Chapter 22 Considerations in going green

Some of the key issues in going green include the following:

Inevitability and market expectations

The built environment accounts for approximately 40% of global greenhouse gas emissions. The greening of Australia’s building stock has been identified by many studies as the cheapest step to reduce Australia’s greenhouse gas emissions. Buildings that are not green may lose value and struggle to attract tenants, or be most costly to retrofit to meet green standards that will be likely imposed in the future. Government agencies are now requiring sustainability outcomes and climate change risks to be considered in the business case stage of project proposals.

Use of collaborative delivery models

Green buildings are typically most effectively delivered by a collaborative approach involving all consultants. This use of collaborative working groups is common in the development of green building design, where a group of designers and experts in all the disciplines relevant to the design and operation of the building work together on the design. The typical design and construction delivery model may not drive the right behaviours and outcomes and may come with a substantial cost premium as the contractor bears the risk of the design. The alliancing and early contractor involvement models may be more appropriate in this context.

Innovative contractual solutions to drive green outcomes

Consider whether the contractual procurement method or your supply chains could incentivise and drive sustainable outcomes. See for example, The Chancery Lane Project, where precedent contract clauses have been collaboratively drafted to incorporate green and sustainable outcomes across commercial contracts. Some examples of new clauses include an enhanced standard of care to incorporate best practice sustainability measures and a ‘Green Modifications’ clause to incentivise contractors to provide greener solutions to the construction of a project during the construction phase.

Climate risk for construction projects

The greening of the built environment and increasing sustainability across the construction project life cycle is imperative for achieving the Paris Agreement objectives of limiting warming to below 2 degrees above pre-industrial levels. The physical impacts of a warmer and unpredictable climate due to climate change mean that project delivery delays are inevitable. Damage to the site, equipment and building materials will also be more likely. Challenges with ongoing asset operation and maintenance into the future will increase as remediation of infrastructure assets will become more frequent and costly over the life of the asset. Consideration must be given as to how to contractually allocate these risks depending on the site and type of project. Consideration of climate risks should be incorporated in the design of the project to ensure the project will remain fit for purpose.


Updated August 2020