The Royal Bank Plaza in downtown Toronto recently had a retrofit of lighting and air distribution systemsthat cut 31 per cent off annual energy costs.FRED LUM/The Globe and Mail
The shift to environmentally-friendly buildings is motivated mainly by long-term cost savings, but developers are also increasingly aware of the public relations value of "green" construction.
That's the finding of a new survey of architects, contractors, engineers, building owners and developers that asked about what's driving the spate of green building in Canada.
The study, commissioned by the Canada Green Building Council and conducted by McGraw Hill Construction, shows that energy and water savings are the top factors that get companies interested in green buildings -- indeed, 80 per cent of those surveyed think it is very important.
But 55 per cent also cited the "public demonstration of corporate sustainability" as a crucial factor in prompting green developments.
Green buildings can include a wide range of features, including energy efficient lighting, deep lake or ocean-water cooling, real-time energy monitoring, recycling programs, and windows that let in sunlight but reduce heat gain. Some incorporate geothermal heating, water recycling, green roofs and on-site waste water treatment or the recycling of waste water heat.
A green building can be a new structure, or involve retrofits or "tune-ups" to an existing building's systems.
Blake Hutcheson, chief executive officer of Oxford Properties Group, said that there is no question there are significant incremental savings from constructing green buildings or retrofitting existing ones so they are more efficient. In Oxford's 130 Canadian properties about $10 million in annual savings have been generated just through energy saving devices -- although most of that flows to the tenants, he said.
In one building alone -- Royal Bank Plaza in downtown Toronto -- a recent retrofit of lighting and air distribution systems cut 31 per cent off annual energy costs.
At the same time, the indirect benefit to a building owner's reputation is extremely valuable, Mr. Hutcheson said. "The reality is that our customers are calling out for it," and Oxford's own staff also want the company to be a leader in sustainability, he said. "Employees feel better about being associated with a company that makes that a priority. It is increasingly becoming a competitive edge."
The building council report notes that there is a perception in the marketplace that green buildings are considerably more expensive, and that energy costs in Canada are low enough that the benefits are marginal and the payback fairly long.
But Mr. Hutcheson said the cost of putting up a new green building is usually less than 3 per cent higher than building a conventional one. The payback -- in long-term cost savings, tenant satisfaction, and reputation -- makes it worthwhile, he said.
One reason for the drive to construct more green buildings in Canada, the report said, is that many office and commercial properties are owned by institutions such as pension funds, and they want to look like they are out front of the crowd when it comes to sustainable investments.
Pension funds know that green buildings give a good return on investment, said Thomas Mueller, CEO of the Canada Green Building Council. They also know these structures are less likely to become obsolete over a long-term investing time frame, if tenants become unhappy with the environment, he added. Green buildings "provide a better and healthier work environment, so [their growth] is being driven by client demand."
Mr. Mueller said the technology involved in building or retrofitting green buildings has also become more mainstream, and there are far more professionals who are able to use them.