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Subcontractor Performance Risk

Green Building Means Go

Cheri Hanes | August 5, 2022

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Some builders have been traveling down the green building path for years, but for much of the construction industry, sustainable construction is something they'll get involved in when the right project opportunity comes along. When it comes to sustainable building, many builders are effectively sitting at a red light, waiting for it to change to green. That change is coming.

There are a variety of factors speeding up the rate at which that light will turn green, and there are steps you can take to prepare for that moment. Here are a few of the factors driving this imminent change.

Governmental and Industry Initiatives

President Joe Biden signed a $1.2 trillion infrastructure bill into law that includes $550 billion of new federal investments in America's infrastructure over 5 years. The law allocates billions of dollars to priority areas, including significant funding for the development of carbon capture infrastructure, alternative energy sources, and technologies.

Additional initiatives include the following.

  • The United States has pledged a goal of a 50–52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030 and to reach 100 percent carbon-pollution-free electricity by 2035.
  • President Biden rejoined the Paris Agreement and set the course for the United States to reach net zero emissions economy-wide by no later than 2050.
  • The White House announced a "Buy Clean" task force to focus on the production and purchase of low-carbon materials made in America for use in federal construction projects.

But it's not just the federal government that is driving this change. Across the United States, state and local governments are also targeting reductions in emissions.

About 80 percent of the top 10 and 65 percent of the top 20 architecture/engineering/planning firms in the United States have signed on to the 2030 challenge, which asks the global architecture and building community to adopt specific climate-related targets in their work.

Further, many large real estate investors are also making net-zero pledges and disclosures, with more to follow as the Security and Exchange Commission's proposed climate change rules, which will require disclosure of climate-related information in annual reports and registration statements, garner attention.

In brief, many climate promises have been made. As an industry, construction will be critical to delivering on them. This effort will require significant changes in how buildings are built and retrofitted. Builders will have to deliver on the needed strategies to keep up with these promises and, ultimately, remain competitive.

Financial Drivers

In addition to the variety of federal and local tax credits available for improving building efficiency, sustainable projects can achieve financial savings through their design and operation. Green buildings are designed to consume fewer resources and less energy in construction and operation, meaning lower costs to build and an opportunity for building owners to save money in the long run.

A study done by the World Green Building Council found that the initial cost of a typical green building is 0–4 percent higher than its nongreen counterpart; however, they consume 25–35 percent less energy with 14 percent lower operation and maintenance costs. These buildings also sell at a higher price. For example, a US Department of Energy report states that the price premium for the sale of Energy Star-certified buildings is 6–10 percent and as much as 31 percent for a Leadership in Energy and Environmental Design (LEED) certified building. In other words, the initial construction costs are offset by tax incentives, the lower costs of operation, maintenance, and sales values, so the higher costs are paid for relatively quickly. This means the prospectuses for green buildings work out well.


What in the world do workforce challenges have to do with climate and sustainability, you may ask? It's simple: the younger generation wants meaningful work; this is a piece of the labor attraction and retention puzzle. By 2025, millennials and members of Generation Z will constitute more than 75 percent of the workforce. These groups cited "seeking out employment at companies that demonstrate a commitment to responsibility" as a top priority, according to a recent study by marketing firm Cone Communications.

The study found that 93 percent of Gen Z'ers and 87 percent of millennials believe companies should address urgent social and environmental issues. The industry's ability to attract and retain workers depends on our ability to demonstrate our commitment to the planet through our actions.

And Finally—It's the Right Thing To Do

As stewards of the earth, it's our responsibility to make it better, not worse. We can do better, and we should. With buildings contributing around 40 percent of global energy-related emissions, the construction industry's response is a critical piece of this effort to leave the planet a habitable environment for our children and grandchildren.

Getting Started

If your organization is currently waiting for your own light to turn green, what can be done to prepare for acceleration of your green building practice?

Start with People

Invest in getting the right resources trained and hired to lead the effort. Also, take the time to make sure everyone in your organization understands WHY this is important to your organization. Passionate leadership needs to communicate a clear vision. Don't have a clear vision? Do the work to understand your why—your reason for embarking on this road—and then develop processes that support that vision.


Your processes are your road map. Defined processes support your teams in addressing the new challenges that come with this type of work effectively and consistently. In addition to the education mentioned above, this effort will likely include the development of new quality control checklists, processes for effectively supporting the pursuit of LEED or other building certifications, developing new subcontractor relationships, new supply chain management, defining risks and communicating them to owners to assist in their decision-making, and capturing lessons learned to plug into your continuous improvement cycle.

This is also an opportunity to begin exploring useful technology to support your sustainability efforts. There are several tech solutions out there, and more are being brought to market each day. These tech solutions may assist in coordination among the various parties, streamline the LEED certification process, detect or even prevent excessive water usage on site, help with waste management, etc. Leveraging helpful technology from the start of your green journey may make it smoother for all concerned.


On this journey, you don't have to go alone. Others have driven this road before you. Industry peer groups are a great way to gather and share knowledge. This truly is a "rising tides float all boats" moment. The more builders who are getting this right and the better the industry gets at properly planning for, pricing, and scheduling this work, then the easier it is for all builders to do this work profitably. Leverage the opportunities that peer groups present to learn from the challenges and successes of others.


Taking the right steps now to be ready when that light turns green ensures a smoother acceleration and a better ride to the finish line. Focus on getting the people, processes, and peers in place to support your journey to a greener future.

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