A Global Review of Sustainable Construction Project Financing: Policies, Practices, and Research Efforts

Despite the increasing investment in sustainable development over the past decade, a systematic review of sustainable construction project financing is lacking. The objectives of this paper are to conduct a systematic review to examine the policies, practices, and research efforts in the area of sustainable construction project financing, and to explore the potential opportunities for the future research. To achieve these goals, this paper first reviewed the sustainable construction project financing practices implemented by four representative developed economies including the United Kingdom, the United States, Singapore, and Australia. Then, this paper reviewed the efforts and initiatives launched by three international organizations including the United Nations, the Organization for Economic Co-operation and Development, and International Finance Corporation. After that, this paper reviewed the research efforts of sustainable construction project financing published in peer-review journals and books. This paper identified four major research themes within this area, which are the review of financial stakeholders and market of sustainable construction, benefits and barriers to sustainable construction project financing, financial vehicles for sustainable construction projects, innovative models and mechanisms for sustainable construction project financing. Additionally, this paper revealed five directions for the future research of sustainable construction project financing, which are the identification of financial issues in sustainable construction projects, the investigation of financial vehicles for sustainable construction projects in terms of their strengths, limitations, and performances, the examination of critical drivers for implementing sustainable construction project financing, the development of a knowledge-based decision support system for implementing sustainable construction financing, and the development of best practices for implementing sustainable construction project financing. This paper contributes to the body of knowledge by reviewing existing policies, practices, and research efforts in the area of sustainable construction project financing. Meanwhile, the findings from this paper benefit the industry as well, because they are able to provide the practitioners with a holistic view of sustainable construction project financing, thereby enhancing their knowledge and skills in this regard.

[1]  Rebecca L. Henn,et al.  Overcoming the Social and Psychological Barriers to Green Building , 2008 .

[2]  Marcelo Cajias,et al.  Green performs better: energy efficiency and financial return on buildings , 2013 .

[3]  J. Tait,et al.  Challenges and opportunities. , 1996, Journal of psychiatric and mental health nursing.

[4]  Zoi Christina Siamanta.  Building a green economy of low carbon: the Greek post-crisis experience of photovoltaics and financial 'green grabbing' , 2017 .

[5]  Gary David Holt,et al.  Analysis of Strategic Issues Underpinning the Innovative Financing of Infrastructure within Developing Countries , 2013 .

[6]  Bon-Gang Hwang,et al.  An Exploratory Analysis of Risks in Green Residential Building Construction Projects: The Case of Singapore , 2017 .

[7]  Patrick T.I. Lam,et al.  The market for green building in developed Asian cities—the perspectives of building designers , 2009 .

[8]  Konstantinos D. Patlitzianas,et al.  Sustainable energy investments in Hellenic urban areas: Examining modern financial mechanisms , 2011 .

[9]  R. Yamaguchi,et al.  New Financing for Sustainable Development , 2017 .

[10]  M. Jong,et al.  Financing Sino-Singapore Tianjin Eco-City: What Lessons Can Be Drawn for Other Large-Scale Sustainable City-Projects? , 2017 .

[11]  Sui Pheng Low,et al.  Project Management and Green Buildings: Lessons from the Rating Systems , 2010 .

[12]  Yongrok Choi,et al.  Does the Sustainable PPI Investments Promote Financial Market’s Sustainable Development? , 2016 .

[13]  I. Cherneva.  The Business Case for Sustainable Finance , 2012 .

[14]  D. Štreimikienė.  Review of financial support from EU Structural Funds to sustainable energy in Baltic States , 2016 .

[15]  Renard Y.J. Siew.  Alternative framework for assessing sustainable building funds: Green Building Fund , 2015 .

[16]  David G. Carmichael,et al.  A review of building/infrastructure sustainability reporting tools (SRTs) , 2013 .

[17]  W. Fan,et al.  Engaging financial stakeholders: opportunities for a sustainable built environment , 2011 .

[18]  Ka Chi Lam,et al.  The significance of financial risks in BOT procurement , 1999 .

[19]  Vittal S. Anantatmula,et al.  Greening Project Management Practices for Sustainable Construction , 2011 .

[20]  Z. Işik,et al.  Role of Financial Risks in BOT Megatransportation Projects in Developing Countries , 2017 .

[21]  Ming Shan,et al.  Causal Factors of Corruption in Construction Project Management: An Overview , 2019, Sci. Eng. Ethics.

[22]  Nathan Fabian.  Economics: Support low-carbon investment , 2015, Nature.

[23]  M. Malina.  Delivering Sustainable Buildings: An Industry Insider's View , 2012 .

[24]  Jian Zuo,et al.  Green building research–current status and future agenda: A review , 2014 .

[25]  Demos C. Angelides,et al.  The financial risks in build‐operate‐transfer projects , 2005 .

[26]  Peter E.D. Love,et al.  Future Proofing PPPs: Life-Cycle Performance Measurement and Building Information Modelling , 2015 .

[27]  M. Hensey,et al.  Financial Issues in Engineering Management: Interview , 1990 .

[28]  Friedemann Polzin,et al.  Mobilizing private finance for low-carbon innovation – A systematic review of barriers and solutions , 2017 .

[29]  Patrick X.W. Zou,et al.  An agent based environmental impact assessment of building demolition waste management: Conventional versus green management , 2016 .

[30]  J. Yudelson.  The Green Building Revolution , 2007 .

[31]  Xianbo Zhao,et al.  A scientometric review of global BIM research: Analysis and visualization , 2017 .

[32]  Bon-Gang Hwang,et al.  Overview of Design for Maintainability in Building and Construction Research , 2018 .

[33]  Qinghua He,et al.  Mapping the managerial areas of Building Information Modeling (BIM) using scientometric analysis , 2017 .

[34]  Paulo Franklin von Paumgartten,et al.  The business case for high performance green buildings: Sustainability and its financial impact , 2003 .

[35]  Johnny Wong,et al.  Enhancing environmental sustainability over building life cycles through green BIM: A review , 2015 .

[36]  N. Vivek,et al.  Green finance for sustainable green economic growth in India , 2016 .

[37]  Amos Darko,et al.  Drivers for green building : a review of empirical studies , 2017 .

[38]  Alberto De Marco,et al.  Risk and Value in Privately Financed Health Care Projects , 2013 .

[39]  Andreas Wibowo,et al.  Financial Risk Analysis of Project Finance in Indonesian Toll Roads , 2005 .

[40]  Li Yang,et al.  Green building in China: Needs great promotion , 2014 .

[41]  Bon-Gang Hwang,et al.  Green commercial building projects in Singapore: Critical risk factors and mitigation measures , 2017 .

[42]  Appu Haapio,et al.  A critical review of building environmental assessment tools , 2008 .

[43]  J. L. van Genderen.  Only one Earth: the long road via Rio to sustainable development , 2014, Int. J. Digit. Earth.

[44]  Jae-Jun Kim,et al.  A Financing Model to Solve Financial Barriers for Implementing Green Building Projects , 2013, TheScientificWorldJournal.

[45]  Albert P.C. Chan,et al.  Review of Barriers to Green Building Adoption , 2017 .

[46]  Chris G. Corps,et al.  Toward Sustainable Financing and Strong Markets for Green Building , 2008 .

[47]  Suzy Edwards.  Sustainable building and construction Construction products and life-cycle thinking , 2004 .

[48]  Bon-Gang Hwang,et al.  Investigating Reworks in Green Building Construction Projects: Magnitude, Influential Factors, and Solutions , 2016 .

[49]  Albert P.C. Chan,et al.  Critical analysis of green building research trend in construction journals , 2016 .

[50]  Bon-Gang Hwang,et al.  Safety in green building construction projects in Singapore: Performance, critical issues, and improvement solutions , 2018 .

[51]  Xianbo Zhao,et al.  The importance of use and end-of-life phases to the life cycle greenhouse gas (GHG) emissions of concrete : a review , 2014 .

[52]  David G. Carmichael,et al.  The relationship between sustainability practices and financial performance of construction companies , 2013 .

[53]  Xianbo Zhao,et al.  The past, present and future of carbon labelling for construction materials – a review , 2014 .

[54]  Albert P.C. Chan,et al.  Overview of corruption research in construction , 2014 .

[55]  Sathyanarayanan Rajendran,et al.  Impact of Green Building Design and Construction on Worker Safety and Health , 2009 .

[56]  T. Busch,et al.  Sustainable Development and Financial Markets , 2016 .

[57]  E. W. Cheng,et al.  Perception of Financial Institutions toward Financing PFI Projects in Hong Kong , 2009 .

[58]  Ni-Bin Chang,et al.  Optimal design for water conservation and energy savings using green roofs in a green building under mixed uncertainties , 2011 .

[59]  Hongxing Yang,et al.  A comprehensive review on passive design approaches in green building rating tools , 2015 .

[60]  Jarnail Singh,et al.  A case study for sustainable development action using financial gradients , 2012 .

[61]  M. Skitmore,et al.  Green building incentives: A review , 2016 .

[62]  Tapas K. Mallick,et al.  Is Renewable Heat Incentive the future , 2013 .

[63]  S. Finnegan.  New Financial Strategies for Sustainable Buildings: Practical Guidance for Built Environment Professionals , 2017 .

[64]  Peter E.D. Love,et al.  Achieving the Green Building Council of Australia's World Leadership Rating in an Office Building in Perth , 2012 .

[65]  Mirjam Staub-Bisang,et al.  Infrastructure as an Asset Class Investment Strategy Sustainability Project Finance and PPP , 2016 .

[66]  Marcel H. A. Jeucken.  Sustainable Finance and Banking: The Financial Sector and the Future of the Planet , 2001 .

[67]  Raja R. A. Issa,et al.  BIM Execution Planning in Green Building Projects: LEED as a Use Case , 2015 .

[68]  Wadim Strielkowski,et al.  Network charging and residential tariffs: A case of household photovoltaics in the United Kingdom , 2017 .

[69]  Ali GhaffarianHoseini,et al.  Sustainable energy performances of green buildings: a review of current theories, implementations and challenges , 2013 .

[70]  Bon-Gang Hwang,et al.  Investigating residents’ perceptions of green retrofit program in mature residential estates: The case of Singapore , 2017 .