There are lots and lots of claims about quality - seals of approval are common in lots of businesses, but in the 'sustainable' real estate industry they are frequently touted – and inherently meaningless due to a lack of transparency (see LEED program for energy savings is faith-based more than science-based?).

A study conducted by MODUL University Vienna examined the role of non-governmental organizations (NGOs) in sustainable real estate in Austria and throughout the world. In addition to a survey of international green building councils, a comprehensive case study explored five different aspects that strongly affect the scope of influence of these organizations. Their size and their perception as reliable partners were also identified as key criteria. 

The Bank of America Tower in New York, the Deutsche Bank Towers in Frankfurt and the IZD Tower in Vienna are flagship projects for sustainable building and holders of international seals of quality. As the issuing authorities for such seals of quality, green building councils have primary responsibility for developing and implementing sustainable construction projects. A study conducted by MODUL University Vienna has now addressed the role of
green building councils
 in this market. 

You can get a green seal of quality if you pay some money

According to Dr. Sabine Sedlacek, project coordinator and researcher at the Department of Public Governance and Sustainable Development, the "market" for seals of quality is characterized by a lack of transparency due to varying standards and models. This is an impediment to the development, financing and implementation of sustainable construction projects because verifiable sustainability is considered a mark of quality and ensures long-term visibility and an increase in the market value of real estate. 

The preliminary work for this latest study, carried out in conjunction with Vienna University of Economics and Business, included surveys of international green building councils, interviews with their boards and an analysis of their organizational structures, objectives and activities. This work was followed by a comprehensive case study of the Austrian Sustainable Building Council (Österreichische Gesellschaft für Nachhaltige Immobilienwirtschaft, ÖGNI). This involved interviewing a total of 90 members, auditors and network partners on the advantages and disadvantages of membership and the certification system for awarding seals of quality.

The data allowed conclusions to be drawn about the role of
green building councils
 in increasing the dynamic nature of the real estate market in relation to sustainability. The study showed that
green building councils
 can evolve as independent third parties into "environmental governance actors", who participate actively in governance processes within a sustainable real estate industry. Commenting on this, Sedlacek says, "Sustainable building is a poorly regulated policy area in Austria. The decision about whether building certification is sought is purely market-driven and therefore voluntary, as it is made solely by the individuals involved in the project."

Given these circumstances, it was important  to systematically analyze the basic conditions for the effective functioning of
green building councils
 using a specially designed framework: "First of all, we analyzed the role of green building councils as independent third parties. Another factor was their respective decision-making power. The size of a GBC is key to its perception as a power player, as increasing membership numbers signal vitality and ensure market coverage and – through members' contributions – ensure that the work is economically viable."

But size alone is not the only thing that matters: it is crucial for GBCs and their certifications that they are seen as independent. However, according to Sedlacek, the perception of this independence must be balanced by the representation of internal interests of members, who frequently come from the real estate and construction industry.

Clearly defined accountability resulting from a transparent internal organization helps to achieve this. The legitimacy of
green building councils
as institutions is essential for gaining trust. Ultimately, securing acceptance is also crucial. The better these criteria are fulfilled, the better
green building councils
 can participate in governance processes as actors and the greater is their spectrum of activities.


Non-Governmental Organizations as Governance Actors for Sustainable Development: The Case of Green Building Councils. S. Sedlacek. Environmental Policy and Governance 24, 247–261 (2014) DOI: 10.1002/eet.1643

Can green building councils serve as third party governance institutions? An economic and institutional analysis. S. Sedlacek, G. Maier. Energy Policy 49, 479–487 (2012) DOI: 10.1016/j.enpol.2012.06.049