[email protected] Business Drivers for Green Buildings & Infra Dr. Seppo Junnila Helsinki University of Technology P.O.Box 9800, FI-02015.

[email protected]

Business Drivers for Green Buildings & Infra

Dr. Seppo JunnilaHelsinki University of TechnologyP.O.Box 9800, FI-02015 TKK, Finlandemail: [email protected]

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Background Environmental sciences Economic theories Business indicators What green buildings & infra has to offer

How to Boost Emergent Demand? Information and marketing New production philosophy User involvement Business concepts and value chains

Content

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Science about Green Buildings&Infra

Services sector creates 70% of the value added in the world and is the fastest growing sector (World Bank 2006)

Services is responsible for 40% of total industrial GHG emissions in the United States (Suh, ES&T, 2006)

The office building (with infra) contributes roughly 30-55% to environmental impacts in services companies (Junnila, Int J LCA, 2006)

Buildings account for 40% of world’s materials and energy flows (U.S. DOE 2002, UNEP 1999, Worldwatch 1995 )

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Economics about Green Buildings&Infra

Building efficiency is economically the best short-term strategy for California to reduce climate change (Hanemann et al. 2005)

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Carbon market in EU

In Europe, the size of carbon market is 20 000 – 50 000 million € (EU Emissions Trading Scheme)

Suggestions both in UK that the building owners should be included (The Guardian, 6-Dec-06)

Many of the UK's big businesses - including supermarkets, banks, universities, hotel chains, hospitals and government departments - would be forced to sign up to a carbon-trading scheme under proposals being drafted by ministers Gordon Brown…

…cover all organisations with annual electricity bills of more than £250,000, or with electricity consumption above 3,000 megawatts - The Guardian, 6-Dec-06 -

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Business about Going Green

Wall Street Journal, 23-Jan-07 In the US, a growing number of companies are

pushing for a mandatory emissions limit, or "cap."

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Market Value of Green Companies

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Operational Performance of Green Companies

Guenster et al. 2005 “The least eco-efficient firms show significant

operational underperformance Eco-efficiency improves Return on Assets,

more than 10 percent of the average ROA”

“The survey results, as well as other available literature, corroborate the view that ISO 14001 accreditation confers economic benefits”

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Green BUILDINGS & INFRA can offer

Buildings & Infra is a platform for businesses The best environmental improvement

potential Good cost benefit ration Existing solutions Short reaction time

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What’s stopping the companies?

1. Business concepts and models The value chains and customers, fallacy of volume The Long Tail economy - NO blockbusters Products vs. Services – if you talk the talk be

prepared to walk the walk User involvement - Remontti Reiska vs Jaana

Pelkonen Leap into unknown for many organizations

2. Operational philosophy in construction industries Adversial relations Sub-optimizing, sub-contracting Defensive approach

3. Understanding and communication Biased toward smokestacks The common mind set

Transformation of economies from manufacturing to services is a solution to the environmental problem

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Conclusion

There seems to be a good business opportunity for Green Buildings and Infra

Scientific evidence Economic theories Business success

However, the competitive edge is narrowing... Technology innovations are needed but also

1. Business concepts and models2. Operational philosophy3. Understanding and communication

Sustainable Communities is all aboutMaximum value by Minimum waste