Green Market Overview
There can be no doubt that environmental awareness has crept into the corporate mainstream, and is gaining prominence. Broader global awareness of human impact on the environment and consumer demand for sustainable goods and services are creating new challenges and opportunities for businesses across all industries. Corporations are responding to these changes by becoming more environmentally aware. Voluntary initiatives and partnerships like the US Green Building Council (USGBC) are raising corporate awareness and participation in the movement. More and more companies are reporting information about their efforts to become more sustainable. In 2005, American companies spent $200 billion on green investments,
[i] a number which is projected to grow rapidly.
Buildings have been an area of focus for green investment dollars because they are a primary contributor to environmental impact. Buildings are the world’s heaviest consumers of natural resources. They account for 71% of all electricity consumed in America and 40% of global CO2 emissions. As a result, businesses seeking to make themselves more sustainable have focused their efforts on improving their buildings’ energy efficiency. They can also reduce their fixed operating costs by improving the efficiency of their buildings.
These efforts have already made a substantial impact on the commercial real-estate market. As of 2006, 775 million sq. ft. of commercial office space had been certified under the USGBC’s LEED® system as green. This represents about 2% of US commercial office space. This pace is expected to accelerate exponentially, with green buildings accounting for 5-10% of the US commercial construction market by 2010.
Other signs point to rapidly accelerating activity in the green construction market. In 2008 67% of global construction firms reported that at least 16% of their projects are green buildings. Forecasts indicate that by 2013 that number will climb to 94% of construction firms. By that time, 53% of global construction firms expect to be largely or fully dedicated (>60% of projects) to green building.
[ii] These numbers indicate that green construction is well on pace to become a significant part of the $4.7 trillion global construction industry.
Indicators show that the shift towards green construction is a global trend, with more developed areas putting more resources into improving efficiency and sustainability. Europe has the highest level of green construction activity. Forty-four percent of European construction firms are building green on at least 60% of their projects. North America and Australia lag slightly behind Europe in green construction levels, but the gaps are closing. Asia represents the area with the greatest potential for market growth. The number of firms dedicated to green construction in Asia is expected to triple between 2009 and 2013.
[i] McGraw Hill “Greening of Corporate America 2007” [ii] McGraw Hill “Global Green Building Trends” 