Clients more likely to invest in environmental performance if benefits can be demonstrated

{"version":"0.3.0","atoms":[],"cards":[["images-card",{"images":[{"url":"http:\/\/res.cloudinary.com\/dpcbzfiye\/image\/upload\/v1664567780\/r5wmtetndm46f2qozivb.jpg","id":"6550336"}]}]],"markups":[["em"],["i"],["b"],["a",["href","https:\/\/www.aia.org\/articles\/6523687-scotus-decision-on-epa-is-not-the-end-of-t"]]],"sections":[[1,"h2",[[0,[],0,"Between the trend lines with AIA\u0027s chief economist. "]]],[1,"p",[[0,[0],1,"When Federal Reserve Chair Jerome Powell announced another interest rate hike after the Federal Reserve Board\u0027s late September meeting, it was clear that the central bank was fully committed slowing the growth of demand so\nthat supply might catch up. They characterized the impact on small businesses\nas nothing less than a \u201clending cliff,\u201d and as loans become more expensive, the\nreluctance of business owners to borrow will have a ripple effect in an economy\nwhere skilled labor and materials are significantly more expensive than at this\ntime last year. Predictably, architects\u0027 clients"],[0,[1],1,"\nwill look to shave costs, making the architect\u2019s fight to encourage investment\nin environmental performance all the more critical to decarbonizing\narchitecture. \u201cClients\nusually don\u2019t want to invest more money than they need to,\u201d says AIA Chief\nEconomist Kermit Baker, Hon. AIA, \u201cwhich is an acute sentiment right now\nbecause of our high inflation environment and because of the supply chain\nissues.\u201d "]]],[1,"p",[[0,[2],1,"The most recent AIA\nWork-on-the-Boards survey indicated that a combined 60 percent of polled architects\nsay their government and education clients are most likely to invest in\nenvironmental performance, while only a combined six percent say commercial\nproperty developers and industrial property owners are the most likely. What\naccounts for this chasm?"]]],[1,"p",[[0,[],0,"There are two types of clients out\nthere\u2014ones who are building and holding, and ones who are buying and selling.\nThe calculation of long-term benefits might be different in those categories,\nbut the concern about cost behind them is fundamentally the same. If you\u2019re\nlooking at clients who are most likely to invest in environmental performance,\nit\u2019s the ones who are holding, not selling: government and educational institutions. That\nshould tell you something."]]],[1,"p",[[0,[],0,"The industrial sector will never come up\nto the top because there aren\u0027t enough architects to working in this sector of\nthe construction industry. But the ones\nthat are at the top of the list of clients most likely to invest in\nenvironmental performance have a lot to do with big sectors that don\u2019t buy and\nsell properties. Colleges likely won\u2019t be \u201cselling\u201d their libraries in 10\nyears. Rental property owners may. The ones at the top are also big sectors\nthat have a lot of oversight in the upstream decision making about\nrequirements. "]]],[10,0],[1,"p",[[0,[2],1,"How would you\ncharacterize a willingness among clients today to invest in environmental\nperformance now compared to a few years ago?"]]],[1,"p",[[0,[],0,"Even though there\u2019s no doubt a lot more\nenvironmental sensitivity among clients today, there are limits to what they\nare prepared to do\u2014a perennial fact that can, during difficult economic times,\nseem especially true. To try and get a read on that, we recently asked\narchitects to estimate the change in how willing their clients are to make specific\ntypes of investments that enhance the environmental performance of their projects.\nThe options they could choose from included improving energy efficiency,\nimproving lifecycle costing, increasing use of sustainable materials, improving\nwater conservation, incorporating alternative energy, increasing resiliency,\nand achieving rating system certification."]]],[1,"p",[[0,[],0,"We found that 55 percent of firms have\nclients who are either somewhat or much more willing to invest in improving\nenergy efficiency, which was the most common activity on the list,\nfollowed\u2014rather distantly\u2014by incorporating lifecycle costing, at 37 percent of\nfirms. "]]],[1,"p",[[0,[2],1,"Were these results\nespecially shocking?"]]],[1,"p",[[0,[],0,"It wasn\u2019t shocking to see improving energy\nefficiency at number one because architects can easily generate data that shows\nthe extent to which clients will save in costs over the long term because of those measures. It also wasn\u2019t\nshocking because energy efficiency is a concept that has been a priority in\nbuilding and construction since the mid-1970s energy crisis, which contributes\nto client awareness over many decades now. The other good reason is the spike\nin energy prices over the last year compels clients to think differently about\nguarding against rising energy costs. "]]],[1,"p",[[0,[2],1,"Achieving rating\nsystem certification is suspiciously low on these results\u2014rock bottom in\nfact\u2014and yet it\u2019s a commonplace concept that\u2019s been part of the industry for\ngoing on a quarter century. Why is it so low?"]]],[1,"p",[[0,[],0,"Achieving rating system certification is\nat the bottom of the list for the reason we\u2019ve "],[0,[3],1,"talked about before"],[0,[],0,"\u2014clients say it\u2019s an\nordeal to do it. If I\u2019m a client, I can save time and energy by not going\nthrough the certification process, which is an attitude that architects\nreported a lot in the comments of our survey. We had one comment that said, \u201cSo\nmuch of those ratings systems has already been incorporated into building\ncodes,\u201d which I take to mean that redundancy seems like a signal that we\u2019ve\ndone well on making the strategies behind certification commonplace, even if\nthe certification process itself is less popular among clients. "]]],[1,"p",[[0,[2],1,"Between those\nextremes, there seems to be a pretty even balance between the middle responses\nhere in terms of activities that lead to environmental performance. What would\ncause some of those strategies in the middle of the reporting range to change\nposition?"]]],[1,"p",[[0,[],0,"My sense is that architects can change\nthe discussion by pushing clients beyond initial costs. Environmental lifecycle\ncosting isn\u2019t an environmental performance measure, it\u2019s a measure of value.\nWhen I started working at AIA, one of the ideas we debated all the time was how\nwe could measure the ways in which good design generated higher rents and\nhigher resale values in these buildings. Whether we can definitively prove that\nor not, I think there\u2019s something important about that point. I think there has\nto be a direct and obvious line that links design with health and environmental\nbenefits in everything we talk about. "]]]]}