Decision making when investing in sustainable technology within the building sector

University essay from KTH/Tillämpad termodynamik och kylteknik; KTH/Tillämpad termodynamik och kylteknik

Abstract:

The housing and service sector in Sweden are estimated to be responsible for 40 % of the total primary energy usage (Energimyndigheten, 2011). There exist a lot of inventions that have the possibility to greatly improve the environmental performance of a building´s LCA (Life Cycle Assessment) (Swentec, 2012) (Rutqvist, 2008). In order to achieve implementation of new innovative sustainable installations in buildings it is important to understand the process during the investment decision. Understanding the decision making process used in practise, is the first step towards creating a strategy for how to get a new technology implemented. By conducting a survey including both contractors and developers in Sweden an overview of the building sectors standpoint on environmental sustainability is achieved. In order to refine the information and achieve a more detailed picture of the issue the survey was followed up by In-depth interviews.The findings show that valuation techniques are varying a lot between companies but surprisingly many of the companies do use inferior methods such as pay back-time for investment calculations. Overall in the construction business technical and economic risk aspects are not being valued explicitly but rather through the use of product ratings and brand promise of well-known suppliers. Negative externalities are not being included in the calculations and the valuation of intangibles is not done explicitly but rather seen as implicitly derived from the cost and value of sustainability certifications.

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