Buildings that are certified for sustainable operating performance across Australia will need to meet tougher requirements from next year as an overhaul of the rating system comes into force.

The Green Building Council of Australia (GBCA) has launched the second version of its Green Star Performance rating tool, known as Green Star Performance v2.

The new version of the tool represents a comprehensive overall compared with the original Green Star Performance v1 that was released more than a decade ago in 2014.

The overhaul aims to respond to a range of international ‘megatrends’ which GBCA says have evolved over the past decade.

These include carbon management, climate change resilience, nature, health and wellbeing and diversity and inclusion.

The tool also responds to developments which have occurred over the past decade. These include the Paris Agreement, the 2020 report from the Intergovernmental Panel on Climate Change and more comprehensive ESG reporting needs of commercial property investors, landlords and tenants.

Largely speaking, the changes are similar to those which were incorporated into the current version of the Green Star Buildings tool that was launched in 2020.

A full description of the changes between Green Star Performance V2 and V1 can be seen here.

Major changes include:

• Replacement of the previous nine specific categories in the original tool with eight new categories which are much broader in scope. This will extend beyond defining best practices in energy, water and waste performance and will deliver buildings which are ‘better, healthier and more responsible’.
• New credits that will be offered for initiatives that promote responsible management and operation, social justice and inclusion and thriving places which support amenity, culture, heritage, identity and biodiversity.
• Much more rigorous decarbonisation requirements and specific focus on decarbonisation objectives. For example, all buildings which are certified under Green Star Performance v2 will need to have a zero-carbon action plan. By 2040, all certified buildings of any rating will need to be ‘climate positive’ and powered 100 percent by renewables.
• Establishment of clearer expectations for projects through a set of rating expectations that every building is expected to meet in order to be eligible for a certain rating. (In the previous version, compulsory requirements were restricted to energy and water management, with projects being able to then pick and choose other credits to achieve the required points.)
• Recalibration of benchmarks which are required to achieve four, five and six-star ratings to ensure that buildings of these ratings effectively respond to challenges of our time. For instance, from the time of inception of the new tool (which is available now), five-star buildings will need to operate on 100 percent renewable energy whilst six-star buildings will need to be carbon neutral.

Projects are now able to register for the new version of the rating tool.

The new version will be compulsory for all new projects which are registering from 1 July next year and for all submitted projects from 1 January 2026.

Jamie Wallis, Senior Manager of Buildings, Fitouts and Market Engagement at GBCA, said that the new version responds to significant changes in the landscape of sustainable finance and ESG which have occurred since Green Star Performance first entered the market in 2013.

In particular, many of the frameworks that investors now rely on, such as the Paris Agreement, the Task Force on Climate-Related Disclosures (TCFD) and the United Nations Sustainable Development Goals (SDGs), were either non-existent or in their infancy when the original version was introduced.

Today, these frameworks play a critical role in guiding investment decisions, and the need for robust, reliable sustainability assessments has never been greater, Wallis says.

The new version also aligns with leading frameworks such as the Climate Bonds Initiative (CBI), GRESB, TCFD, and 14 of the 17 UN SDGs. Buildings with NABERS ratings can earn up to 27 points towards a Performance rating.

“Investors are now looking for assets on a clear path to net zero, and the sustainable finance community needs to know whether assets are aligned with global decarbonisation goals,” Wallis said.

“The world has changed enormously since we launched Green Star Performance v1.”

According to Wallis, the updated tool takes a holistic view of sustainability, embedding circular economy principles into operations and addressing key areas such as fit-out waste, embodied carbon, health and wellbeing, social impact, nature, and climate resilience.

It also supports better corporate reporting and disclosure, aiding investors and banks in making informed decisions while providing facilities managers with a clear pathway to improvement.

He said that the focus of version 2 extends from individual buildings to also cover portfolios.

“We heard from over 200 experts to ensure our benchmarks are aligned with the world’s leading investor and sustainable finance frameworks and with the net zero expectations in the Climate Positive Pathway for Existing Buildings,” Wallis said.

“Green Star Performance v2 is set up to support better corporate reporting and disclosure, helping investors and banks make better decisions.

“Our focus was on ‘sustainability at scale. Where Version 1 was designed for single buildings and adapted for portfolios, Version 2 makes portfolios the default. We’ve developed a digital platform that harmonises with NABERS and helps sustainability teams manage the deluge of ESG reporting requirements, easing the burden and enabling smarter work.”

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