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.

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.”

Moreover, with global warming becoming a menace, going green not only saves the environment, but also brings various economic benefits for all involved. Let’s take a look at some of the benefits these buildings offer.

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) one of the three rating systems of green buildings in India, (the other two being LEED and IGBC) offers some interesting insights into the benefits of going green. It says businesses opting for green buildings:

  • 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

Thus, investing in green buildings bring in a lot of long-term benefits. 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)

Better Employee Productivity

A recent project undertaken by Harvard professor Joseph Allen revealed some surprising facts. It found 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.

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/ work in green buildings. This further reduces costs related to these in the long run.

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.

As Juggy Marwaha, MD South JLL India, says, “The overall benefits of green buildings depend on the extent to which sustainable features are included during the initial planning and design.”

Sustainability is the need of the hour. With the 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.

We, at Bajaj Finserv, offer collateral free engineer loans which self-employed engineers can avail to invest in greener architecture for a more productive tomorrow. These loans have high loan amounts of up to Rs.15 lakh and can be availed within 24 hours with minimal documentation and door-to-door services. Talk to our loan experts today!

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