Green Infrastructure: Green Construction

Green infrastructure is the range of systems and technologies that enable and provide for a more sustainable way of living. In this blog series, we will outline seven specific areas: green transportation, green energy, green fuel, waste management, green infrastructure & equipment, pollution control, and green constructions. We will define these themes, how they contribute to green infrastructure and how they are instrumental to the space as a whole moving forward.

Green construction is becoming increasingly important as awareness of the environmental impact of commercial and residential structures grows. Buildings are responsible for a significant portion of global greenhouse gas emissions, as well as other environmental impacts, such as resource depletion and waste generation. Green construction seeks to reduce these impacts by designing, constructing, and operating buildings in a way that is more environmentally friendly.

Buildings consume a significant amount of energy for heating, cooling, lighting, and other purposes. By using energy-efficient building systems and practices, these structures can reduce their energy consumption and lower their environmental impact.

Increasingly popular systems that use less energy include HVAC (heating, ventilation, and air conditioning) arrangements, as well as lighting systems that are designed to be more energy-efficient. In the United States, the adoption of green construction practices has been growing steadily in recent years. According to a report from the U.S. Green Building Council, there were over 36,000 LEED-certified registered projects in the United States through 2021. This indicates that more building owners are recognizing the benefits of sustainable building practices.

In addition to mitigating the environmental impact of buildings, green construction can also lead to cost savings for building owners and occupants. While energy-efficient buildings can have a higher initial cost, this is offset by lower operating costs than traditional buildings, which can result in significant savings over the life of the building.

Square Feet of LEED-Certified Building Space by Type as of 2022

Source: usgbc.org, as of December 2022.

There are also a number of government policies and programs that promote green construction in the United States. The Inflation Reduction Act offers tax incentives for energy-efficient building upgrades, and many state and local governments have adopted building codes and standards that require or incentivize green building practices.

Energy Recovery Inc. (ERI) is a green construction company that develops and manufactures energy recovery devices used in HVAC systems to improve their energy efficiency. These devices use pressure exchanger technology to capture and reuse energy that would otherwise be wasted, helping to reduce energy consumption and lower greenhouse gas emissions.

ERI's devices are particularly useful in green buildings, which are designed to be more energy-efficient and airtight. By improving the energy efficiency of HVAC systems, ERI's devices help to reduce the environmental impact of buildings and lower operating costs for building owners.

Overall, green construction is becoming increasingly important as people become more aware of the significance of reducing their environmental impact. Green building certifications, such as LEED, are an important way to promote sustainable building practices and recognize buildings that meet certain environmental and sustainability standards.

Investors can access key green infrastructure companies with the VanEck Green Infrastructure ETF (RNEW). The ETF provides diversified exposure to companies across the seven green infrastructure sub-themes.

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