The Business Case for Green Office Buildings: Cost Savings & Employee Well-Being

Research clearly shows that there are a wide-ranging benefits of green buildings, which are experienced by various stakeholders. However, one ongoing debate centers on whether these benefits can be measured in financial terms—an important question for property investors and owners. Do green buildings actually offer higher rental or resale values? Are they more appealing to tenants and occupiers? And can greener spaces really boost employee productivity and wellbeing?

As someone newly entering the world of green building consultancy, I also found myself questioning the real benefits for tenants who choose to lease space in certified green buildings—especially considering the often higher rental costs. At first glance, this premium pricing also seemed like a potential disadvantage for building owners, possibly driving tenants toward more affordable, conventional alternatives. And from the tenant’s perspective, why pay more for a space that, on the surface, serves the same functional purpose? So what’s in it for both parties—the lessor and the lessee? Let’s find out.

Design and Construction Costs

A publication from the World Green Building Council (WBGC) states that there is no significant difference in average costs between green and conventional buildings. Many project teams have delivered LEED-certified buildings within budgets similar to those of conventional buildings. One major challenge in delivering cost-effective green buildings is recognizing that green design isn’t just an add-on to traditional construction but an integrated approach that requires a new way of thinking.

When the goal of green building is established from the start and shared by all stakeholders— owners, architects, contractors, engineers, etc.—it becomes part of the project’s foundation. Green design shouldn’t be seen as something extra or optional, but rather as a core mindset that informs every decision from early planning through to construction. By aligning the goals from the outset, teams are better able to integrate cost-effective strategies, avoid redesigns, and make smarter long-term choices. This way, green building becomes less of a challenge and more of a natural outcome of thoughtful, collaborative planning focused on long-term value.

Prioritizing short-term savings in delivering cost-effective buildings may seem appealing. Yet It’s important to recognize that upfront costs may be slightly higher but are often balanced by lower long-term life cycle expenses. Moreover, green buildings offer lasting value by promoting better health, enhancing quality of life, and boosting productivity in office and commercial spaces.

Asset Value

Global research shows that green-certified buildings tend to achieve higher rents and sale prices, with sales averaging 8% to 21.4% more and rental rates 3% to 13% higher than conventional buildings. The green building sector is expected to grow significantly, with market value anticipated to hit $1.37 trillion by 2034. With demand for green buildings continuing to rise, developers and contractors who commit to green projects today are well-positioned to secure high-value contracts and benefit from long-term financial gains driven by high market demand.

In fact, based on BCG research, 74% of consumers are willing to pay a premium for green buildings, with eco-minded consumers showing considerably higher willingness than others—further reinforcing the market viability and attractiveness of sustainable developments, as green buildings provide substantial benefits not only to owners or lessors but also to tenants, who, while not holding the physical asset, gain value through improved health, well-being, and productivity, representing an investment in people that also ultimately contributes to operational efficiency and cost savings. In essence, green buildings create long-term asset value for all stakeholders involved in more ways than one.

In markets where green buildings are becoming the norm, there is growing evidence of ‘brown discounts’—a trend where non-green properties may sell or rent at reduced prices; because investing in green building design doesn’t just improve how a space functions—it also elevates the building’s overall asset value in a competitive, future-focused market.

Operating Costs

Green buildings also have been shown to save money by lowering energy and water use, as well as reducing long-term operation and maintenance costs. Mainly through design features that improve efficiency in cooling, heating, ventilation, lighting, and water consumption.

Research has found that adopting green buildings can lower costs per square metre by around 41.74% compared to conventional buildings. Several LEED-certified buildings in the United States are estimated to use 25%–30% less energy, with some estimates reaching as high as 35%–50% reduction. Research by Kats (2010) also estimates that water-saving measures—such as reuse systems and efficient plumbing fixtures—can reduce water consumption by approximately 39% compared to similar conventional buildings.

Aside from resource efficiency, operation costs also refer to all costs of operating the building or facility arising from the building itself rather than how it is used by occupants. The costs are shaped by the longevity and resilience of the building's systems and materials. Choosing the right set of sustainable materials and systems can lead to long-term financial savings by reducing the need for frequent replacements, as well as lowering maintenance or even cleaning efforts. Additionally, low-toxicity and low-emission materials contribute to healthier indoor environments. In some cases, materials that are truly cradle-to-cradle have an additional cycle of recycling and recovery at the end of their life, creating the potential for an additional income stream.

Buildings have a long lifespans, taking a life cycle approach is key to finding sustainable and cost-efficient solutions.

Workplace Productivity and Health

Buildings are fundamentally made for people. Nowadays, many individuals spend the majority of their time indoors, particularly in work environments, often over the course of many years. Consequently, the design of an uncomfortable work environment has a significant impact on human health and well-being.

Retail Metrics Framework

Source : World Green Building Council Wellbeing & Productivity in Retail : The Impact of Green Buildings on People and Profit

From a business perspective, promoting better health and higher productivity among employees is a smart investment. Human capital remains one of the most critical assets within any organization—driving innovation, performance, and long-term growth. At the same time, it also represents one of the largest cost components, encompassing salaries, benefits, and training.. Creating a healthy and supportive work environment, not only enhances employee well-being but also boosts productivity. There is a clear loop between employee health, financial benefits, and the physical building. A well-designed, comfortable, and sustainable workspace can lead to better focus, fewer sick days, minimize staff turnover, and higher morale. When employees perform at their best, organizations perform better—business goals are more easily achieved, overall outcomes improve and that’s a return on investment no company should overlook. 

One of the core purposes of a 'green' space is to positively impact its users. If a building fails to support the health, well-being, or comfort of its occupants, it cannot truly be considered ‘green’. Better aligning the workplace with modifiable drivers of health could unlock years of higher-quality life and ultimately deliver long-term benefits for businesses through improved well-being and productivity.

Risk Mitigation

Sustainable design helps companies adapt to evolving regulations and market expectations while building resilience for the future. Effective risk mitigation in green buildings addresses multiple dimensions, including regulatory risk, market risk, physical risk and technology risk. 
Regulatory risks involve potential drops in property value due to changes in planning policies, challenges competing with newer green buildings, lower energy ratings that reduce marketability, and the risk of being unable to lease properties that don’t comply with updated regulations. Market risks come from shifting tenant and investor preferences, including “brown discounts” for non-sustainable buildings, faster depreciation, lower occupancy rates, shorter lease terms, and greater exposure to market fluctuations, alongside increasing pressure to meet sustainability standards set by investors.

Physical risks are linked to climate change and environmental factors such as extreme weather, flooding, subsidence, rising temperatures, and changing rainfall patterns, all of which can reduce occupant comfort and satisfaction. Technology risks arise from rapid changes or mismatches in building technologies, including missed chances to implement efficient systems, unintended problems during design or construction, and high maintenance costs over time.

By addressing these interconnected risks through green building strategies, property owners can protect asset value, improve resilience, and achieve better long-term returns.

—So It is a Win-Win Investment

Green office buildings offer long-term measurable value on both sides. For building owners or lessors, certified green buildings tend to achieve higher occupancy rates, attract ESG-conscious tenants, and command better returns on investment through operational savings and enhanced marketability. For tenants or lessees, the benefits go far beyond energy efficiency. Green office building environments are intentionally designed to support health, wellbeing, and productivity—with features like superior indoor air quality, ample daylight, acoustic comfort, and better thermal regulation. These elements contribute to a safer, healthier workplace that reduces absenteeism, enhances employee morale, and supports long-term business performance. In essence, tenants aren’t just paying for a workspace—they’re investing in a better quality of life during their workday. And that, increasingly, is worth the cost.

Lastly, by greening our buildings, we contribute—at the same time—to major economic goals such as reducing climate change impacts, enhancing energy security, conserving resources, and promoting long-term resilience and improved quality of life.

As we shape the spaces we work in, in time, they shape the way we live.

Source

Brassey, Jacqueline; Hartenstein, Lars; Jeffrey, Barbara; Simon, Patrick (2024). Working nine to thrive. McKinsey Health Institute. https://www.mckinsey.com/mhi/our-insights/working-nine-to-thrive#/

Miraj, Perdana; Berawi, Mohammed Ali; Utami, Siti Rahma (2020). Economic feasibility of green office building: combining life cycle cost analysis and cost–benefit evaluation. Taylor & Francis Online. https://www.tandfonline.com/doi/full/10.1080/09613218.2021.1896354 

World Green Building Council (2016). Health, Wellbeing & Productivity in Retail : THE IMPACT OF GREEN BUILDINGS ON PEOPLE AND PROFIT

World Green Building Council (2014). Health, Wellbeing & Productivity in Offices : The next chapter for green building. 

World Green Building Council (2013). The Business Case for Green Building: A Review of the Costs and Benefits for Developers, Investors and Occupants 

Zapanta, Kyo (2025). The Real Cost of Green Construction: Is Sustainability Affordable?. Workyard. https://www.workyard.com/construction-management/green-construction-statistics