ºÃÉ«ÏÈÉúTV

For once, it is not only architects and building services engineers that will be banging the green drum – we are about to see a groundswell of investor support for sustainable development. The Association of British Insurers, whose members control about one-fifth of the London stock market, is calling for companies' annual reports to disclose whether they are exposed to environmental, social and ethical risks that could affect their share price, and to say how these risks are being managed. This could mean that clients with schemes that are not energy-efficient, or that use materials such as tropical hardwood, may be in trouble – particularly if a group such as Friends of the Earth gets to hear about it.

The government is getting tougher, too. Last year, it issued a revised version of Part L of the ºÃÉ«ÏÈÉúTV Regulations, which made buildings more energy efficient. Other sticks were an aggregates levy to stimulate demand for recycled materials, and a landfill tax to encourage the industry to produce less waste. And as the government looks likely to miss its target of generating 10% of the UK's energy from renewable energy by 2010, there are probably more regulatory changes to come.

The government has produced a few carrots, too. These include the carbon trading mechanism, which allows a business that has invested in energy-efficient buildings to sell "pollution credits" to other less green companies. There are also tax breaks available in the form of enhanced capital allowances for energy-efficient products.

It is not only the UK government driving the green agenda. A European commission directive to be issued this year proposes that all buildings be given an energy "MOT" test. This is good news for contractors, because substandard buildings will have to be brought up to scratch. But it could be bad news for developers, as buildings that do not make the grade may end up being demolished.

Already, buildings are changing in response to clients' demands for energy efficiency. Perhaps the most prominent example is the Swiss Re, under construction in the City of London. This will combine natural ventilation with air-conditioning units sized to meet local heat loads. The result it that the building will use 40% less energy than a standard office of an equivalent size – and all because Swiss Re's environmental policy demanded it.