Industries worldwide are making environmental responsibility a priority, including industrial real estate. Developers, investors, and tenants are recognizing the long-term benefits of eco-friendly building practices, or sustainability, for the environment and business performance.
What is sustainability in industrial real estate?
Sustainability in industrial real estate refers to designing, constructing, and operating buildings in ways that minimize environmental impact. They also optimize energy efficiency, water use, and resource consumption. Sustainable practices go beyond reducing carbon footprints—they also can help lower operating costs, improve worker health and productivity, and enhance property values.
Key sustainable building practices
One of the main ways sustainability is incorporated into industrial real estate is through energy-efficient technologies. LED lighting, high-performance insulation, and smart heating, ventilation, and air conditioning (HVAC) systems are widely used to reduce energy consumption. Solar panels and other renewable energy sources are also being integrated into industrial facilities to offset reliance on traditional energy grids.
Another growing trend is the use of green roofs. The roofs help regulate building temperatures, absorb rainwater, and reduce the urban “heat island” effect. According to the U.S. Environmental Protection Agency (EPA), green roofs can cut heating and cooling costs, making them an attractive option for industrial properties looking to lower operating expenses.
Business advantages of sustainable industrial buildings
Sustainable industrial buildings offer several business advantages. Companies that invest in eco-friendly properties often experience lower utility bills thanks to energy-efficient systems. The U.S. Green Building Council (USGBC) reports that LEED-certified buildings—those adhering to strict sustainability standards—can reduce energy use by up to 30% and water use by up to 40%.
Industry experts says that sustainable buildings promote healthier work environments. Many are designed with enhanced ventilation systems and access to natural light, which improve air quality and can help employee well-being. Studies have shown that these indoor environments can boost productivity and reduce sick days, making green buildings more attractive to employers and employees alike.
Environmental impact of industrial real estate
According to Global ABC, the building and construction sector is responsible for about 38% of global carbon emissions, which includes operational emissions (energy used in buildings) and embodied emissions (emissions from materials and construction). Within the sector, industrial properties represent a significant portion of the total emissions due to their higher energy demands. Sustainable building practices can play a role in reducing these emissions.
The building sector is also responsible for about 28% of global energy consumption, with industrial buildings requiring substantial energy for lighting, heating, cooling, and machinery. By adopting sustainable design practices and technologies, developers can reduce a building's overall environmental impact. Certifications like LEED and BREEAM encourage the use of energy-efficient systems and sustainable materials, promoting more efficient resource consumption in the industry.
Growing demand and government support
Governments worldwide are enacting policies aimed at reducing carbon emissions, and offer financial incentives for green buildings. Programs such as Energy Star certification and the Green Building Tax Credit help businesses adopt energy-efficient technologies and sustainable practices.