Sustainability 14 08808 v2

sustainability
Article
Green Building Contractors 2025: Analyzing and Forecasting
Green Building Contractors’ Market Trends in the US
Hala Sanboskani 1, * , Mounir El Asmar 1 and Elie Azar 2
1 School of Sustainable Engineering and the Built Environment, Arizona State University,
Tempe, AZ 85287-3005, USA; asmar@asu.edu
2 Department of Civil and Environmental Engineering, Carleton University, Ottawa, ON K1S 5B6, Canada;
elie.azar@carleton.ca
* Correspondence: hsanbosk@asu.edu; Tel.: +1-347-854-8235
Abstract: With population growth, the demand for building construction is continuously increasing.
This comes at the price of the built environment where the building sector is contributing to large
energy consumption and carbon footprint releases. To encourage sustainable construction, contractors
need to see the market benefit of “going green”. Previous studies of green building contractors (GBCs)
mainly relied on qualitative discussions and lacked studying the market performance which drives
contractors’ decisions the most. This paper collects GBC revenue data from the Engineering News-
Record magazine for the top 100 GBCs over a 13-year period and performs trend analysis to assess the
market performance of GBCs and time series analysis to forecast future revenues. In addition, k-means
clustering technique was used to divide the firms into subsets of similar behavior to understand
growth trends for different firm sizes. The results show a continuous increase in green building
revenues (GBRs), where commercial office buildings contribute the most to it. Furthermore, the
firm ranks responsible for most of the growth are identified; mainly the top 9. Predictions show the
expected steady increase in GBR in the upcoming years which is anticipated to reach 83 billion USD
in 2025. The findings inform contractors considering executing green buildings by understanding the
Citation: Sanboskani, H.; El Asmar, market trends and forecasted revenues. Moreover, contractors who are already in the green building
M.; Azar, E. Green Building business can use this information to increase their revenues in their respective market subset.
Contractors 2025: Analyzing and
Forecasting Green Building Keywords: green building revenue; green building contractors; sustainable; market; trend analy-
Contractors’ Market Trends in the US.
sis; clusters
Sustainability 2022, 14, 8808. https://
doi.org/10.3390/su14148808
Academic Editor: Antonio Caggiano

1. Introduction
Received: 20 May 2022
Accepted: 14 July 2022
Several studies have shown the rate at which humans are harming the environment
Published: 19 July 2022
they are living in with new technologies and arising industries. For example, the total US
energy consumption reached a very high level in 2018 of 101 quadrillion British thermal
Publisher’s Note: MDPI stays neutral
units [1].
with regard to jurisdictional claims in
Considering the constant growth in population, sustainable construction of buildings
published maps and institutional affil-
is expected to be a great contributor to sustainable development (SD). Statistics show that
iations.
the building sector is responsible for 55% of annual global electricity consumption, and
about 40% of annual global CO2 emissions divided between building operations (28%)
and building materials and construction (11%) [2]. Construction goods account for 40%
Copyright: © 2022 by the authors.
of the greenhouse gas emissions (GHGE) from global materials production [3]. Cement
Licensee MDPI, Basel, Switzerland. and concrete are identified as the worst materials in terms of carbon dioxide emissions
This article is an open access article and depletion of fossil energy resources, and they are the most used materials in construc-
distributed under the terms and tion [4]. Construction materials cause a high percentage of GHGE in the world [5]. Hence,
conditions of the Creative Commons the building sector presents itself as a highly influential candidate to start implementing
Attribution (CC BY) license (https:// sustainable construction practices. To minimize the negative impacts on the built envi-
creativecommons.org/licenses/by/ ronment, owners and contracting firms must be interested in efficiently investing in and
4.0/). executing sustainable projects.
Sustainability 2022, 14, 8808. https://doi.org/10.3390/su14148808 https://www.mdpi.com/journal/sustainability

Sustainability 2022, 14, 8808 2 of 23
2. Literature Review
2.1. Sustainable Development and the Business Aspect of Green Buildings
Some research efforts investigated the practical business aspect of green buildings
from different angles. An interesting study in South Africa shows that the need for green
buildings exists due to economic factors such as reducing the cost of energy, being rec-
ognized by industry rating systems, and competitive advantages rather than ecological
factors [6]. A recent study by Wang et al. investigated whether construction firms with
good financial conditions devote more resources to environmental activities [7]. They
concluded that financial performance does not significantly impact environment infor-
mation disclosure (the metric they used to measure the firm’s environmental activities).
Yan proposed a framework of market efficiency and performance measures to evaluate
project-based competition mechanisms for sustainable developments in the building and
construction sectors [8]. They analyzed the competitive market behavior under different
awarding systems. However, they did not address economic performance. Economic
pressures which represent the large environmental costs contractors are expected to bear
when constructing while fulfilling environmental sustainability goals were found to be
related to the level of contractor greenwashing behaviors [9]. Greenwashing often refers
to misleading communication to gain unwarranted environmental legitimacy [10]. The
findings from the recent study by Wang et al. highlight the importance of showcasing to
contractors how they can overcome the economic pressures and benefit from an economic
opportunity while avoiding greenwashing.
One economic study involved examining the activities specific to green buildings that
are associated with transaction costs in the real estate development process [11]. Recommen-
dations include that project managers pay attention to sustainability to minimize hidden
societal costs. They also worked on referencing professionals who can aid in improving
best practices of the green building market by optimizing the societal costs. Moreover,
one interesting study performed a comprehensive review of research investigating the
economic viability of green buildings including cost-benefit analyses considering building
life cycle and major market participants [12]. They found that there is unclarity around the
economic viability from the perspectives of developers and occupants driven by informa-
tion, behavior, and policy factors. A similar conclusion was reached by a study conducted
in the Italian real estate market to examine if green buildings can achieve higher prices and
superior economic performance than traditional buildings [13]. They concluded that green
buildings have higher financial performance due to the increase in revenue for selling at
higher prices and due to favorable absorption rates (both significant). Yang et al. identified
the local economic development level as one of the critical factors affecting green residential
building development in China [14]. Guo and Yuan studied the correlation between the
number of green residential buildings in China and 18 influencing factors covering the
social economy and real estate market to encourage the development of green residential
buildings [15]. These are a sample of international studies trying to investigate the business
aspect of green buildings; yet they neither touch on contractor’s financial benefits nor cover
the US region.
2.2. The Focus on Contractors

Most of the reviewed studies show how single or multiple stages of the building life
cycle can be addressed theoretically. However, as owners decide to go for sustainable
planning and design to satisfy green building rating systems certifications, they need to
support this initiative by hiring contracting firms that follow sustainable construction best
practices and regulations to receive these certifications. Hence, it is a joint effort between
both contractual parties, which requires having all stakeholders interested.
Several studies investigated the factors that influence the stakeholders’ interest in
investing in green buildings. For example, research shows that owners are driven by their
internal incentives, such as the health and well-being of building occupants, rather than
financial ones to adopt green building practices [16,17]. This comes with several tangible
benefits to them, such as growing their reputation as advocators of the environment,

resource use efficiency, increased marketability, and enhanced societal reputation [17,18].
Teng et al. found that market development environment and ecological value are significant
direct drivers of sustainable development of green buildings [19]. The results support that
owners’, designers’, and contractors’ willingness to “go green”, as part of the market driver,
has the most significant impact on sustainable development. However, there was not
enough evidence to support the influence of economic value on going green in buildings.
Hence, more studies directed towards measuring the economic values to the stakeholders
are needed to highlight the importance and influence of this factor.
Rakitta and Wernery studied the impact of cognitive biases on sustainability in build-
ings and showed that a default effect leads to a more sustainable building design by
significantly decreasing building energy use, embodied energy, and carbon footprint [20].
However, contractors’ contribution remains somewhat behind due to a number of perceived
challenges. These include increased time demand, fear of change, increased equipment
and material costs, fear of auditing of construction documents, and lack of needed green
expertise [21,22].
Research in Singapore showed that the top five critical risks in green residential
building construction projects are complex procedures to obtain approvals, overlooked high
initial costs, unclear owner requirements, employment constraints, and lack of availability
of green materials and equipment [22]. Another study identified promotion strategies to
encourage green building technologies (GBTs) in construction, which include financial and
further market-based incentives for GBTs adopters, availability of better information on
cost and benefits of GBTs, mandatory governmental policies and regulations, and green
rating and labeling [23].
There were some studies exploring the roles of contractors in the successful implemen-
tation of green residential buildings; these include the competence of project managers, the
coordination of designers and contractors, leadership and organization, target management,
and emotional intelligence [24,25]. Other studies focused on how to enrich the contractor’s
role by educating them about GBTs [23]. However, considering that a contracting firm
is a profit-driven organization, few research efforts have studied the economic, financial,
market, or business aspect of going green for contractors. This calls to start by studying
contractors’ revenues to lure their interest into the green building industry and then resolve
their perceived challenges of going green by studying their performance and understanding
the difficulties they are encountering. In other words, to understand their perspective on
green buildings is to be able to show them where they can be efficient and where they are
stronger by revenue subgroups or building sectors. This is one way to help them enhance
their “green” profiles and make them more appealing or “green building” qualified to be
selected by other owners seeking green building development for future work.
3. Research Questions
3.1. Problem Statement and Research Gaps
The review of recent literature reveals several gaps relevant to the sustainable develop-
ment of green buildings. First, there is more focus on the technical aspects and sustainable
performance of green buildings than on the factors influencing the decision of going green.
This means there is more focus on the impacts of going green than on the drivers of going
green. Therefore, to promote the development of green buildings, there is a need to study
the factors influencing the decisions of going green. Among these factors is the role of
stakeholders and decision-makers. Some studies have investigated the role of investors,
designers, and occupants in promoting sustainable development; however, there is limited
focus on overcoming contractors’ barriers to going green. Of course, high costs are among
the identified barriers. Thus, it is critical to present to contractors the increasing revenues
associated with going green, which would ease the way for them to overcome the barriers.
This identified the need to analyze green contractors’ revenue performance. This also
highlights the second gap which is the lack of quantitative studies analyzing green building
market trends to highlight the financial benefits to contractors to promote their involvement
in green buildings. Moreover, the reviewed efforts on the business aspect of green buildings
cover regions in Asia, Africa, and Europe with no focus on North America, where green
buildings are currently booming [26]. All of these motivate the need for additional research
to help contractors overcome the financial challenges by showing them, with numbers
collected from practice, the advantages of engaging in sustainable and green building
construction (e.g., improvements in reputations and increases in revenues).
Contractors are in the business of construction which is, in large part, profit-driven.
Thus, if we show that there are considerable revenues to be had in green building con-
struction, and these revenues are increasing, this could motivate some contractors to join
this growing market. This is part of the motivation and need for the work documented in
this paper. The gap here is that there are no research studies presenting revenue data and
covering the trends to help contractors make an informed decision on the topic. Thus, we
have consolidated and analyzed revenue data as well as conducted statistical forecasting
to see if these questions can be answered. The more specific questions are: have green
building revenues increased in the past decade? If so, how are they distributed across
the various green building sectors? Will the green building construction market continue
to grow?
3.2. Objectives
This paper presents a unique market analysis study of the top 100 green building
contractors’ (GBCs) revenues in the United States based on the green building revenue
(GBR) data available and collected from Engineering News-Record (ENR) during the years
2008 through 2020. Statistical analysis methods, including data-mining techniques and
time-series analysis, are applied to: (1) analyze the trends in the GBC revenue perfor-
mance and growth, (2) benchmark against the overall construction industry performance,
(3) identify and compare among different revenue-based clusters of the top 100 firms to
determine similar market trend behaviors, (4) highlight focus areas by building sectors,
and (5) attempt to forecast future revenues and market shares of the total GBC market and
its different subsets.
Research-wise, this paper builds on the analysis and findings of an earlier paper
by the authors that presents a preliminary analysis of the market trends of GBR [27].
Industry-wise, on the one hand, this paper presents to contractors, based on data collected
from practice, the accumulated revenues associated with constructing green buildings and
gives them a detailed overview of what to expect based on their firm’s size. On the other
hand, it highlights the building sectors with the highest revenues based on the firm size.
Nevertheless, it promotes going green by forecasting the GBR for future years, which shows
a continuous increase, especially across top-ranked firms. In the long-term, this study aims
to contribute to the sustainable development plan by encouraging the construction of green
buildings which brings the world one step closer to reducing the depletion of resources in
the present and preserving life in the future.
The paper starts by describing the methods used for acquiring the data and analyzing
it. Then, the results are presented and analyzed. This is followed by discussing the results
in light of the literature and available reports on the matter while presenting future research
ideas and the limitations of the study. Finally, the paper concludes by summarizing the key
takeaways and highlighting the contributions of this paper.
4. Methodology
To accomplish the paper’s objectives, the methodology adopted includes data collec-
tion, cleaning, and analysis using several techniques, as shown in Figure 1 and described
in the following sub-sections.
4. Methodology
To accomplish the paper’s objectives, the methodology adopted includes data collec-
tion, cleaning, and analysis using several techniques, as shown in Figure 1 and described
Data collection
From Engineering From US Census

News-Record magazine Bureau
Data
cleaning
Data analysis
Descriptive statistics and

Cluster analysis and trend Time series analysis and
trend analysis of the top
analysis of the subsets forecasting
100 GBC
Figure 1.
Figure 1. Research methodology.
methodology.
4.1.
4.1. Data
Data Collection
Collection and Cleaning
and Cleaning
The authors collected
The authors collected lists lists of
of the
the top
top 100
100 GBCs
GBCs in in the
the US
US published
published on on aa yearly
yearlybasis
basis
by
by ENR
ENR [21,28–39].
[21,28–39]. ENRENR publishes
publishes these
these reports
reports every
every year,year, and
and each
each report
report shows
shows the
the
previous year’s data and rank, and right next to it, it shows the same
previous year’s data and rank, and right next to it, it shows the same companies’ rank for companies’ rank
for
the the year
year before
before that,that,
justjust
as as a reference
a reference pointfor
point forcomparison
comparisontotosee seehow
howeacheachfirm
firmhas
has
improved (or not) in the ranking (year to year). The collected data covers
improved (or not) in the ranking (year to year). The collected data covers the contractor’s the contractor’s
rank,
rank, GBR,
GBR,percentage
percentageof ofcontractor’s
contractor’srevenue
revenuegenerated
generatedfrom fromgreen
greencontracting,
contracting, number
number of
accredited staff, and the percentage distribution of GBR across the different
of accredited staff, and the percentage distribution of GBR across the different building building sectors
as shown
sectors asinshown
the examples in Tables in
in the examples 1 and 2. ENR
Tables compiles
1 and 2. ENRthese lists through
compiles a survey
these lists throughdata
a
collection
survey data technique
collectioninvolving
techniquecontracting firms. The rank
involving contracting firms.isThe
for the
rankrevenues
is for theof projects
revenues
that have been certified by a third-party organization that sets standards for measuring a
of projects that have been certified by a third-party organization that sets standards for
building’s sustainability performance of environmental impact, energy efficiency, or carbon
measuring a building’s sustainability performance of environmental impact, energy effi-
footprint. These revenues are referred to as GBR. A total of 13 reports were collected,
ciency, or carbon footprint. These revenues are referred to as GBR. A total of 13 reports
and the GBR performance of 209 contractors was assessed for the years 2008 through
were collected, and the GBR performance of 209 contractors was assessed for the years
2020. The projects taken by these contractors are dispersed across the US and cover the
2008 through 2020. The projects taken by these contractors are dispersed across the US
various building sectors, including commercial offices, educational facilities, and hotels,
and cover the various building sectors, including commercial offices, educational facili-
among others. In addition, data were collected about the construction industry spending
ties, and hotels, among others. In addition, data were collected about the construction in-
from the US Census Bureau for each month and aggregated for each year as shown in
dustry spending from the US Census Bureau for each month and aggregated for each year
the examples in Table 3. The collected data were cleaned using Microsoft Excel, and data
as shown in the examples in Table 3. The collected data were cleaned using Microsoft
analysis was performed in Excel and R studio statistical computing software as described
Excel, and data analysis was performed in Excel and R studio statistical computing soft-
ware as described in the following sub-sections.
Table 1. Sample collected data for firm features from ENR for year 2020.
Table 1. Sample collected data for firm features from ENR for year 2020.
FirmName
Firm Name FirmFirm
a a Firm bFirm b. . . . . . ….. . …..
.. ... FirmFirm
z z
Rank
Rank 1 1 2 2 . . . . . . . .
….. ….. . ... 100 100
Accredited staff
Accredited staff 756 756 436 436 . . . . . . ….. . .….. . ... NANA
Green revenue (USD, in millions) 6797.1 4568.78 ... ... ... ... 5.09
Green revenue
Percentage (USD,
of total in millions)
revenue 47 6797.1 79 4568.78
. . . . . . ….. . .…..
. ... 5.091
Table 2. Sample collected data for green contracting by sector.
Green Contracting by Sector

2008 2009 ... ... ... ... 2020
(Percentage)
Airports - - ... ... ... ... 7.9
Educational facilities 15.4 18.8 ... ... ... ... 12.1
Government offices 12.1 13.6 ... ... ... ... 8.0
Healthcare 9.6 14.8 ... ... ... ... 7.8
Hotels 8.4 3.5 ... ... ... ... 3.3
Manufacturing and industrial 3.3 3.0 ... ... ... ... 3.2
Multi-unit residential 10.3 7.0 ... ... ... ... 11.4
Retail/office 28.2 21.4 ... ... ... ... 25.9
Sports, entertainment, and civic 4.2 6.5 ... ... ... ... 5.0
Telecommunication 2.3 3.0 ... ... ... ... 6.0
Non-building miscellaneous 0.3 0.7 ... ... ... ... 6.0
Other buildings 6.0 7.7 ... ... ... ... 4.0
Table 3. Sample collected data of construction industry spending.
Spending (US$, in Billions) January February ... ... ... ... December Total Construction Spending
Year 2008 spending 1121.5 1121.6 ... ... ... ... 1053.7 13,075.9
... ... ... ... ... ... ... ... ... ... ... ... ... ...
Year 2020 spending 1369.2 1366.8 ... ... ... ... 1490.4 16,733.9
4.2. Descriptive Statistics and Trend Analysis

Using the total GBR values for each year, different graphs were plotted to understand
the performance of GBCs across the years. The analyzed trends include frequency of
contractors with more than 50% of total revenue as GBR, the association of GBR with
accredited staff, GBR distribution by building sector, and benchmarking of GBR market
growth against construction market growth and inflation. The analyzed trends were done
by counting and summing the data. The benchmarking relied on Equation (1) to calculate
the green building market percentage growth. The monthly reports collected from the US
Census Bureau are considered representative of the construction industry market. Using
the data from Table 3 as well as Equation (1) but replacing the GBR with total construction
spend, the construction market percentage growth was also calculated. As for inflation,
it was calculated using the inflation calculator [40]. This trend analysis, coupled with the
analysis done by Sanboskani et al. [27], presents the current status and performance of the
GBC firms as a whole.
Total GBRyear(n) − Total GBRyear(n−1)
Green building market percentage growth from year(n − 1) to year(n) = (1)
Total GBRyear(n−1)
4.3. Segmentation/Cluster Analysis of the Top 100 GBCs

To understand the performance of firms depicting similar behavior during the 13-year
study period, segmentation was performed to identify the groups of ranks of similar
growth rates.
The objective of segmentation is to partition the data into subsets with similar market
trends using a data mining technique called “k-means clustering” on the 100 top GBC
revenues. K-means is the most popular and simplest partitional algorithm [41]. Although
there are many other clustering algorithms to choose from depending on the choice of the
objective function, probabilistic generative models, and heuristics, k-means remains easy to
implement, simple, and has a record of empirical success [41]. Moreover, other clustering
algorithms such as DBSCAN and OPTICS do not perform well on small datasets whereas
k-means works fine and takes less time to execute versus other methods [42]. Among
the different clustering techniques, the “partitioning” k-means clustering method is the
one usually used for market analysis applications [43,44]. It is a data science algorithm
to identify groups of ranks with similar growth rates during the 13-year study period.
K-means method minimizes the distance between the center and the points within a cluster
making it a centroid-based algorithm [45]. To achieve the purpose of k-means, two input
parameters are required: the standardized data matrix and the number of clusters to be
analyzed. The first step in this segmentation approach is to calculate the yearly growth rate
for all the firms in each year using Equation (2).
Firm GBRyear(n) − Firm GBRyear(n−1)

Firm yearly growth rate from year(n − 1) to year(n) = (2)
Firm GBRyear(n−1)
Then, these growth rates for each rank, shown in Table 4, are used as the input matrix
in R studio. The data in the matrix undergo standardization using the “scale” function in R,
and the standardized matrix is analyzed by the “elbow method” to determine the needed
number of clusters. The “elbow method” suggests that the point at which the change in
sum of squares becomes minimal is eligible to be chosen as the number of clusters, or as the
method’s name suggests where an elbow is seen [46]. Essentially, the sum of squares is a
measure of the Euclidean distance between points and the center within each cluster where
a smaller sum of squares is recommended [47]. A relatively high “between cluster sum of
squares/total sum of squares” represents the reduction in the sum of squares needed to
determine the k [48]. After determining the right k, the clusters are fit using that k and the
standardized data matrix as input for the “k-means” function in R. The results of k-means
clustering are presented in the “Results” section.
Table 4. Sample of the growth rate data matrix.
Rank 2008–2009 2009–2010 ... ... ... ... 2019–2020

1 0.14 0.18 ... ... ... ... 0.04
2 −0.04 0.03 ... ... ... ... −0.06
... ... ... ... ... ... ... ... ... ... ... ...
100 0.13 −0.01 ... ... ... ... −0.91
To illustrate the revenue and percent share changes, as well as growth in subsets,
different graphical representations were plotted and discussed in the “Results” section.
These include the percent share and the revenue share of the top 100 GBRs per subset.
The growth in terms of market share and revenue for each subset is plotted to observe the
general performance of each subset between the years 2008 and 2020 noting which have
positive growth and which have negative growth. Using 2008 as the base year, the revenue
growth is also calculated for each year for the 10 subsets. Moreover, a comparison between
green and non-green revenues for each subset is plotted. The distribution of the revenue by
sector is plotted for each subset to attribute the growth of each subset’s GBR to a certain
building sector by plotting the average across the years for each. Finally, the number of
accredited staff per a billion dollar of GBR is plotted for the top 100 GBCs, the top 9, and the
bottom 6. The equations used and/or the process implemented to develop the graphical
representations and comparisons are described in Figure 2.
x FOR PEER REVIEW
Sustainability 2022, 14, 8808 8 8of
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23
Figure 2. Clustering analysis comparisons description.
4.4. Time
4.4. Time Series
Series Analysis
Analysis
Considering that the yearly GBR data are correlated to previous data points as well
Considering that the yearly GBR data are correlated to previous data points as well
as time, time-series analysis would be useful to analyze it and predict future GBR. Time
as time, time-series analysis would be useful to analyze it and predict future GBR. Time
series data are a chronological sequence of observations on a variable of interest exhibiting
series data are a chronological sequence of observations on a variable of interest exhibiting
dependence and temporal ordering [49,50].
dependence and temporal ordering [49,50].
To reduce the noise in the data and uncover patterns, a recommended first step is
To reduce the noise in the data and uncover patterns, a recommended first step is to
to overlay a smoothed version of the data on the original time series plot [50,51]. The
overlay a smoothed version of the data on the original time series plot [50,51]. The simple
simple moving average is one of the most straightforward and widely used approaches
moving average is one of the most straightforward and widely used approaches to smooth
to smooth the data. Different spans for the simple moving average are used to determine
the data. Different spans for the simple moving average are used to determine which
which smooths the data better. This is done in R using the “rollmean” function and moving
smooths the data better. This is done in R using the “rollmean” function and moving av-
average spans of 2, 3, and 4. The results of this are presented in the “Results” section.
erage spans of 2, 3, and 4. The results of this are presented in the “Results” section.
Before moving to the prediction step, the data should be stationary [51]. Stationary
means Before moving
that the time to the prediction
series step, statistical
exhibits similar the data should
behaviorbe in
stationary
time [51].[51].
It isStationary
tested by
plotting the autocorrelation function (ACF) and partial autocorrelation functionis(PACF)
means that the time series exhibits similar statistical behavior in time [51]. It tested byof
plotting the autocorrelation
the smoothed data [51]. If thefunction
plots show(ACF)
that and partial
the data autocorrelation
exhibit functionproperty
the “not stationary” (PACF)
of thesignificant
with smoothed valuesdata [51].
forIfACF
the plots show that
and PACF, the data exhibit
differencing should the “not stationary”
be applied. To determineprop-
erty with significant values for ACF and PACF, differencing should be
which differencing order suits the data, the function “auto.arima” is used in R since it applied. To deter-
mine which
generates thedifferencing order suits
optimal parameters the testing
after data, theallfunction
possible“auto.arima”
combinationsisand used in R since
outputs the
it generates the optimal parameters after testing all possible combinations
model with the lowest AIC and BIC [52]. After identifying the right Arima model, the and outputs the
model with the lowest AIC and BIC [52]. After identifying the right
model is fitted on the available data and is used to predict the revenues for the upcoming Arima model, the
model is fitted
five years usingon thethe available
“fitted” anddata and isfunctions
“forecast” used to predict the revenues
in R, respectively. foranalysis
This the upcomingis also
five years using the “fitted” and “forecast” functions
done for the clusters and is presented in the “Results” section. in R, respectively. This analysis is
also done for the clusters and is presented in the “Results” section.
5. Results
This section shows the results of the data analysis methods mentioned earlier present-
ing a recent market analysis of the top 100 GBCs. First, trend analysis for the entire dataset
Sustainability 2022, 14, x FOR PEER REVIEW 9 of 25
5. Results
Sustainability 2022, 14, 8808 This section shows the results of the data analysis methods mentioned earlier pre- 9 of 23
senting a recent market analysis of the top 100 GBCs. First, trend analysis for the entire
dataset is conducted over the past 13 years. Then, using the clustering results, other trends
areisanalyzed.
conductedFinally, GBR
over the forecasts
past for Then,
13 years. 2021 through 2025
using the are estimated.
clustering results, other trends are
analyzed. Finally, GBR forecasts for 2021 through 2025 are estimated.
5.1. Trends for the Top 100 GBCs
5.1.Figure
Trends3for the Top
shows the100 GBCs
total revenue for the top 100 GBCs from 2008 to 2020, as well as
the number Figureof 3accredited
shows thestaff.
totalInrevenue
general,for theistop
there 100 GBCs from
a continuous 2008
increase intothe2020,
GBRas well as
except
the number of accredited staff. In general, there is a continuous
for the three years 2012, 2014, and 2020 for different reasons discussed by Sanboskani increase in the GBR except
et
al.for
[27].the three
These years lack
include 2012,of2014,
survey and 2020 for different
participation from bigreasons
firms and discussed
the effect byofSanboskani
COVID-
19 et al. [27]. These
constraints. include
Moreover, for lack of survey
the first couple participation from big
of years, the results show firms
that and
as thethe effect of
number
of COVID-19
accredited constraints.
staff increases,Moreover, for theincreases,
the revenue first couple of years,
leading to the results show that as
assumption thethe
number
larger of accredited
the number staff construction
of green increases, theexperts
revenueinincreases, leading team,
the contractor’s to the assumption
the better the that
contractor’s performance in green buildings, measured by an increase in the GBR. How-the
the larger the number of green construction experts in the contractor’s team, the better
contractor’s
ever, from yearperformance
2012 onwards, in green buildings, measured
this assumption is no longer by an increase in
supported asthe
an GBR.
inverseHowever,
rela-
from year 2012 onwards, this assumption is no longer supported
tionship is shown between these parameters. Hence, beyond a certain threshold, the num- as an inverse relationship
berisof
shown between
accredited staffthese
is noparameters.
longer expectedHence, to beyond
influence a certain
the GBR. threshold,
Anotherthe number
metric was of
accredited
calculated to staff
assess is no
thelonger
number expected to influence
of accredited the GBR.
staff per Another
1 billion USD metric
of GBRwas for calculated
the top
100toGBCs
assessand the for
number
other of accredited
subsets staff perin
as discussed 1 billion
SectionUSD 3.2. of GBR for the top 100 GBCs and
for other subsets as discussed in Section 3.2.
Figure 3. The association of GBR with accredited staff for the top 100 GBC.
Figure 3. The association of GBR with accredited staff for the top 100 GBC.
Figure 4 shows the frequency of contractors (out of the 100) having more than 50%
of Figure 4 shows
their total theas
revenue frequency of contractors
GBR. Although (out of
a significant the 100)
decrease is having more
shown for thethan
years50%
2012,
Sustainability 2022, 14, x FOR PEER of their total
2014,
REVIEW revenue
and 2020, as buildings
green GBR. Although a significant
construction decrease
is gaining moreispopularity
shown forwhere
the years 2012,
on 10
average,
of 25
2014, andone-third
almost 2020, green buildings
of the construction
contracting firms areismaking
gaining more
more popularity
than where
50% of their on aver-
revenues from
age, almost
green one-third
building of the contracting firms are making more than 50% of their revenues
projects.
from green building projects.
50 45
43
45
39
Frequency
40
33 33 33
35 30 31 31
29
30 25 26
25
20 17
15
10
5
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year
Figure 4. Frequency of contractors with more than 50% of total revenue as GBR.
Figure 4. Frequency of contractors with more than 50% of total revenue as GBR.
As shown in Figure 3 and regardless of the years where the GBR decreased, the total
As shown
revenues of theintop
Figure 3 andalmost
100 GBCs regardless of the
doubled years
in the where
past the GBR
13 years. decreased,
Figure the total
5 benchmarks such
revenues of the top 100 GBCs almost doubled in the past 13 years. Figure 5 benchmarks
such remarkable performance against the construction market performance and US econ-
omy inflation by comparing the percentage growth from year to year [40,53]. The results
show that the green building market provided some buffer in the recession period. Ac-
cording to the ENR report published in 2010, the green building market continued to
remarkable performance against the construction market performance and US economy

inflation by comparing the percentage growth from year to year [40,53]. The results show
that the green building market provided some buffer in the recession period. According to
the ENR report published in 2010, the green building market continued to thrive despite
the recession [29]. However, right after that, the construction market started growing
back as a whole while the green building market faced a downfall. This might be due
to following the recession period; investors were in a haste to benefit economically from
going green and did not care a lot about applying for certifications [29]. Contractors were
facing uncertainty when clients were going after the economic and operational benefits of
sustainable construction and did not seek the certifications. Hence, even though contractors
and investors might have abided by green building practices, their efforts were not certified
by the right parties to be considered as part of the GBR. In general, except for the three
years described earlier, the green building market has been outperforming the construction
market. This shows that the green building market’s contribution to the construction
market is increasing as a whole with a growth rate of more than 5% on a yearly basis. This
is another reason to encourage green building construction. In the years under study,
Sustainability 2022, 14, x FOR PEER REVIEW the
11 of 25
inflation rate was between 0 and 4%, which was always less than the GBR growth except
for the years with negative growth. This is an indication that the growth in GBR is critical.
15%
Year to Year Market Growth (%)
10%
5%
0%
-5%
-10%
-15%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year
Green building market % growth Construction market % growth U.S. economy % inflation
Top100
Figure5.5.Top
Figure 100 GBCs
GBCs revenue
revenue growth,
growth,total
totalconstruction
constructionmarket
marketgrowth, andand
growth, inflation for the
inflation for years
the
20082008
years through 2020.2020.
through
TheGBR
The GBR distribution
distribution forfor
thethe
toptop
100100
GBCsGBCs
was was
also also plotted
plotted acrossacross the building
the building sec-
sectors in Figure 6 to help contractors specialized in specific sectors know
tors in Figure 6 to help contractors specialized in specific sectors know how much thesehow much these
sectors account for from the total GBR. The results show that the retail/commercial
sectors account for from the total GBR. The results show that the retail/commercial offices offices
sectormaintained
sector maintaineda arelatively
relativelysignificant
significantcontribution
contributionofofabout
about25%
25% throughout
throughout the
the years,
years,
except for 2010 and 2011, whereas manufacturing and industrial buildings
except for 2010 and 2011, whereas manufacturing and industrial buildings had the small- had the smallest
average
est averagecontribution
contributionthroughout
throughout thethe
years, except
years, for the
except for years 2010 2010
the years through 2014 where
through 2014
where hotels had the smallest contribution. Airports projects were not part of the businesson
hotels had the smallest contribution. Airports projects were not part of the business early
but started in 2010 and have been increasing slightly since then. Multi-unit residential also
early on but started in 2010 and have been increasing slightly since then. Multi-unit resi-
encountered an increase in GBR over the years associated with the increase in green design
dential also encountered an increase in GBR over the years associated with the increase in
revenues for the years prior to the noted increases. On the other hand, the contribution
green design revenues for the years prior to the noted increases. On the other hand, the
from healthcare buildings decreased with time. This is also the case for government offices;
contribution from healthcare buildings decreased with time. This is also the case for gov-
however, they regained some contribution in 2020. In general, the other sectors maintained
ernment offices; however, they regained some contribution in 2020. In general, the other
relatively the same contribution across the years. To better understand which contracting
sectors maintained relatively the same contribution across the years. To better understand
firm sizes execute more in which building sectors, the distribution by sector is also assessed
which contracting firm sizes execute more in which building sectors, the distribution by
for the subsets in Section 3.2.
sector is also assessed for the subsets in Section 3.2.
100% Other buildings

90% Non -building miscellaneous
80% Telecommunication
70% Sports, entertainment, and civic

dential also encountered an increase in GBR over the years associated with the increase in
green design revenues for the years prior to the noted increases. On the other hand, the
contribution from healthcare buildings decreased with time. This is also the case for gov-
ernment offices; however, they regained some contribution in 2020. In general, the other
sectors maintained relatively the same contribution across the years. To better understand
Sustainability 2022, 14, 8808 which contracting firm sizes execute more in which building sectors, the distribution by23
11 of
sector is also assessed for the subsets in Section 3.2.
100% Other buildings

90% Non -building miscellaneous
80% Telecommunication
70% Sports, entertainment, and civic
60% Retail/office
50% Multi-unit residential
Manufacturing and industrial

40%
Hotels
30%
Healthcare
20%
Government offices
10%
Educational facilities
Sustainability
0% 2022, 14, x FOR PEER REVIEW 12 of 25
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Airports
Figure
Figure6.6.Top
Top7100
100GBCs revenue
GBCsthat
revenuedistribution
distribution by building sector.
Figure shows except for the by building
first sector.
year, the median for the GBR is relatively
constant;
Figureyet7 the dispersion
shows between
that except for thethe GBR
first values
year, and thefor
the median mean values
the GBR is are increasing
relatively con-
with years reaching higher values. This supports the need to study the
stant; yet the dispersion between the GBR values and the mean values are increasingfirms in subsets
with
wherereaching
years the increase in dispersion
higher values. Thisis supports
expected the
to be from
need to larger
study firms withinlarger
the firms subsetsrecorded
where
GBR.
the increase in dispersion is expected to be from larger firms with larger recorded GBR.
7. Descriptive statistics (mean, median,

Figure 7. median, quartiles)
quartiles) for
for the
the top
top 100
100 GBCs.
GBCs.
5.2.
5.2. Trends
Trends for
for Segmentation
Segmentation
Figure
Figure 8 shows the
8 shows the within
within clusters
clusters sum
sum of
of squares
squares for
for different
different values
values of
of the
the number
number
of
of clusters (k) ranging between 2 and 30. K= 10 is the number of clusters where where
clusters (k) ranging between 2 and 30. K= 10 is the number of clusters the
the reduc-
reduction in the sum of squares becomes minimal. Another evidence for the choice
tion in the sum of squares becomes minimal. Another evidence for the choice of k is by of k is
by comparing it to k = 7 and k = 13. The results show that it has a relatively high “between
comparing it to k = 7 and k = 13. The results show that it has a relatively high “between
cluster sum of squares/total sum of squares”, which represents the reduction in the sum of
cluster sum of squares/total sum of squares”, which represents the reduction in the sum
squares that this number of clusters achieves. For k = 7 it is 64.95%, for k = 10 it is 75.25%,
of squares that this number of clusters achieves. For k = 7 it is 64.95%, for k = 10 it is 75.25%,
and for k = 13 it is 77.3%; hence, there is no more significant reduction from k = 10 to k = 13
and for k = 13 it is 77.3%; hence, there is no more significant reduction from k = 10 to k =
as there is from k = 7 to k = 10 without the risk of overfitting the data. Thus, the inputs
13 as there is from k = 7 to k = 10 without the risk of overfitting the data. Thus, the inputs
used for the k-means function in R are the 10 clusters and the standardized matrix. The
used for the k-means function in R are the 10 clusters and the standardized matrix. The
subsets are determined to be of the ranks 1–9, 10–20, 21–37, 38–45, 46–64, 65–75, 76–81,
subsets are determined to be of the ranks 1–9, 10–20, 21–37, 38–45, 46–64, 65–75, 76–81, 82–
82–85, 86–93, and 94–100. Figure 9 shows the average annual growth per rank divided into
85, 86–93, and 94–100. Figure 9 shows the average annual growth per rank divided into
the 10 subsets.
the 10 subsets.
Sustainability 2022,
Sustainability 2022, 14,
14, 8808
x FOR PEER REVIEW 13
12 of 25
of 23
Figure 8. Within clusters sum of squares for varying number of clusters (k).
8. Within
Figure 8. Within clusters
clusters sum
sum of
of squares
squares for
for varying
varying number
number of
of clusters
clusters (k).
(k).
10%
10%
Average Annual Growth Rate from 2008 to
Average Annual Growth Rate from 2008 to
8%
8%
6%
6%
4%
4%
2%
2%
2020
2020
0%
0%
-2%
-2%
-4%
-4%
-6%
-6%
-8%
-8%
0
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
0
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Rank
Rank
Top 9 10–20 21–37 38–45 46–64 65–75 76–81 82–85 86–93 94–100
Top 9 10–20 21–37 38–45 46–64 65–75 76–81 82–85 86–93 94–100
Figure 9. Average annual growth per rank separated into 10 subsets using k-means clustering method
Figure 9. Average annual growth per rank separated into 10 subsets using k-means clustering
(k = 10).9. Average annual growth per rank separated into 10 subsets using k-means clustering
Figure
method (k = 10).
method (k = 10).
Figure 10a,b show the percent share and the nominal revenues of the top 100 GBRs
Figure 10a,b
per subset, show the percent share
thatand the nominal revenues of the top 100 GBRs
Figurerespectively.
10a,b show Results show
the percent share in
and terms of percent
the nominal share, the
revenues ofsubsets
the topseem to be
100 GBRs
per subset,
stagnant atrespectively.
about the Results
same show
percentage that in
meaning terms
that of
thepercent
top 9 share,
firms the
are subsets
always seem to
responsible
per subset, respectively. Results show that in terms of percent share, the subsets seem to
be
forstagnant
about 42% at about
thethe same
for percentage
top 100 meaning that the top 9 firmsof are alwaysvalue,
respon-
be stagnant at of
about GBR
the same the
percentage GBCs.
meaning However,
that thein terms
top 9 firms the
aredollar
always respon- all
sible for about
subsets have 42% of the GBR
encountered an for the top
increase in 100 GBCs. where
revenues, However,
the in terms
first five of the dollar
subsets (i.e., value,
the top
sible for about 42% of the GBR for the top 100 GBCs. However, in terms of the dollar value,
all
64 subsets have encountered an increase in revenues, where theand
first2020.
five subsets (i.e., the
all ranks)
subsetshavehavealmost doubled
encountered an their revenues
increase between
in revenues, 2008
where the first five These
subsets represent
(i.e., the
top
the 64
topranks) have
two-thirds almost doubled
discussed by their revenues
Sanboskani et between
al. who 2008
have and
an 2020.
average These
growthrepresent
rate of
top 64 ranks) have almost doubled their revenues between 2008 and 2020. These represent
the
5.7%top[27].
two-thirds discussed by Sanboskani et al. who have an average growth rate of
the top two-thirds discussed by Sanboskani et al. who have an average growth rate of
5.7% [27].
5.7% [27].
Sustainability2022,
Sustainability 2022,14,
14,8808
x FOR PEER REVIEW 14
13 of 25
of 23
(a) (b)
Top 100 GBR (US$, in billions)

Percent Share of Top 100 GBR
100% 80
70
80%
60
60% 50
40
40% 30
20
20%
10
0% 0
Top 9 10–20 21–37 38–45 46–64 Top 9 10–20 21–37 38–45 46–64
65–75 76–81 82–85 86–93 94–100 65–75 76–81 82–85 86–93 94–100
Figure 10. (a)

Figure10. (a) Percent
Percent share
share of
of top
top 100
100 GBCs
GBCs revenue
revenue per
persubset;
subset; (b)
(b) revenue
revenuefor
foreach
eachsubset
subset for
forthe
the
top 100
top 100GBC.
GBC.
Following
Following up up on
on Figure
Figure 10,
10, Figure
Figure 11 11 shows
shows the
the growth
growth raterate for
for revenue
revenue and and market
market
share
share for
for year
year 2008
2008 versus
versus 2020
2020 for
for each
each subset.
subset. Except for firms in the the first
first two
two subsets,
subsets,
which
whichare areresponsible
responsiblefor forabout
about63%63%of ofthe
therevenues,
revenues,andandthethe last
last one,
one, which
which is is responsible
responsible
for
for less
less than
than 1%,
1%, all
all the
the firms
firms seem
seem to to be
be losing
losing their
their relative
relative revenue
revenue shares.
shares. As As the
the rank
rank
increases or the firm gets smaller in size, the market share loss increases.
increases or the firm gets smaller in size, the market share loss increases. Nevertheless, the Nevertheless,
the
graphgraph confirms
confirms thatthat contractors
contractors in allinranks
all ranks are encountering
are encountering an increase
an increase in revenue
in revenue value
value since the initiation of the green building survey except
since the initiation of the green building survey except for the subset 82–85 and for the subset 82–85 and
86–93,
86–93,
which seem to be facing the most turbulence. It is expected that the last 15 ranks to to
which seem to be facing the most turbulence. It is expected that the last 15 ranks be
be losing
losing in in terms
terms ofoftheir
theirrevenues
revenuesconsidering
consideringthat thatfirms
firms occupying
occupying these these ranks
ranks areare not
not
constant
constantand andthere
thereare arenewnewsmall-sized
small-sized firms
firmstrying to join
trying the the
to join green building
green industry
building but
industry
failing. Yet, the last 6 firms show an increase of 147% which can be
but failing. Yet, the last 6 firms show an increase of 147% which can be explained by thisexplained by this subset
having its lowest
subset having revenuerevenue
its lowest in 2008in which
2008 increased by far in
which increased byall
farthe other
in all theyears
other although
years alt-
still faced turbulence from year to year. These results are
hough still faced turbulence from year to year. These results are also confirmed also confirmed by Figure
by Figure 12
that shows the percent growth in revenues for each of the subsets using 2008 as the base
12 that shows the percent growth in revenues for each of the subsets using 2008 as the
year. As discussed, unlike the other subsets, subsets 82–85 and 86–93 seem to have a sharp
base year. As discussed, unlike the other subsets, subsets 82–85 and 86–93 seem to have a
decreasing trend going below zero. It also shows that the top 64 firms grow at a faster rate
sharp decreasing trend going below zero. It also shows that the top 64 firms grow at a
than the others. Another interesting observation is that the bottom 6 firms had very fast
faster rate than the others. Another interesting observation is that the bottom 6 firms
Sustainability 2022, 14, x FOR PEER REVIEW of had
growth rates, although they represent the smallest portion of the revenues. As a15whole, 25
very fast growth rates, although they represent the smallest portion of the revenues. As a
the top 100 GBCs have an increasing percent growth in revenues for each year compared
whole, the top 100 GBCs have an increasing percent growth in revenues for each year
to 2008.
compared to 2008.
4.3%
Top 9 91%
11.3%
10–20 103%
21–37 -1.9%
79%
38–45 0.6%
84%
46–64 -11.7% 61%
65–75 -26.8% 34%
76–81 -41.1% 8%
82–85 -53.4%
-15%
86–93 -67.5%
-41% 38.5% 147%
94–100
Growth (%)
Market share growth Revenue growth
Figure 11. Market share and revenue changes for each subset for 2008 versus 2020.
200%
ase 2008)
150%
86–93 -67.5%
-41% 38.5% 147%
94–100
Growth (%)
Market share growth Revenue growth
200%
Growth Percentage (base 2008)

150%
100%
50%
0%
-50%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Top 9 10–20 21–37 38–45 46–64 65–75
76–81 82–85 86–93 94–100 Top 100
Figure
Figure12.
12.Percent
Percentgrowth
growthininrevenues
revenuesfor
formarket
marketsubsets
subsets(base
(baseyear
year2008).
2008).
ToToassess
assessthe
thereasons
reasonsbehind
behindthese
thesegrowth
growthrates,
rates,Figure
Figure13a 13ashows
showsthe thedistribution
distributionofof
revenues in percentage between the different building sectors for
revenues in percentage between the different building sectors for each market subset each market subsetinin
2020. It seems that the fastest growth rates for the top 64 firms have to do with
2020. It seems that the fastest growth rates for the top 64 firms have to do with the building the building
industrythey
industry theyare
areinvolved
involvedininthethemost,
most,which
whichisisretail
retailincluding
includingcommercial
commercialoffices
officesand
and
retailfacilities.
retail facilities.The
Thefocus
focusshifts
shiftsatatthe
the65th
65thfirm
firmandandbeyond
beyondtotoeducational
educationalfacilities.
facilities.InIn
addition,Figure
addition, Figure13b
13bshows
showsthe thedifference
differenceininrevenue
revenuevalues
valuesacross
acrossthe
thebuilding
buildingsectors
sectors
for years 2008 versus 2020 for subset 10–20 to highlight the building sector that led toled
for years 2008 versus 2020 for subset 10–20 to highlight the building sector that theto
the
best
Sustainability 2022, 14, x FOR PEER best increasing growth rate. The results show that the increase is in
increasing growth rate. The results show that the increase is in retail and multi-unit
REVIEW retail and multi-
16 of 25
unit residential
residential between
between 20082020.
2008 and and 2020.
Hence, Hence, shifting
shifting focusfocus to these
to these building
building sectorssectors
is ex-is
expected
pected to improve
to improve greengreen building
building revenue.
revenue.
(a) Educational facilities
(b)
Top 9 Other markets
Government offices
10–20 Other buildings
21–37 Healthcare
Entertainment/Civic
38–45 Hotel Multi-unit residential
46–64 Hotel
Multi-unit residential
65–75 Healthcare
76–81 Retail Educatinal facilitis
82–85 Entertainment/Civic Government offices
86–93 Retail
Other markets
94–100
0 100 200 300
Other buildings 2020 2008
0% 20% 40% 60% 80% 100% GBR (US$, in billions)
Figure 13. (a) Revenue distribution byRevenue

Figure 13. (a) buildingdistribution
sector for market subsets
by building in for
sector 2020; (b) firms
market 10–20
subsets GBR(b)
in 2020; infirms
2008 10–20
and 2020
GBRby
building sector. in 2008 and 2020 by building sector.
Figure
Figure14a,b
14a,bshow
showthethegreen
greenand
andnon-green
non-greenrevenues
revenuesfor forthe
thesubsets,
subsets,respectively.
respectively.
Although
Althoughthe thenon-green
non-greenbuilding
buildingrevenue
revenue for
for the top 100
100 GBCs
GBCsisisalways
alwayshigher
higherthan
thanthe
the green revenue across the 13-year period, the GBR is growing at a faster
green revenue across the 13-year period, the GBR is growing at a faster rate. The green rate. The
green revenue
revenue for the
for the top top
100 100
GBCsGBCs grew
grew by by
81%81% whereas
whereas thethe non-green
non-green buildingrevenue
building revenuein-
increased
creased byby 6%
6%from
from2008
2008toto2020.
2020.The
Thefigures
figuresalso
also show
show that
that in in years
years 2010,
2010, 2017,
2017, 2018,
2018, and
and 2020,
2020, thethe green
green revenue
revenue forfor
thethe Top
Top 9 firms
9 firms exceeds
exceeds their
their non-green
non-green revenue.
revenue.
120 (a) (b)

120
green Building Revenue
GBR (US$, in billions)
100
100
(US$, in billions)
80
80
60 60
40 40
20
Figure 14a,b show the green and non-green revenues for the subsets, respectively.
Although the non-green building revenue for the top 100 GBCs is always higher than the
green revenue across the 13-year period, the GBR is growing at a faster rate. The green
revenue for the top 100 GBCs grew by 81% whereas the non-green building revenue in-
Sustainability 2022, 14, 8808 creased by 6% from 2008 to 2020. The figures also show that in years 2010, 2017, 2018, and
15 of 23
2020, the green revenue for the Top 9 firms exceeds their non-green revenue.
120 (a) (b)

120
Non-green Building Revenue

GBR (US$, in billions)
100
100
(US$, in billions)
80
80
60 60
40 40
20 20
0 0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Top 9 10–20 21–37 38–45 46–64 Top 9 10–20 21–37 38–45 46–64
65–75 76–81 82–85 86–93 94–100 65–75 76–81 82–85 86–93 94–100
Figure 14.
Figure 14. (a)
(a) GBR
GBR for
forthe
thesubsets
subsetsofofthe
thetop
top100
100GBCs;
GBCs;(b)(b) non-green
non-green building
building revenue
revenue forfor
thethe sub-
subsets
sets of top 100
of top 100 GBCs. GBCs.
Figure 15 shows
shows thethenumber
numberofofaccredited
accreditedstaff forfor
staff every
every 1 billion
1 billionUSD USDfor for
the the
top top
100
GBCs,
100 which
GBCs, whichhas has
the the
samesametrend as the
trend number
as the number of accredited
of accredited staff in general,
staff in general, as as
shown
shown in
Figure
in Figure3. 3.
Moreover,
Moreover, thethe
toptop9 firms
9 firms seem
seem toto
have
have the
thesame
same trend;
trend; however,
however,the thebottom
bottom6
6firms
firmsdodo not
not exhibit
exhibit a meaningful
a meaningful trend
trend across
across thethe years.
years. TheThe results
results show showthatthat
there there
is a
is a higher
higher numbernumber of accredited
of accredited staff staff
per 1per 1 billion
billion USD where
USD where these these
firms firms
make makenearlynearly
negli-
negligible revenues
gible revenues compared
compared to thetotopthe ones.
top ones. By plotting
By plotting this this
metricmetric forthe
for all all subsets,
the subsets, the
the results
results showshowthatthat the 37
the top topfirms
37 firms
exhibitexhibit a similar
a similar trendtrend
to theto the unlike
total, total, unlike
the otherthe firms.
other
firms. Furthermore,
Furthermore, summingsumming
up theupnumber
the number of accredited
of accredited staff staff for each
for each subsetsubset
showsshowsthatthat
the
the top 37 firms have staff in the order of four digits while those
top 37 firms have staff in the order of four digits while those of the others are in17the
Sustainability 2022, 14, x FOR PEER REVIEW of the others are ofin25the
order
order of digits
of three three digits
wherewhere
the top the37top
firms 37 firms are responsible
are responsible for 80% forof80%
theof GBRtheacross
GBR across
the yearsthe
years
(Figure(Figure
10a). 10a). Hence,
Hence, this this
mightmight indicate
indicate lower-ranked
lower-ranked firmscutting
firms cuttingtheir
their resources
resources in in
terms
terms ofofaccredited
accredited staff by by
staff probably
probably hiring moremore
hiring experienced ones that
experienced oneswould
that still
wouldprovide
still
provide the needed expertise but are more efficient than 10 junior staff. This would reduce
the needed expertise but are more efficient than 10 junior staff. This would reduce the
the contractor’s costs for going green which was identified as a barrier by the literature.
contractor’s costs for going green which was identified as a barrier by the literature.
1200
Number of accredited staff/1 billion USD
1000
800
600
400
200
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Top 100 Top 9 94-100
Figure 15. Number of accredited staff per 1 billion USD.

5.3. Time-Series Analysis Results
5.3. Time-Series Analysis
Figure 16 Results averages of spans 1, 2, 3, and 4 for total green building market
shows moving
Figure 16
revenues shows
from moving
2008 averages
to 2020. Span 4ofseems
spansto1, be
2, 3,
theand 4 for
best total green
smoothing building
option mar-
as the data
ket revenues from 2008 to 2020. Span 4 seems to be the best smoothing option as the data
reveal a steadily increasing pattern. Hence, a moving average of span 4 is used to smooth
the data.
Top 100 Top 9 94-100
Sustainability 2022, 14, 8808

5.3. Time-Series Analysis Results 16 of 23
Figure 16 shows moving averages of spans 1, 2, 3, and 4 for total green building mar-
ket revenues from 2008 to 2020. Span 4 seems to be the best smoothing option as the data
reveal aa steadily
reveal steadily increasing
increasing pattern.
pattern. Hence,
Hence, aa moving
moving average
average of
of span
span 44 is
is used
used to
to smooth
smooth
the data.
the data.
Figure 16.
Figure 16. Moving
Moving average
average of
of GBR,
GBR, with
with different
different spans.
spans.
The
The plots
plots of
of ACF and PACFPACF show
show that
that the
the data
data exhibit
exhibit the
the “not stationary” property
with
withsignificant
significantvalues
valuesforforACF
ACF and PACF
and PACFas well as decreasing
as well as decreasingACFACF
and first
and PACF lag close
first PACF lag
to 1. Hence, differencing should be applied. As discussed in the “Materials
close to 1. Hence, differencing should be applied. As discussed in the “Materials
Sustainability 2022, 14, x FOR PEER REVIEW and Methods”
and
18 of 25
section,
Methods” “auto.arima” is used in Ristoused
section, “auto.arima” determine
in R towhich differencing
determine which order is needed.
differencing orderTheis
output
needed.points to ARIMA(0,2,0);
The output hence, a differencing
points to ARIMA(0,2,0); of order 2 isof
hence, a differencing needed
order 2and no further
is needed and
moving average
no further moving andaverage
autoregressive processes areprocesses
and autoregressive needed. Toare verify that the
needed. stationary
To verify thatand
the
stationary and problems
autocorrelation autocorrelation problems
are solved, the ACFare andsolved,
PACF ofthe the ACF and PACF
ARIMA(0,2,0) of the
are plotted.
ARIMA(0,2,0)
Figure 17 shows arethat
plotted. Figure
both ACF and17PACF
showssatisfy
that both ACFresiduals
that the and PACF are satisfy that thenow
independent re-
siduals are independent now since there are no more significant correlations
since there are no more significant correlations (blue lines not exceeded) except at lag 1 (blue lines
not exceeded)
which is normalexcept
due toatthelagrandom
1 which is normal
error duean
[54]. Thus, to ARIMA(0,2,0)
the random errormodel [54].
fitsThus,
the dataan
ARIMA(0,2,0) model fits the
and will be used for forecasting. data and will be used for forecasting.
Figure 17.
17. Auto correlation and
and partial
partial auto
auto correlation
correlation functions
functions plots
plots for
for difference
differenceorder
order(d)
(d)2.2.
The ARIMA (0,2,0) model is plotted in Figure 18 along with the forecasted revenues
for the years 2021 through 2025 with the upper and lower prediction intervals. Similarly,
Figure 19a,b show the ARIMA model for each subset. The results indicate an increase an-
ticipated to reach 83.325 billion USD in 2025 for the top 100 GBCs. Half of it is by the top
Figure 17. Auto correlation and partial auto correlation functions plots for difference order (d) 2.
The ARIMA
The ARIMA (0,2,0)
(0,2,0) model
model is is plotted
plotted in
in Figure
Figure 18
18 along
along with
with thethe forecasted
forecasted revenues
revenues
for the years 2021 through 2025 with the upper and lower prediction intervals.
for the years 2021 through 2025 with the upper and lower prediction intervals. Similarly, Similarly,
Figure 19a,b
Figure 19a,b show
showthetheARIMA
ARIMAmodel modelfor foreach
eachsubset.
subset.The results
The indicate
results indicatean increase
an increasean-
ticipated to reach 83.325 billion USD in 2025 for the top 100 GBCs. Half
anticipated to reach 83.325 billion USD in 2025 for the top 100 GBCs. Half of it is by the of it is by the top
9 firms
top onlyonly
9 firms confirming
confirmingthe analysis by Sanboskani
the analysis by Sanboskaniet al. et
[27].
al. In addition,
[27]. the firms
In addition, rank-
the firms
ing 10–3710–37
ranking are expected to contribute
are expected by 40%
to contribute by from the total,
40% from leaving
the total, aboutabout
leaving 10% for 10%allfor
other
all
ranks.
other ranks.
Figure 18. Time series analysis predicted

predicted revenues
revenues for
for the
the top
top 100
100 GBCs
GBCs until
until 2025.
2025.
Figure 19.
Figure 19. (a)
(a) Time
Timeseries
seriesanalysis
analysispredicted
predictedrevenues
revenues
forfor
thethe first
first twotwo subsets;
subsets; (b)(b) time
time series
series anal-
analysis
ysis predicted
predicted revenues
revenues for subsets
for subsets 3 through
3 through 10. 10.
Table 55 shows
Table shows thethe observed
observed revenues
revenues for
for the
the top
top 100
100 GBCs
GBCs and each subset in 2020,
as well
as well as
as the
the predicted
predicted revenues
revenues in
in 2025.
2025. The
The predicted
predicted market
market revenues
revenues forfor the
the subsets
subsets
weresummed
were summedup uptotocompare
compareagainst
against that
that resulting
resulting from
from thethe
toptop
100100 model.
model. TheThe results
results are
are almost
almost the same
the same differing
differing by about
by about 3% due3%todue to rounding
rounding errors.errors.
Hence,Hence,
this is this is a confir-
a confirmation
mation
of of thefrom
the results results
thefrom the models.
models.
Table 5. Forecasted 2025 GBR (USD, billions) for the GBC market subsets.
Subset 2020 Revenue 2025 Predicted Revenues 95% Lower Limit 95% Upper Limit
Top 9 31.92 40.25 31.91 48.59
10–20 15.70 19.98 18.83 21.12
21–37 11.12 12.93 12.11 13.75
38–45 3.26 3.86 1.87 5.84
Table 5. Forecasted 2025 GBR (USD, billions) for the GBC market subsets.
Subset 2020 Revenue 2025 Predicted Revenues 95% Lower Limit 95% Upper Limit
Top 9 31.92 40.25 31.91 48.59
10–20 15.70 19.98 18.83 21.12
21–37 11.12 12.93 12.11 13.75
38–45 3.26 3.86 1.87 5.84
46–64 4.71 5.27 4.55 6
65–75 1.68 1.64 1.46 1.82
76–81 0.66 0.68 0.66 0.71
82–85 0.32 0.4 0.37 0.42
86–93 0.37 0.58 0.42 0.73
94–100 0.42 0.4 0.25 0.55
Top 100 cumulative 70.16 85.99 72.43 99.53
Top 100 model 83.33 66.17 100.48
6. Discussion and Limitations

A report about the 2018 green building trends showed that almost one-third of the firms
perceive green buildings as not being affordable and only meant for high-end projects [55].
This paper contributes to altering this concept and encouraging green buildings by provid-
ing a systematic analysis of market trends for contracting firms to make more informed
decisions when going green. A study by Tan et al. concluded that there was no unique
relationship between sustainable construction practices and contractors’ competitiveness at
that time, but they anticipated that this would change in the future [56]. Ten years later,
the current paper highlights the increase in revenues associated with constructing green
buildings (Figure 3) confirming the expectations of Yan et al. [8]. This discussion ties in with
focusing on one of the dimensions of the triple bottom line since the sustainability concept
is often considered a triple bottom line framework which incorporates the three dimensions
of performance as environmental, social, and financial [57]. There has been a lot of work
published on the social and environmental dimensions of sustainable construction, but
considerably less work on the financial dimension, especially when considering the market
performance of GBC [7,8,20,58–60]. Thus, this paper’s novel contribution is that it started
the critical discussion of the financial aspects of sustainable construction, particularly fo-
cusing on and identifying the increasing revenues generated from sustainable construction
and making this new information available to construction firms. This paper shows them
there are considerable and increasing revenues in this industry sector to encourage them to
engage in it; hence filling an important gap in the body of knowledge around the financial
dimension of sustainability.
A study in 2018 compared the cost performance of green and conventional construc-
tion projects to deduce that most green building construction projects have a cost premium
of 5–10% [61,62]. The results indicate that green residential buildings have the highest
cost premiums compared to their non-green counterparts, followed by commercial of-
fices [61,62]. The stated cost premium is a main reason why residential buildings are
not so popular among GBCs (Figure 6). The results of Bon-Gang also show that project
size and project type are different variables with statistical significance that impact cost
premiums [61]. This supports the analysis performed in this paper where segmentation of
the firms to those exhibiting similar behavior and assessments across the building sectors
give the contractors better guidance to make more informed decisions relative to their firm
size and types of projects to work on.
Nevertheless, a study in Nigeria showed that sustainable construction of educational
buildings creates more fear than other buildings since most are funded by the government,
which makes exceeding their budgets an issue for those responsible for delivering the
project [63]. The results identify similar behavior in the US in some focused sectors, where
the largest firms (ranking 1–64) refrain from committing most of their resources to educa-
tional buildings while lower-ranked firms end up constructing more of those (Figure 13a)
and these were identified to be losing their GBR the fastest (Figures 11 and 12).
In opposition to earlier studies, a study by Emergen Research in 2020 shows that
green residential buildings will be experiencing a substantial growth rate, by 2027, due to
the increasing demand for residential buildings, which will dominate the green building
construction market [64]. This supports the results presented in Figure 13b that show that
multi-unit residential buildings experienced the highest increase between years 2008 and
2020 for the subset of firms that have experienced the fastest GBR growth rates so far. The
report also shows that the forecasted increase in the green construction market will be
driven by the growth in North America (38.6%). This is another indicator of why it is
critical to understand the market of GBC in the US, since it is responsible for a substantial
portion of the developments in the green construction market.
Moving to practice, many experts in the field of sustainable design and construction
support that the pandemic and government shutdowns slowed down the development of
green buildings in 2020, on one hand, but reshaped the whole mentality of going green on
the other hand to improve the approach of the built environment to support the health and
well-being of occupants [16,65–67]. This explains the decline in GBR in 2020 (Figures 3–5).
The most recent report by ENR discusses that “green design firms and contractors report
that building performance standards are being driven less by new technologies and more
by market pressure as public awareness grows of the magnitude and associated risk of the
climate crisis” [16]. This supports the predicted continuous increase in GBR (Figure 18)
since the public mentality now shifted focus to maintaining their environment, especially
after the COVID-19 pandemic. Papiez, the director of sustainable design at Ewig Cole,
explains how reducing embodied carbon can be achieved through leaner design by limiting
the quantity of material used in construction and eliminating unnecessary products [16].
A sustainability director at one of the top 100 green design firms emphasizes that the
pandemic increased clients’ willingness and interest in sustainable structures which means
that more sustainable design and construction are expected in the upcoming years [16],
hence increasing the GBR even further. Thus, to complement all of these plans and to
inform decision-making, this paper explores the future of GBR for contractors interested in
pursuing this market. It also shows them the revenues of the various sectors. Hence, if a
firm is specialized in a certain sector (e.g., airports), they will know how it is doing in terms
of revenue and whether it is an attractive opportunity for them to widen their spectrum
and diversify their financial opportunities while fulfilling sustainability goals at the same
time. It gives them a glimpse of what to expect with time as achieving sustainability
goals becomes more of a requirement than a luxury (e.g., already required for US federal
governments, for instance).
This paper addressed one dimension that plays a role in informing contractors’ de-
cisions when constructing green buildings. However, more thorough studies of how to
overcome other challenges for contractors must be undertaken in future research endeavors.
One such approach is understanding how revenues from green buildings can be associated
or used for green construction materials costs, which is one of the biggest challenges for
contractors. As a limitation, and due to the lack of data availability, this study relied
mostly on the financial metric of revenues, and somewhat on the number of accredited
staff. Future studies can investigate the influence of the number and years of experience
of accredited staff and the performance of GBCs. Other potential metrics to include in the
analysis include the number of projects completed and the number of projects success-
fully completed within budget and on time, among others. Nevertheless, if the profit and
net rate of return on the different types of green buildings are accessible, more thorough
analysis can be done on those to show which sectors seem to be more profitable to which
contractors. Probably, revenues can be studied from another perspective of how they are
utilized in other green building projects and how they could influence the popularity of
constructing green buildings. On the other hand, analyses around the best project delivery
methods, procurement methods, and selection approaches, as well as contract types, can be
conducted to give more guidance for investors and contractors on which combinations of
the available options across each of the processes lead to more successful experiences with
“going green”. Another limitation is that the analyzed data are for the top 100 GBC firms
which do not necessarily represent the whole industry but are generally responsible for a
large portion of the revenues. Furthermore, the data collected through the surveys do not
always represent the same firms since some firms might not participate in the survey in a
given year. Moreover, the ranks of the participating firms change across the years and no
one firm is expected to hold the same rank throughout the study period, especially since
there is a large failure rate in the construction industry and many companies can be just
starting with their green building experiences and trying to build themselves up.
7. Conclusions
This paper presented a unique analysis of the market status of GBCs in the US using
yearly collected revenue data of the top 100 GBCs from ENR. Market trends were analyzed
for the top 100 GBCs as a whole and for subsets of those that exhibit similar GBR growth
behavior. The main results from our analyses show that there has been a consistent increase
in GBR since 2008 except for three notable years due to identified reasons. Benchmarking
against the construction market and US economy inflation shows that green buildings are
positively contributing to the construction market. Analyses associating the number of
accredited staff to GBR provides additional insight to contracting firms on how to handle
their resources better while not compromising the needed expertise and still increasing
their GBR. One critical takeaway is the results about the building sectors, revealing the
popularity of retail and commercial offices at all times covered by the analysis, and a
continued increase for sustainable residential buildings.
Studying the top 100 contracting firms in clusters/subsets revealed that the top
20 firms are responsible for about 63% of the revenues and have constantly been increasing
their revenues and market share. Studying the subset that demonstrated the fastest and
most revenue growth revealed the shift in focus on more residential buildings. Furthermore,
the paper provided a forecast of future GBR that continues to increase for the top 100 firms
and is expected to reach about 83 billion USD in 2025. The top two-thirds of the firms
are also expected to increase in revenues while the rest show relatively constant revenues.
Accordingly, the analysis presented would be the first step to help contractors interested in
constructing green buildings know which types of projects to go for considering their size,
resources, and expertise. Moreover, it provides insight for the contractors already in this
field to better manage their resources and strategically plan to grow. As governmental poli-
cies and other reports have mentioned, the need for sustainable buildings will eventually
reach a point where it is a necessity in order to meet policies aiming to sustain the built
environment and human health. Hence, it is critical for contractors who are not there yet to
start preparing themselves, and at least explore the opportunity to enter this market sector
if it is the fit for them. Owners and investors also benefit from this study by learning which
sectors are growing and which sizes of contractors are involved in them. The presented
analyses can also help owners, as well as accreditation organizations, note the sectors that
are least invested in or that may be causing declines in revenues for smaller firms. This
way they can check the reasons for such performance and maybe develop new policies or
incentives to resolve the issues.
Other than providing market analyses for contractors and other stakeholders to make
more informed decisions, this paper contributes to the sustainability and construction
management body of knowledge by (1) conducting statistical clustering and trend analysis
to analyze the GBC market data and uncover trends for different firm sizes and sectors,
and (2) forecasting GBR trends into the near future. The paper updates the state of the art
on studies of sustainable development, focusing on sustainable. Furthermore, the methods
presented in this paper can be replicated in another country and into the future, as long as
the needed data are available.
Author Contributions: Conceptualization, M.E.A. and H.S.; methodology, M.E.A. and H.S.; software,
H.S.; formal analysis, H.S.; resources, M.E.A.; data curation, H.S.; writing—original draft preparation,
H.S.; writing—review and editing, E.A.; supervision, M.E.A. and E.A. All authors have read and
agreed to the published version of the manuscript.
Funding: This research received no external funding.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: ENR green building revenues survey data at https://www.enr.com/
toplists/2021-Top-100-Green-Building-Contractors-Preview (accessed on 15 August 2021).
Conflicts of Interest: The authors declare no conflict of interest.
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Academic Editor: Antonio Caggiano

Sustainability 2022, 14, 8808. https://doi.org/10.3390/su14148808 https://www.mdpi.com/journal/sustainability

2.2. The Focus on Contractors

benefits to them, such as growing their reputation as advocators of the environment,

From Engineering From US Census

Descriptive statistics and

Table 2. Sample collected data for green contracting by sector.

Green Contracting by Sector

Table 3. Sample collected data of construction industry spending.

4.2. Descriptive Statistics and Trend Analysis

4.3. Segmentation/Cluster Analysis of the Top 100 GBCs

Firm GBRyear(n) − Firm GBRyear(n−1)

Table 4. Sample of the growth rate data matrix.

Rank 2008–2009 2009–2010 ... ... ... ... 2019–2020

Figure 2. Clustering analysis comparisons description.

remarkable performance against the construction market performance and US economy

100% Other buildings

70% Sports, entertainment, and civic

100% Other buildings

70% Sports, entertainment, and civic

50% Multi-unit residential

Manufacturing and industrial

7. Descriptive statistics (mean, median,

Top 100 GBR (US$, in billions)

Figure 10. (a)

Growth Percentage (base 2008)

Figure 13. (a) Revenue distribution byRevenue

120 (a) (b)

120 (a) (b)

Non-green Building Revenue

Top 100 Top 9 94-100

Figure 15. Number of accredited staff per 1 billion USD.

Figure 15. Number of accredited staff per 1 billion USD.

Sustainability 2022, 14, 8808

Sustainability 2022, 14, x FOR PEER REVIEW 19 of 25

Figure 18. Time series analysis predicted

6. Discussion and Limitations

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