive training, Wilkinson expects 5 000 homes to be certified through EDGE by end 2016. “We expect EDGE to form as much as 50% of our organisation, certainly as big as commercial, if not bigger,” says Wilkinson.
GBCSA’s My Green Home project demonstrates that behavioural change in a typical middle-class home can achieve an energy consumption saving of 29% at no cost to the homeowner. Upping the ante to include investment into renewable energy can mean the average family, spending between R1 000 to R2 000 a month on electricity, could save around 50% on monthly electricity costs.
Energy and water saving features add saleability to a property, according to Dr Andrew Golding, chief executive of the Pam Golding Property group, which has partnered with GBCSA in the My Green Home project. “Properties offering green or energy- and water-saving features as well as emergency or back-up power solutions are at a competitive advantage in the marketplace. These properties are becoming more sought after by buyers, in preference to properties that don’t offer such features,” says Dr Golding.
It seems that choosing a sustainable lifestyle not only positively contributes to the environment, but also makes good business sense.
“Our aim is to meaningfully influence the ‘green agenda’ in the domestic space not only because it will increasingly impact how our clients perceive value in property, but because our economic and social development depends on it. Homeowners and homebuyers are becoming more aware of the need to reduce rising energy and water costs as well as to help conserve the country’s natural resources,” adds Dr Golding.
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