IFC talks to Sarah El Battouty, the founder of one of Egypt’s leading environmental design and auditing companies, ECOnsult. In this episode, she talks about charting her own path away from her family’s expectations, and making green buildings affordable, accessible, and respected in Egypt.
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Jasmin Bauomy (Host): This is Creating Markets from the International Finance Corporation.
Hello, and welcome to this new season of Creating Markets. We've been a little bit quiet there for a while, and that's because we've been tirelessly working on this new season. And boy, do we have some amazing episodes in store for you?
I'm your host, Jasmin Bauomy, and I'll be introducing you to some fantastic guests.
This season will sound just a little bit different than the last and that's because we've switched things up a little bit. Every episode, we'll start off with a few icebreaker questions for our guests followed by a three-part interview that tries to answer these questions. First, how did we get here and what's at stake? And second, what's it like now in your industry? And third, where's this going? And why should anybody invest?
To start us off we're tackling an industry that's still new in some parts of the world, but will soon become a major part of our lives considering the acceleration of climate change effects.
And so today's episode's topic: green buildings.
Sarah El Battouty: The idea of green buildings for better livelihoods, for embettering people's lives and health and incomes, and for responding to climate needs has changed the conversation. There's been like an awakening of the role of green buildings all over the world that they cannot serve multi-billion dollar projects and multinationals because the world isn't that.
JB: This is Sarah El Battouty, she's an architect and she's the co-founder of a consultancy for green buildings based in Egypt.
SB: So ECOnsult is a company that, um, specializes in green buildings. I also serve on the board of the Egypt Stock Exchange Sustainability Foundation and the National Institute of Governance and the American University School of Architecture, and the school of entrepreneurship and business Management, all focusing all of my energy on putting climate change very high on the agenda in Egypt, as much as I can in the realm of economics, finance, education. And I have also been serving as an advisor to the Egyptian president with a focus on environment and climate change since 2014. So several different hats, uh, also a mom and a wife and the proud dog owner.
JB: All right. So that's a lot of hats to wear, but before we dive into the serious part, I just want to get to know you just a little bit better. And so I have some icebreaker questions for you.
SB: Yes, go ahead.
JB: Where were you born?
SB: I was born in Egypt and I was raised and educated in the UK. The UK and Egypt are both home.
JB: What is it that you couldn't survive your home office without?
SB: Oh, wow. Okay. First of all, you know, speaking of sustainability and the different hats, I cannot survive without coffee. I am entirely independent and in love with coffee.
JB: How many cups a day are you on?
SB: About five, and I go to sleep early. It's absolutely no problem. I go to sleep quite early. It doesn't keep me up, but it keeps me energized.
JB: So we'll go into the first part of this interview. And the first part is to look back a little bit and to look at how we got here and what's at stake. How did you get here?
SB: So I studied architecture and then I studied environmental design. I'm a fourth generation architect. We just don't know how to do anything else in the family. So my family actually operates a family business in Saudi Arabia. At the time when I graduated, women working as architects was quite restricted in Saudi Arabia.
JB: And so Sarah, just like so many of the women in her family, went to work in Cairo. And she came to work, bringing along her passion for environmental issues.
SB: I tried to come back here and sort of influence the family business one way or the other.
JB: How did that go?
SB: It didn't go. And so I protested with my family and just said, fine. Now I'm going off on my own. I went off to a very important prominent architectural professor in Egypt that was working on several Aga Khan projects, community projects, like really large scale projects that affect communities of different income stratas and everything. And I just said, listen, I think I'm good at what I do. I'm very interested . And then he just said, who are you? And who do you think you are? Why aren't you working with your family. And I just said, no, no, cause I really want this, but I have my condition. I will work a million hours a day. And my condition was that I sit in on every single meeting so I can understand the business of doing architecture more than just design. And I was doing that for about three years, then I decided to start my own consultancy and that didn't go well with my family either because they're like, oh, what do you want? Do you just want to make life difficult?
JB: So tell me what was, what was at stake for you? Like why did you want to disrupt this?
SB: Well, It's such an established industry. Housing is huge. It's never going to stop. People will never stop building. Populations will increase and increase and increase. This is a polluting carbon intensive industry. It is contributing to a much larger problem and wherever you are in the world, it just seems that design and buildings are being celebrated all the time, but they're not held accountable for this contribution. I don't think that being a professional means that you're okay to be oblivious. And that kind of way of thinking is, is the main thing that kept me going through the challenges.
JB: Yeah. So you started your own consultancy. You ran against some walls. What were the you know, the challenges you're facing?
SB: So first of all, this idea of green consultancy was fairly new. In Egypt, there was no, you know, how you, when you come to register for your taxes and register the company, there was no description of a green consultancy. It didn't exist. So I was running from one syndicate to the other from one ministry to the other. I'm trying to get a definition and not letting go of this. I don't want to be a design studio. I want to be a green consultancy. You know, add it to the list. And they did, it took a year.
SB: It took a year of paperwork describing, showing other models and everything, but eventually it was, it was registered as the first, uh, green consultancy. The startup capital for this, I was not able to get. And so I sold my car and that's how I had the capital to start to start ECOnsult. It was just myself with a laptop. My co-founding partner with his laptop and we're just sitting. We're like, what do we call it? What's the look and feel? It's a really, really bumpy start. And then slowly, slowly, it started getting better.
JB: So fast forward to now, you know, from the woman who sold her car to get this off the ground, somehow, where are you at right now?
SB: We're in a different place. First of all, I'm now hired by my family. To give them green tips. And since I sold my car, my first paycheck was for them to get me a car. So that was very rewarding. Today, eConsult is the leader in green building both in the number of certified green buildings. In Egypt, we have buildings also in China and in Italy, but in Egypt, it's the largest certified. And it's also a very small sort of boutique niche company that sits on the board with multinationals and really large scale companies. Today, we are influencing legislation. Government is taking advice from us. Anyway, we really want to make green buildings, something that is affordable, accessible, respected in Egypt and making it easy for people to, to make that conscientious switch.
JB: Right now in Egypt, at least in your circles, what's the climate change discussion like these days? And what are the misconceptions people have about green buildings as to what it truly is?
SB: So the first thing that, that people do not understand is that, you know, they just think that green buildings are extremely expensive to build. This is a problem. It's true. This is true all over the world, but then that's because there is one model and the model was to have green buildings are only high tech, high investment buildings, large scale, and with a specific one or two rating systems that tailor for it. And within these rating systems, there are a handful of experts that achieve these kinds of buildings. So it's very niche. It's very exclusive.
When you start off by making a product, if you're going to make it haute couture like that, then it will remain very, very expensive and it will remain very high end. And so these misconceptions are, are basically true. They're based on a truth. However, recently, the idea of green buildings for better livelihoods. For better, for embettering people's lives and health and incomes and for responding to climate needs has changed the conversation. There's been like an awakening of the role of green buildings all over the world that they cannot serve multi-billion dollar projects and multinationals. The world isn't that.
JB: Can you give me a hands-on example as to like, in which way, what a green building change, the livelihoods and the lives of, you know, real people that aren’t, you know, the big multinationals?
SB: I mean, first of all, if you have for instance climate change affecting extreme heat, we've designed buildings that are 10 degrees cooler without any mechanical assistance, just through architecture and vernacular design, they've reached 10 degrees more cooling. How does this help people? Thirty percent of people's household incomes goes into cooling basically in the form of an air conditioning system, which is high emissions, you know, it has its own issues, but at the end of the day, the level of discomfort and the level of overheating and damage to people's health, people's sleep patterns, people's excessive use of water and the demand for energy. You, you have to think about what do people spend? And so people spending on poor design should not be allowed. We need to do everything, so that your home, our building, your workspace contributes to your productivity. It doesn't become a liability for your whole existence all the time, especially now. Already people used to spend 90 percent of the time inside the building, but you can imagine with COVID now it's become most 98 percent inside a building. So these buildings, they have to be designed for the people inside them. They can't be designed for brands.
JB: So who, who in Egypt are you building these, these houses for?
SB: Our clients are, are, are quite varied. We've got some hospital buildings. Schools are interesting because schools do not have air conditioning, especially in, in, in rural areas. Homes. Now you have two types of clients that want green homes. You have the high-end, high-income clients that is yearning for a healthier lifestyle or return to nature, the ability to connect with the outdoors because they're now confined to these spaces more and more. And you also have rural communities that are being directly affected by extreme heat or extreme flooding. And certain areas of Cairo.
Currently, now we're working to create green guidelines for the upgrading of 3,000 villages in Egypt in a very, very large initiative called a decent life, Hayat Kareema. Within these rural communities that depend on agriculture and fishing, etc. They are home to 55 million Egyptians and they are affected by climate change.
JB: What's the reception been like?
SB: You know, people who work on a field and people whose livelihoods is connected to something like climate change are the ones that have the highest sensitivity to it. So their radar is very high. They are extremely aware. A rural, you know, woman in her forties with five children probably has more knowledge, indigenous, local, built in knowledge of her livelihood and the risk of her vulnerabilities, then you would being in the city, taking the decision on her behalf. In Egypt, especially agricultural communities and communities that whose livelihoods is as, as very much dependent on this, they sense the danger. They have created their own adaptation techniques. But climate change itself and the climate crisis itself is no longer sort of, you know, tapping politely at the door. It's hitting hard and it's coming in and it's causing a whirlwind and, and, and heavier destruction. So the enablement and the partnership with these communities is very important because it's a win-win situation. We know more about the technology. We know more about the forecasting and the dangers, and they know more about their immediate day-to-day impact. And so it can't be top down. This one cannot be top-down. It will always be a partnership.
JB: So I want to move on to the third major part of the interview, which is to look at the solutions. How are you making them more affordable, especially to rural communities?
SB: Perhaps the first thing that we do do is forecast as much as possible what the climate challenges geographically are. There's a little bit of research that needs to go into where this building is. So context. The first thing, second thing is we’re a local consultancy, so you don't need to get anyone from, you don't need to fly in consultants. It's here. Especially in our case, we rely that our client is somewhat a designer. If you own a field and you have kids to feed, you really want something to work.
Some of them are, like tell us, you know, if you want insect, repellents, and you want to repel rodents, then burn chamomile everywhere and stuff. So there are all these interesting things. So we have natural diffusers in our building used with chamomile. But the main thing is to use the local materials. Don't import materials, use the local knowledge, understand how people consume and waste because that's where the saving is.
SB: so saving materials, saving water, and saving energy doesn't necessarily mean coming in and changing the way people do things. It's just identifying the opportunities and the waste and managing that waste.
JB: Okay. So let's say you got local material, which is gonna, you know, lower the price. You've got local skills in terms of like you as a consultancy, what are other price points that make these green buildings so expensive? Or well, not expensive, but what makes them, you know, more pricey that is still a challenge that could be dealt with with a different solution?
SB: The problem with the expense comes into the supply chain of the major buildings, you know, the large corporates, the big banks, et cetera. So in order to certify a building, there are certain components that go into it. Now in certain green buildings, you have to create components for water-saving cement and particular steel that doesn't have 1, 2, 3, and, and paint that doesn't have chemicals. So the market for green buildings in order for these large manufacturers to create an entire product line isn't big enough. So the price remains very high. The consultant is expensive because we don't have many green consultants. The material is expensive. The paperwork, and all of that is very expensive, accumulated as well that you have to get contractors to build these buildings and you have to audit them so many times across the value chains that their timing as well begins to stretch out.
SB: So. The main problem is it doesn't, it's not particularly attributed to one of these parties or one of these players. It's definitely in the demand. This is what we need. This is what the Middle East needs. This is what Egypt needs. It needs a commitment, legislation, law that says it needs local green building code. That are globally certified. And now we have like, you know, one or two, which is a very encouraging point. It needs political will, and, and also it needs government to really push the agenda that climate change action in Egypt is not just about waste management, agriculture, transport, and renewable energy. There's an entire sector called housing on the Paris agreement and that one needs to be addressed. I'm very optimistic about this in Egypt because Egypt remains committed to the Paris climate accord.
JB: In which way, do you know certificates play into this entire game? Like the IFC EDGE certificate, et cetera. And in which way do the, do they offer a solution or maybe even an obstacle to certain things?
SB: So far, I think ECOnsult has the first registered EDGE advance certificate in Egypt. So we've, we've worked with many of the certificates. There are the ones that are local, which are very, very affordable. There are the ones which are sophisticated, like LEED one, and then there's EDGE. I'm a consumer of EDGE as a consultant. EDGE is designed for developing countries. That is very critical because the playing field focuses more and more about innovation, creativeness, adaptation, localizing material, and it has also a wonderful focus on water saving, which is extremely relevant to a country like Egypt. I mean, now this is really the discussion of all discussions. So having rating systems that are relevant to the GDP of a country, relevant to its economic and security resources, is the only way that these rating systems will flourish because they are not oblivious.
So we need to tailor-make solutions a lot more. It's being done with every single product in the world. Every time somebody complains about a button not working on a laptop or an earphone or a car or something like that, the entire industry moves towards making it more accessible except for buildings. It's just… what's wrong, you know? So I think, I think I'm very, very encouraged by having a variety.
SB: Here in Egypt, there is room for all of the rating systems to be attainable. And then it's up to the client to decide which one they feel really speaks to their needs.
JB: What would you tell investors? The people who are looking to invest in, you know, something that's really sustainable in Egypt, what would you tell them why they should be investing into, you know, green building?
SB: Everyone who invests in buildings needs to realize that the question is who is your client? Who’s your customer? It's the person that uses these buildings. So you can't say that you're investing in the healthcare of your people if they are existing in sick buildings. If you are not spending your resources correctly, if you're spending, you know, on cooling stupid buildings, that's not a very good investment. You need to see the solutions here. If you're building in the wrong areas. If you're doing CSR projects and building a school, look at impacts. And I think all corporates, all investment and all governments are now looking towards impact because investing has become a risk. There's a lot of pressure for success. And so that's where I think it's going to move forward. And I have to mention that, you know, I'm in awe with younger people in Egypt... the interest that we have from people studying architecture that are demanding to know more and more about this. These are the people that will be investing in the future.
So my bets on them. They're going to be my future clients and I'm not going to have to have this conversation at all. They're going to come in and be like, we want to save this. We want some green building and I'm just, and I'm going to be happy.
JB: And that's it for this episode of Creating Markets. If you liked this episode, please click the subscribe button and leave us a review. It'll help other listeners find our show. And if you want to learn more about IFC’s efforts in the green buildings markets, go to our website, www.ifc.org. Many thanks to Sarah El Battouty for taking the time to chat.
Creating Markets is produced by the IFC communications team and by me, Jasmin Bauomy. And I'll talk to you again.