Seals of quality carry weight in the sustainable real estate industry – but the variety of existing certification systems results in a lack of transparency. These are the key findings of a current study conducted by MODUL University Vienna, Austria. The study examined the role of non-governmental organizations (NGOs) as actors in a sustainable real estate industry in Austria and throughout the world. In addition to a survey of international green building councils, a comprehensive case study was also elaborated. The study explored five different aspects that strongly affect the scope of influence of these organizations. Their size and their perception as reliable partners were also identified as key criteria. The findings, which were recently published internationally, illustrate MODUL University's expertise in the cutting-edge field of environmental governance.
The Bank of America Tower in New York, the Deutsche Bank Towers in Frankfurt and the IZD Tower in Vienna are flagship projects for sustainable building and holders of international seals of quality. As the issuing authorities for such seals of quality, green building councils (GBCs) have primary responsibility for developing and implementing sustainable construction projects. A study conducted by MODUL University Vienna has now addressed the role of GBCs as actors in this dynamic market. The study's findings are available internationally.
WATERTIGHT SUSTAINABILITY
According to Dr. Sabine Sedlacek, project coordinator and researcher at the Department of Public Governance and Sustainable Development, the fact that there is room for improvement in the certification system for seals of quality is a key finding: "The "market" for seals of quality is characterized by a lack of transparency due to varying standards and models. This represents an impediment to the development, financing and implementation of sustainable construction projects. After all, verifiable sustainability is considered a mark of quality and ensures long-term visibility and an increase in the market value of real estate." Thus, according to Dr. Sedlacek's assessment, the green building councils, as issuing authorities, are required to ensure greater transparency. They can do this through educational work and by networking with one another and in this way make it easier to implement sustainable construction projects.
The preliminary work for this latest study, carried out in conjunction with Vienna University of Economics and Business, included surveys of international GBCs, interviews with their boards and an analysis of their organizational structures, objectives and activities. This work was followed by a comprehensive case study of the Austrian Sustainable Building Council (Österreichische Gesellschaft für Nachhaltige Immobilienwirtschaft, ÖGNI). This involved interviewing a total of 90 members, auditors and network partners on the advantages and disadvantages of membership and the certification system for awarding seals of quality.
FROM INTERMEDIARIES TO ACTORS
The data was subsequently analyzed, allowing conclusions to be drawn about the role of GBCs in increasing the dynamic nature of the real estate market in relation to sustainability. In fact, the study showed that GBCs can evolve as independent third parties into "environmental governance actors", who participate actively in governance processes within a sustainable real estate industry. Commenting on this, Dr. Sedlacek says: "Sustainable building is a poorly regulated policy area in Austria. The decision about whether building certification is sought is purely market-driven and therefore voluntary, as it is made solely by the individuals involved in the project."
Given these circumstances, it was important for Dr. Sedlacek to systematically analyze the basic conditions for the effective functioning of GBCs using a specially designed framework: "First of all, we analyzed the role of green building councils as independent third parties. Another factor was their respective decision-making power. The size of a GBC is key to its perception as a power player, as increasing membership numbers signal vitality and ensure market coverage and – through members' contributions – ensure that the work is economically viable," says Dr. Sedlacek. But size alone is not the only thing that matters as Dr. Sedlacek's study also shows: it is crucial for GBCs and their certifications that they are seen as independent. However, according to Dr. Sedlacek, the perception of this independence must be balanced by the representation of internal interests of members, who frequently come from the real estate and construction industry. Clearly defined accountability resulting from a transparent internal organization helps to achieve this. The legitimacy of GBCs as institutions is essential for gaining trust. Ultimately, securing acceptance is also crucial. The better these criteria are fulfilled, the better GBCs can participate in governance processes as actors and the greater is their spectrum of activities.
Overall, the study of the sustainable real estate industry has analyzed very fundamental aspects of this highly dynamic economic sector, which is the subject of great public interest, and made the results available to an international audience. MODUL University Vienna has thus once again proven its internationally recognized academic expertise in the area of environmental governance.
References:
Non-Governmental Organizations as Governance Actors for Sustainable Development: The Case of Green Building Councils. S. Sedlacek. Environmental Policy and Governance 24, 247–261 (2014) DOI: 10.1002/eet.1643
Can green building councils serve as third party governance institutions? An economic and institutional analysis. S. Sedlacek, G. Maier. Energy Policy 49, 479–487 (2012) DOI: 10.1016/j.enpol.2012.06.049