Breaking the `vicious circle of blame`

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In the early 1990s, organisations globally sprouted up to codify sustainable real estate best practices. In the late 1990s, these governmental, non-profit and for-profit organizations signalled hope that sustainable real estate would soon be “business as usual” when they launched their respective green building rating systems, such as the UK’s BREEAM (1993/1998), France’s H.Q.E. (1999), and North America’s LEED® (1998) and ENERGY STAR® (1999). Nonetheless, many real estate stakeholders were frustrated with slow progress and asked: Who is to blame for why sustainability has not gone mainstream yet?

David Cadman introduced the concept of the “vicious circle of blame” in 2000. He suggested that investors, occupants, contractors and developers blame each other sequentially and in a loop for their own lack of commitment to adopt healthier and/or more resource-efficient real estate practices. In 2008, The Royal Institution of Chartered Surveyors echoed Cadman’s frustration and his hope for sustainable real estate to go mainstream, and carried on the conversation through a conference and well developed articles, asking questions like:

How and when does an abundance of interest in sustainability and a strong will to go green translate into sufficient demand for a viable market?

The good news is that our industry responded with bold action to RICS’ assessment by overcoming obstacles, addressing unfulfilled key drivers, heeding messages and investing, as recommended, to yield superior results for all parties. And, as early as 2007, sustainable real estate in the United States burst the vicious circle of blame when green building entered a period of rapid and accelerating market adoption, exceeding 100 per cent year-on-year growth. Mandatory and voluntary, green went mainstream. Will sustainability endure?

MAINSTREAM DEFINED
Whether and when sustainable real estate went mainstream can be assessed by applying the familiar concepts of product and technology adoption lifecycles, researched and written about at length by authors such as Dr Everett Rogers in his book “Diffusions of Innovation” (1962) and Geoffrey A. Moore in his book “Crossing the Chasm“ (1991). In summary, innovators (2.5 per cent of the market) and early adopters (13.5 per cent) comprise “early markets”. To escape “early markets” and enter “mainstream markets”, products and technologies must “cross the chasm” and reach a “tipping point”. This transition is signalled by the “tornado”, a period of rapid and accelerating adoption by early majority (34 per cent) and late majority (34 per cent) users. Laggards (16 per cent) complete the bell-shaped curve adoption lifecycle.

In 2007, certain geographic regions and certain property types seeking various green building certifications entered the tornado. Today, it is clear that green building has crossed Moore’ s chasm and is well on the way to “mainstream” adoption. What is not as clear is how we should define sustainable real estate. Although the duration of these lifecycles varies widely and is generally getting shorter, the green building lifecycle seems to be 20 to 30 years. That is, the “early market” took roughly 15 to 20 years, and the “mainstream market” may last another decade or two until the next incremental or disruptive innovation. Companies that anticipated green trends and thrived in “early market” years are those with today’s lowest costs, most formidable competitive advantages and greatest resiliency to thrive in any economic climate.

SUSTAINABILITY DEFINED
With nearly the entire planet going green, definitions of sustainability differ widely, creating a green building continuum and shades of green. Simply put, three perspectives prevail. To some industry participants, green building means simply energy or resource efficiency or a checklist of technologies. To others, sustainable real estate encompasses integrated design and a lifecycle perspective. And, to others, sustainability extends beyond real estate to corporate strategy and operations. To a large degree, the current global economic crisis has temporarily distracted under-capitalised stakeholders from the
latter two perspectives despite their superior offensive and defensive benefits in any business climate.

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