Green building projects used to come with the reputation that sustainability came at a price: reduced profitability. Increasingly, contractors are finding that this is no longer the case—it is indeed possible to succeed financially while building sustainably.
Flipping The Script
That’s what Stephen Tross, Chief Investment Officer at Bouwinvest (a $17 billion dollar firm), says it’s time to do:“Today, you don’t sacrifice returns for sustainability, you create returns with sustainability.” As Construction Dive reports:
Sustainable construction. Green building. Call it what you will but it is estimated that by 2025, “over 60 percent of all new buildings could be labeled net-zero ready—or capable of being built with zero carbon emissions.” (Top Five Construction Industry Trends for 2023 (armacell.us) The pressure is on from owners, too. They want contractors that use the most “cutting-edge products, innovations and delivery methods…”. They want buildings with lower carbon footprints, and that are more energy efficient….The benefits of green building are numerous. Not only does it improve the construction industry’s negative impact on the environment, but also, it’s profitable.
Experts at Beck Tech explain that one reason taking on LEED projects can result in a net gain for builders is government incentives: “Because the federal government wants contractors to build more green projects, there are a lot of financial incentives available, including zoning allowances and tax rebates. Additionally, LEED certification often means that a contractor can avoid financial hits like waivers, fees, and audits. One example? In Seattle, LEED buildings are exempted from the energy audits that the city otherwise requires.” Green building can also give construction businesses an edge in the tight labor market by making them more attractive to workers:
While it’s important that your potential clients can differentiate you from the ten other contractors down the street, it’s equally as important that the people you want working for you see you as a leader in your industry. New talent, especially those who have just graduated, want to join companies who embrace the future and who don’t keep do things “because that’s how we’ve always done them.” LEED certification is still relatively young. By showing that you’re interested in how to make projects both successful and sustainable, you’re showing potential hires that you’re willing to innovate and experiment, even if you might be some of the first ones to do it.
Financial Insights
Smart building requires leveraging financial insights for day to day decision making. While this has always been true for constructors, it is ever more so the case, when estimating, bidding—and winning. That’s why Colonial Surety offers The Partnership Account® for Contractors. With this free service, you can plot the growth of your business, strategically, one step at a time. The Partnership Account® arms you with a private digital dashboard, providing a day to day snapshot of single and aggregate limits, as well as current and available bond capacity. As work in progress decreases, you can even update your work on hand—increasing your aggregate, so you can go ahead and move that next bid ahead. Take control of your finances—and get an edge too as you issue your own bid bonds, instantly, using our powers of attorney.
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Green and Tech Forward Too
Although frequently referred to as two different trends disrupting business as usual for builders, green building and the increased application of technology (aka contech) actually go hand in hand in many important ways, as evidenced in these examples from Construction Pros:
Smart construction platforms purpose-built for the industry can improve decisions, provide predictive insights through the use of AI, and help mitigate risks and assist in lowering carbon emissions. For example, digital documents, drawings, and 3D models help reduce paper. Even more helpfully, though, smart construction platforms can also help reduce waste and costly rework by visualizing the end result before starting to build….Data analytics can change how everything is constructed, from individual buildings to major public infrastructure projects and even entire cities. Data can help teams measure the sustainability of current construction methods and leverage those insights to show sustainability throughout the entire construction lifecycle’s plan, build, and operate phases. When employed correctly, data can help propel the built-asset industries toward long-term sustainable development methods.
Interesting To Consider: Efficiency First
Because green building is rooted in a drive for efficiency—and the elimination of waste, it is in many ways inherently aligned to profitability, as Natalie Terrill, Director of Sustainability at DESTINI Estimator points out:
Every sustainable building should be taking an efficiency-first approach to reduce energy, water, and waste. Sustainable construction operations on job sites can lead to fewer health impacts on workers. A healthier working environment can increase productivity, reduce absenteeism and job-related incidents, and lower health insurance premiums. Reduced waste leads to fewer dumpster hauls and healthier building materials expose people to fewer harmful substances. The traditional premium we used to see for “green materials” can be avoided because these products are now readily available from most major manufacturers. An efficient construction process aims to create efficiencies and eliminate multiple forms of waste—that improves the bottom line and lessens the burden on natural resources.
In the push forward, don’t forget, Colonial Surety is here to help builders of all sizes win—and we are all about efficient (and speedy) bid, performance and payment bonds. See for yourself today: The Partnership Account®.
Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed.