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Green Building - An Eco-Friendly Business Practice

  • Highlights

  • A growing green buildings industry

  • Economic benefits and increased productivity

  • Reduce operating costs and energy

  • Engineers can get a good ROI in the long-run

In India, green buildings don't account for even 5% of the existing constructions. However, the market potential for these buildings is huge. The Dodge Data & Analytics World Green Building Trends 2016 SmartMarket Report estimates that the green building industry in the country will grow 20% by 2018, driven by the need for healthier neighborhoods and environmental regulations.

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According to Jane Henley, Operations Manager, Green Building at IFC/World Bank Group and former CEO of WorldGBC, "From risk mitigation across a building portfolio and city-wide economic benefits, to the improved health and well-being of individual building occupants, the business case for green building will continue to evolve as markets mature. Indeed, we have already seen this momentum grow globally where in more and more places, green is now becoming the status quo."

Investing in green buildings

With existing resources under immense pressure, the economic benefits offered by green buildings are reason enough for businesses to invest in such architecture.

This is particularly true for competitive fields like engineering businesses. There is a great demand on employees working in such firms, to put their maximum into what they do. Thus, it is a great idea for self-employed engineers to invest in green buildings, not only for themselves, but for those that work under them as well.

Additional Read: Benefits of an Engineer Loan from Bajaj Finserv

Self-employed engineers can avail engineer loans to invest in greener architecture for a more productive tomorrow, whereas businesses can avail an easy business loans.

Benefits of green buildings

1. Sustainable Buildings - Economic Benefits

It is a common belief that green buildings are more expensive than normal buildings. However, the construction of green buildings cost only 10% more than the construction of conventional ones- and that is because of the use of certain extra materials. But, the extra cost can be recouped within 3-4 years after construction, due to a reduction in operational costs, making green buildings sustainable.

The Green Rating for Integrated Habitat Assessment (GRIHA), a system that rates green buildings in India, offers some insights into the business benefits of going green.

Reduce 8-9% of their operating cost
Save 25-30% in energy consumption
Save 20-30% in water consumption
Enhance 40% in office space utilisation
Reduce 35% carbon emission
The savings made on energy and water consumption help maintain a healthy cash flow that can be utilised in other areas of operations. Provided with green materials, these buildings have energy-efficient windows and roofing materials. These provide long-term economic benefits as the maintenance cost is less.

Developers of such buildings enjoy benefits such as:
Increase in occupancy ratio by 3.5%
Increase in rent ratio by 3%
Increase in building value by 7.5%
Rebate in balcony/LMR/passage/staircase premium by 50%, 40%, and 30% respectively (for GRIHA 5-star, 4-Star and 3-Star)

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2. Better Employee Productivity

A recent project undertaken by Harvard professor revealed that workers in a green building environment scored 61% higher in cognitive function than those in a traditional building.

The improved cognition had a major impact on a variety of skills including focus, crisis response, and strategy. In a competitive landscape, this can have a major say, particularly where workers need to make fast and smart decisions.

The study found productivity benefits ranging from USD 6,000 to 7,000 per employee annually.

3. Savings in the Long Run

It is estimated that making an investment of USD 4 per square foot in green buildings will yield savings of more than USD 58 per square foot over a 20-year period. The savings could be even greater by using recycled drywall, steel, and glass.

Moreover, the water and power tariffs on the buildings reduce and is better for the environment and the general health of people who live in such buildings. This further reduces costs related to these in the long run.

4. Sustainable Use of Resources

With India ratifying the COP 21 climate change agreement, green buildings are an ideal way to reduce the overall carbon footprint. However, the real benefits of sustainable buildings will come only when resources are used sustainably.

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