Key Impact Points:
- Nearly 90% of building products companies now generate revenue from sustainable products and services.
- Europe leads with the highest number of companies deriving over half their revenues from sustainable solutions.
- Investing in these companies supports financial returns and the transition to a sustainable built environment.
The Rise of Sustainable Building Products
Nearly 90% of the 110 building products companies covered by Morningstar Sustainalytics derive some portion of revenue from sustainable products and services. This marks a significant industry shift towards supporting the global transition to green buildings.
Why Green Buildings Matter
Green buildings use less energy and water, create less waste, and offer healthier indoor environments. According to the LEED rating system, they also have higher resale values and lower operational costs than non-green buildings.
Benefits to Planet, People, and Profits
- Planet: Green buildings reduce environmental footprints through energy efficiency and renewable energy use.
- People: They offer healthier indoor spaces, improving well-being and productivity.
- Profits: Despite misconceptions, green buildings are cost-effective due to lower operating expenses and potential for higher rents and sale prices.
Regional Regulations Driving Change
- Europe: With buildings accounting for 40% of energy consumption, the EU aims to double energy renovation rates by 2030 and mandates all new buildings to be net zero by the same year.
- Asia-Pacific: The Asia Pacific Net Zero Readiness Framework supports decarbonizing the built environment in a region housing 60% of the world’s population.
- United States: The U.S. Green Building Council promotes LEED certification, facilitating a coordinated transition to sustainable practices.
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Industry Leaders in Sustainable Solutions
Companies like Saint-Gobain, Rockwool, Toto, and Trane Technologies are leading by deriving significant portions of their revenue from sustainable products.
- Saint-Gobain: Reports that 73% of its 2023 sales came from sustainable products assessed through an in-house methodology.
- Rockwool: Its stone wool insulation products, accounting for 77% of sales, align with green building requirements.
- Toto: Derives over 70% of its sales from green products like the Washlet, which consumes less electricity and water.
- Trane Technologies: Reports 41% of its 2023 net revenue from energy-efficient and low-emission solutions.
Europe Leading the Way
Europe hosts the largest number of companies deriving over half their revenues from sustainable solutions. The U.S., Canada, and Asia-Pacific regions show similar performance, while companies in Africa and the Middle East lag in this area.
Looking Ahead
With buildings accounting for over 30% of global energy consumption, sustainable development in the built environment is critical. Investing in building products companies not only offers potential financial returns but also supports the transition toward a more sustainable future.
Related Article: Bloomberg’s Green Shift: Biodiversity Solutions Take Root
