Green Star retail business case

Increase sales

Compelling international research confirms that green retail buildings – those with good natural light and ventilation, high-performance heating and cooling systems, and materials low in harmful chemicals – are not only more efficient and cheaper to operate, but can also improve the experience for customers and retail takings too.

The Heschong Mahone study into daylighting (2003) found that naturally-lit retail spaces can increase sales by up to 40%.  In fact, the profit from increased sales associated with daylight is worth up to 100 times more than the energy savings.

A study from the University of Notre Dame study (2012) has found that bank branches rated under the USGBC’s LEED system:

• opened 458 more consumer deposit accounts
• had $3 million more in consumer deposit balances
• had $1 million more in loan balances than their non-LEED counterparts. 

The WorldGBC’s Business case for Green Building (2013) reports significant increases in sales at Walmart from daylighting.

Achieve operational cost savings

Green buildings are designed to be highly energy and water efficient, which makes them cheaper to operate.

The Value of Green Star: A decade of environmental benefits (2013) finds that Green Star buildings use 66% less electricity and 51% water than the average Australian building.

The Green Retail and Hospitality SmartMarket Report (2013) found that green building projects in the US retail sector a 15% more energy-efficient and 8% cheaper to run than their non-green counterparts.

Boost worker productivity and health

Green Star buildings consistently outperform non-green buildings in terms of comfort and productivity. Natural light, fresh air and access to views of the outdoors, as well as control over individual workspace temperature and lighting, can affect productivity directly.

• The World Green Building Council’s Business Case for Green Building (2013) analysis of workspaces found up to:

Attract the best employees

Employees, particularly young people, increasingly want to work for the ‘good guys’ - the companies that are conscious of their impact on the environment. 

Working from a green retail space can positively impact how employees feel about their employer, and higher satisfaction can mean higher employee retention. 

Attract customers

Retail customers are increasingly rewarding sustainability with their wallets. 

The Australian Food and Grocery Council’s Green Shopper Summary Report (2014) found 80% of consumers think about environmental issues when shopping, and 96% place importance in a retailer’s efforts to reduce their environmental impact.

Boston Consulting Group’s When Social Responsibility Leads to Growth (2014) finds responsible products currently account for 70% of product growth.

Centre owners and operators

Increasingly, owners and operators of retail centres around Australia are going green, as the business case for sustainability stacks up.

Higher return on investment

Green buildings deliver consistently higher returns on investment compared their non-green counterparts.

The Green Retail and Hospitality SmartMarket Report (2013) found that green building projects in the US retail sector deliver a 7% increase in asset value and an 8% increase in return on investment. 

The Building Better Returns report (2011) found that Green Star-rated buildings deliver a 12% ‘green premium’ in value and a 5% premium in rent, when compared to non-rated buildings.

World Green Building Council’s Business Case for Green Building (2013) found that price premiums for green buildings could be up to 30% – with evidence that the higher level of certification, the best results.

Achieve operational cost savings

Green buildings are designed to be highly energy and water efficient, which makes them cheaper to operate.

The Value of Green Star: A decade of environmental benefits (2013) finds that Green Star buildings use 66% less electricity and 51% water than the average Australian building.

The Green Retail and Hospitality SmartMarket Report (2013) found that green building projects in the US retail sector a 15% more energy-efficient and 8% cheaper to run than their non-green counterparts.

Attract tenants

While few studies have been undertaken to explore the link between green-rated retail centres and tenant attraction, more broadly, green buildings have a competitive edge and can help to attract prospective tenants.

The GBCA’s Valuing Green (2008) report found that green buildings attract better quality tenants, such as government and ‘top tier’ corporates with stable businesses and strong commitments to corporate social responsibility.

World Green Building Council’s Business Case for Green Building (2013) found that buildings with a green rating report an occupancy rate increase of up to 23%. The higher the rating, the higher the rental premium – with an average 3% increase in rent for each additional level of certification.

Colliers International’s Office Tenant Survey (2012) found that 95% of tenants want to be in a green building, up from 75% two years earlier. ‘Green space’ is one of the top four attributes tenants look for – along with bike racks, childcare facilities and a gym.

CBRE’s Do Green Buildings Make Dollars and Sense? (2009) found that that green buildings have 3.5% lower vacancy rates and 13% higher rental rates than the wider market.

Increased sales

Compelling international research confirms that integrating green design – such as access to natural light and ventilation, and choosing materials that are low in harmful chemicals – can improve retail takings and improve the business bottom line. 

The Heschong Mahone study into daylighting (2003) found that naturally-lit retail spaces can increase sales by up to 40%.  In fact, the profit from increased sales associated with daylight is worth up to 100 times more than the energy savings.

A study from the University of Notre Dame study (2012) has found that bank branches rated under the USGBC’s LEED system:

• opened 458 more consumer deposit accounts
• had $3 million more in consumer deposit balances
• had $1 million more in loan balances. 

The WorldGBC’s Business case for Green Building (2013) reports significant increases in sales at Walmart from daylighting.

Capture environmental benefits

Building green is a clear expression of commitment to the environment.

The Value of Green Star: A decade of environmental benefits (2013) finds that, on average, Green Star-certified buildings:

• Use 66% less electricity than average Australian buildings
• Produce 62% fewer greenhouse gas emissions than average Australian buildings
• Use 51% less potable water than average buildings
• Recycle 96% of their waste, compared with 58% for the average new construction project.

Demonstrate leadership

People around the world perceive green buildings as modern and ethical.  A Green Star rating can reinforce corporate social responsibility and demonstrate leadership.