THE CERTIFYING GREEN OPPORTUNITY

Green Building Certification Programs; Global Certification Programs for New and Existing Buildings in the Commercial and Residential Sectors: Market Analysis and Forecasts
Eric Bloom and Clint Wheelock, 2Q 2010 (Pike Research)

"In today’s commercial and residential real estate industries, green building certification programs are increasingly being applied to new and existing buildings as a means of verifying that a building meets…energy efficiency, sustainable materials selection, site location, and indoor environmental quality [standards]...[T]here are dozens of green building certification programs in operation around the world [like U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) standards] for a wide range of building types and sizes…

"Since the establishment of the U.K.-based Building Research Establishment (BRE) in 1990 and the U.S. Green Building Council (USGBC) in 1993, many organizations have been formed…The Toronto-based World Green Building Council (World GBC) currently recognizes 20 established green building councils around the world, with more than 40 other national-scale groups seeking similar status…[But] green building is still in its nascent stages in many markets…though builders and designers in the majority of developing countries are adapting quickly…to growing demand."

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"There are three major drivers…[1] green building has become synonymous with environmental responsibility…and green building is increasingly becoming an important component of corporate social responsibility (CSR) plans…[2] many see green building certification programs as an opportunity to reduce operational expenses through energy efficiency…[3] and perhaps the most important to consider in the long term – is a growing number of regulatory requirements that require green building certifications for certain types of buildings…[G]overnments at the city, state/province, and national scales are establishing laws requiring…a certain rating under a green building certification program.

"…[M]ost green-certified space has been in the commercial building sector…Demand is growing, particularly in cities looking to attract multinational corporations. On the demand side, many corporations and government agencies are beginning to establish policies that they will only own and occupy spaces that have received green building certification…Approximately 60% of total net green building space is in existing buildings…[Most] certified under the two major international programs, LEED and the U.K.-based Building Research Establishment Environmental Assessment Method (BREEAM), are new buildings…"

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"[W]ithin the residential market, most of the focus has been on certifying new properties… Certification programs in Europe cover a wide range of residential buildings…In the next decade, a great deal of major construction of large-scale residential buildings in Asia Pacific, such as China and India, will receive green building certification…[T]his segment is likely to represent a small portion of the overall market in the next 10 years.

"Pike Research forecasts that cumulative green building certified space will grow from about 6 billion sf in 2010 to about 53 billion sf worldwide in 2020. Taking market conditions and regulatory changes into account, commercial buildings will likely represent about 80% of space certified under green building programs in 2020. While LEED and BREEAM will continue to dominate the North American and European green building markets, respectively, newly developed programs in China and India are likely to represent about 30% of all certified green new construction by 2020."