Back in 2012, after the Green Building Council of Australia (GBCA) completed its last update of its Green Star rating tools, it began thinking about the next update.

At that stage, the vision was not ambitious. On buildings, the next update would pick up on a few things the previous Green Star – Design and As Built ratings had missed. Potentially, an extra category may be added.

In the following years, much happened. The Paris Agreement signed by 195 countries in 2016 aimed to limit temperature rises to two degrees Celsius above pre-industrial levels by the turn of the century and to try to limit increases to 1.5 degrees Celsius. The United Nations set 169 targets and 5,132 actions as part of their 17 Sustainable Development Goals covering not just climate action but a range of social, economic and environmental indicators. A greater focus on wellness saw the WELL Building Standard emerge.

The world had changed. Buildings needed to step up.

As a result, GBCA undertook a complete re-evaluation of the rating tool and what it needed to achieve.  Feedback from stakeholders was that the organisation should ‘go big’ and be bold about change.

All this culminated in the Green Star Buildings tool launched on October 29. In developing this tool, GBCA has:

• redefined its definition of a sustainable building
• required buildings which achieve 6-Star, 5-Star, 4-Star and any Green Star ratings which are registered from 2020, 2023, 2026, and 2030 respectively to be ‘NetZero’
• responded to several global megatrends
• adopted a framework to ensure transparent and sustainable material supply; and
• set minimum expectations for any Green Star building of any rating.

To be ‘NetZero’ as referred to above, buildings will have to run entirely on renewables (no fossil fuels), run entirely on electricity (no gas), be energy efficient and have remaining emissions offset.

Speaking before an online audience at the launch, GBCA Head of Market Transformation Jorge Chapa said the change should not be underestimated.

“We had a genuine recognition that the built environment needed to step up significantly,” Chapa said.

“That is something that we felt very strongly that the rating tool needed to respond to.

“We stepped back and thought, ‘how can we make this (Green Star) be meaningful for the next decade’? We spent a lot of time talking to Andrew (Cole – see below) and Jennifer  (Saiz – see below) and their investors or stakeholders to understand what they needed to show when they have a Green Star rating on their building.

“We believe Green Star responds to that. It’s issues around how do we address climate change, how do we guarantee a minimum level of performance within the built environment and most importantly, how do we expand the definition of what a great building is from one that is green to one that is healthy, resilient, positive and creates better places for people and responds to nature?

“That become how we evolved the rating tool that way. It was us taking a strategic view of what we wanted to achieve … and getting industry to come on the journey with us on that.”

During the launch, Chapa participated in a panel session which explored why Green Star had to change along with the benefits that the changes will deliver. Other panellists included Andrew Cole, Director and Manager of Sustainability at Lend Lease Funds Management; Jennifer Saiz General Manager Group Property and Security at Commonwealth Bank and David Clarke, Director and Partner at environmentally sustainable design consulting firm Cundall.

According to Cole, demand for low-carbon and NetZero products is being driven by investors.

He points to the growth in the volume of signatories to the United Nations Principles of Responsible Investing (UNRI). In 2006, data on the UNPRI web site shows, there were 32 signatories with combined assets under management of $US6.5 trillion. In 2020, that number is now 521 signatories with assets worth $US103.4 trillion.

This, Cole says, underscore the principle that environmental, social and governance (ESG) principles are now mainstream among institutional investors. There is now a recognised requirement for institutions to carefully examine social and environmental impact when making investment choices.

On Green Star, he says the emphasis around climate action and the move to align the tool with the 1.5 degree outcome specified in the Paris Agreement will be transformative as it will deliver independent certification that a building is constructed in a manner consistent with Paris Agreement requirements.

For buildings with Green Star certification, this will do two things.

For tenants, it will deliver evidence of the long-term sustainability of the premises which they operate and will help to safeguard their corporate reputation.

As well, it will help to support ongoing institutional investment in Australian real-estate.

To illustrate, Cole uses the example of his own employer Lendlease, which recently announced a global target of becoming a, ‘1.5 degree Celsius aligned company’ and committed to a five step process to eliminate all of its carbon emission by 2040.

In making that commitment, Cole said the company had engaged in dialogue with investors to unpack the implications of this for investor portfolios and assets as well as new buildings and there had been a strong demand in the marketplace for assets with attributes which would support this.

With many other players setting targets around zero carbon, Cole says the new Green Star tool will help to provide a framework by which they can plan strategies in this area.

Speaking from a tenant’s viewpoint, Saiz says physical workplaces will need to deliver a tangible representation of the values of the organisation which occupies them particularly as hybrid forms of work gain popularity after COVID.

Here, the expansion of Green Star to encompass place and community as well as sustainability will mean that the tool is now a vehicle through which corporate tenants can benchmark and demonstrate the performance of their premises against a broader set of community based objectives.

On the specific issue of positive workspaces, she says the tool gives straightforward, specific and holistic guidance about what this looks like in practice. Large tenants will therefore be able to use the tool to define a positive workplace for their people within their building requirements brief.

Speaking from a consultant viewpoint, finally, Clark said GBCA had been freed up to evolve Green Star to address emerging issues such as biodiversity, the circular economy and supply chain practices as many of the existing Green Star requirements are now standard practice in delivering a Green Star rated building.

Elimination of many ‘fluffy credits’ and requirements to ‘write reports for report writing sake’ will enable more focus on areas which have greater impact.

Finally, the setting of a higher bar along with flexibility in how requirements are to be reached leaves room for innovation and new strategies.

With many corporations having made NetZero commitments by 2025 or 2030, he said it had been necessary for Green Star to move ahead of this to remain relevant.

More broadly, Clarke says sustainable buildings are becoming more important for tenants as many millennials and GEN-Z who now make up over half of the world’s population are purpose driven and will be willing to work only for organisations that support their values and beliefs.

The new Green Star Buildings tool, he says, will provide a roadmap for organisations to understand what that looks like within their buildings and what needs to be done to provide spaces which are sustainable resilient and healthy.

Granted, there have been challenges.

During initial focus sessions in 2017 and 2018, Jorge says there was a sense that NetZero should not be mandated on 6-Star buildings until around 2025. Only after several rounds of consultation was this brought back to 2020 – even then with concerns about how the elimination of fossil fuels as an energy source was going to happen. Much of this, however, has been worked through in early access projects.

Further challenges surrounded how to integrate the multiple different considerations into the tool and how to assign a suitable weighting to each area, Clarke added.

Moreover, whilst many leading property firms are well prepared for the new 6-Star requirements, Clarke says a requirement for 6 Star rated buildings be powered entirely with electricity will pose challenges for some retail outlets who are accustomed to cooking with gas.

Furthermore, Chapa acknowledges areas where the new tool was not able to achieve everything GBCA would have liked.

Whilst carbon emissions in operation were dealt with, genuine limitations meant GBCA was not able to push as hard in the area of embodied carbon as they would have liked.

The notion of building resilience, meanwhile, remains less clear than what would be ideal. Further understanding is needed before ‘super difficult’ objectives will be able to be set in that space.

Finally, questions around dynamic buildings and how buildings can interact with and contribute energy back into the grid along with how Green Star can accommodate this are yet to be resolved.

Solutions in this area will depend on players from both within and beyond the industry.

Still, Chapa says the new tool has moved a long way. A greater focus on biodiversity and the doubling in value of the nature category is an achievement of which he is particularly proud.

He expressed delight about the level of corporation and agreement from stakeholders throughout the process.

Every time we went and said, ‘hey, we think we should do this’, industry came back and said ‘yes, let’s do that. We are ready for a high level of ambition and we know it will be more difficult for us to get there.

“It was always about ‘let’s make a better way to get results in the built environment.’”