ZELENA GRADNJA

GREEN BUILDING

Economic benefits on the part of the investor

There are currently only 110 buildings with green certificates in Serbia. We asked
Bojan Bogdanović, president of the Serbia Green Building Council, whether there
could be more of them and how to promote green building as a key carrier of the
transformation of the construction sector.
Text: Jovana Nikolić
Photo: SrbGBC
Although green building is becoming more and more present in Serbia and the
number of certified green buildings is increasing, we are still quite far from
transitioning to sustainable development of the construction sector. The current
energy crisis has reminded us more than ever of the importance of energy
efficiency and energy security, which can definitely be enhanced by more massive
green building, but also by energy rehabilitation of the existing building stock. The
Serbia Green Building Council (SrbGBC), as a national member of the world
(WorldGBC) and European (WorldGBC Europe) Green Building Council, promotes
green building through its activities at every level, encourages dialogue between
the public and private sectors, as well as changes in legislation, and to see where
we have arrived on that road, we spoke with the President of the Council, Bojan
Bogdanović.
The term green building has been widely used in recent years, but it seems to be
more part of the popular environmental narrative than actually present in
practice. What do the data say: how many buildings in Serbia have a green
certificate so far?
Globally, green building is gaining importance, and in our market, based only on
the number of certified buildings, one could speak of an almost geometric
growth. The first certified building in Serbia was registered in 2013, in the first
quarter of last year there were 29 (LEED and BREEAM), and at the moment there
are 110 certified buildings registered in Serbia (LEED 26, BREEAM 44, EDGE 40),
with a large number of those thar are in the process of certification. We believe
that our promotion of green building contributed significantly to this. Last year,
the Serbia Green Building Council organized an event to support developers in the
form of awarding certificates of appreciation to leaders who certified their
buildings in the previous two years. We proudly point out that the largest number
of them are actually members of the Council.
It could be concluded that this increase in interest in green building is certainly
not only in the domain of the “environmental narrative“, but is a consequence of
the recognition of economic benefits by developers. In the circumstances of the
energy crisis and the war in Ukraine, increasingly intensive investment in energy
efficiency and renewable sources in the buildings themselves not only brings
significant energy savings, costs and benefits for the environment (due to the
reduction of CO2 emissions), but also contributes to energy security.
Nevertheless, despite the fascinating growth of interest in green building,
unfortunately, compared to the total number of buildings built, this percentage is
so small that it is not even worth mentioning.
Green building is not directly related to certification, but the implementation of
green aspects is necessary if someone opts for certification. The bottom line is
that credits awarded within defined categories are key to evaluating green
building. The choice of type and variant of certification is free will, and results in
some form of certification rating as a confirmation of green building.
How green a building will be depends on the approach, principles, methods and
tools involved. Depending on how green you want to be, so many aspects of
green you will implement (renewable energy sources, rainwater collection,
implementation of recycled material, reuse, introduction of innovative solutions
that reduce energy and electricity consumption, save water, green roof, smart
systems in the form of sensors which regulate aspects of comfort...).
What kind of certificates exist and how much do they increase the value of the
facility?
There are very different forms of certification on a global level, but there are
officially sixty of them administered by the World Green Building Council and
which, as a national member of the same, we support by familiarizing ourselves
with them (LEED, BREEAM, EDGE, WELL Health-Safety...). The very growth of
certified buildings speaks in favor of the fact that there are justified economic,
environmental and social reasons for green building. Numerous studies confirm
the justification of this kind of construction precisely for the reason of increasing
the value of a certain facility. A form of green financing has also been activated in
the construction sector, which requires confirmation in the form of a green
certificate. Some of the developers in Serbia (our members) already have a
positive experience in this in terms of significantly lower interest rates, not to
mention the cost effectiveness during the use of such a facility
Although the value of the facility is mainly viewed through economic parameters,
its parallel environmental value is also important, as the ultimate goal of
sustainable development – reduction of the negative impact on the environment
by creating a resilient built environment. There is also a measurable positive
impact on the end user, whether it is the business, commercial or residential
sector. Specifically, by introducing smart systems (positive economic aspect and
savings) that monitor and manage aspects of comfort, the quality of the interior
space for the end user, the satisfaction of staying in such a space, as well as a
positive impact on his/her health hereby increase.
How much can the price of green building be a factor that demotivates
investors? Is a green building necessarily more expensive than an ordinary one?
The greener the facility, the more economically justified it is. If this were not the
case, there would be no market demand for them. It is only a matter of the
investor’s perception whether he bases his business on long-term or short-term
plans. In long-term planning, where the green building, during its life cycle,
remains in the ownership of either the owner as the end user, or the owner who
rents the space, it is more than a cost-effective investment. Its higher initial
investment is indisputable, but also the fact that they later have a facility that has
lower operating costs during use and maintenance. For now, they are mostly
represented in the commercial sector, which only confirms the strong motivation
of business in turning to green building.
The situation is quite different in the residential area, where the plans are short-
term and end with the sale of the investment immediately after construction.
Although there are those, among the investors of residential buildings, who work
to improve the quality and some aspects of green can be glimpsed (most often
with a part of the green roof), the majority of them are not motivated for larger
initial investments, because they do not encounter such demand; there is no
motivation for more investment, because the market is potent and there are no
problems with sales. Hence, this trend of “demotivation“ will continue until the
moment the market does not become more demanding, until price and location
are not the only concerns, until future apartment owners when buying
apartments do not include long-term planning in terms of future expenses that
they will have during the use of it, that is, until they do not take into consideration
the savings they can achieve.
In many EU countries, the practice is that investors are obliged by law to abide
by the principles of green building. Can you give us some examples of such
practice?
Within the World Green Building Council, there is a program called The Net Zero
Carbon Buildings Commitment, which implies an even more advanced green
building that leads to a zero energy and emission transition. So far, six regions
countries (USA, UK, Spain, Germany...), 28 cities around the world (London, New
York, Copenhagen, Paris, Oslo, Sydney, Tokyo, Toronto...), as well as 138
organizations/companies have committed themselves to it.

At the European level, there is a binding directive for members, which refers to
the aspiration of nearly zero energy performance of buildings, as a segment of
green building. In Britain, BREEAM certification is mandatory for the public sector.
Also, the practice for larger cities to require the certification of facilities that
exceed certain square footage, precisely for the reason of their influence within
the built environment, is growing worldwide; certification of green building in the
context of reducing negative environmental impact is being insisted on. The
influence of international financial institutions (EBRD, World Bank, etc.) and
commercial banks, which, by providing stimulating financing conditions that
promote green building, help the wider and more frequent implementation of
green building principles in practice, is also very important.
What is the situation in our country when it comes to laws? Are there plans to
adopt some binding regulations, for example, on the use of recycled
construction waste?
There is a mutual initiative and the Council has already had meetings with
relevant ministries. There is a lot of potential for cooperation, and we are invited
to make proposals in the area of legislation, but also to work even harder on
educating all stakeholders and the public, because this is exactly the biggest
challenge in green building. As a member of the Alliance for Green Transition,
there is a certain membership activity of SrbGBC in that part, as well as
engagement within the Proposal of the Circular Economy Development Program
in the RS for the period 2022-2024. For now, the implementation of the circular
model in the construction sector is at the level of individual engagement, in the
form of the application of recycled material or reuse, and the role of SrbGBC is
also here at the educational level.
Is the state considering introducing subsidies for companies interested in this
type of investment?
At the state level, green bonds have been announced, citing green buildings as a
potential. Subsidies were also one of the topics at the SrbGBC meeting with the
ministries, which confirms the state’s interest in developing that concept.
As per Serbia, certified facilities, many of which are owned by SrbGBC members
(Ušće Tower 2, Delta House, Sirius, Navigator 2, Atrium, Stop-Shop, etc.), imply
sufficient confirmation of interest in this type of investment. In order to remain
neutral towards the members and faithful to our transparent approach, as well as
open to various types of cooperation, we shall only cite as an example one of the
most recently certified facilities, the NCR K2 Business Center, which received the
highest rating of LEED - Platinum. Also, more and more financial institutions are
strengthening green financing, which will surely affect the construction sector as
well.
In Europe, there is a trend of renewing the existing building stock, in order to
reach the modern level of energy efficiency. Is there an initiative to implement
this on a larger scale in our country?
In the conditions of the current energy crisis, the energy efficiency of facilities is
one of the important aspects of green building and, at the same time, a current
topic at the state level, considering the huge part of the building stock that is
energy inefficient. The state provides incentives for energy efficiency and
renewable energy sources, as do the international financial institutions and some
commercial banks. Support mechanisms for commercial and individual residential
facilities are becoming more and more available. The biggest challenge concerns
multi-family residential buildings where, from an engineering point of view,
energy rehabilitation is not demanding, but organizationally it is very complicated
due to tenant agreements, obtaining permits, supervision of works... The Ministry
of Mining and Energy, EBRD and USAID are mainly working on the development of
energy rehabilitation projects for residential buildings.
How aware are we that the traditional way of construction, and even the
buildings we live in, are not sustainable and will not withstand the challenges of
climate change in the future? How does the Council carry out its mission of
raising awareness, both of investors and citizens?

The entire activity of the Serbia Green Building Council is subordinated to the goal
that aspects of green building are recognized as key carriers of the transformation
of the construction sector and the built environment. Essentially, the goal of the
transformation is to neutralize its negative impact. All events of the Council are
for the purpose of information and are educational in nature, whether talking of
professional conferences, activities intended for the general public, as well as
work with the youngest, through webinars, projects and other activities, which
you can find more about on the website of the Council www.serbiagbc.rs.
One of the forms of membership activity is the engagement of the SrbGBC
working group in the ETF competition and the expansion of the campus of the
technical faculties, within which, for the first time, aspects of green building are
required in the competition program for a public purpose building.

Glose

The greener the facility, the more economically justified it is

More and more financial institutions are strengthening green financing, which will
certainly affect the construction sector as well

For now, the implementation of the circular model in the construction sector is at
the level of individual involvement, in the form of application of recycled material
or reuse

Signatures:
Bojan Bogdanović, President of SrbGBC
Delta House, the new office building of Delta Holding, has been certified as a LEED
Gold building
NCR K2 Business Center received the highest rating of LEED Platinum
Stop-Shop retail parks of the company Immofinanz in Serbia have a BREEAM
certification
Business center Navigator 2, of the company MPC Properties, is the winner of the
LEED Gold certification