Nils Brown

Owner organizations’ value-creation strategies through environmental certification of buildings

The existing literature (mostly referencing heuristics of the valuation profession) provides little evidence on how property owners and managers themselves perceive value creation from environmental certification (EC) of buildings. To address this issue, questionnaire and interview data from non-residential EC building owners in Sweden are gathered and related in a ‘strategy map’ that explains their perceived value creation from EC. The mapping process also considers the four standard perspectives of the balanced scorecard, prompting researchers and owners to evaluate EC in terms of its contribution to long-term strategy, measuring it according to financial and non-financial metrics of organizational performance. The study confirmed that tenant demand is an important EC driver for property owners (particularly for large organizations) and therefore that increased EC awareness amongst tenants is important for EC and for further value creation. It was found that tool developers, property owners and valuers could all benefit from more closely aligning valuers’ documentation requirements with those for accreditation with EC tools. Energy efficiency contributes significantly to value creation, but owners use energy management programs in addition to EC, possibly as a result of the performance gap phenomenon.

Value creation for tenants in environmentally certified buildings

ABSTRACT Previous research suggests that environmental certification (EC) affects rental rates in non-residential buildings, but there is still little understanding of how tenants differentiate such buildings from those without EC. This paper examines whether and how tenants perceive value creation in EC premises in Sweden. The findings (based on 29 questionnaire responses and 14 interviews with tenants in EC buildings) inform landlords and tenants on the development of EC strategies for improved organizational outcomes. EC creates value for tenants principally as support for their environmental management and reporting (e.g., low energy demand). EC is important for tenants internally, raising employee environmental awareness and improving employee attraction and retention. Tenants are generally positive about employee morale, indoor environmental quality (IEQ) and rental costs. However, it is not clear if such perceptions are dependent on features of modern premises in general, such as new fixtures, fittings and furnishings, and space-efficiency or from some EC-related feature. Tenants do not identify health or productivity increase in their EC premises. Findings suggest that the research focus should be shifted from investigating health and productivity increases through IEQ improvement to understanding the motivational improvement through value alignment with employees through EC.