For the first time in history, the value of oil dropped into the negatives in April. While it has recovered for now, some are predicting an incomplete recovery at best. In the greater context of post-COVID life, the safest investments will be green.
Construction has faced numerous challenges since the beginning of the pandemic. Supply-chain interruptions and rising costs of materials posed a unique set of issues to the industry. While new construction has ultimately slowed, the industry remains surprisingly resilient despite the struggles. Now, buildings are being designed for the next 100-year flu and a greener future overall.
What is driving the uptick in green construction? For one, it’s less risky overall. With uncertainty regarding fossil fuels, heating, air conditioning, and ventilation will have to become more efficient. Now that the virus’s spread is proven to increase in poorly ventilated areas, builders will have to rethink the tightly sealed construction that once made air conditioning more efficient.
For a safe return to the office, traditional construction will no longer make the grade. Not surprisingly, lenders are increasingly wary of offering to fund projects that cannot weather an uncertain future. Naturally, given the risk, both builders and lenders are looking towards the future through green-colored glasses.
Green construction companies are also on the rise. According to a report from The U.S. Green Building Council and Dodge Data & Analytics, 45% of those surveyed expected most of their projects by 2021 to be green construction. Given the additional push of the pandemic, those numbers could now be even higher.
New construction isn’t the only focus either. A significant amount of construction projects will include retrofitting older buildings with more environmentally-friendly fixtures. According to the same report, changes such as these will lead to a 13% decrease in operating costs over five years.
Lenders have been even warier of risk since the pandemic. In order to continue, they need to focus on construction that will be resilient during any future changes. Things will certainly not go back to how they were, but instead of lamenting, lenders must embrace the changes to continue moving forward.