How to Achieve your ESG Goals through Green Building

What’s Happening?

The World Green Building Council reports that buildings and construction account for 39% of carbon emission globally.

The notoriety doesn’t end there.

Buildings account for over 40% of the world’s energy use, a quarter of global water consumption, and one-third of global greenhouse gas emissions.

Thankfully, the wave of sustainability and environmental consciousness within the construction world has led to the emergence of Net Zero Energy Buildings, Green Buildings, Smart Buildings and the like.

What’s the Deal?

Sustainable buildings are attracting investors, who understand that they make property more attractive, can attract profitable tenants, raise property value, and lead to increased profitability.

Also, investors and consumers are increasingly concerned about environmental, social, and governance (ESG) issues, since legislation, regulation, and reporting requirements are changing rapidly in countries around the world.

In recent times, terms like ‘ESG reporting’ or ‘sustainability reporting’ are floating around in the corporate world, particularly in investment decisions.

ESG comes into play when a company or an investor screens the potential investments to act responsibly.

This article sets out to explore what ESG reporting means for the built environment and particularly, how green buildings enhance such reporting.

What is ESG?

Environmental, social, and governance (ESG) performance of an organization is represented by the three letters, which stand for its three main pillars.

Environmental criteria evaluate a company's environmental protection efforts, such as its climate change policy.

The company's relationships with its workers, suppliers, customers, and the communities in which it operates are examined under the social criteria.

A corporation's management, executive compensation, audits, internal controls, and shareholder rights are all aspects of governance.

How is ESG Used by Stakeholders?

• Owners and investors use ESG to decide where to invest in their next projects.

• Project owners consider ESG factors when deciding which suppliers and contractors to work with.

ESG & the Construction Industry

ESG metrics shapes businesses all around the world in development and operation. The construction industry is no exception.

In the construction industry, the ESG framework will identify and measure factors such as raw material selection, their potential for reuse, their embodied carbon, and its ecological footprint rather than simply considering the operational performance of the building.

The industry will become more environmentally conscious as a result of all these considerations, which will also stimulate more environmentally-friendly designs and operating decisions.

Note that when we talk about wider ESG considerations, they also involve things outside of environmental aspects.

In recent days, construction firms are facing a shortage of skilled workers.

This will have an impact on productivity, delay in project completion, and quality control. Having a skilled labor pool is also one of the “social factors” of ESG metrics.

Companies will need to provide extensive reporting as well as defined plans in order to demonstrate their workforce sustainability and resilience.

Potential Consideration of ESG Factors in Construction is Shown below.

How can a Company Implement ESG through Green Buildings?

The aim of both ESG and green construction is to make things "better" – better spaces in terms of green building, better firms in terms of ESG.

And, of course, there is a good amount of overlap in those two domains.

When we talk about asset value, resilience, performance, social aims, and environmental impact in Green Buildings, we notice that they’re actually the pillars of ESG as well.

Clearly, green buildings align with the requirements of ESG and play an important role in the ESG reporting world.

Here is how a green building can help you enhance your ESG performance:

Environmental Considerations

Energy, water, and material are three important environmental factors in the lifecycle of a building that have an impact on the natural environment.

Switching to renewables such as solar, wind or biomass to satisfy the energy needs can reduce carbon footprints of the building. In addition, high quality windows selection, building envelope air sealing, duct sealing, installing energy efficient lighting HVAC system can also contribute towards energy efficiency of the building.

There are two main ways of conserving water in green buildings. Firstly, using low-flow water fixtures can reduce excessive water consumption. Using alternative water sources like rainwater or recycled greywater for purposes like irrigating lawns and flushing toilets is another way of conserving water.

In case of materials, building materials attained from a sustainable source can lessen the impact on environment in construction. Also, sourcing these materials from a local supplier can reduce GHG emissions related with transportation.

Social Considerations

A building should be designed for social well-being of the occupants. Therefore, health, comfort, and safety should be considered.

Three qualities of a green building that contributes to the social factors:

Indoor Air Quality (IAQ)

Pollutants such as particulate matter and volatile organic compounds (VOCs) can induce allergies, nausea, and respiratory issues.

By properly maintaining and changing the mechanical ventilation filters, these can be minimized.

Adequate Supply of Air

Proper selection of window size and its positioning can regulate the air flow inside the room.

For example, placing windows across the room can create cross breeze, allowing air circulation and easy cooling.


Strategies for daylighting depends upon the availability of natural light, climate, and orientation of the building.

Daylighting has a direct impact on wellbeing and productivity of the occupants.

Proper daylighting design strategies and its integration with the operations can support performance of the occupants.

Governance Considerations

In order to demonstrate effective governance in building operations, maintenance, and management, metrics to monitor the health of the buildings should be developed.

Construction companies should define objectives and take efforts in advancing the firm toward a positive influence on the environment to show how a building can do better.


Construction professionals must respond to the challenge of climate change, not just for the sake of the greater good, but also to attract investment and reduce their exposure to claims and litigations.

In the construction industry, ESG is a good friend of anyone interested in building a resilient business with long-term success.

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