Impact of Sustainable Construction on Business Decisions

Impact of Sustainable Construction on Business Decisions

1Research Scholar, S.Y. M. Arch Dr. D.Y. Patil College of Architecture.

Professor, Dr. D. Y. Patil College of Architecture, Akurdi Pune.

Proconvis Consultants, Pune.

Abstract The concept of sustainability is becoming more widely understood, and green construction approaches are becoming more widely adopted. Both the public and private sectors are concerned about environmental sustainability, which is driving the rise. Some construction firms view the green building movement as a threat, while others see it as a significant chance to set themselves apart from other commercial builders and gain a competitive edge. His study examines how adopting green certification for projects influences developers', investors', and organizations

business decisions And propose mitigation measures to overcome the unfavorable impact on business.

1. INTRODUCTION

TheimportanceandbenefitsofGreenBuildingdesignandsustainableconstructionpracticesaregaininganaudienceinthe Indian construction industry. Although the green building movement is a recent phenomenon in India and is gaining momentumitisnotapartofthemainstreamarchitecturalandconstructionpractices.Intheupcomingtime,greenbuilding designsandsustainableconstructionpracticeswillbethenewnormintheIndianconstructionindustry. Green ratedbuildingsconsumefewerresourcesthanconventionalbuildingsforexecution,butalternativeresources,materials, anddesignstrategiesareadaptedtomakethemeconomicallybeneficialfortheoperationofthefacility.Thereisanincreasing demandforgreen ratedbuildingsasgreenbuildingdesignisbeneficialforconsumersandindependentusersinthelongterm with reduced operating costs for the structure. But it is also important to understand how green building design can be beneficialforconstructioncompanies,investors,anddevelopers.

Althoughthereisawarenessamongthearchitectsanddesignersregardingsustainabledesigns,developers,investors,and manyinfrastructureconstructionfirmsyetarehesitanttomakesustainabledesignorgreenbuildingconstructionasawayof goingfurther.Thisisduetothestigmacreatedintheconstructionindustryofgreenbuildingexecutionbeingmoreexpensive anddifficulttoexecute.ThisstudywillhelpunderstandhowgreenratingprogramsshallImpactthebusinesses,thesales decision, andtheTechnicalities andwill provideanEvaluationMatrixofhowthegreenratingprograms shallgovernthe OverallConstructionBusinessDecisions.

1.1 Need for the study

TherehavebeenalotofstudiesconductedonsustainableconstructionpracticesandpoliciesandtheirimportanceintheIndian constructionindustry.However,therearenostudiesdonetounderstandhowthesustainableconstructionorgreenrating programshavechangedandaddedvaluetothebusinessmanagementoforganizations

Over the period with new technology and practices introduced construction industry is becoming increasingly complex SustainableconstructionisgainingalotofimportanceandawarenessintheIndianconstructionandrealestateindustry.With theobviousbenefitsofsustainableconstructionfortheenvironmentandclientsintermsofreductioninoperationalcostsand easeofusability,thereisahighdemandforsustainablebuildings.Duetonewmethods,designs,andmaterialsinsustainable construction,aswellasbusiness,legalandtechnicalconcerns,sustainableconstructionprojectsrequireprofessionalswiththe knowledgeandskillstodelivertheprojectontimeinanoptimalway

Withsuchadvancementintheconstructionindustry,itisevidentthatsustainabilityNormsandsuppliers/vendorspectrumare co dependentinadeepsymbioticmanner.Itisimportanttostudyandunderstandhowtheinterrelationshipofsustainability andbusinesswasstartedandwhereisitheadedtoattainthegrowth.

Thepurposeofthisresearchistounderstandhowandinwhichphasesoftheprojectgreenratingprogramsimpactthebusiness decisionsandwhethertheyaffectpositivelyoradversely.Itisimportanttounderstandthistodeterminehowprojectmanagers orconstructionmanagerscansmoothlyimplementthesedecisionsfortheprojectexecutionwithoutadverselyaffectingthe

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inupcomingyearsinstitutionsneedtoincludethisstudy forprojectmanagementandconstructionmanagement.

projecttimelinesandcosting.Sincesustainabilitywillbethenew

1.2 Research Background

Preliminary research was conducted through a survey to understand the drivers and challenges of adapting sustainable constructionpracticesfordevelopersinIndia.Theanalysisofthecurrentsituationisconcerninginreflectingthatdespitethe obviousbenefitsofsustainableconstructionmanyorganizationsarestillreluctanttoadaptsustainableconstructionpractices. This study intents to pull out facts and findings and put the same on a neutral platform, to enable the organizations to understandthePositiveImpact,andtheValueaddsduetosustainableconstructionpractices,andalsoprovideanswerstoallthe negativeMythsregardingGreenBuildingPracticesonoverallBusiness.

1.3 Aim and Objectives

Thisresearchaimstostudythebeneficialandunfavorableeffectsofthegreenconstructionandcertificationforafacilityona business,inthedifferentphasesoftheconstructionoftheprojectandtounderstandtheimplementationofmitigationstrategies foreffectiveexecution.ThisstudywillhelpunderstandhowgreencertificationforprojectsshallImpactthebusinesses,thesales decision,andthetechnicaldetailingandwillprovideanEvaluationMatrixofhowthegreenratingprogramsshallgovernthe OverallConstructionBusinessDecisions.

Toachievetheaimofthepapertheobjectivesdefinedare

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Toidentifydifferentaspectsthatisaffectedbyadaptinggreenconstructionandtheeffectsindifferentphasesofthe project.

Todeterminewhethergreenratingprogramshavebeneficialordetrimentaleffectsonbusinessmanagement.

Toidentifymitigationstrategiesfortheeffectsthatareunfavorableforthebusinessmanagement.

1.4 Methodology

Aconstructionprojectisaverycomplextaskthatisfragmentedintomultiplesub tasks.Theworkpracticeswithinconstruction projects are highly distributed. Throughout the construction process, a great number of agencies: from a wide range of companiesandlocalauthoritiesandthevendors,enterandleavetheprojectatdifferenttimes.Consideringthesefactors,a combinationofqualitativeandquantitativemethodsisusedforthestudy.

Thisapproachwasimplementedbyastructuredinterviewofdifferentprofessionalsfromtheindustryinvolvedintheproject likethedesignteam,Projectmanager,MEPconsultants,procurementengineer,etc.tounderstandtheeffectofgreenrating programsagreen ratedfacilitywillbestudiedasacasestudy,tounderstandtheprocessofimplementationofgreendesignand constructionstrategiesinearlystagesofplanningandschedulingoftheproject

Acomparativeanalysiswillbecarriedoutbetweenagreen ratedfacilityandaconventionalfacilitytounderstandtheeffectsof greenratingprogramsondifferentaspectslikedesignandplanning,procurement,costingandfinance,etc.

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2. LITERATURE STUDY

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The concept of sustainability is built upon the three pillars of environment, social, and economic factors. Investors and stakeholdershavedifferentperspectivesongreenbuildings.Controllingandmanagingtheseattributeswhilstincorporating greenbuildingpracticesisverycrucial.Amongthemostsignificantchallengesinbusinessforgreenbuildingisthecostfactor Otherthantheadditionalcosts,greencertificationoftheprojectsaffectsthebusinessdecisionsthroughoutthelifecycleofthe project,tounderstandthesedatacollectionforthestudyhasbeenframedbasedonthefollowingfactors:

• GreenProjectRequirementsandBusinessStrategies

• GreenDesignandConstructionEconomics

• Materialprocurementandselectionoftheproducts

• GreenConstructionManagement

• GreenConstructionCostAnalysis.

Thequestionsforstructuredinterviewstostudytheabove mentionedaspectsandtheirimpactonbusinessarementioned below:

ProjectManagerandDesignArchitects

• Whatdrivesthedecisiontohavegreencertifiedfacilitiesforclients?

• Whatwasthepreferenceforgreencertificationprogram?Why?

• Whatwasthegreenbuildingdesignanddeliveryprocess?

• Howdoyoustructureanintegratedmultidisciplinaryteamforaproject?

• Whatarethefirststepsinplanningagreen ratedconstructionproject?

• Howisprojectevaluationandanalysisperformed?

• Howarecontingenciesmanagedfortheproject?

• Howprojectiscostmanagementperformed?

• Whataresomeadditionalriskstobeconsideredforgreenratedfacilitiesandhowaretheymitigated?

• HowdoGreencertificationregulations/guidelinesinfluenceyourconstructionstrategies?

• Howdoyouprioritizetasksforprojectscheduling?

ProcurementManagers

• WhatisyouropiniononMaterialsselection:NaturalversusSynthetic?

• HowdoesLife CycleAssessmentofBuildingMaterialsandProductsaffecttheprojectbudget?

• HowdomaterialandproductselectionandprocurementaffecttheCostingfortheproject?

• Howcanthecapitalcostsforcostliergreenratedmaterialsbereduced?

3. GREEN PROJECT REQUIREMENTS AND BUSINESS STRATEGIES

Thereareseveralreasonswhygreenbuildingdesignandconstructioncanbebeneficialforbuildingownersanddevelopers

Inresponsetogrowingawarenessaboutsustainableconstruction,manylargecompaniesarerenting/buildinggreen rated offices,etc.CompanieslikeRollsRoyce,Amazon,andotherlargecompaniesintheITsectormaintaingreen ratingpoliciesfor theirofficesandmanufacturing/assemblyplantsasgreenbuildingscanenhancetheircorporateimage

Also,professionalsintheindustrybelievethattenantswillincreasinglymakethegreenfeaturesofapropertyanimportant considerationwhenchoosingspaceoverthenextfiveyears.Havingthisbenefit,ahighervaluationofthefacility,andhigher rentalvalues,green ratedfacilitiesareontherise Thevaluationforgreen certifiedbuildingsis72%higherandtherentalvalues are65%higher.

Duringatimeofsharplyrisingenergycosts,energy efficientbuildingstendtosaveonoperatingcostsovertime.

Inadditiontotaxconcessionsandfinancial incentives,manygovernmentagenciesprovideadditionalincentivesforgreen building,providingacompellingincentiveforbuildingownersanddeveloperstotakeadvantageofthe"green"featuresoftheir developmentprojects.Buildingsthatcomplywithgreenbuildingguidelineswillbemuchbettersuitedtomeetexistingand futuregovernmentregulations.

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4. GREEN DESIGN AND CONSTRUCTION ECONOMICS

IntegratedDesignProcess

Successfullyimplementingasustainablebuildingprojectrequiresanintegrateddesignprocesswithaclearandprecisesetof designobjectives,whichshouldbeestablishedearlyintheprocessandheldconsistentlythroughout.Designingandconstructing ahigh performance,green certifiedbuildingrequiresanintegratedapproach. Theconstructionteammustbeintegratedintotheprojectteam.Ineffectiveconstructionpracticescandefeatordiminishmany sustainable features By engaging the construction team, including subcontractors and site workers, in the design and procurementprocess,suchproblemscanbeeliminated

Themajorityofthesuccessofdevelopingagreen ratedfacilitydependsonthepre constructionphaseoftheproject.Withallthe additionaldesignparameterstobeconsideredaccordingtothegreenratingprogramguidelines,materialselectionsaretobe decidedpriortotheexecutionstagetomakeaprojectcostbreakdown.Thedesignprocesstakesmoretimeandisdonewiththe integrationofvariousagencies.Thedifferenceintimelinesbetweengreen ratedandnon green ratedprojectsis1.5times.

GreenConstructionprocess

Although the construction process for green certified and non certified facilities is similar, there is a difference in the constructioncostsforboth.Constructioncostforagreen ratedfacilityis2% 5%higherforindustrialprojects.And10% higheronanaverageforanytypeofbuilding(commercial/residential/institutionaletc.)

Thedifferenceintheconstructioncostsisduetothefactorslikeselectionofmaterials,therequirementformoreskilledlabor, etc.Thecostofgreenbuildingsdependsonvariousfactorssuchasthebuildingprogram,thedemographiclocation,therating beingachieved(ifatall)whengreenprinciplesareappliedintheproject,andthecompetenceofthedesignerswithgreen concepts

5. MATERIAL PROCUREMENT AND SELECTION OF THE PRODUCTS

Theselectionofmaterialsisamajorfactoraffectingthecostandtimelinesoftheproject.Therehasbeenamythregarding natural and synthetic materials ingreen construction, ofnatural materials being more beneficial forthe environment and syntheticmaterialsbeingharmful.Althoughnaturalmaterialsareenvironmentallybeneficial,theyhavetheirlimitations There arenumeroussyntheticmaterialsintroducedwhicharenotharmfultotheenvironment. Sometimestheuseofnaturalmaterialscanalsoaffectadversely,forexample,ifweusenaturalclaybricksinsteadofAACblocks for masonry construction, the dead load of the building can be higher resulting in a bulkier foundation design ultimately resultingingreaterconsumptionofconcrete.

ThegreencertificationprogramslikeIGBC,LEED,andGRIHAhaveguidelinesregardingtheselectionandusageofmaterialsfor constructionwhichhasitseffectsonbusinessdecisions.Aspertheguidelineofgreencertificationprograms,itisadvisedtouse green ratedmaterialsandproducts UseofRecyclableorreusablematerialsissuggested. Thecostsfortheserecyclableor reusable,green ratedmaterialsare5% 10%higher.

Thegreencertificationprogramguidelinesalsorequirethatconstructionmaterialsbeprocuredwithina5kmradiusofthesite location.Thisreducestransportationcostsformaterial,butduetolessavailabilityofgreen ratedvendors,someofthematerial mustbeprocuredfromotherlocations,whichcanraisethecost Asofnow,duetothelowdemandforgreen ratedmaterials,theiravailabilityissomewhatlower,andtheyrequirelongerlead timesthatmustbeincorporatedintotheprojectschedule

6. GREEN CONSTRUCTION MANAGEMENT

Theprojectmanagerisresponsibleforkeepinguptodateonthedevelopmentofdesignsandprovidingadvicetotheintegrated project team about costs as well as receiving feedback from the team. Continuous cost oversight is particularly useful for assessingindividualdecisionsandismostusefulonlargeandcomplexprojects.

Withmostprojects,decidingonbuildingtacticsearlyinthedesignphaseandstickingtothemcanleadtothemostcost effective constructionmodels.Loweringsustainabledesignconstructioncostscanbeachievedbyholdingagoal settingsessionatthe

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start of each project to define acceptable techniques and levels of cost and time inputs. As previouslysaid, many of these methodscomeatlittleornoadditionalexpense,makinggreendesignaneasysell.

Typically,thebestresultsareobtainedwhenaproject'soperationsandcostsarelinked.Theintegratedteamshouldbeengaged atanearlystageofdesignusingtargetcosting,valuemanagement,andriskmanagement Thetimeandcostsoverrunsforgreen ratedfacilitiescanbemanagedbyeffectiveprojectmanagementbyimplementingthefollowing:

• Financialmanagementfortheproject.

• Efficientschedulingtoconsidertasksoverlaps,delays,andleadtimeformaterialprocurement

• Negotiationswithcontractorsandvendors

• InventoryManagement

Thewastedisposaloftheconstructionsiteisalsoapartofconstructionmanagement.Theprojectmusthaveastorageand collectionofrecyclablesareatoqualifyforLEEDcertification.Itspurposeistoreducetheamountofwastesenttolandfillsby encouragingthestorageandcollectionofrecyclables.

7. GREEN CONSTRUCTION COST ANALYSIS

Designcosts

Asanimpactonthebusiness,usingamultidisciplinaryprojectteamislikelytotakemoretimethanaconventionaldesign,which isreflectedinprojecttimeframesandcosts.Hiringagreencertificationagencycomeswithanadditionalcost.Green certified projectshavedesignfeesthatare70%higherthanconventionalprojects Additionalcostsborneforgreencertificationofafacilityareaone timeregistrationfeeofINR20k 25k andapproximately 4lakhRs.for1lakhSqftofBuilt uparea(forindustrialfacilities)

Constructioncosts

Theconstructioncostsisaffectedbyvariousfactorslikelocationofsite,siteconditionsandfeatures,selectionofmaterialand availabilityofmaterialsandlabor.Theconstructioncostforagreen ratedfacilityis2% 5%higherforindustrialprojects.And upto10%higheronanaverageforanytypeofbuilding(commercial/residential/institutionaletc.)

OperationandMaintenancecosts

Ithasbeendocumentedthatgreenbuildingssavemoneythroughreducedenergyandwaterconsumptionaswellaslowerlong termoperationandmaintenancecosts.Typically,theirenergysavingsalonewilloffsetanycostsassociatedwiththeirdesignand constructionwithinareasonableperiodoftime Thedifferenceintheoperatingcostsis20% 25%. Theoperationcostsarestudiedbasedon3factors: reductionincostsforwaterconsumptionisapproximately22% reductionincostsforHVACorventilationsystemsisapproximately25% reductionincostsforelectricalconsumptionisapproximately15% 20%

The operation costs of a facility also include Operating staff, Labor and material for maintenance and repairs, Periodic renovations,InsuranceandTaxes,andUtilities.Althoughtheneedformaintenanceandrepairscouldbelesserinthegreen certifiedfacilities,dependingontheselectionofmaterials,thecostsforrepairsforlaborandmaterialarehigher.

Dependingontheproject'stype,size,location,managementorganization,andotherfactors,eachofthesecostelementshasa differenteffect.Theowner'sultimategoalistoachievethelowestoverallprojectcostwhilemeetingthespecifiedqualityand investmentobjectives

8. CONCLUSION

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Althoughthecapitalcostsforgreen ratedfacilitiesarehighercurrently,thereturnoninvestmentforthegreen rated facilitiesismuchfaster(1.5Years)ascomparedtonon ratedfacilities(3Years)

Withthecurrentgrowthinthemarketandcompetitionforgreen ratedproductsthegapintheconstructioncostscan beminimizedovertimewithincreaseddemandforgreen ratedproductsandmaterials.Thefactthatthecostofgreen

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designhasdecreaseddramaticallyinrecentyearsasthenumberofgreenbuildingshasincreasedhasaidedgreen development.Thetendencyofdecreasingcostsasexperiencewithgreenbuildingdevelopmentgrowshaspresented itself.

Thegreen ratedbuildingsgenerallyhavebetterfinancialperformanceintermsofloweroperationcostsduetoless energyandwaterconsumptionandfasterpaybackperiod Italsohasfinancialbenefitofhighervaluation,higherrental values,greaterreturnoninvestmentandhigheroccupancyrates.

 Green certification notonlyhas financial advantages, but also demonstrates anorganization's commitmentto the environmentandcontributestobuildingitsreputation,whichisanadditionalbenefitformarketingandnetworking

Whenanalyzingthecostsandadvantagesofsustainabledesignandhowtheyrelatetoconstructioncosts,aholisticapproachis required.Thisentails,amongotherthings,financialanalysisofoperationsandmaintenanceexpenses,userproductivityand health,anddesignanddocumentationfees.Thisispartlyduetothefactthatempiricalevidencecontinuestoshowthatthe constructioncostimplicationshavethebiggestinfluenceonsustainabledesigndecisions.Providingaframeworkthatallows teamstoeffectivelymanagetheactualconstructioncostsofrealgreenprojectscangoalongwaytowardassistingateam's capacitytogopastthequestionofwhethergoinggreenistherightchoice.

9. ACKNOWLEDGEMENT

IwouldliketothankmyguideEr.AnanthramanShrinivasansirforhisvaluableinsightonthetopicasaworkingprofessionalof theindustryanddirectorofacompanyandhisguidanceontheframingofobjectivesandrefiningofmyproject.Iwouldalsolike toextendthankstotheprojectmanagersofthefacilitiesofwhomthecasestudiesweredone.

IwouldalsoliketothankmyfacultyEr.AsawariSohni,Assistantprofessor,DepartmentofArchitecture,Dr.D.Y.PatilCollegeof Architecture,forherguidance

REFERENCES

[1] Mr.PrithvirajDilipMane.“Greenbuildingsandsustainableconstruction

[2] ASuchithReddy1,Dr.P.RathishKumar2,Dr.P.AnandRaj3“Sustainableconstruction anIndianperspective

[3] DevarshiTathagat,Dr.RameshD.Dod.“Roleofgreenbuildingsinsustainableconstruction Need,Challenges,andScopein theIndianScenario

[4] MohammedArifandCharlesEgbu AbidHaleem DennisKulonda MalikKhalfan “StateofgreenconstructioninIndia:

[5] SamKubba