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RESEARCH AND THOUGHT LEADERSHIP

Contractors' Attitudes Towards Sustainable Buildings in the Russian Market

Although significant efforts are underway in various circles involving developers, designers, consultants and academia to promote green buildings in Russia, contractors that play a critical role in green building development have so far been largely absent in these efforts. Contractor involvement in green building development is particularly important because in the great majority of international green building standards, compliance of the contractors with sustainable construction rules plays a major role in order for a building to be certified as green. Compliance with such rules by the contractor can make the difference between successful certification of a building or not. In order to contribute to the evolving body of knowledge on green buildings in Russia, and to fill the gap due to the absence of contractors in the green building efforts, a survey among the contractor companies in the Russian construction industry was conducted on the feasibility and practicality of the requirements of the BREEAM standard, one of the two most widely used green building certification standards. In this presentation, we present the results of this survey on the feasibility of fulfilling these requirements in the current market conditions as perceived by the contractors, and the degree of compensation they would expect for compliance. We also present the results on their past experience in green building construction, their familiarity with sustainable construction activities, and their preference among different international certification standards.

 

CONTRACTORS ATTITUTES TOWARD SUSTAINABLE BULDINGS IN THE RUSSIAN MARKET 

(Original Article Published in Commercial Real Estate (CRE) Russia in August 2010, #16-145, p.63-65)

by

B. Kagan Ceylan

Although trailing behind the well developed real estate markets, such as the U.S., Europe and the Gulf, green buildings are finally finding their place in the Russian real estate market. The first green buildings of Russia are going through the certification process based on international standards (e.g. BREEAM International of U.K. and LEED of U.S.).

Green buildings can be defined as those that address the ecological, social, and economic requirements in relation to their environment. The goals of green buildings are to create and operate a healthy environment based on resource efficiency and ecological design. Therefore, unlike the common perception that green buildings are solely related to the ecology, they also encompass both the social and economic interactions with future occupants  of the constructed facilities. Accordingly, a number of standards have been developed and are being implemented to measure the performance of constructed facilities along these dimensions.  Currently, the BREEAM (U.K.) and LEED (U.S.A.) standards are the most commonly used  internationally.

Parallel to the pioneer developers aiming to be the early adopters in the green development market, professional associations are also stepping up their efforts to further promote sustainable construction and development practices in Russia. The Russian Green Building Council (RGBC) established in 2009 is leading these efforts and increasingly playing an active role in the establishment of sustainable construction and development standards. Among others, a major goal of RGBC is to facilitate the establishment of Russia’s own green building standards. Although development of Russia’s green building standards from scratch is one of the options available to achieve this goal, a more likely scenario is using one of the globally accepted green building standards as a basis, and making the necessary revisions to reflect local conditions and transferring elements from other standards on an as needed basis.

Although significant efforts are underway in various circles involving developers, designers, consultants and academia to promote green buildings in Russia, and a green building movement is certainly gaining momentum, contractors that play a critical role in green building development have so far been largely absent in these efforts. More contractor involvement and information exchange with other project stakeholders is essential in order for the green building evolution to take place on a broad base and in the right direction for the Russian market. This is particularly important in light of the fact that in the great majority of international green building standards, compliance of the contractors with sustainable construction rules plays a major role in order for a building to be certified as green.

Besides implementing the green design prescribed by the owners and designers, contractors’ internal operations and practices during the construction process also play an important role in qualifying for green certification.  For example, under the BREEAM standard, requirements pertaining to contractor operations can correspond to some 15 – 18% of the overall points that a building can achieve within the structure of grading applied to greed building certification. These certification requirements, such as those pertaining to the energy consumption of the construction site activities and use of responsibly sourced main construction materials, are typically controlled by the contractor during the construction process. Compliance with such requirements by the contractor can make the difference between successful certification of a building or not, or can improve the rating of a green building by at least one level (e.g. from good to very good under BREEAM standards).

A Survey on Contractor Perceptions of Sustainable Construction Practices

In order to contribute to the evolving body of knowledge on green buildings in Russia, and to fill the gap mentioned above in these efforts, a survey was conducted among the contractor companies in the Russian construction industry on the feasibility and practicality of the requirements of the BREEAM standard, one of the two most widely used green building certification standards on a world-wide basis. Because the BREEAM standard has been adapted to the conditions of various countries and regions to date, and is currently the most preferred standard by developers in Russia, it is also a viable alternative to serve as a basis for Russia’s own green building standards in the future and provides a valid framework for the purpose of our survey.

The survey consisted of 10 questions related to major BREEAM International requirements that are typically fulfilled by contractors and covered issues such as;

-        building commissioning to encourage optimum performance of the building’s engineering systems,

-        management of sites in an environmentally and socially considerate and accountable manner,

-        control of CO2  ( a green house gas)emissions into the atmosphere,

-        electricity and water consumption,

-        use of legally (and responsibly) sourced building materials,

-        construction site waste management and

-        use of recycled aggregates.

In the survey, we investigated the contractor perceptions by measuring how they perceived the feasibility of fulfilling these requirements in the current market conditions, and the degree of compensation they would expect from their owner if a requirement is deemed feasible. We also asked the contractors about their past experience in green building construction, if any; their familiarity with sustainable construction activities, and their preference among different international certification standards to complement their responses.

Results

Our survey results showed that none of the contractors were involved in a sustainable construction project in the past. Our survey results also showed that the contractors are aware of the sustainable construction and development concept but the great majority have minimal information about the requirements (mainly through media, peers and other indirect sources). Similarly, the contractors also indicated that they have little or no information about the content of different green building certification standards (such as BREEAM, LEED and others), and the differences between them, although a few contractors indicated their preference for BREEAM and LEED (Figure 1).

Click below for Figure 1. Core industry segments of contractors participated in the survey and their preference for green standards

The responses provided by the contractors that participated in our survey varied significantly. The results (Figure 2) showed that none of the contractors saw any problem with the BREEAM requirement that a user friendly building user manual is prepared for non-technical building staff to operate the building engineering systems in an optimal and energy efficient manner. Similarly, all contractors believed procurement of standard construction materials, such as green certified insulation material, is feasible. With the exception of some outliers, the great majority of the contractors had the opinion that it is feasible to appoint a special commissioning manager to oversee the installation and commissioning of the building engineering systems to ensure the optimal and energy efficient installation and commissioning of these systems. They also expressed the belief that the impact of construction site operations on the environment and the neighborhood can be controlled and managed as required by BREEAM. 

However, we saw significant disagreement in the contractor opinions on three important BREEAM requirements.

  1.      The first one was the control of construction site impacts, including monitoring, reporting and setting targets for energy and water consumptions, minimizing CO2 emissions from site operations and  vehicles transiting to/from the site, and using environment friendly materials and implementing an Environmental Management System on site.
  2.      The second requirement was responsible sourcing of materials by using key construction materials with Environmental Management System certificates and 100% legally sourced timber.
  3.      The third requirement was preparation and implementation of a site waste management plan to manage demolished materials, set targets for key construction material waste groups and eliminating them from going to landfills by reusing these materials in new construction.

While a significant number of contractors indicated that fulfillment of these requirements is not feasible under the current conditions of Russia, others had the opinion that these can be accomplished if the additional costs are born by the owners. Finally, the great majority of the contractors had the opinion that use of recyled aggregates in new construction is not currently feasible. For this requirement, one contractor that saw this requirement as feasible indicated as a caveat that fulfillment of this requirement would ultimately be based on the capability of suppliers.

Click below for Figure 2. Feasibility of BREEAM contractor requirements as perceived by contractors surveyed 

Conclusions

The overall survey results showed that the contractors were relatively optimistic regarding the feasibility of the BREEAM requirements. The responses indicate that the great majority of the contractors are willing to undertake additional efforts, if requested, to meet the requirements of BREEAM for a green building, although not surprisingly this willingness is on condition that this additional effort is partially or fully compensated by the owner for most of the requirements. However, despite this willingness, the lack of experience and knowledge on sustainable construction practices among these contractors is likely to make assistance from outside consultants essential for the successful execution of green building projects. The availability of certified BREEAM, LEED or other standard assessors is likely to play an important role to fill this gap, at least during the first green building projects until sufficient experience and expertise is built up within these contractor organizations. 

A major conclusion of our survey is that some BREEAM requirements may not be practical, or may be too costly for the contractors to implement under the existing market conditions of Russia. The contractors’ response indicates the current supply chain for construction materials is not ready for widespread use of recycled aggregates in new constructions as required by BREEAM. Similarly, the responses also create doubt about the feasibility of some contractor operations as required by BREEAM, such as site waste management, sourcing of key materials with appropriate Environment Management System certificates, control of site operations’ impact on the environment in terms of energy and water use, CO2 emissions and use of 100% legally sourced timber.

We believe the survey results also show indirectly that green building construction projects may be vulnerable to disputes due to the additional liabilities that may be imposed on the contractors to ensure certification. We are currently not aware of any green building construction contracts that can serve as a precedent. Therefore, the certification targeted by the developers will most likely require special contractual arrangements between the owner and the contractor that are project specific. However, in the absence of precedent and a governing law and regulations, this may prove challenging and bring about questions during the contract execution. For example:

-        In the case the building fails to achieve the planned certification, how would the client’s losses due to failure of achieving the green certification be quantified and claimed?

-        In case the contractors fail to fulfill green design requirements due to conflicts with local norms and regulations, who would be liable for the consequences of such conflicts (e.g. costs associated with changes in the design and construction methods)?

-        Can the typical contractor’s insurance policies and bonds used in the current Russian construction industry (e.g. all risk, professional indemnity, performance bonds) cover such green building claims and liabilities?

One way to counter the above mentioned risks is to establish a rather different owner-contractor relationship. Cooperative owner-designer-contractor relationships, such as partnering, ensuring a win-win situation for all parties can bring green building construction projects to a successful completion much easier rather than the traditional, and relatively hostile, contractual set ups in which responsibilities and liabilities of the owner and the contractor are separated sharply with penalty clauses.

Figure 1a. Core industry segments of contractors that participated in the survey
Figure 1b. Preferred green building standard of contractors that participated in the survey
Figure 2. Feasibility of BREEAM contractor requirements in the Russian market as perceived by survey participants

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