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From Compliance to Competitiveness: How Green Building Solutions can Boost Revenue

The global construction industry is confronting a pressing challenge as it grapples with the dual impacts of climate change and labor shortages. As the urgency to reduce carbon emissions mounts, the need for sustainable building practices becomes increasingly paramount.

For building companies that choose not to plan ahead for the changing regulatory and labor environment, it’s going to cost them. In other cases they’ll be leaving money on the table. For example, the City of Toronto is cracking down on carbon intensive building materials, but they’re also providing a healthy $2,400 to $5,300 per unit incentive for builders who voluntarily choose low carbon building materials.

Simultaneously the construction sector faces the ongoing challenge of a labor shortage, making it essential for building companies to adopt new technologies to meet rising demand. In this blog post, we will explore how building companies can evolve their businesses by harnessing new technologies, focusing specifically on Structural Insulated Panels (SIPs) and low carbon cement as viable alternatives. By doing so, they can effectively address climate change costs, adhere to regulations, and overcome labor shortages.

Climate Change Costs and Regulations:

The mounting costs associated with climate change, including the impact of extreme weather events and energy inefficiency, have compelled governments and regulatory bodies to impose stricter environmental regulations on the construction industry. To remain compliant, building companies must meet stringent energy efficiency standards and reduce their carbon footprint. Non-compliance not only incurs financial penalties but also hinders companies from participating in sustainable development initiatives and accessing funding opportunities.

According to a report by the Royal Bank of Canada, Canada’s construction industry is facing the monumental challenge of achieving its $40 billion net-zero building target by 2030. To accomplish this, companies must prioritize the adoption of sustainable technologies and practices that significantly reduce carbon emissions. This includes employing energy-efficient building materials and techniques.

In North America, several low carbon building regulations have been implemented to mitigate climate change impacts. Here’s a few examples:

  • BC Energy Step Code: The British Columbia Energy Step Code is a performance-based standard that sets energy efficiency requirements for new construction projects in the province. The code consists of several “steps,” each representing a higher level of energy efficiency. Builders are encouraged to meet or exceed the requirements of each step, resulting in reduced energy consumption and carbon emissions. By adhering to the BC Step Code, building companies in British Columbia contribute to the province’s commitment to achieving net-zero energy-ready buildings by 2032, while also benefiting from financial incentives and recognition for their sustainable construction practices.
  • California Green Building Standards Code (CALGreen): California has implemented stringent green building standards under CALGreen, requiring new construction projects to meet specific energy efficiency and sustainability criteria. The code mandates the use of low carbon building materials, such as low VOC (volatile organic compound) paints and adhesives, and encourages water efficiency and waste reduction.
  • New York Local Law 97: In an effort to combat climate change, New York City enacted Local Law 97, which sets emissions limits for buildings over 25,000 square feet. The law requires building owners to reduce carbon emissions and imposes fines for non-compliance. To comply, building companies must invest in energy-efficient systems, renewable energy generation, and low carbon building materials.

The list of regulations and incentives is only going to get longer, so a proactive approach will keep builders on the right side of regulators, and at the front of the line for cash incentives.

Slashing Embodied Carbon

One of the biggest challenges for the building industry comes from the carbon intensity of traditional Portland cement. Cement is one of the most consumed products on earth by humans—second only to fresh water. But producing one ton of cement results in one ton of CO2 going into the atmosphere, making modern construction an embodied carbon nightmare. But there are other options to explore. Magnesium oxide cements offer a compelling solution as a lower carbon alternative to traditional cement. Unlike traditional cement, which relies on the energy-intensive process of heating limestone, magnesium oxide cements utilize magnesium oxide derived from natural sources or industrial byproducts. The production of magnesium oxide cements emits significantly fewer carbon emissions compared to traditional cement, as the production process involves lower temperatures and does not release carbon dioxide during the chemical reaction. Additionally, magnesium oxide cements have a higher resistance to fire, corrosion, and water damage, making them a durable and sustainable choice for construction projects. The lower carbon footprint and enhanced durability of magnesium oxide cements position them as an attractive option for building companies seeking to reduce their environmental impact while maintaining structural integrity in their construction projects.

Structural Insulated Panels (SIPs) and Energy Efficiency

Structural Insulated Panels (SIPs) have emerged as a building solution that contributes to both climate change mitigation and enhanced energy efficiency, while also addressing the labor shortages. SIPs (like ZS2 TechPanels) are prefabricated building panels consisting of a foam core sandwiched between two pieces of sheathing with a structural spline. These panels provide superior insulation and airtightness, reducing energy consumption and associated carbon emissions from heating and cooling processes.

The Structural Insulated Panel Association (SIPA) emphasizes the benefits of SIPs, highlighting their energy efficiency, durability, and reduced waste during construction. By adopting SIPs, building companies can effectively address energy efficiency requirements, meet stringent environmental regulations, and reduce long-term operating costs. Moreover, the streamlined construction process associated with SIPs enables faster project completion, potentially mitigating labor shortage challenges. Advanced SIPs—like ZS2 TechPanels—use high-performance sheathing made from magnesium-based cement to provide the additional benefits of fire, water, insect, and mold resistance to create a sustainable and resilient building.

The Bottom Line

While there is no specific research or comprehensive study that provides exact figures on the lost revenue that builders will face due to the failure to adopt sustainable, low carbon building materials, what is clear is the valuable opportunity green building represents for forward-thinking companies.

World Green Building Council (WGBC) Report: The WGBC estimates that the green building industry represents a $24.7 trillion investment opportunity by 2030. That’s only seven years away! So, building companies who aren’t moving in that direction now will be missing out on an incredible amount of investment capital.

Green Building Economic Impact Study: The U.S. Green Building Council (USGBC) conducted a study that analyzed the economic impact of green construction in the United States. The report found that green construction projects generated $167.4 billion in gross domestic product (GDP) and created 2.1 million jobs in 2018 alone. This demonstrates the economic benefits that builders can tap into by embracing sustainable practices.

Final word

Building companies that embrace this transformation by utilizing low carbon building materials like Structural Insulated Panels (SIPs) and magnesium oxide cements can position themselves for long-term success. Not only do these materials help reduce carbon emissions and energy consumption, but they also comply with stringent low carbon building regulations such as LEED Certification, California Green Building Standards Code (CALGreen), New York Local Law 97, and the BC Energy Step Code. By embracing green construction, companies can tap into growing market demand, access government incentives, and enhance their brand reputation. The time to evolve is now, and by integrating new technologies and sustainable practices, building companies can thrive in a changing industry landscape while contributing to a greener, more sustainable future for generations to come.

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