Justin Duarte | Candidate Attorney | Werksmans Attorneys | mail me |
South Africa’s construction industry is in a tough spot. Output shrank by 4.2% in 2024, capping a decade-long slide that began around 2009, with the sector’s GDP contribution down over 30% since then.
Like the broader economy, it is battling low growth and inflation. But as one of the nation’s top carbon emitters, buildings and construction alone risk doubling emissions by 2050 without action. The sector must therefore pursue green building transformation to remain competitive and sustainable.
Enter green building transformation: a smart fix that is cutting waste, slashing costs and sparking demand in a sector desperate for revival.
The headwinds are holding it back
Why the stall? Pinpointing causes reveals a perfect storm. First, the “construction mafia”, gangs demanding protection money, project stakes and using threats to halt work, has derailed sites nationwide. These extortion rackets, often masked as “business forums”, delay projects, inflate costs and scare off foreign investors eyeing infrastructure.
Second, there is a heavy reliance on imports. Around 40% to 50% of materials come from abroad, leaving the industry vulnerable to global tariffs and supply chain disruptions. Recent hikes could squeeze margins further.
Third, there is a glaring skills gap. South Africa lacks engineers, welders, electricians and carpenters, with many leaving for better opportunities abroad. This shortage, worsening in 2025, hampers everything from design to delivery. Forecasts paint a grim near-term: another 0.5% dip in 2025 amid weak private spending. Yet, amid this, sustainability demands intensify. The sector consumes vast raw resources and generates large amounts of waste.
New rules under the Climate Change Act of 2024 now mandate carbon plans and reporting for high emitters. These regulations will accelerate green building transformation and help shape a more resilient construction industry.
Green building – a practical pivot
Green building transformation counters these challenges by minimising harm and maximising efficiency through smarter designs and recycled materials. It is not a luxury; it is a growth driver.
The Green Building Council South Africa (GBCSA), founded in 2007, steers this transformation. It certifies projects via Green Star for holistic sustainability, Net Zero for carbon-neutral operations and EDGE for cost-effective solutions in developing markets. GBCSA also shapes policy, pushing for greener standards that support green building transformation nationwide.
Regulations reinforce this momentum. SANS 10400-XA, from the South African Bureau of Standards, enforces energy-efficient designs in all new builds. Meanwhile, National Energy Act rules require buildings over a certain size to display energy performance certificates (EPCs) by December 7, 2025. This functions much like a “fuel efficiency” label for structures.
Demand is also growing. Middle-class buyers are willing to pay premiums for eco-homes, while firms, landlords and tenants increasingly crave certified spaces for both branding and operational savings. Yet, uptake still lags global benchmarks, with certified floor space at just 30% in 2020.
Regulatory push – the tipping point
Change is coming fast. The Companies and Intellectual Property Commission (CIPC) issued Notice 6 of 2025, launching consultations on mandatory ESG reporting and exploring ISSB standards with the Department of Trade, Industry and Competition. This means firms will soon have to disclose sustainability metrics, exposing laggards and rewarding early movers in green building transformation.
Locally, four metros: Cape Town, Johannesburg, Tshwane and eThekwini, are mandating net-zero carbon for new builds by 2030 and for all structures by 2050. Johannesburg is piloting monitoring tools, and if others follow, green demand will surge.
Tighter rules will nudge owners toward retrofitting buildings to improve ESG scores, while tenants will flock to low-emission spaces to reduce their carbon footprints.
The payoff – savings, value and funding
The myth that green always costs more is fading. Upfront changes such as better insulation often yield long-term savings that far outweigh initial costs. Certified buildings use around 7% less electricity over time and command higher rents and sales prices, with some markets showing premiums of up to 10%.
Awareness gaps persist, but targeted campaigns can unlock growth in areas such as affordable housing. Financing options are also expanding.
Green loans from banks such as Standard Bank and Nedbank offer lower rates for certified projects. IFC-backed deals reached $250 million in 2025 alone for eco-developments supporting green building transformation.
Seizing the green opportunity
South Africa’s construction sector teeters but teems with potential. Consumers are willing to pay more for sustainable homes, regulations enforce green standards, and funding flows more easily. All these trends align with global climate pledges and fuel the momentum behind green building transformation.
If the industry taps into this unmet demand, firms could rebound strongly, attracting both local and foreign investment into projects that build back greener. The math is simple. Broader adoption means more jobs, greater efficiency and a cooler planet.
It is time to build differently.
Reviewed by:
- Natalie Scott | Director | Head of Sustainability | Werksmans Attorneys | mail me |
- Jennifer Smit | Director | Head of Construction & Engineering | Werksmans Attorneys | mail me |