An occupier’s introduction to green building certifications: three key takeaways
Matt Hayes, research analyst at Knight Frank, summarises what an occupier should consider when analysing green building accreditations.
4 minutes to read
Over the past few months, I have explored the landscape of green building certifications. Taking a deep dive into three of the world’s most prominent rating systems, I have examined what BREEAM, NABERS and LEED offer from an occupier perspective.
Here I highlight three key takeaways from my analysis.
Green building comparison
Firstly, we must acknowledge that green building accreditations are not interchangeable. A top-tier award from one provider does not necessarily correlate with one from another. While there is a certain degree of overlap in terms of the overarching aims, administrative bodies and, in some cases, an overlap in methodology or criteria, the green building ratings market is made up of distinct providers that have developed distinct products, each leveraging their own complex scoring methodologies.
Comparing BREEAM and NABERS, for instance, we have one certification that is primarily based on an assessor’s scorecard, spanning a host of criteria ranging from land use to health and wellbeing factors, while the other is exclusively focused on rating a project’s energy efficiency.
Lifecycle assessment
Similarly, we must appreciate that the leading green building accreditations offer ratings across the entire span of an asset’s lifecycle. A provider’s methodologies and assessment criteria can vary greatly from category to category.
Using LEED’s framework as an example, the sustainability credentials of a work site can be worth as much as 10% of a total score, for a Core and Shell Development certification, or as little as 0%, for a Commercial Interiors score. As such, the grade of a LEED-certified project’s rating is only half of the story and, as a result, not all ratings from a single provider’s system can be compared like-for-like.
Green portfolios
Thirdly, I found that, while green building accreditations can be a valuable strategic tool, they should be used by occupiers as part of an informed and expansive green buildings strategy, but not as a substitute for one. Of course, the growing presence of the leading ratings provides a valuable opportunity for multinational occupiers in need of an effective means of greening their global commercial real estate portfolios.
In our latest Y(OUR) SPACE survey, more than a third of corporate respondents claimed to have a target for increasing the amount of accredited green buildings in their portfolio. Ubiquitous rating systems like BREEAM and LEED, therefore, can be leveraged as universal, must-have criteria for global occupiers seeking new premises while working towards sustainability goals. However, a multitude of additional factors must be considered.
For instance, occupiers must consider the nature of their activities, and how this shapes their carbon footprint. For some occupiers, Scope 3 emissions (i.e. those from a company’s value chain, excluding purchased utilities) can account for more than 70% of their annual total.
Key Scope 3 components, such as emissions resulting from business travel, employee commuting, and waste disposal, can have an important relationship with an occupier’s commercial real estate portfolio, which may not always be reflected in a rating system’s scores. For instance, offices in the vicinity of favourable public transport links or in locations close to where an occupier’s employees live could significantly reduce their carbon footprint, regardless of what accreditations the facility may have.
Occupiers must therefore be cognisant of the scope and relevance of the accreditations they are pursuing, and be mindful of other emissions factors and environmental considerations when developing and implementing their green building strategies.
In addition to this, we must acknowledge that ratings are often reflective of imperfect data. Self-reported figures can undermine the veracity of an accreditation. Similarly, ratings for design-stage projects and new builds often rely on estimations and projections as opposed to post-completion, operational data and, in turn, may not paint a true picture of a project’s environmental credentials.
Real-world data is essential. While, some rating systems like NABERS factor real building performance data into their scores, or give participants the opportunity to earn additional points through building performance monitoring like LEED, this is a consideration that occupiers must bear in mind when incorporating green building accreditations into their corporate strategy.
Strategic decisions
The offices of the future are going to be sustainable. Green building certifications, such as BREEAM, NABERS and LEED, are an important tool for occupiers that provide benchmarks for sustainability credentials, helping to inform occupiers’ commercial real estate criteria, and shaping their policies and strategies.
However, they should not be wielded blindly. While they help to streamline decision making, occupiers should use these ratings as a starting point for their green building strategies, upon which they can develop their understanding of their operations’ environmental impact. In turn they can build real estate portfolios that are comprehensively environmentally-conscious and make a genuine difference.