Built Environment Project and Asset Management

A risk-responsive framework for green retrofit projects in Sri Lanka

Indeewari Ranawaka, Harshini Mallawaarachchi,
Article information:
To cite this document:
Indeewari Ranawaka, Harshini Mallawaarachchi, (2018) "A risk-responsive framework for
green retrofit projects in Sri Lanka", Built Environment Project and Asset Management, https://
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

doi.org/10.1108/BEPAM-10-2017-0088
Permanent link to this document:
https://doi.org/10.1108/BEPAM-10-2017-0088
Downloaded on: 16 October 2018, At: 01:23 (PT)
References: this document contains references to 44 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 3 times since 2018*
Access to this document was granted through an Emerald subscription provided by emerald-
srm:320271 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald
for Authors service information about how to choose which publication to write for and submission
guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as
well as providing an extensive range of online products and additional customer resources and
services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the
Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for
digital archive preservation.

*Related content and download information correct at time of download.

 The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2044-124X.htm

A risk-
A risk-responsive framework responsive
for green retrofit projects in framework

Sri Lanka
Indeewari Ranawaka and Harshini Mallawaarachchi
Building Economics, University of Moratuwa, Moratuwa, Sri Lanka
Received 12 October 2017
Revised 23 February 2018
6 August 2018
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

Abstract Accepted 13 September 2018

Purpose – The purpose of this paper is to evaluate the risks associated with green retrofit projects in
Sri Lanka in order to develop a risk responsive framework.
Design/methodology/approach – The survey method under the quantitative approach was selected as the
research methodology as this research is required evaluating the risks associated with green retrofit projects.
Both preliminary survey and the main questionnaire survey were conducted to collect the data. The survey
data were evaluated and analysed by using mode value as a descriptive statistical analysis technique, and the
risk rating matrix.
Findings – The overall results of risk assessment deliberated that there are ten “critical” risk factors, such as
construction cost, inflation, energy saving uncertainty, warranty risk, delay in project completion, productivity
and quality risks, requirement of permits and their approval, design changes, damage to structure or property
and procurement delay influencing green retrofitting. Finally, a risk responsive framework was developed by
proposing suitable strategies for mitigating the risks associated with green retrofitting.
Practical implications – The developed framework can be used as a basis to mitigate the risks associated
with green retrofitting projects. An abundant upgrade of existing high-rise buildings into green can be reached.
Originality/value – A little attention paid on green retrofitting and the absence of proper risk
management strategy for green retrofit projects in current practice have made this research a paramount
need and a focal point.
Keywords Sri Lanka, Risk management, Risk assessment, Green retrofit, Risk mitigation,
Risk responsive framework
Paper type Research paper

1. Introduction
The foremost benefits of converting existing buildings into green have made “green
retrofitting” a very popular method, not only to reduce the effect of greenhouse gas emissions
and its contribution towards global climatic challenges, but also to achieve the energy
efficiency of buildings, and therefore, green retrofitting has become important (Bu and
Shen, 2013; Wu et al., 2015). Kodmany (2014) stated that partially or wholly occupied existing
buildings can be upgraded as green buildings to increase energy efficiency, to create a healthy
workplace and to maintain indoor air quality. Rios et al. (2016) argued that green retrofits can
be defined as an adaptation of existing buildings to a new condition through changing
maintenance activities, functions and the performance of buildings. Hence, green retrofit
involves upgrading, extension and alteration, change of the building use and renovation,
which increase the quality of the building ( Jagarajan et al., 2015).
Assuring its utmost benefits, green building concept has quickly extended all over
various enterprises in most of the countries. Sri Lanka also has increased the number of
building development projects with green retrofitting (Mendis, 2013). However, green
retrofitting of an existing building is not only a business decision but it also affects the
financial status of the project, management and investment decisions, occupancy
behaviour, and technology and the government policy. Therefore, retrofitting of an
existing building can be a process of a higher risk than that of constructing a new building Built Environment Project and
Asset Management
(Baek and Park, 2012). As Eichholtz et al. (2010) further stated, green retrofitting of © Emerald Publishing Limited
2044-124X
existing buildings can be associated with several challenges and risks, such as climate DOI 10.1108/BEPAM-10-2017-0088
 BEPAM changes, service changes, policy and regulation changes, human behavioural changes, etc.
However, no proper consideration has been given upon mitigating the risks associated
with green retrofitting of building projects. Further, previous studies specifying the
benefits and performance of green building projects can be found while a few studies were
focused on green retrofitting of high-rise buildings. Similarly, lack of risk management
procedures for green retrofit projects also existed as a main loophole. Ma et al. (2012)
signified the importance of risk management for green retrofit projects. Furthermore,
since investment in building retrofits has a high degree of uncertainty, more research on
risk assessment of building retrofits is also needed by the authors. Building retrofit with
comprehensive energy simulation, economic analysis and risk assessment is an effective
approach to identify the best retrofit solutions to authors. Furthermore, research work and
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

investigation in this regard are needed to facilitate cost effective building retrofits. Along
this line of thinking, this research was aimed to develop a risk responsive framework for
green retrofitting of high-rise building projects in Sri Lanka through a comprehensive risk
assessment. Hence, this study indicates a way to industry practitioners to manage the
risks in green retrofit projects in Sri Lanka by providing sufficient financial support,
proper communication and responsibility. Hence, the objectives of this study are to:
identify the risks associated with green retrofit projects in Sri Lanka; analyse the
criticality of each risk factor; and develop a risk responsive framework for green retrofit
projects in Sri Lanka. However, the study was limited to the green retrofitted high-rise
building projects in Sri Lanka; thus, the findings presented subsequently can be
generalised to the aforesaid with confidence.

2. Literature review
2.1 The current status of green retrofits
The concept of green building improves the energy efficiency and the indoor air quality in
buildings while decreasing the consumption of resources (Prins et al., 2016). Filippi (2015)
emphasised that green retrofit is an adaption of existing building to the new condition
through changing maintenance activities, changing functions and the performance of the
building. Aly et al. (2016) explained that green retrofit creates environmentally responsible,
efficient resource structures and a process for building life cycle. As Trencher et al. (2016)
mentioned, green retrofit is a concept which attracts green building. As the other developing
nations, green retrofitting has created a huge focus in the current phenomenon in Sri Lanka,
where its contribution towards reducing the environmental effect of buildings was evident
by other countries (Karunarathne, 2015). Green building concept has quickly extended to
most of the countries as a new concept. Sri Lanka has also started developing green
retrofit projects more than ever before (Mendis, 2013). For example, Central Engineering
Consultancy Bureau; Holy Family Convent, Kalutara; Hatton National Bank, Kalmunai; and
Variosystems Electronics, Badalgama are green accredited projects in Sri Lanka
(Dissanayake, 2015).
Eichholtz et al. (2010) stated that green retrofitting of existing buildings is associated with
many challenges and risks, such as climate changes, service changes, policy and regulation
changes and human behavioural changes. The combination of risks such as financial,
legal and industry risk is affected by most of the green retrofit projects (Mallikage, 2015).
For example, financial risks could incorporate extra costs when moving to green through
green retrofitting. On the legislative perspective, the developing number of government
rules for structures to meet green standards can be added to the latent risks (Lanka Business
News, 2015). A negative impact was that some of the green retrofit projects have stopped on
the account of related risk factors, and some of the green retrofit projects have not been
advantageous to the organisation. Thus, risk management of green retrofit projects in
Sri Lanka is an essential focal point to mitigate and manage the associated risk factors.
 Although, various factors may influence green retrofitting, most of the occupants have A risk-
identified that green retrofitted building achieve productivity through energy saving and, responsive
therefore, current demands for green retrofitting of existing buildings has increased. framework
2.2 Risk management of green retrofit projects
Many organisations need their building structures to convert into “green”. However, a set of
risk exposures have hindered its implementation. Green retrofitting of an existing building
has been identified as a process of higher risk than that of constructing a new building by
many previous researchers (Eichholtz et al., 2010; Menassa, 2011; Baek and Park, 2012).
Hence, risk management is an essential impetus for green retrofit projects especially for
decision makers to get a sufficient level of information and confidence about their selected
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

retrofit project. Risk management assists investors to identify risk factors associated with
the life cycle cost and future benefits of the project (Menassa, 2011). Salawu and Abdullah
(2015) mentioned that the risk management is important to green retrofit projects to fulfil
tenant and owner’s requirements, as it contributes to reduced energy consumption and
management cost. Indeed, risk management is important to the green retrofit projects as it
enhances the quality of the project (Arashpour and Arashpour, 2012).
The process of risk management consists of several stages. According to a study by
Fan et al. (2017), the main steps of the risk management process include risk identification,
risk analysis, risk assessment and risk control. Hence, the steps, such as risk
identification, risk analysis, risk assessment and risk control, were considered in this
study. As stated by Tummala and Burchett (1999), Muriana and Vizzini (2017) and
Jahangiri et al. (2017), four risk controlling strategies, such as avoiding, transferring,
mitigating and accepting the risks, can be identified. As Wang and Chou (2003) stated,
risk retention including the changing of structure or material, developing a contingency
plan and a system to analyse the market, etc. are increasingly important aspects of risk
management when dealing with low risk factors. Further, risk reduction may include
education and training, physical protection to reduce the likelihood of risk, brainstorming
to identify new risks and physical protection for people and property (Muriana and
Vizzini, 2017). Risk transferring denotes the switching of risk responsibility between
parties which are involved in the system to deal with high risk factors of a project such as
the use of expertise project team, implementing proper time management procedure,
obtaining legal advice, etc. Most importantly, risk avoiding strategies, such as redesigning
of processes, conducting routine checks and proper documentation, etc., can be introduced
within the system ( Jahangiri et al., 2017). The identified risk mitigation measures were
presented in the risk responsive framework.

2.3 Risks in green retrofit projects

Risk identification is the first step of the risk management process. Hence, the risks
associated with green retrofit projects were identified from the literature review.
Consequently, 30 risk factors were encountered by reviewing 12 key research works of
literature (Table I).
Calculating the energy saving of the green retrofit project is an essential part of the
return on investment. Also, in some projects, allocated company budgets are not sufficient
to cover the life cycle cost of the project because of the inappropriate financial model.
Therefore, it is difficult to attain long-term benefits of green retrofit projects (Zhi, 1995).
According to Arashpour and Arashpour (2012), the age of the building, the existing layout,
the purpose of retrofitting and the savings level can affect the financial status of the project.
Hence, a study by Bond (2011) emphasised that an inappropriate financial model (RF2) and
inadequate return on investment and payback (RF3) are major risks associated with green
retrofit projects. Furthermore, when achieving cost objectives of a green retrofit project,
 Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

Table I.
BEPAM

Risk factors identified

References
Arashpour Chanter
Zhang Song Qin Bruce Hwang Yang and Durmus- and
et al. et al. et al. et al. et al. Hildebrand and Zou Arashpour Drew Bond Pedini and Swallow Zhi
Code Risk factors (2017) (2017) (2016) (2015) (2015) (2014) (2014) (2012) (2011) (2011) Ashuri (2010) (2007) (1995)

RF1 Construction cost | | | |

RF2 Inappropriate | |
financial model
RF3 Inadequate return on | | |
investment and
payback
RF4 Higher cost than | | | |
anticipated operating
expenses
RF5 Inflation |
RF6 Loan interest | | | | |
RF7 Unable to achieve | |
expected value
RF8 Not meeting client’s | |
expectations of green
buildings
RF9 New compliance | |
requirement
RF10 Lack of consensus in | |
the market
RF11 Man power supply | |
and availability risk
RF12 Material supply | |
availability risk
RF13 New and untested | | |
product and
material risk

(continued )
 Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

References
Arashpour Chanter
Zhang Song Qin Bruce Hwang Yang and Durmus- and
et al. et al. et al. et al. et al. Hildebrand and Zou Arashpour Drew Bond Pedini and Swallow Zhi
Code Risk factors (2017) (2017) (2016) (2015) (2015) (2014) (2014) (2012) (2011) (2011) Ashuri (2010) (2007) (1995)

RF14 Lack of experience of | |

consultant and
subcontractor
RF15 Failure to meet green | | |
code or green
certification
RF16 Energy saving | | |
uncertainty
RF17 Warranty risk | | |
RF18 Delay in project | |
completion
RF19 Accreditation of |
energy saving
companies
RF20 Team performance |
risk
RF21 Indoor air quality |
issues
RF22 Reliability and | |
accuracy of
benchmark
RF23 Productivity and | |
quality risk
RF24 Pre-retrofit tenant | |
cooperation risk
RF25 Post-retrofit tenant | |
cooperation risk

(continued )
framework
responsive
A risk-

Table I.
 Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

Table I.
BEPAM

References
Arashpour Chanter
Zhang Song Qin Bruce Hwang Yang and Durmus- and
et al. et al. et al. et al. et al. Hildebrand and Zou Arashpour Drew Bond Pedini and Swallow Zhi
Code Risk factors (2017) (2017) (2016) (2015) (2015) (2014) (2014) (2012) (2011) (2011) Ashuri (2010) (2007) (1995)

RF26 Lack of knowledge | |

regarding the building
structure
RF27 Tax changes | | |
RF28 Regulatory incentive | |
changes
RF29 Changing of green | | | |
building codes
RF30 Requirement of | | |
permits and their
approval
 (RF1) construction cost can be associated as another financial risk factor. Also, costs higher A risk-
than the anticipated operating expenses (RF4), the inflation rate (RF5) and loan interest rate responsive
(RF6) could act as the financial risk factors of the green retrofit projects (Hwang et al., 2015). framework
According to a study by Yang and Zou (2014), green retrofit project developers have to
articulate the benefits of the project for their clients. When project developers are unable to
perform a retrofit project, the market risk arises as they fail to achieve their expected market
value. As Hildebrand (2014) stated, a major cause of the market risk is lack of knowledge
regarding the benefits of green retrofit projects in the market of real estate. Also, lack of a
consensus in the market and the reliability and accuracy of benchmark could also affect the
sustainability in the market. Thus, inability to achieve the expected value (RF7), not meeting
client’s expectations of green buildings (RF8), new compliance requirements (RF9) and lack
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

of consensus in the market (RF10) were identified as market risk factors (Yang and
Zou, 2014; Hildebrand, 2014). Further, a study by Durmus-Pedini and Ashuri (2010) stated
that when retrofitting of an existing building, the contractor and the designer should have a
proper understanding about green technologies and the building work. Today in the
construction industry, understanding the green building concept does not expand amongst
project participants. This has highly affected the industry risk as most of the engineers,
designers and construction companies do not participate in the green building practices in
the industry (Zhang et al., 2017). Thus, the industry risk category consists of several risk
factors, such as man power supply and availability risk (RF11), material supply availability
risk (RF12), use of new and untested product and material (RF13) and lack of experience of
consultants and subcontractors (RF14).
Performance risks were also encountered relating to green retrofitting (Chanter and
Swallow, 2007). As previous researchers stated, performance risk can have a greater impact
on decision makers of retrofit projects. The identified risks include failure to meet green code
or green certification (RF15), energy saving uncertainty (RF16), warranty risk (RF17), delay in
project completion (RF18), accreditation of energy saving companies (RF19), team
performance risk (RF20), indoor air quality issues (RF21), reliability and accuracy of
benchmark (RF22), productivity and quality risk (RF23), pre-retrofit tenant cooperation risk
(RF24), post-retrofit tenant cooperation risk (RF25) and lack of knowledge regarding building
structure(RF26) (Chanter and Swallow, 2007; Bruce et al., 2015; Zhang et al., 2017).
Nevertheless, tax changes (RF27) and the regulatory incentive changes (RF28) can also affect
as the legislative risks of retrofit projects. Legislative risks cannot be controlled by the
decision makers; therefore, they could affect future investment plans and budget allocation of
retrofit projects (Hwang et al., 2015). Furthermore, Bruce et al. (2015) stated that the changes of
green building codes and mandates (RF29) and the requirement of permits and their approval
(RF30) can also be considered as the legislative risk factors of green retrofitting.
The additional five factors, such as design changes (RF31), procurement delay (RF32),
damage to structure or property (RF33), delay payments on contract (RF34) and the design
errors (RF35), were encountered through the preliminary survey of green retrofitted
building projects in Sri Lanka. The aforementioned 35 risk factors were used to assess the
risks associated with green retrofitted building projects in Sri Lanka. The methodology
adopted is described in Section 3.

3. Research methodology
Justification made upon the factors are: investigating significant risk factors; developing a
risk matrix by using impact and probability calculation; and collecting data from a fraction
of population and generalising the findings to the population with quantitative descriptions
which supported the selection of the survey method under quantitative phenomenon.
The survey was designed to conduct in two stages by compromising a preliminary survey
and the main survey.
 BEPAM As the first stage, the preliminary survey questionnaire was handed over to the ten
selected green building professionals in Sri Lanka to validate the questionnaire. As per the
response of the seven professionals (70 per cent response rate), five additional risk factors
were added to the profile of risk factors as described in Section 2.3.
The main survey was conducted to evaluate the identified risk factors.
The main survey questionnaire consists of three major sections as follows:
(1) Section A describes the general information of the respondents. It generally includes
the name of the respondents and the name of the organisation and years of
experience and designation.
(2) Section B includes the risk identification and the evaluation.
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

(3) Section C consists of the strategies to mitigate the risks. So that timely responsive
actions were initiated to avoid the risks of transfer and to reduce the likelihood and
risk impact.
In the finalised questionnaire, the identified 35 risk factors were added in section B for the
evaluation. The respondents were asked to state their response over a five-point Likert scale
developed for impact and probability of each risk. The scale of probability consists of
1 ¼ probable, 2 ¼ seldom, 3 ¼ occasional, 4 ¼ likely and 5 ¼ frequent. The scale of impact
was developed with the 1 ¼ low, 2 ¼ Minor, 3 ¼ Moderate, 4 ¼ Significant and 5 ¼ Severe.
In total, 40 professionals of green retrofitted high-rise building projects who had experience
over three years in the field of green buildings were randomly selected for collecting the data.
Hence, the selected sample consists of 40 professionals including 9 architects, 18 engineers,
6 project managers and 7 maintenance managers as stated in Table II.
The questionnaire was handed over manually to each respondent to ensure a high and
quick response without delay. Out of 40 distributed questionnaires, 36 questionnaires were
returned. However, four of them were incomplete, thus rejected. The data collected through 32
questionnaires were used for the risk analysis by maintaining the 80 per cent of response rate.
As verified by Nulty (2008), 50 per cent is regarded as an acceptable response rate; thus, the
sample size of 80 per cent obtained in this survey was considered as an adequate response
rate. The surveyed data were analysed by using descriptive statistics. As the most frequently
used technique, mode value was used to evaluate the risk criticality. The mode is the figure
which occurs for the maximum number of times in a series. In other words, it is the value with
the highest frequency (Kar, n.d.). The mode value of each risk factor is then counted in
analysis. According to Elmontsri (2014), risk matrix can be used to rank the risk factors by
using 4 × 4 or 5 × 5 matrices having event consequences along the other axis. Thus, in this
research, the risk rating matrix was used to characterize and rank the risk factors.
The data analysis and key research findings are presented in Section 4.

4. Results and discussion

4.1 Risk analysis of green retrofit projects
The identified risk factors were evaluated in order to determine the risk score of each risk
factor. The probability and impact of each risk factor were calculated by using the mode value.

Experience in green retrofitting

Designation No. of respondents Experience over three years Experience in the filed

Architects 9 | |
Engineers 18 | |
Table II. Project managers 06 | |
Profile of respondents Maintenance managers 07 | |
 The risk score for each factor was determined by considering the “severity of its impact” as A risk-
shown in Table III. responsive
According to the data analysis, energy saving uncertainty (RF16) and design changes framework
(RF31) obtained the highest risk score of 20 with a likely probability (mode ¼ 4) and a severe
impact (mode ¼ 5). The risk factors of inflation (RF5), productivity and quality risk (RF23) and
procurement delay (RF32) showed the second highest risk score of 16 with a likely probability
(mode ¼ 4) and a significant impact (mode ¼ 4). However, the requirement of permits and their
approval (RF30) and damage to structure or property (RF33) risk factors showed the risk
score of 15 with an occasional probability (mode ¼ 3) and severe impact (mode ¼ 5).
Construction cost (RF1) showed an occasional probability (mode ¼ 3) and a significant impact
(mode ¼ 4), while warranty risk (RF17) showed a likely probability (mode ¼ 4) and severe
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

impact (mode ¼ 5). Although the factor of delay in project completion (RF ¼ 18) showed a
seldom probability of occurrence with the mode value of 2, it showed a severe impact on green
retrofit projects (mode ¼ 5); thus scored with 10.The factors of inadequate return on
investment and payback (RF3), lack of consensus in the market (RF10), new and untested
product and material risk (RF13), team performance risk (RF20), post-retrofit tenant
cooperation risk (RF25), delay payments on contract (RF34) and design errors (RF35) showed
an occasional probability (mode ¼ 3) and a moderate impact (mode ¼ 3). However, the factors

Category Risk factor Probability Impact Risk score

Financial risk RF1: construction cost 3 4 12

RF2: inappropriate financial model 1 4 4
RF3: inadequate return on investment and payback 3 3 9
RF4: higher cost than anticipated operating expenses 2 4 8
RF5: inflation 4 4 16
RF6: loan interest 1 2 2
Market risk RF7: unable to achieve expected value 2 2 4
RF8: not meeting client’s expectations of green buildings 1 3 3
RF9: new compliance requirement 1 3 3
RF10: lack of consensus in the market 3 3 9
Industry risk RF11: man power supply and availability risk 2 2 4
RF12: material supply availability risk 2 3 6
RF13: new and untested product and material risk 3 3 9
RF14: lack of experience of consultant and subcontractor 1 3 3
Performance RF15: failure to meet green code or green certification 1 3 3
risk RF16: energy saving uncertainty 4 5 20
RF17: warranty risk 4 3 12
RF18: delay in project completion 2 5 10
RF19: accreditation of energy saving companies 2 2 4
RF20: team performance risk 3 3 9
RF21: indoor air quality issues 2 2 4
RF22: reliability and accuracy of benchmark 1 3 3
RF23: productivity and quality risk 4 4 16
RF24: pre-retrofit tenant cooperation risk 3 1 3
RF25: post-retrofit tenant cooperation risk 3 3 9
RF26: lack of knowledge regarding the building structure 3 2 6
Legislative risk RF27: tax changes 1 2 2
RF28: regulatory incentives changes 1 2 2
RF29: changing of green building codes 2 3 6
RF30: requirement of permits and their approval 3 5 15
Other RF31: design changes 4 5 20
RF32: procurement delay 4 4 16
RF33: damage to structure or property 3 5 15
RF34: delay payments on contract 3 3 9 Table III.
RF35: design errors 3 3 9 Risk score calculation
 BEPAM of man power supply and availability risk (RF11), accreditation of energy saving companies
(RF19), indoor air quality issues (RF21), not meeting client’s expectations of green buildings
(RF8), new compliance requirement (RF9), lack of experience of consultant and subcontractor
(RF14), failure to meet green code or green certification (RF15), reliability and accuracy of
benchmark (RF22), pre-retrofit tenant cooperation risk (RF24), loan interest (RF6), tax changes
(RF27) and regulatory incentive changes (RF28) were scored with probable and seldom
probabilities and the low, minor and moderate impacts accordingly.
As the next stage of data analysis, the risk score of each risk factor (refer Table III) was
used to develop the risk rating matrix. The categories of probability of occurrences and the
categories of severity of impacts were defined according to the given context. The developed
probability and impact categories are illustrated in Table IV.
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

All the results were presented to determine a common score for each risk factor.
Consequently, low, medium, high and extreme risk factors were determined as shown in Table V.
As Table V illustrates, the risk factors which showed 1–4 risk score levels, such as
inappropriate financial model (RF2), inability to achieve the expected value (RF7), not meeting
the client’s expectations of green building (RF8), reliability and accuracy of benchmark (RF22),
failure to meet the green code or the green certification (RF15), accreditation of energy saving
companies (RF19), indoor air quality issues (RF21), new compliance requirement (RF9),
pre-retrofit tenant cooperation risk (RF24), tax changes (RF27), regulatory incentives changes
(RF28) and loan interest (RF6), were identified as low risk factors. A study conducted by
Zhi (1995) also stated that the inappropriate financial model of the project can have the least
severity as it may influence the cost of the organisation. Further, accreditation of energy
saving companies, indoor air quality issues, tax changes and loan interest have also been
identified as low risk factors in key literature (Bond, 2011; Hwang et al., 2015).
The developed matrix further presented that the inadequate return on investment and
payback (RF3), costs higher than the anticipated operating expenses (RF4), lack of
consensus in the market (RF10), man power supply and availability risk (RF11), material
supply and availability risk (RF12), and new and untested products and material risk
(RF13), lack of experience of consultant and subcontractor (RF14), team performance
risk (RF20), post-retrofit tenant cooperation risk (RF25), lack of knowledge regarding the
building structure (RF26), changing of green building codes (RF29), delay on payments on
contract (RF34) and design errors (RF35) as medium risk factors which showed risk score

Table IV.
Definitions of the Risk score Probability × Impact
categories of Categories of probability of occurrences Categories of severity of impacts
probability 1 2 3 4 5 1 2 3 4 5
and impact Probable Seldom Occasional Likely Frequent Low Minor Moderate Significant Severe

Severity of impact
Probability of
occurrences Low Minor Moderate Significant Severe
Definition Value 1 2 3 4 5

Probable 1 RF6, RF27, RF28 RF22, RF24

Seldom 2 RF7, RF21 RF26, RF29
Table V. Occasional 3 RF8, RF9, RF15 RF11, RF12 RF3, RF10, RF13, RF1 RF33
Risk rating matrix of RF20, RF25, RF34, RF35
green retrofitting Likely 4 RF2, RF19 RF4 RF17 RF5, RF23, RF32
projects in Sri Lanka Frequent 5 RF5, RF14 RF18 RF30 RF16, RF31
 level between 5–9. Those factors were proved by key research studies reviewed from A risk-
literature (Zhang et al., 2017; Song et al., 2017; Hildebrand, 2014; Chanter and Swallow, 2007). responsive
According to the assessment, ten risk factors were determined as critical risk factors framework
which showed high (10–15) and extreme (16–25) risk score levels in the risk matrix. The
critical risk factors include construction cost (RF1), inflation (RF5), energy saving
uncertainty (RF16), warranty risk (RF17), delay in project completion (RF18), productivity
and quality risk (RF23), requirement of permits and their approval (RF30), design changes
(RF31), procurement delay (RF32) and damage to structure or property (RF33). The
outcomes were further supported by previous research studies conducted in the similar
fields. As stated by Chanter and Swallow (2007), delay in project completion could create a
considerable effect on green retrofitting projects where it has been identified as a critical
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

factor in this research. As Chanter and Swallow (2007) further verified, delays could claim
for reducing the satisfaction of clients regarding the green retrofitting of existing buildings.
Further, Arashpour and Arashpour (2012) stated that the construction cost, design changes
and procurement delay are other risk factors which require mitigation, as they could
generate negative impacts on green retrofit projects. Accordingly, probable strategies were
identified to mitigate the risks of green retrofitting.
Section 4.2 presents the probable risk controlling strategies proposed to mitigate the
associated risks of green retrofitting. The risk responsive framework, which was developed
for green retrofit projects in Sri Lanka, is illustrated subsequently.

4.2 Risk responsive framework for green retrofit projects in Sri Lanka
The risk responsive framework suggests suitable strategies to avoid, retain, reduce and to
transfer the risks associated with green retrofit projects in Sri Lanka by considering the risk
score values calculated. Hence, the framework consists of the risk responsive strategies,
which were proposed to mitigate the low, medium, high and extreme risks of green retrofit
projects in Sri Lanka, as shown in Figure 1.
It has been noticed that any green retrofit project could consist of extreme, high, medium and
low risks. Finally, based upon the level of each risk, proper risk response strategies were
suggested based on key literature reviewed and the responses given by the survey respondents.

Risk Responsive Framework

Retain
Allocate daily target to project team
Avoiding performance problems using the related strategies in
order to obtain higher rent, sale price
Aware all team members to explore market
Change the structure or material
Check Energy Saving Companies’ credibility
Contingency plan
Create new performance schedule
Establish a performance-based contract with the consultants
Maximise Productivity
Prepare a knowledge portal
Systems to analyses the market
Tap on government and regulatory incentives
Use Geographic Information
Transfer
Re-structuring financial cost
Adopting green strategies and including them in the budget
from an early stage
Use the expertise team to the project
Purchase insurance
Motivate the project members
Proper time management
Obtain legal advice
Institution aspect properly address in project preparation
Physical protection to reduce risk
Green Retrofit Projects in Sri Lanka
Reduce
Adhere to construction practices
Comply with mandates and code
Conduct progress meeting with all supported staff
Low risk
factors Develop machinery and automation usage
Documenting performance and savings data
Follow project life cycle as planed
RF2, RF7, RF8, RF22, Get government support to invest and develop in green
RF15, RF19, RF21, RF9, material and the research works
RF24, RF27, RF28, RF6 Get materials from approved suppliers
Get the service of a qualified and licensed contractor
Improve team participants’ communication and integration
Prepare proper financial plan
Medium
Preparing database for green materials
risk factors
Proper plan on which area to be concern for LEED
Provide proper leadership project
RF3, RF4, RF10, RF11, Retain experienced and knowledgeable team members
RF12, RF13, RF14, RF20, Schedule material supply carefully
RF26, RF29, RF34, RF35 Industry institutions and government to provide green
materials available
Select the Design and Build delivery method
High risk Use experienced architectures and engineers
factors Use of modern technologies
RF18, RF30, RF17, RF1, RF33
Avoid
Keep relationship with bank
Extreme Establish a performance-based contract with the consultants
risk factors Proper energy simulation
Conduct routine checks Figure 1.
RF5, RF23, RF32, RF16, RF31 Adhere to proper design norms Risk responsive
Prepare a realistic procurement plan
Ensure proper documentation framework
 BEPAM 5. Conclusions
Since it is new to the Sri Lankan context, the process of green retrofitting has been identified
as a process of a higher risk than that of constructing a new building. Indeed, it may also
affect the finance status of the project, management and investment decisions as proved by
previous research works. Different categories of risks such as financial risk, market risk,
industry risk and performance, legislative and other risks are associated with green retrofit
projects. The risk factors of each category were evaluated in the context of green retrofitting
of high-rise building projects in Sri Lanka. The findings of this research determined the low,
medium, high and extreme risk factors associated with green retrofit projects in Sri Lanka. A
risk responsive framework was developed thereafter as the focal point of this research, by
proposing risk responsive strategies to overcome the identified risks of green retrofitting
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

projects in Sri Lanka. Moreover, the project managers, architects and engineers on the
respective green retrofit projects should be made responsible for managing the risks
associated with the particular project. This study may ensure the proper identification of risks
throughout the project and thereby ensures the success of the project to a greater extent.
Further, the findings can be generalised to the selected sample with confidence.
By enhancing the value of this research, the following implications are highlighted as
major outcomes derived from this research:
• The research outcome can be used as a guideline for green retrofitting of existing
high-rise buildings in Sri Lanka.
• Prior identification of green retrofit risks contributes to the reduction of its impacts to
a greater extent by taking appropriate risk response strategies.
• Green retrofit project teams can carry out awareness programs to ensure project
success and to introduce risk response strategies, which would support to overcome
the risks and to improve the performance of projects.
• Having a proper plan for managing risks in a green retrofit project could reduce
the cost of the project and achieve the continuous improvement of the project process.
• Implementing green retrofitting of existing buildings might have to face various
risks than those of new constructions. Therefore, the findings may help to allocate a
sufficient budget, provide proper communication and to allocate responsibility for
managing risks in green retrofit projects.
• Since investing in green retrofit projects can have a high degree of uncertainty,
having a proper risk management procedure is inevitable.
Accordingly, the developed framework could be used as a basis to manage the risks of green
retrofit projects. Also, it can be introduced as a novel model that can be used in Sri Lanka and
other developing countries for a fruitful upgrading of existing buildings into green retrofit.

References
Aly, D., Khodeir, L.M. and Tarek, S. (2016), “Integrating HBIM (heritage building information
modeling) tools in the application of sustainable retrofitting of heritage buildings in Egypt”,
Procedia Environmental Sciences, Vol. 3 No. 34, pp. 258-270.
Arashpour, M. and Arashpour, M. (2012), “A collaborative perspective in green construction risk
management”, Proceeding of the 37th Annual Conference of the Australasian Universities
Building Educators Association, Sydney, pp. 1-11.
Baek, C.H. and Park, S.H. (2012), “Changes in renovation policies in the era of sustainability”,
Energy and Buildings, Vol. 47 No. 2012, pp. 485-496.
Bond, S. (2011), “Barriers and drivers to green buildings in Australia and New Zealand”, Journal of
Property Investment and Finance, Vol. 29 Nos 4/5, pp. 494-509.
 Bruce, T., Zuo, J., Rameezdeen, R. and Pullen, S. (2015), “Factors influencing the retrofitting of existing A risk-
office buildings using Adelaide”, Structural Survey, Vol. 33 No. 2, pp. 150-166. responsive
Bu, S. and Shen, G. (2013), “A critical review of green retrofit design”, pp. 150-156, available at: www. framework
researchgate.net/publication/269078533 (accessed 5 May 2015).
Chanter, B. and Swallow, P. (2007), Building Maintenance Management, Blackwell, Oxford.
Dissanayake, R. (2015), “Green buildings for sustainable built environment in Sri Lanka GreenSL? Or
LEED”, The Newspaper of the Institution of Engineers, Colombo, available at: www.srilankagbc.
org/doc/Green%20Buildings%20for%20sustainable%20built%20environment%20in%20Sri%
20Lanka.pdf (accessed 5 May 2015).
Drew, L. (2011), “ ‘Careers in green construction’ ”, available at: www.bls.gov/green/construction
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

(accessed 21 May 2015).

Durmus-Pedini, A. and Ashuri, B. (2010), “An overview of the benefits and risk factors of going green
in existing buildings”, International Journal of Facility Management, Vol. 1 No. 1, pp. 1-15.
Eichholtz, P., Kok, N. and Quigley, J.M. (2010), “Doing well by doing good? Green office building”,
American Economic Review, Vol. 100 No. 5, pp. 2492-2509.
Elmontsri, M. (2014), “Review of the strengths and weaknesses of risk matrices”, Journal of Risk
Analysis and Crisis Response, Vol. 4 No. 1, pp. 49-57.
Fan, H., Li, G., Sun, H. and Cheng, T. (2017), “An information processing perspective on supply chain
risk management antecedents, mechanism, and consequences”, International Journal of
Production Economics, Vol. 185, pp. 63-75.
Filippi, M. (2015), “Remarks on the green retrofitting of historic buildings in Italy”, Energy and
Buildings, Vol. 95 No. 2015, pp. 15-22.
Hildebrand, J. (2014), “Risk management environmental compliance: what happens when our operation
is being construction”, Journal of Green Building, Vol. 9 No. 3, pp. 37-49.
Hwang, B.G., Zhao, X. and Tan, L.L. (2015), “Green building projects: schedule performance,
influential factors and solutions”, Engineering, Construction and Architectural, Vol. 22 No. 3,
pp. 327-346.
Hwang, B.G., Zhao, X., See, Y.L. and Zhong, Y. (2015), “Addressing risks in green retrofit projects: the
case of Singapore”, Project Management Journal, Vol. 46 No. 4, pp. 76-87.
Jagarajan, R., Asmonib, M.M., Lee, J.Y. and Jaafar, M.N. (2015), “An overview of green retrofitting
implementation in non-residential existing buildings”, Jurnal Teknologi, Vol. 73 No. 5, pp. 85-91.
Jahangiri, K., Eivazi, M.-R. and Mofazali, A.S. (2017), “The role of foresight in avoiding systematic
failure of natural disaster risk management”, International Journal of Disaster Risk Reduction,
Vol. 21 No. 2017, pp. 303-311.
Kar, P.K. (n.d.), “Research methodology. Sociology-7”, available at: http://ddceutkal.ac.in/Syllabus/MA_
SOCIOLOGY/Paper-7.pdf (accessed 25 May 2018).
Karunarathne, R. (2015), “Sri Lanka: green building concept to advance eco-friendly environment”,
available at: www.asiagreenbuildings.com/10035/sri-lanka-green-building-concept-to-advanced-
eco-friendly-environment/ (accessed 22 May 2015).
Kodmany, K. (2014), “Green retrofitting skyscrapers: a review”, Buildings, Vol. 4 No. 4, pp. 683-710.
Lanka Business News (2015), “Sri Lanka is witnessing greener development”, available at: www.
dailymirror.lk/82851/sri-lanka-is-witnessing-greener-development (accessed 22 May 2015).
Ma, Z., Cooper, P., Daly, D. and Ledo, L. (2012), “Existing building retrofits: methodology and state-of-
the-art”, Energy and Buildings, Vol. 55 No. 2012, pp. 889-902.
Mallikage, S.T. (2015), “Green building concept and its Sri Lankan context”, available at: www.sjp.ac.lk/
sites/forestry/2015/04/02/green-building-concept-and-its-sri-lankan-context (accessed 5 April 2015).
Menassa, C.C. (2011), “Evaluating sustainable retrofits in existing buildings under uncertainty”,
Energy and Buildings, Vol. 43 No. 12, pp. 3576-3583.
 BEPAM Mendis, P. (2013), “Building a sustainable future – greener buildings, better places, healthier people”,
available at: www.sundaytimes.lk/130929/business-times/building-a-sustainable-future-greener-
buildings-better-places-healthier-people-63527.html (accessed 21 May 2015).
Muriana, C. and Vizzini, G. (2017), “Project risk management: a deterministic quantitative technique”,
International Journal of Project Management, Vol. 21 No. 3, pp. 320-340.
Nulty, D.D. (2008), “The adequacy of response rates to online and paper surveys: what can be done”,
Assessment and Evaluation in Higher Education, Vol. 33 No. 3, pp. 301-314.
Prins, H.J., Flikkema, M.B., Schuiling, B., Kaeding, Y.X., Voermans, A.A., Müller, M., Coache, S.,
Hasselaar, T.W.F. and Paboeuf, S. (2016), “Green retrofitting through optim”, Transportation
Research Procedia 1, Vol. 14 No. 2016, pp. 1591-1600.
Qin, X., Mo, Y. and Jing, L. (2016), “Risk perceptions of the life-cycle of green buildings in China”,
Downloaded by UNIVERSITY OF NEW ENGLAND (AUS) At 01:23 16 October 2018 (PT)

Journal of Cleaner Production, Vol. 126 No. 2016, pp. 148-158.

Rios, C.F., Parrish, K. and Chong, W. (2016), “Low-investment energy retrofit framework for small and
medium low-investment energy retrofit for low-investment energy retrofit framework for small
and medium office buildings”, Procedia Engineering, Vol. 145 No. 2016, pp. 172-179.
Salawu, R.A. and Abdullah, F. (2015), “Assessing risk management maturity of construction
organisations on infrastructural project delivery in Nigeria”, Organisations on Infrastructural
Project Delivery in Nigeria, Vol. 172 No. 2015, pp. 643-650.
Song, W., Ming, X. and Liu, H.-C. (2017), “Identifying critical risk factors of sustainable supply chain
management: a rough strength-relation analysis method”, Journal of Cleaner Production,
Vol. 143 No. 2017, pp. 100-115.
Trencher, G., Broto, V.C., Takagi, T., Sprigings, Z., Nishida, Y. and Yarime, M. (2016), “Innovative
policy practices to advance building energy efficiency retrofitting: approaches, impacts and
challenges in ten C40 cities”, Environmental Science and Policy, Vol. 66 No. 2016, pp. 353-365.
Tummala, V.M. and Burchett, J.F. (1999), “Applying a risk management process (RMP) to manage cost
risk for an EHV transmission line project”, International Journal of Project Management, Vol. 17
No. 4, pp. 222-235.
Wang, M.-T. and Chou, H.-Y. (2003), “Risk allocation and risk handling of highway projects in Taiwan”,
Journal of Management in Engineering, Vol. 19 No. 2, pp. 60-68.
Wu, P., Feng, Y., Pienaar, J. and Xia, B. (2015), “A review of benchmarking in carbon labelling schemes
for building”, Journal of Cleaner Production, Vol. 2015 No. 109, pp. 108-117.
Yang, R.J. and Zou, P.X. (2014), “Stakeholder-associated risks and their interactions in complex green
building projects: a social network model”, Building and Environment, Vol. 73 No. 2014, pp. 208-222.
Zhang, L., Li, Q. and Zhou, J. (2017), “Critical factors of low-carbon building development in China's
urban area”, Journal of Cleaner Production, Vol. 142 No. 2017, pp. 3075-3082.
Zhi, H. (1995), “Risk management for overseas construction projects”, International Journal of Project
Management, Vol. 13 No. 4, pp. 231-237.

Further reading
Cagno, E., Caron, F. and Mancini, M. (2007), “A multi-dimensional analysis of major risks in complex
projects”, Risk Management, Vol. 9 No. 1, pp. 1-18.
Miller, E. and Buys, L. (2008), “Retrofitting commercial office buildings for sustainability: tenants’
perspectives”, Journal of Property Investment and Finance, Vol. 26 No. 6, pp. 552-561.
Moresco, J. (2009), “5 Major risks to green building market growth: Gigaom”, available at: http://gigaom.
com/2009/09/02/5-major-risks-to-green-building-market-growth/ (accessed 16 June 2015).

Corresponding author
Harshini Mallawaarachchi can be contacted at: hmallawarachchi@gmail.com

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com