Green Building Boom – What are the 4 new risks for Green Building Industry?
New government mandates, long-term cost savings, and an enhanced sensitivity to partnering an environmental outline are the prime reasons for this exponential growth. In the year 2005, green building market was a meagre 2 percent of all non-residential construction initiations. However; this number grew by 28 - 35 percent by 2010 and approximately 40 to 48 percent by the year 2014, - comprising of all new nonresidential constructions.
A lot has been said and written about the benefits associated with green building. But we all have been missing out on one very important aspect, “the RISKS” associated with such construction. In a survey conducted by Marsh, the global leader in insurance broking and risk management, surveyed construction industry executives to reach a conclusion that there are clear and present risks associated with green building projects, which both construction companies and project owners should be familiar with:
- Financial Risks: The supplementary outlays connected with green buildings may have a profound impact on implementing projects in a timely and cost-effective manner. The cost of not going green should be taken into consideration before taking the final decision.
- Legal Risks: The new and ever evolving directives of LEED certification; have enhanced the risk of legal obligation for green building design and construction experts.
- Performance Risks: There is a need for the project owners and developers to entail supplementary contract provisions and warranties concerning the energy efficacy of green buildings, affected enhanced exposure to latent obligation for breach of contract or warranty.
- Lack of Experience Amongst Consultants/Sub Consultants and Subcontractors: Chances of unforeseen challenges due to inexperienced consultants/sub consultants and subcontractors shall not be ruled out. These are specifically including but not limited to procurement of LEED certification, delays and inappropriate material conditions.
- Risks Related to New Regulations: Due to new regulations and building codes there can be enhanced obligation to all and sundry associated with green construction procedure.
The ultimate objective of green building projects is to get LEED certified, which means better living conditions in a cost effective manner. In the year 1998, U.S. Green Building Council (USGBC) introduced the Leadership in Energy and Environment Design (LEED) Green Building Rating System in order to standardize; process, construction and design of both novice and refurbished green buildings. Green building projects have swiftly grown & so has the industry quickly acknowledged the need for LEED certification system as the one to assess the efficiency of green design and construction, while attaining one of the three levels of LEED certification: silver, gold, or platinum.
Every building, every construction needs to be totally integrated with synergistic policies to generate remunerations. GREEN buildings or LEED should be considered to be something that can be worked out during the process to gain full points and the certifications. If the goals are created and organized from the inception itself, comprehending how each side influences the other, operating costs may diminish.
Prevailing trends suggest that big construction companies who work their way across-the-board projects have been more open in implementing these ideas as compared to smaller developers who are still reluctant towards these changes. Need of the hour is to find ways to implement these new ideas – considering them to be opportunities; rather than doing it for the sake of doing it.