Value Beyond Cost Savings - Green Building Finance Consortium

Value Beyond Cost Savings: How to Underwrite Sustainable PropertiesSubstantial work has been completed providing an emerging theoretical foundation linkingsustainable property investment and improved financial performance and value. We presenta chronological listing of key work in Appendix E.Sarah Sayce, Louise Ellison, and Judy Smith from the United Kingdom began publishingpapers around 2003 and early 2004 that began to integrate sustainability into the appraisalof property worth. Their work was part of the Sustainable Property Appraisal Project 63 andwas the first we reviewed that specifically addressed the theoretical foundation for linkingsustainable property attributes and property performance. 64Chris Corps and a team consisting of Cushman Wakefield, LePage, Busby Perkins + WillBuildGreen Consulting, and DTC (UK) led a collaborative project and published “GreenValue” in late 2005, still one of the best theoretical and empirical pieces of work linkingsustainable property attributes and value. Chris Corps continued his work in the valuationarena through his founding of the Vancouver Valuation Accord and his continuingauthoring of important theoretical and empirical works, including his May 2009 coauthorshipwith Theddi Wright Chappell of “High Performance Green Buildings: What’s ItWorth?” and “Valuing Sustainability,” which he wrote as a special report of theCommission for Environmental Cooperation in the fall of 2007.David P. Lorenz and Thomas Lütztendorf of Germany, who have written a series of papersthat explore in detail the relationship between sustainability and market value and risk,have made substantial contributions. Simultaneous with the work by Lorenz andLütztendorf, a number of Australians, including Richard Reed, John Robinson, GeorgiaMyers, Phillip Kimmet, and Stefan Trück, began developing additional theoretical supportfor the relationship between sustainability and the value of buildings. Their work and thework of many other important Australian sustainability authors was formalized into theYourBuilding.org website (http://www.yourbuilding.org/), which today is one of the bestorganized and most accessible websites providing a foundation for the linkage betweensustainable property attributes and financial performance and value, written from acommercial real estate perspective.Researchers in Japan have also made important contributions. Since 2005, Sumitomo Trusthas been studying environmental added value. The Japan Real Estate Institute is studyingsustainable valuation practices internationally. Professor Tomonari Yashiro of the Instituteof Industrial Science at the University of Tokyo has been actively involved in key valuationresearch and has helped to tie together the relationship between sustainability and value.Kei Owada, of the Mitsubishi Research Institute and Masato Ito, of the Sumitomo Trustand Banking Company, Ltd., have also been publishing more recently on the critical63 This research project was made possible through the financial support of the Department of Trade and Industry,Prudential Property Investment Mangers, Investment Property Forum, Boots Properties, and the ongoing support ofDrivers Jonas, IPD, Universities Superannuation Scheme and Forum for the Future.64 Sarah Sayce has been publishing papers on these and related topics since the 1990s.92