The Next Frontier for Green Building Certifications
Jones Lang LaSalle IP, Inc. takes a look at the future of Green Building certifications.
According to JLL, there are many different ways to demonstrate sustainability in commercial real estate, but the most common form has been through third-party building certifications schemes, like the U.S.-developed LEED and UK-led BREEAM. Yet, as the transition to net zero reshapes how we define high-quality assets, how must these leading certifications evolve?
This transition presents many challenges as well as opportunities not just to buildings and their owners, but to the certification frameworks we rely on to gauge sustainability. As decarbonization becomes the goal, occupiers, owners and investors alike are reassessing their sustainability-related priorities, and many are placing material carbon reduction measures at the top of the list. While the built environment accounts for around 40% of global emissions, 27% directly comes from building operations, creating an acute urgency to tackle a building’s energy and emissions performance. Yet, the most prevalent green building certifications across most markets today are typically focused on design and construction and do not necessarily reflect improved energy use or emissions during operation.
From differentiator to market standard
While the industry in most countries seeks ways to reconcile this performance gap, top-quality markets are also revealing a shift of their own. Multiple studies have looked to quantify the statistically significant price and/or rental premium for sustainable buildings, or the ‘green premium’, often measured by the presence of a green certification. Across global markets, JLL Research has found evidence of rental premiums ranging from 7.1% to 11.6% for green certified office assets. Although estimates across these studies vary, they reveal that sustainable attributes are generally always accretive to building rents and values, as assessed by LaSalle’s research, The Value of Green.