The Dollars and Sense of Green Building 2008 edition

Building the business case for green buildings in Australia

Principal sponsor:

RATING TOOLS 1 GREENSTAR Existing buildings 11.1.3

National rating tool of choice 11.1.1

International rating tool framework 11.1.4

Beyond single buildings 11.1.2

Technology 11.1.7 Green star – Carbon 11.1.6

Focus on Green Star Design to As Built 11.1.8

Products and materials 11.1.9

RESEARCH, 2 EDUCATION, INNOVATION AND SKILLS

Innovation 11.2.4

Green Star - Energy 11.1.5 Professional education 11.2.2

Public education 11.2.1

Sustainable Cities

Skills shortage 11.2.5 Research 11.2.3

3

INDUSTRY LEADERSHIP

Disclosure and reporting 11.3.5

Green Building Council of Australia

Low carbon green buildings 11.3.6

Carbon strategy 11.3.1

Improved valuation techniques 11.3.2

Industry knowledge sharing 11.3.3

Labeling of products and appliances 11.3.4

4 GOVERNMENT LEADERSHIP

Roadmap

Planning concessions 11.4.6 Emissions Trading Scheme and Carbon Pollution Reduction Scheme (CPRS) 11.4.3

National standards (BCA) 11.4.1 Leadership by example 11.4.2

5

Reducing green tape, achieving consistent planning and eliminating outdated regulation 11.4.8

Cost sharing with utilities 11.4.5

Financial incentives 11.4.4

COLLABORATIVE PARTNERSHIPS

Asia Pacific Partnership 11.5.4

Build Environment Meets Parliament 11.5.1

Membership 11.5.3 Green Star Business Partnership 11.5.2

National targets and delivery models 11.4.7

World Green Building Council 11.5.5

Australian Sustainable Built Environment Council 11.5.6

For further information about these initiatives please refer to section 11.

ACKNOWLEDGEMENTS

In April 2004, the Green Building Council of Australia (GBCA) received funding from AusIndustry under its Innovation Access Program for a project titled ‘Green Star Diffusion’.

The AusIndustry project sought to disseminate information to promote the uptake of green building practices by the Australian property industry.

As part of this project the GBCA undertook to examine the business case for green commercial buildings in Australia by reviewing the latest international information and local case studies.

In late 2005, the Victorian Building Commission and Sustainability Victoria provided additional funding to the GBCA to update the AusIndustry Report to identify actions for industry and government that could be used as a basis for the development of a national roadmap for future sustainable building in Australia.

The report was released in 2006 and was titled The Dollars and Sense of Green Buildings: Building the Business Case for Green Commercial Buildings in Australia.

In 2008, the Green Building Council of Australia reviewed this report in response to the growth and uptake of green building practices in Australia. This review was made possible by sponsorship funding from InterfaceFLOR.

The GBCA wishes to thank all those who have given support, encouragement and advice to the development of this report, in particular: • The Honourable Tom Roper • Victorian Building Commission Tony Arnel • City of Melbourne - Prof. Rob Adams • Carnegie Mellon University - Professor Vivian Loftness • Sustainability Victoria - Roger Kluske • Rider Levett Bucknall - Mark Quinn • The Kador Group - Carolyn Parker and Mark Ross • Bond University - Professor George Earle, Ann Rask & Hikari Kato • Davis Langdon - Michael Manikas • Stockland - Davina Rooney and Greg Johnson • Brookfield Multiplex - Brenton Loth • Connell Wagner - Belinda Konopka • Viridis - Warren Overton • GPT - Robert Hitchcock • Colonial First State Global Asset

Management - Richard Dehn and John Dillon • Business Outlook and Evaluation - Lindsay Bevage • Interfaceflor - Sally Orme • Good Environmental Choice Australia Nick Capobianco Thanks to Leslie Jones who undertook the challenge of revising and updating the 2006 report and the original author of the 2006 version Romilly Madew. Special thanks also to Suzie Barnett for her contribution and coordination of this report.

Designed by: Rhodes Wingrove.

2-3

A green building is one that incorporates design, construction and operational practices that significantly reduce or eliminate the negative impact of development on the environment and occupants with strategies for addressing:

1. energy efficiency; 2. greenhouse gas emission abatement; 3. water conservation; 4. waste avoidance, reuse and recycling; 5. pollution prevention – noise, water, air,

soil and light;

6. enhanced biodiversity; 7. reduced natural resource consumption; 8. productive and healthier environments; and 9. flexible and adaptable spaces.

8 Brindabella Cicuit Canberra Australia’s first 5 Star Green Star Office Design Certified rating

CONTENTS 1

INTRODUCTION

2

BACKGROUND

3

AUSTRALIAN GREEN BUILDING INDUSTRY

3.1 Climate change and buildings 3.2 Rapid cultural change 3.3 Validating green claims 3.4 Green building definition

18 20 22 22

4

THE GREEN BUILDING COUNCIL OF AUSTRALIA

4.1 4.2

28 28

5

THE BENEFITS OF GREEN BUILDINGS

5.1 Owners and managers 5.2 Developers 5.3 Investors 5.4 Tenants

36 45 47 51

6

BREAKING DOWN THE BARRIERS TO BUILDING GREEN

6.1 Cost barriers 6.2 Multiple rating tools 6.3 Split incentives 6.4 Education, skills and industry 6.5 Green tape 6.6 Building products and materials

59 66 66 68 71 72

7

INTERNATIONAL DEVELOPMENTS

7.1 Worldwide green building councils 7.2 Other worldwide organisations 7.3 Focus on Asia Pacific

76 78 79

8

GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION

8.1 Federal government 8.2 State government 8.3 Local government

83 85 92

9

THE EXISTING BUILDING CHALLENGE

96

10

RESEARCHING PERFORMANCE OF GREEN STAR RATED BUILDINGS

104

11

THE WAY FORWARD

1.1 Purpose 1.2 Report structure

8 9 12

History Progress

11.1 Green Star rating tools 11.2 Education, research, innovation and skills 11.3 Industry leadership 11.4 Government leadership 11.5 Collaborative partnerships

112 115 119 122 127

12

ABOUT THE CONTRIBUTORS

132

13

LIST OF COMPANIES

134

14

REFERENCES

138

15

ENDNOTES

141

CASE STUDIES

DIAGRAMS

TABLES

1.

Old Bushels Warehouse (88 George St) 2. InterfaceFLOR 3.

Orion Springfield 4. City Central Tower 5.

Workplace6 6.

CH2 7.

Bishops See – South Tower 8.

Bond University Mirvac School of Sustainable Development 9.

Sydney Harbour Foreshore Authority 10. Charter Hall 11. Trevor Pearcey House 12. 40 Albert Road 13. City of Sydney Heritage Floor Space Scheme 14. Quad 4

14 24 32 42 48 54 64 69

Diagram A – Green Building Benefits Flowing to Owners Diagram B – Green Building Benefits Flowing to Occupiers Diagram C – Davis Langdon Australian Cost Graph of

Green Star vs Non-Green Buildings Diagram D – Circle of Blame

37 51 60

Table A - Green Star Registered and Certified Project

Statistics Table B – State Government Office Accommodation Guidelines Table C – Cost vs Sustainability Matrix of Common Green Building Initiatives Table D – Green Star Building Performance Research Findings

21

90 99 100 108 126 130

67

38 63 104

INTRODUCTION SECTION|ONE

6- 7

1

1.1 PURPOSE

In 2006, the aim of the original Dollars & Sense of Green Buildings report was to examine international case studies and local examples of buildings to demonstrate a strong business case for building green. It was the Green Building Council of Australia’s first attempt to provide a basis for a national roadmap for future sustainable building in Australia, and to identify a range of actions that could provide a way forward.

Given the success of the 2006 report, the 2008 edition of the Dollars and Sense of Green Building report aims outline changes and how the understanding of ‘green’ has evolved. It also reviews what has been learned from case studies, improvements in the rating tools, industry practices and knowledge as well as the new cost benchmarks, business benefits and economics of green buildings.

Having set out the current position this report examines realistic future goals and targets, continuing barriers, and the actions required to enable the industry to continue to move forward.

Commercial office buildings provide much of the discussion and the best examples of green buildings. But other building types including retail, industrial, educational, healthcare and residential are now being planned and developed as green buildings.

While some of these have been used in this report, it is still very early days, so as the best examples of these buildings occur, the Green Building Council of Australia will produce summary information sheets outlining their aims, cost and benefits.

This 2008 Report continues the original goal of providing a basis for a national roadmap for future sustainable building in Australia and recommending actions that are necessary if Australia is to future proof its building assets and maintain its reputation as one of the leading nations in green building.

8- 9

1.2 REPORT STRUCTURE

This Report has been written with the diversity of the commercial property industry in mind, including leading Australian institutional investors, superannuation funds, valuers, property trusts, financial organisations, private investors, developers, asset managers, builders, design practitioners, manufacturers and suppliers.

It is also highly relevant for local, state and federal government agencies as well as for tenants.

2 3 4 5 6 7

Section two: provides an update on how the industry has changed since the 2006 Report was written and summarises the original rationale and approach of the report which essentially haven’t changed.

Section three: specifically addresses the importance of the built environment in our fight against climate change.

8 9

Section four: provides an update on the Green Building Council of Australia and an overview of future plans.

10

Section five and six: focuses on the benefits and how to overcome the barriers to building green.

11

Section eight: outlines the incentives and leadership currently being offered by local, state and federal governments.

Section nine: addresses the challenge of how to green our existing building stock.

Section ten: provides advice to owners and tenants on how to enhance their performance in a Green Star rated building, based on research by Mirvac School of Sustainability.

Section eleven: identifies a range of actions which could provide a way forward for more green building activity in Australia.

Section seven: provides an overview of what is happening internationally.

1. Introduction

BACKGROUND SECTION|TWO

10 -11

2

2. BACKGROUND

Australia’s property industry has seen dramatic change since the Green Building Council of Australia (GBCA) published its Dollars and Sense of Green Building report in February 2006. At that time those committed to sustainable design and environmental management, the early adopters, felt some industry resistance.

The view was that Australia was at a crossroads. There was great pressure from the knowledgeable and leading developers and occupiers in the industry to ‘build green’ but there was also widespread scepticism.

Negative perceptions were rife; tenants did not care, the cost penalties for green were significant, tenants would not pay the necessary rent, and valuers would not reflect ‘green’ building specifications in valuations.

By 2008, there has been a fundamental shift in the building industry and a realisation that green buildings make economic sense. ‘Green’ is no longer considered marginal or niche, in fact nongreen buildings now occupy this space.

The industry has come to understand the reality of climate change and the need and urgency to create a sustainable future by adopting ‘green’ principles in all stages of the building life cycle.

Climate change and the need to reduce GHG emissions, in particular CO2, is probably the most important and urgent issue facing mankind. Because buildings contribute about 23% of total emissions they should be at the frontline of the fight against global warming.

Public awareness of climate change and propensity for action have been bolstered by films, reports and events such as Al Gore’s An Inconvenient Truth; reports by Sir Nicholas Stern, the Intergovernmental Panel on Climate Change (IPCC), CSIRO and the Garnaut Climate Change Review; Tim Flannery’s The Weather Makers, and the frequent media coverage of extreme weather events and water shortages.

At an industry level there have been the Australian Sustainable Built Environment Council, McKinsey and Vattenfall reports.

12 - 13

Australia’s ratification of the Kyoto Protocol, which gives a binding commitment to limit GHG emissions to 108% of 1990 levels by 2012, should lead to nationwide co-ordination of strategies and policies which will promote even more rapid change.

The Green Building Council of Australia has been an important leader and advocate for change and the rapid spread in awareness, acceptance and use of the Green Star rating system throughout Australia is a key indicator of the GBCA’s success.

The Dollars and Sense 2006 report pointed to some of the main challenges and barriers to the mainstream uptake of green building principles and actions needed to facilitate change. To overcome these barriers the Green Building Council of Australia has energetically promoted the merits and adoption of green building principles throughout the building industry, government, investor, financial, industry and professional organisations, as well as among occupiers and educators. The GBCA’s promotion of green building has been multi pronged and has included participation in or running of conferences, seminars and training workshops, commissioning research reports, working with industry organisations and continuing to develop the Green Star suite of rating tools.

It should be apparent from the report that two of the best indicators of change in the green building industry are: (a) The development market has moved rapidly beyond the early and misplaced focus on cost, to a focus on the benefits of green buildings and the growing demand for them. As a result 62% of developers and owners registered for Green Star are seeking to achieve a 5 or 6 Star rating. (b) The growth and changing membership structure of the GBCA. Members now come from all sectors and overall growth since the 2006 Report has been 308%.

Climate change and the need to reduce GHG emissions, in particular CO2, is probably the most important and urgent issue facing mankind. Because buildings contribute about 23% of total emissions they should be at the frontline of the fight against global warming.

2. background

CASE STUDY

Old Bushels Warehouse

1

Description The State heritage-listed building at 88 George Street is made up of two interconnected warehouses. Number 88 George Street was built in 1886 and number 86 in 1912, and both have a close association to the mercantile activities of The Rocks and in particular the Bushels Tea Company. Once completed, the project will deliver approximately 2,200 square metres of commercial office and retail space over six levels.

In December 2007, 88 George Sreet became the first State heritage listed building in Australia to achieve a 5 Star Green Star - Office Design rating.

Business case SHFA estimates the project to have cost approximately 5% over the premium rate to achieve a 5 Star Green Star rating, which will be paid back through higher rents and full tenancy before the building refurbishment has been fully completed.1

Green Star initiatives Management

• •

•

Green Star accredited professional.

Tuning the heating, ventilation and cooling systems to improve their energy performance.

Developing a building users’ guide to give tenants relevant information on how to most effectively use the water, energy, waste, transport and other sustainable components of the building.

Indoor Environment Quality

• The air conditioning system provides ventilation levels that are 50 per cent higher than the Australian standard.

14 - 15

•

•

•

•

•

•

•

•

•

The thermal mass of the existing sandstone walls and floor help stabilise internal temperatures.

Maintaining functional windows to allow tenants to turn off the air conditioning and take advantage of ocean air flow and external air conditions.

Large external windows on most facades allow tenants to enjoy high levels of daylight.

High quality and efficient lighting to balance tenant comfort and energy use.

More than 60 per cent of office space has an external view with no point on each floor more than 12 metres from a window.

Use of insulation and equipment to reduce internal noise levels and improve occupant comfort.

Low volatile organic compound (VOC) paints, adhesives and sealants and products with low or no formaldehyde have been used in construction to reduce internal air pollutants and eliminate ‘sick building’ syndrome.

Polished timber and natural flooring in common areas to promote occupant well being and health.

Air exhaust risers into every tenancy floor help eliminate indoor air pollutants created by activities like photocopying and printing.

Energy

•

•

Installing an innovative approach to air conditioning using a future district cooling system which will deliver energy savings of up to 40 per cent and prevent approximately 136,000 kilograms of carbon dioxide entering the earth’s atmosphere per annum.

Installing sub-metering on every floor to allow tenants to better manage their own energy use.

•

Installing lighting zones of less than 100 square metres on every floor with easily accessible and identified switches to help tenants reduce their energy consumption.

Transport

•

•

•

Fewer parking spaces have been installed to encourage tenants to travel to and from work by cycling, walking or using public transport located nearby.

Cycling facilities for up to 12 bicycles, as well as accessible showers, change facilities, secure storage and lockers, have been installed.

A number of parking spaces are designated for small cars only.

Water

88 George Street will reduce the amount of potable water usually consumed by a commercial office building of this size and nature by up to 85 per cent by: •

•

•

Using the harbour to ‘reject’ heat from the building’s heating, ventilating and air conditioning system (HVAC) to replace cooling towers, saving an estimated 3.8 million litres of water each year.

Installing high efficiency dual flush toilets and 6 Star tap and sink fittings to allow tenants to minimise water use.

Water sub-metering to allow tenants to better manage their own water consumption.

Materials

•

•

A dedicated recycling waste storage area has been installed for use by all offices in the building.

The building’s original heritage fixtures, including its façade and structure, were conserved to reduce waste.

Address: 86-88 George Street, The Rocks,

Sydney, New South Wales Owner: Sydney Harbour Foreshore

Authority (SHFA) Architect: Terroir Heritage Architect: Design 5 Mechanical Engineer: Steensen Varming Electrical Engineer: Steensen Varming Main Contractor: Hooker Cockram Structural Engineer: Simpson Design Associates Quantity Surveyor: Chris Bylett and Associates Building Type:

•

•

Timber used during construction and installed in the building (such as plywood for concrete forming, doors, feature timber surfaces and cabinetry) is either recycled or comes from sources certified by the Forest Stewardship Council (FSC).

Poly Vinyl Chloride (PVC) alternatives have been used to replace 60 per cent of the PVC that would normally be installed in such a building.

Existing Commercial Office

.

Emissions

•

•

•

•

Using non-ozone depleting refrigerants in the building’s cooling systems.

Using insulation products that were made without ozone depleting gases in their manufacture or composition.

Using the harbour to ‘reject’ heat from the building’s heating, ventilating and air conditioning system (HVAC) to replace cooling towers and reduce water flow to the sewer.

Minimising façade lighting and positioning it to prevent light spilling to neighbouring properties and the surrounding area.

Innovation

The building will be connected to an innovative district cooling system planned for The Rocks that will: • Eliminate the risk of legionella by allowing the cooling towers in the building to be removed.

• Significantly reduce the amount of water used for air conditioning.

• Eliminate noise from the existing cooling tower.

• Remove the need for the use of biocides to clean the existing air conditioning system.

• Improve the aesthetics of The Rocks by removing clutter on the building’s rooftop.

Case study.1

.

THE AUSTRALIAN GREEN BUILDING INDUSTRY

SECTION|THREE

16 -17

3

3. THE AUSTRALIAN GREEN BUILDING INDUSTRY

3.1 CLIMATE CHANGE AND BUILDINGS

There is now overwhelming scientific consensus and empirical evidence in support of the notion that human industry and activity is the main cause of accelerating global warming. The world community has very little time in which to avoid the worst of the predicted impacts of climate change. Urgent worldwide action is needed to prevent catastrophe.

The Garnaut Draft Report on Climate Change2 released on 4 July 2008 made several key points, including: 1. Climate change is happening

faster than previously forecast and

will accelerate unless global action is

taken to stop it.

2. Australia is most vulnerable because

it is so dry.

3. A market based scheme is the

cheapest and most effective means

of reducing emissions.

In developed countries like Australia where more than 80% of the population lives in cities and towns, as well as in developing countries which are experiencing rapid urbanisation, the global building stock represents both the greatest challenge and the biggest opportunity in tackling rising energy use and Greenhouse Gas (GHG) emissions.

18 -19

Worldwide estimates of total energy use, atmospheric emissions, generation of waste and overall contribution to global warming are similar. As the largest single contributor, buildings: •

•

• • •

Use 32% of world’s resources in construction.

Use 40% of global energy (includes embodied energy).

Generate 40% GHG emissions.

Consume 12% of water.

Make up 40% of waste to landfill.3

The commercial office and residential building sector alone is responsible for almost 23% of Australia’s total GHG emissions.4 With the continuing trend to urbanisation, and with it, to airconditioned and artificially lit workspaces, energy consumption and CO2 emissions are rising strongly.

The Australian Greenhouse Office estimates that GHG emissions from buildings (in Australia) will increase by 94% in the period 1990-2010.

A wide range of predicted environmental changes as a result of climate change will impact on the building industry directly or indirectly through the adverse impacts on the economy. Directly, the building industry is faced with higher operational

costs due to more difficult and expensive insurance and higher storm damage, energy, water and management costs.

In addition construction and demolition costs will increase due to rising oil prices and transportation costs, as well as increasing landfill charges.

Global and national policy and economic responses to climate change will need to employ a multi pronged approach.

The building industry also needs to pursue all available options starting with those with highest return on cost.

All GHG stabilisation scenarios assessed by the Intergovernmental Panel Climate Change (IPCC) show that 60-80% of reductions would come from energy supply and use and industrial processes.5 The IPCC Fourth Assessment Report (Working Group 111) notes that: 1.

The largest growth in GHG emissions between 1970 and 2004 has come from the energy supply sector (increase 145%).

2.

While in the period 1970-1990 building emissions grew by 26% (and stayed fairly stable till 2004), the building sector has a high level of electricity use and therefore total direct and indirect emissions grew by a much higher rate of 75%.

3. By 2030 about 30% of the projected

GHG emissions (from buildings) can

be avoided with net economic benefit.

4.

Energy efficient buildings not only reduce demand upon infrastructure and CO2 emissions but they improve indoor and outdoor air quality, social welfare and enhance energy security.

The imperative to act is not purely based on environmental or social reasons.

There are compelling economic and financial reasons to act now. Going green makes good national economic sense and good business sense at industry level.

The McKinsey & Company Report, An Australian Cost Curve for Greenhouse Gas Reduction, addresses the questions of extent, timing and cost of abatement measures for GHG emissions.6 The report’s main findings include: 1.

A significant reduction in Australian GHG emissions is achievable – 30% below 1990 levels by 2020 and 60 percent by 2030 - without major technological breakthroughs or lifestyle changes.

2. Reducing emissions is affordable

– with an average annual gross cost

of approximately AU$290 per

household (2007 levels) to reduce emissions in 2020 to 30% below 1990 levels. This compares to an expected increase in annual household income of over AU$20,000 in the same period.

McKinsey’s estimate that by 2020, almost 80 Mt, or 25% of the total reductions potential, can be realised with positive returns (or ‘negativecost’) from simple energy-efficiency improvements in buildings and appliances.

3.

Achieving significant emissions reductions requires prompt action from government, business and consumers - including rapid pursuit of negative-cost opportunities through incentives and regulation, fast-tracking the commercialisation of key technologies and accelerating effective information campaigns to drive changes in consumer behaviour.

These findings reinforced McKinsey’s conclusions in a 2007 international review that found the following7: •

•

Taking a 25 year perspective, the power generation and manufacturing industries offer less than half the potential for reducing emissions.

Almost a quarter of possible emission reductions would result from

•

measures such as better insulation, more efficient plant, lighting, fittings and management in buildings.

Because building improvements can be done now, have immediate effect in reducing energy consumption and the lowest cost of all CO2 emission abatement measures, they are the most beneficial in terms of economic growth.

But implementation requires regulations to support market initiatives and to ensure strict technical standards and rules for building energy efficiency.

It is obvious that building owners and developers are key players in the bid to decrease global emissions. In the case of new buildings it is increasingly accepted that sustainability is integral to financial success and many Green Star developments with the highest (current) standards of operational efficiency, natural light and indoor environmental quality are already accepted as good business sense. However, improving the efficiency and ‘greening’ the existing stock is the major challenge – and this was a key conclusion from the Green Cities 08 conference.

3. australian green building industry

3.2 RAPID CULTURAL CHANGE

Reflecting the rapid growth in public awareness of climate change and the need to reduce GHG emissions, the property industry is quickly coming to understand the fundamental importance of buildings in tackling climate change. This increased knowledge has occurred across all sectors of the industry - made up of those who produce, develop, plan, design, build, alter, own or maintain the built environment, as well as building material manufacturers and suppliers, and end use occupiers.

Since the 2006 Report the new commercial building sector has, in the sustainability sense, turned on its head. Whereas developers, owners and tenants used to ask “why go green?” Now, if a non-green building is proposed they ask “why isn’t it green?”.

The 2008 industry survey by BCI Australia, for the Green Building Market Report 8 confirmed the increasing level of green building activity. The report noted that: • 85% of Australian architects, contractors and building owners had been involved in green building;

20 --21 21

•

66% of Australian construction and property professionals described their firm’s commitment to green building as ‘high’ or ‘very high’.

The heightened awareness in the community has flowed through to the corporate sector – from both general economic and occupier view points.

The Business Council of Australia has encouraged corporations to factor the risks from climate change into their corporate strategies and business, if for no other reason than insurance purposes, and corporations are demanding green buildings for their tenancies.

The extent of the change is such that, while the term ‘green’ still conveys the nature of the trends, for new construction ‘green’ has been established as the new norm in CBD’s – but suburban developers have been slower to change.

Perhaps the best indicator of the rapidly changing level of acceptance and adoption of green building practices is the increase in the numbers of buildings registered with and certified by the Green Building Council of Australia under the Green Star environmental rating system for buildings.

Table A. Green Star registered and certified project statistics

Green Star Feb 2006

(Publication of D&S)

27

June 2008

680

70

Market differentiation - over 50% Operating cost benefits - 58% Creation of innovative culture - 57% Bottom line improvement - over 33%.

•

Other indicators of the increased corporate sustainability trend are more corporate reporting on environmental and sustainability policies, an increase in both voluntary initiatives

7

The Property Council of Australia (PCA) (which prepares the Office Quality Grade Matrix used by the industry throughout Australia) recognised the market shift when it included the Green Star and NABERS Energy ratings (formerly known as Australian Building Greenhouse Rating System or ABGR) in the parameters and metrics for Grades A and Premium in 2005.9

• Much of corporate America perceives green activities as part of their growth strategies.

50 270

Important observations include:

Certified

June 2007

The fundamental shift in industry thinking and the quality and environmental performance demanded by the market has caused the Grade A office standard to be redefined.

The changed Australian market demand mirrors overseas experience. The McGraw Hill Construction Report 2007 “Greening of Corporate America” noted that U.S. companies are moving fast to embrace sustainability.10

Registered

and the money directed toward socially responsible investments.

The McGraw Hill survey found that the market advantages of green are:

The heightened community awareness and attitudes to climate change are reflected in new levels of corporate social responsibility and the recognition of the need and the business benefits from providing a healthier and more productive work place.

A Colliers report “Lifeblood”11 indicates that a tenant survey across the Brisbane, Sydney, Melbourne CBD markets found that the two highest ranking predicted future building requirements were more effective air-conditioning and building environmental performance. The second highest driver for premises selection is the health and wellbeing of staff. But the survey also found that while over 70% of tenants were conscious of reducing energy consumption and GHG emissions only 26% had a process for evaluating the environmental performance of a prospective building. Colliers found that large organisations are most likely

to have an environmental sustainability policy that included property and that, across industry sectors, Government was the most conscious of environmental issues. As was to be expected, the demand for green is being led by the large, progressive corporations in the private sector as well as governments at all levels.

Perhaps the greatest impact has come from the various levels of government in implementing accommodation guidelines which set minimum standards for the procurement of office space for their own use. Leading this push are the South Australian, Victorian and Queensland governments which have set a minimum 5 Star Green Star standard for all government office accommodation.

To a lesser degree, other state governments have set a minimum energy requirement, as has the Federal Government which introduced a minimum 4.5 Star Australian Building Greenhouse Rating (now NABERS Energy) for office areas above 2000m2.

The current Federal Government’s stated policy is that all new buildings will be 5 Star NABERS Energy. This standard, however, does not take into account other environmental issues that impact emissions and human health such as transport and indoor environment quality.

3. australian green building industry

3.3 VALIDATING GREEN CLAIMS

While green buildings have become the new norm, the standards and performance specifications are increasing at pace as the target cuts in GHG emissions become larger.

Hence, the building industry is facing a continuing rise in demand for green building materials, products and services.

Another organisation that has benefited from growth in green building is the Good Environmental Choice Label (GECA) which in 2006 was known as the Australian Environmental Labelling Association. Products and materials play a major role in building green and manufacturers are now seeking third party validation of their environmental claims from GECA. GECA achieved an annual growth of around 100% for the last three years (based on number licenses granted), and the trends based on market demand and marketing activity indicate the same growth rate will continue into 2009.

During the course of the 2007- 2008 year the organisation created 17 new standards and has now rigorously commenced the revision of the organisations foundation standards after their second expiry round. GECA now has 42 different environmental performance standards covering goods and services.

According to GECA, the market segment with the biggest uptake has been the building and interior fit-out product segments. They expect the strong growth in the number of new licensed products for the building industry to continue, as well as growing demand for cleaning and consumer products and services.

The sharp rise in demand for third party certification whether it be Green Star

22 -23

3.4 GREEN BUILDING DEFINITION

or GECA is a direct result of community concern over the poor state of the environment reaching unprecedented levels. As the market becomes more educated about the environment, so does the need for organisations to establish credibility for their green claims and those who ‘green wash’ are now being watched not only by consumers but also the Australian Competition and Consumer Commission (ACCC).

According to the ACCC Deputy Chair Louise Sylvan “any claims of compliance with a certification must be verifiable and preference should be given to schemes that have wide industry, or government acceptance. The general rule can be summed up as this. If you can’t back a claim with verified scientific evidence, don’t make it”.12

The overall trend towards green buildings is clear, but as the 2006 Dollars and Sense report noted there has been confusion as to what constitutes a green building.

Some confusion still exists.

The Green Building Council of Australia defines a green building as one that incorporates design, construction and operational practices that significantly reduce or eliminate the negative impact of development on the environment and occupants with strategies for addressing: 1.

2.

3.

4.

5.

6.

7.

8.

9.

energy efficiency; greenhouse gas emission abatement; water conservation; waste avoidance, reuse and recycling; pollution prevention - noise, water, air, soil and light; enhanced biodiversity; reduced natural resource consumption; productive and healthier environments; and flexible and adaptable spaces.

The Organisation of Economic CoOperation and Development (OECD) defines green buildings as those that have minimum adverse impacts on the built and natural environment, in terms of the buildings themselves, their immediate surroundings and the broader regional and global setting.13 The Green Building Council of Australia has set the minimum standard for being formally certified as ‘green’ at 4 Star Green Star. Progression to 5 Star or 6 Star Green Star means that the building is greener and has a reduced environmental impact.

There is not a single or definitive green benchmark or building standard.

The Green Star rating system recognises that there are shades or degrees of green.

As industry knowledge, technology and acceptance of environmental sustainability principles increase, so new and refurbished buildings are becoming greener and so owners, developers and tenants are aiming for higher Green Star ratings. This trend will continue, and the Green Star rating system will continue to set higher standards and raise benchmarks as appropriate and in accordance with stakeholder engagement.

BUILT ENVIRONMENT FACTS AND FIGURES

14,15

The critical point is that green buildings are the future – the new generation.

They are neither niche nor in a different class. With the same general features as their predecessors, the differences are in attention to location, design and natural light, air quality, operational efficiency and technology, all of which are reflected in overall quality and a more effective use of resources.

• Property in Australia was worth more than $6 trillion in June 2008 representing two thirds of the nations total assets.

In other words green buildings are conventional, just next generation.

• $158 billion will be spent on new construction in Australia in 2008.

If we are to achieve the ultimate aim of carbon neutral buildings, industry should begin the Green Star rating system journey, over time the Green Star rating credits will be improved and modified to realise the ultimate goal zero carbon emmisions.

• The market value of Australia’s homes is $2.7 trillion.

Think of the Green Star certification as the foundation and building blocks for a gobal green future.

• The built environment is worth more than $2.7 trillion in June 2008, about 250% of GDP.

• More than 1 in 2 Australian’s own the nation’s commercial property assets.

• More than 1 million people are employed in the nation’s construction industry.

• Almost $26 billion is paid annually in property taxes.

• Commercial office and residential building occupants account for around 23% of Australia’s total greenhouse gas emissions.

• Greenhouse gas emissions will more than double by 2050.

• Australia’s construction industry has the 2nd lowest R&D of all sectors, just 1.5%.

• Time delays in development approvals can add 15% to total development costs.

3. australian green building industry

InterfaceFLOR The world’s leading maker of modular carpet InterfaceFLOR is transforming itself from a traditional “smokestack” industry to one synchronised with our environment. It’s an extraordinary ongoing journey driven from the top down. InterfaceFLOR is a company that has proven profit and principles can sit side by side.

The Beginning It was in 1994 Ray Anderson had a “spear in the chest” moment – an epiphany. While reading Paul Hawken’s The Ecology of Commerce it became crystal clear to Anderson that his company InterfaceFLOR could no longer continue doing “business as usual” at the expense of the planet. His primary concern was the role that business has played in the deterioration and degradation of our natural environment and the need for business to come up with solutions to these issues. Anderson recognised that his own business, making modular carpet on four continents and operating in 100 countries, was a very material-intensive business. In 1994 around half of the material used to produce InterfaceFLOR’s products was burnt and another large portion was wasted. Anderson also accepted that this business model was unsustainable and out of step with nature, and therefore was ultimately working against the organisation. While Interface acted in compliance with environmental law, it did not venture too far beyond it as an essential principle of the business.

That moment of recognition set InterfaceFLOR on a radically different course, culminating in Mission Zero - a pledge to eliminate any negative impact the company may have on the environment by 2020. This required a change in all of the organisation’s dimensions - in people, product, process, the planet and of course profits.

Anderson likens the journey to climbing a mountain - Mount Sustainability the peak of which is defined as the point of zero environmental impact.

A Change in Thinking Mission Zero is a vision and philosophy that influences every business decision

24 - 25

InterfaceFLOR makes from raw material extraction and processing, internal manufacturing, transportation and distribution, use, re-use, maintenance and recycling or final disposal.

It required a complete re-imagining and re-designing of everything InterfaceFLOR does to develop production systems that dramatically reduce the burdens placed upon living systems.

So how did InterfaceFLOR, a company with sales of more than $1 billion a year, integrate traditional business practices with the need to take into account the other bottom lines of the environment and responsibility?

It approached it like any other business challenge, starting off with a vision for the future and developing a strategy in order to get there. So in 1994, it developed seven strategies which are still in place today.

At the top of the list is eliminating all forms of waste. InterfaceFLOR defined this as anything created by or resulting from excess. Every part of the process sourcing, producing, making, delivery, selling a product the customer wouldn’t readily pay for - is defined as waste.

This activity has helped the organisation save $350 million so far. This boost to the bottom line has allowed the company to continue its investment in Mission Zero.

According to InterfaceFLOR Asia Pacific Managing Director Rob Coombs “the best thing you can do as a materials - based business is use less stuff - the multiplier effect is enormous.”

‘Closing the loop’ is another important strategy adopted by InterfaceFLOR. The company has taken ownership of the product throughout its entire lifecycle - from the source of materials to what happens to it at the end of its life.

InterfaceFLOR aims to get to the point where it never takes another drop of oil from the earth by utilising the natural cycle and redesigning processes and products to close the technical loop.

InterfaceFLOR has pioneered the industry's most successful carpet recycling program, known as ReEntry, which harvests

reclaimed carpet - both the carpet backing and face cloth - and recycles each into new product. “Clearly you have to have ownership of the whole lifecycle of your product. We know exactly how much CO2/m2 of carpet is generated right from the start of the process from our raw materials, through to the manufacture of the carpet, delivery to the customer, maintenance throughout its life and finally its disposal,” commented Rob Coombs.

“You have to take ownership of the whole process and of the whole product.”

Another of Interface’s sustainability initiatives helps spur the rest into action - that is to energise people both inside and outside the organisation. Without the full engagement of everybody in the organisation a change in approach, a change in mentality of this type can’t happen. You can’t dictate values and beliefs in this area.

The support and cooperation of the organisations within Interface’s supply chain – upstream and downstream within the wider community – is also important. It is in effect creating a “green ripple effect” by asking its suppliers and customers to join it in reducing their ecological footprint.

One of the most challenging of the seven fronts of sustainability was to create only benign emissions. Interface wanted to use only renewable energy efficient transportation but this issue has proven the least within the organisation’s control.

As a means of navigating this obstacle the company has bridged this gap through carbon offsets.

The Results The results speak for themselves. Since Mission Zero started InterfaceFLOR has: • As a global company, reduced its greenhouse gas emissions by 82% in total – despite growth.

• In Australia, reduced greenhouse gas emissions by 25%, despite growing four-fold in size.

• Reduced water consumption by 48%.

• Decreased fossil fuel energy use by 45%.

• Sourced 20% of materials from renewable resources.

CASE STUDY 2

•

•

•

•

Become Australia’s first climate-neutral manufacturer.

Tactiles - glue free installation method reduces the environmental footprint by 95% when compared to traditional glue.

I 2’s random installation reduces waste by 90% compared to broadloom.

Seen sales rise by two-thirds and profits double.

The Journey Continues InterfaceFLOR’s sustainability journey has delivered on many fronts – including the environment, the bottom line, attracting and retaining quality staff and encourages other companies to join the journey.

Leadership is key to this effort.

Rob Coombs says: “It really is a fundamental shift of thinking that needs to be on the agenda – regularly, frequently. So leadership is a must.”

InterfaceFLOR has learnt over time that the triple bottom-line of profit, environmental and social responsibility is not a compromise – it is mutually supportive. “We’re convinced that Interface has got a much stronger business as a result of our philosophy and our action. It’s more productive, has better people, has more customers and it’s growing faster than it otherwise would have done,” Mr Coombs said.

“You have to approach this as you would any other business challenge – by balancing short-term imperatives with longer term vision and establishing priorities.”

InterfaceFLOR is about halfway through its journey timeframe and about halfway up the mountain to Mission Zero – and as many would note – the last half of the journey is the most difficult.

“We have moved past the low-hanging fruit and now begin the more difficult challenges,” Mr Coombs concluded.

InterfaceFLOR last year became Australia’s first 100 per cent carbon neutral manufacturing company. For more information on InterfaceFLOR and its Mission Zero journey visit: www.interfaceflor.com.au

Case study.2

THE GREEN BUILDING COUNCIL OF AUSTRALIA

SECTION|FOUR

26 -27

4

4.1 HISTORY

4.2 PROGRESS

In response to the need for a national approach to building green a number of industry and government agencies conceived the idea of a not-for-profit organisation to provide an integrative framework and a national environmental rating system for buildings. The end result was the formation of the Green Building Council of Australia (GBCA) which was launched at the end of 2002.

Since 2006 the Green Building Council of Australia (GBCA) has made dramatic progress in pursuing its mission to define and develop a sustainable property industry and achieve market acceptance of Green Star as the national comprehensive environmental rating scheme for buildings in Australia.

The GBCA’s mission is to define and develop a sustainable property industry in Australia and to drive the adoption of green building practices through marketbased solutions.

Central to the work of the GBCA is the development and operation of the Green Star environmental rating system for buildings, the only national holistic environmental rating scheme for buildings in Australia.

Based on international rating systems from the UK and US, Green Star separately evaluates the environmental initiatives of projects based on credits within nine environmental impact categories: 1. Management 2. Energy efficiency 3. Water efficiency 4. Indoor Environment Quality 5. Transport 6. Material selection 7. Land Use and Ecology 8. Emissions 9. Innovation Green Star established a common language and standard of measurement for green buildings in Australia. It promotes integrated, whole-building design and identifies building life-cycle impacts.

Most importantly Green Star rating tools are voluntary. They are also targeted at driving the market to pull standards above typical practice and allow regulatory bodies such as the Building Code of Australia to introduce higher minimum environmental standards.

28 - 29

In 2007, the GBCA expanded its mission to position Australia as a world leader in sustainable building.

There is now widespread acceptance of the unique and fundamental strength of the Green Star rating system, which is based on the underlying principle that any strategy to move towards a more environmentally sustainable building industry must start with integrated building design and construction.

The other great strength of the Green Star rating system is that it will cover all building types. While the initial focus was on office buildings, rating tools are now being trialled and developed for industrial, retail, education, health, residential and other building uses.

Considered a leading authority on green buildings, demand for the GBCA's Green Star Accredited Professionals course education and associated support services has continued to grow at a rapid pace.

As at 30 June 2008, the GBCA had: •

•

•

• •

615 member organisations (both government and private); 9504 industry representatives trained in the use of Green Star; 2814 Green Star Accredited Professionals; 680 registered Green Star projects; 70 certified Green Star projects;

To respond to growth in membership and demand for services the Green Building Council of Australia has established permanent offices in Sydney, Melbourne, Queensland, Canberra and Perth. Almost 50% of GBCA staff members work within the Green Star team to keep pace with the demand for new and revised tools as well as project certification.

The new commercial office sector has already widely adopted green building principles and the Green Star rating tool is widely accepted as the industry standard.

Increasingly, the developers of commercial buildings are aiming beyond the best practice 4 Star Green Star certified rating, and are trying to achieve a 5 or 6 Star Green Star rating. ‘Green Star’ is now part of common industry language and is the benchmark standard for measurement of green buildings, to promote integrated, whole-building design; and to identify building life-cycle impacts.

The Green Building Council of Australia has acted on the challenges and barriers outlined in Dollars and Sense 2006 in the following way:

•

Green Star for all Sectors – The GBCA continues to work towards establishing Green Star as the tool of choice across Australia for all major property sectors.

•

National Standards – The GBCA continues to work closely with government agencies and committees such as the Building Ministers Forum to increase national minimum standards within the Building Code of Australia to ensure a better sustainability outcome in Australia’s buildings.

•

National Product Labelling – Dedicated and qualified personnel are working with industry on labelling and performance standards of materials and products to further improve overall environmental performance of buildings.

•

Professional Education – The GBCA has delivered a large number of successful conferences (Green Cities), seminars and workshops to further educate the industry on green building. The Green Star Accredited Professional training courses have been expanded and are still selling out across the country. It has also worked with other professional associations to deliver joint education events (including Green Cities which is in collaboration with the PCA). GBCA staff are asked regularly to present at industry conferences and seminars Australia wide.

•

Improved Valuation Techniques – Efforts to foster greater valuer awareness and accurate valuations have included conferences, working with API and RICS and commissioning the research paper Valuing Green Report – which was released at Green Cities 08.

•

Leadership and Partnership – The GBCA has encouraged governments to provide leadership and to work closely with the property industry to develop effective policies and regulation. The GBCA is also an active participant in the Australian Sustainable Built Environment Council (ASBEC) which comprises industry leaders representing a cross section of the built environment.

The GBCA also established the Green Star Business Partnership (refer to page 26 for more information on this initiative) and is a partner of the Built Environment Meets Parliament (BEMP) initiative (refer to section 11.5.1 for more information).

•

Leadership by Example – The GBCA has assisted in the development of accommodation guidelines for government occupied premises, and commissioned a benchmark study comparing the policies and enacted commitments in the various states. Most jurisdictions, including the Commonwealth, have adopted accommodation guidelines which support green building. Green Star has been adopted into the accommodation guidelines in Victoria, South Australia, Queensland and is under consideration in Western Australia.

•

Carbon Trading – Following the release of the Carbon Pollution Reduction Scheme (CPRS), GBCA will continue to work with Government and industry to ensure buildings are addressed through the Emissions Trading Scheme (ETS).

Refer to the GBCA’s position paper on the built environment and the ETS (released September 2008).

•

Complementary Measures – The GBCA is on the ASBEC Climate Change Task Group which has finalised a paper on identifying a range of complimentary measures which will work in conjunction with the CPRS to further encourage building owners, tenants and developers to adopt green practice. These measures are designed to ensure the built environment is in a position to take advantage of the opportunities presented by emissions trading.

4. the green building council 0f australia

A suite of Green Star Rating tools for the different phases of commercial Class 5 office developments has been completed and includes: •

•

•

•

Green Star – Office Design v3: for the design phase of new or refurbished offices.

Green Star – Office As Built v3: for the construction and procurement of new or refurbished offices.

Green Star – Office Interiors v1.1: for tenant fitouts, and more of the issues involved in commercial offices which the tenant can have control over.

Green Star – Office Extension: to rate the extension of existing commercial offices.

Version 3 (v3) of the Green Star – Office Design and As Built commercial office rating tools was released in February 2008. These tools are the latest generation of tools which are more robust, more relevant and easy to use.

Green Star certification recognises and rewards leadership within green building design and construction, and it is only through constant revision of the tools that the GBCA can keep re-defining industry best practice.

The new version of the rating tools includes new credits to encourage smarter sustainable design and to incorporate international innovation, including design for disassembly, reuse of materials and dematerialisation.

A number of benchmarks were also increased to represent changing national concerns, including water and energy.

Reuse of water is now essential to achieve full credits under the water category, and greater greenhouse gas emission reductions are necessary to gain full credits in the energy category.

To ensure these tools are easier to use, the Green Building Council of Australia combined the two Green Star tools into one technical manual and one spreadsheet, and included specific checklists to highlight the clear relationship between Green Star –

30 - 31

Office Design and Green Star – Office As Built documentation requirements.

The final tool to complete the office suite is the Green Star – Office Existing Building tool which is in EXTENDED PILOT format and is currently being finalised.

In addition to the commercial office tools the GBCA recently released the following tools for other sectors: •

•

Green Star – Retail Centre v1: for the design phase of new or refurbished shopping centres as well as extensions (previously known as Green Star – Shopping Centre).

Green Star – Education v1: for the design and fitout of campus style buildings such as schools and universities.

New Green Star rating tools continue to be developed and are currently being tested on the market including: • •

•

• •

Green Star – Healthcare PILOT Green Star – Public Building Design PILOT Green Star – Multi Unit Residential PILOT Green Star – Industrial PILOT Green Star – Mixed Use PILOT

In August 2008 the GBCA board approved the following Green Star rating tools for development in 2009: • • •

•

Green Star – Hotels and Resorts Green Star – Airports Green Star – Precinct/ Neighbourhood/Communities Green Star – Retail Interiors

It is expected that by 2011, there will be a single Green Star rating tool which can be adopted to each stage of a building's function and assessment; Design, As Built, Interior and Existing. With one single Green Star rating tool, as an adaptable, robust, easy-to-use and yet relevant means of appraisal, the GBCA can help transition the property industry towards more sustainable practice as never before.

Green Star Business Partnership

The Green Star Business Partnership is an initiative by the Green Building Council of Australia in which organisations commit to supporting sustainability within the built environment by: •

Ensuring all newly constructed buildings in its property portfolio meet a Green Star rating, using Green Star – Office Design and Office As Built rating tools it owns, and Green Star – Office Interiors for buildings it occupies.

•

Raising the performance of new and existing established buildings in its portfolio that undergo a major refurbishment.

•

Transparently reporting the performance of its office property portfolio – owned or occupied – against the Green Star criteria.

The first ten signatories of this initiative include: •

• • • • • • •

• •

Colonial First State Global Asset Management Dexus (previously DB RREEF) Investa ISPT Lend Lease Multiplex Stockland Sydney Harbour Foreshore Authority Sydney Olympic Park Authority GPT

For more information about this initiative or to sign up and become a Green Star Business Partner email: info@gbca.org.au.

"Green Star is so simple and easy to understand that every project can do it - you don't need to be a scientist. It should be intrinsic to your design process"

v1.1

ChĂŠ Wall - Managing Director Lincolne Scott, Co-founder and Director Green Building Council of Australia

4. the green building council 0f australia

Orion Springfield Town Centre

Description Orion’s total site area is 40 hectares, with Stage 1 encompassing approximately 35,000m2 with over 120 shops and services. Orion combines the best of a traditional town square – with its main street, town square, plazas and parks and integrates this with a carefully planned retail environment unlike any other in Australia, where visitors can shop, be entertained, do business and belong to a vibrant community.

Business case The cost of the project is estimated at $130m with an additional $2.5m spent on green building initiatives which has been predicted will offer a payback period of 6 years. According to Mirvac the shopping centre is already saving money operationally compared to other centres in its portfolio and is future proofed to meet tenant and consumer demand for sustainable buildings over the coming decade.16

manufacturer.

• Tactiles - glue free installation method Address: 1 Main St, Springfield Central,

Queensland Owner: Springfield Regional Shopping Centre Trust Developer: Mirvac (QLD) Architect: Rice Daubney Architects ESD Consultant: Synergy of Mind Structural & MPN Consultants Pty Ltd Civil Engineer: Main Contractor: Mirvac Construction (QLD) Services Consultants: DMA Professional Engineers Building Type: New Shopping Centre

32 - 33

Green Star initiatives

CASE STUDY 3

Management

Transport

Innovation

• •

•

•

• •

• •

•

Green Star Accredited Professional.

Commissioning in accordance with ASHRAE/CIBSE codes.

Provision of documentation and training for shopping centre management staff.

Waste and Recycling Management Plan which was adopted in both the construction period and daily operation of the centre.

Indoor Environment Quality

• High daylight penetration into the malls without compromising the Thermal Comfort of the building.

Reaching a 2.5 Daylight Factor for 95% of the malls.

• Minimisation of VOC emitting materials for the base building design.

• High levels of natural ventilation.

Energy

•

•

•

•

Sub-metering was installed

in tenancies.

Sub-metering was installed to substantive energy uses throughout the centre.

Due to the design and operation of the malls the use of air-conditioning was significantly reduced.

Natural ventilation and passive supply in carpark.

Bus interchange located on site.

Dedicated bicycle storage and amenities are incorporated into the design to cater visitors and staff.

Water

•

•

• •

•

Use of recycled water (A+ equivalent) supply to the cooling towers. This is a first in retail development in Australia.

Water savings fixtures/ fittings were incorporated into all public and staff amenities.

Rainwater supply via storage tanks.

Water meters were installed to all high usage services and tenancies.

Water saving devices included in the design of landscaping and water features.

Public “Green” Education Centre.

Water Recycling Strategy which exceeded the Green Star Benchmark for Occupant Amenity Potable Water Efficiency.

Provision of VAV diffusers which was acknowledged via receipt of R&D funding. Provision of VAV diffusers into Retail Tenancy spaces is an innovative initiative aimed at giving more control to tenancies to improve Energy and IEQ outcomes.

Materials

•

•

Dedicated storage area for recycled materials is located within the centre.

During tenancy fitouts dedicated recycling bins were supplied for the contractors.

Land Use & Ecology

•

•

Site is located on land of low ecological value.

No topsoil was removed from the site during construction.

Emissions

•

•

Mega GPT and soil treatment is used to treat storm water leaving the site.

Co-generation was implemented in the heating for cleaners’ facilities and staff amenities.

Case study. 3

THE BENEFITS OF GREEN BUILDINGS

SECTION|FIVE

34 -35

5

5. THE BENEFITS OF GREEN BUILDINGS

The key benefits of green buildings have not changed since 2006.

However, there has been a change in the level of acceptance of these benefits by owners and developers.

Indeed, the benefits of green office buildings are so widely accepted that prudent developers and investors are now seeking to achieve 6 Star Green Star or at least 5 Star Green Star.

But the greatest shift over the last two years has been in tenant demand. Many large organisations are now demanding Green Star commercial office buildings because they have recognised that these are the buildings for the next generation, offering not only enhanced productivity benefits but also strong brand association and credibility.

Green is being adopted across other building types but the trend is not as

obvious and examples are at an early stage of development. The Green Building Council of Australia (GBCA) is supporting and monitoring the uptake of ‘green’ across all sectors of the industry, particularly in: • • • • • •

retail industrial public buildings multi-unit residential education healthcare

As examples of completed and certified green buildings become available GBCA will prepare and distribute summary fact sheets.

The following sections outline the key benefits for each segment of the market including: owners/ managers, developers, investors and tenants.

“A lot of what we are talking about is actually just future proofing your asset base. If you are a long term holder of assets then it is about putting in place sustainable outcomes that will make them last longer and that future proofs them against changes that are inevitably coming.” 18 Matthew Quinn - Stockland

5.1 OWNERS AND MANAGERS

Commercial buildings and in particular offices, might be managed by their owners or by facility managers. In most cases the drivers for both are similar including: • •

•

• •

lower operating costs; greater tenant attraction and reduced vacancy periods; higher returns on assets and increased property values; enhanced marketability; reduced liability and risk.

36 - 37

It has been said that the factors of risk, economics and corporate governance are major drivers for property owners to make their existing portfolio greener.

The ‘Commercial Property Going Green’report by Jones Lang La Salle (‘JLL’)17 concluded that property owners who overhaul older buildings will be rewarded with cost reductions such as lower energy costs, waste disposal and water costs, lower environmental and emission costs, and lower operations and maintenance costs. Astute owners and investors are increasingly recognising that green buildings have: •

Increased demand for new space, as reflected in a pre-commitment or the winning of tenants in competition with non or less green competitors.

•

•

More favourable lease terms, which may include one or more of a higher rental rate, higher fixed annual increases and a longer lease term.

Reduced building operating costs, which should flow through to the owner by way of increased rent when compared with non green and less efficient but otherwise comparable buildings.

Measurement of the benefits and comparison of their value with building costs, requires an understanding of how the benefits flow through to either the property owner. The nature of the flows are shown in Diagram A.

Diagram A. Green Building Benefits Flowing to Occupier

5.1.1 LOWER OPERATING COSTS

Direct operating costs include all expenditures incurred to operate and maintain a building over its full life.

Obvious costs are energy and water consumption, security, cleaning, minor repairs and routine maintenance activities. However, this cost category also includes less obvious costs such as property taxes, insurance, and the costs of reconfiguring and upgrading space and services to accommodate occupant moves. Excluded are the costs of major renovations that are considered to be direct capital investments.

According to an American guide to marketing green buildings,19 green buildings will save on energy costs for years to come. It states: “with the price of oil rising dramatically and the prospect of peak period electricity prices zooming up again, it just makes good sense to design the most energy-efficient building possible. Even with “triple net” leases in which the tenant pays all the operating costs, it makes sense to offer tenants buildings with the lowest possible operating cost.”

OWNER Green Building Benefits

Lower Costs

Increased Income

HIGHER RENTAL RATE

HIGHER RENTAL GROWTH

HIGHER Occupancy LEVEL

BUILDING ENERGY,* & WATER COSTS REDUCTION

Sustainability Victoria states that successful energy management can produce economic benefits for your business. Audits suggest that most businesses can save 10–25% on their annual energy costs.

Capital

Reduced Life Cycle & Capital Costs

INCREASED NET RENT

This guide, published in 2004, was written with the aim of raising and answering key questions relating to marketing green buildings. The author relied on publicly available material from the US Green Building Council and other North American data. A number of chapters are relevant to this Report including Chapter 4 – ‘Forecasting Market Demand’, Chapter 5 – ‘What Makes Green Buildings Valuable?’ and Chapter 11 – ‘Selling Green Buildings’.

Energy efficiency reduces the operating costs of buildings and equipment and, hence, saves money. Cost initiatives (such as doing things in a different way) can achieve huge savings and investments in technical solutions can pay for themselves quickly.

Nearly all Australian state and territory government accommodation guidelines identify reducing government’s operating expenses as a priority.

Annual Operating COSTS

INCREASED BUILDING VALUE

OWNER

* Note: Under a gross lease the savings in operating costs will flow directly to the owner, but under a net lease recoupment is by way of an increase in the net rent through a negotiated mechanism or the valuation process at review.

5. THE BENEFITS OF GREEN BUILDINGS

5.1.2 GREATER TENANT ATTRACTION AND REDUCED VACANCY PERIODS

New South Wales

South Australia

Where an existing building is owned by the agency, the agency must:

All newly constructed office buildings that are owned by the State Government are required to achieve a 5 star rating under the Green Building Council of Australia’s (GBCA) Green Star Office Design rating tool. For all new Government office leases the Government gives preference to those buildings that meet at least a 5 star Australian Building Greenhouse Rating (ABGR) scheme energy rating from 2006.

– Achieve a 3-star* building rating by 1 July 2006 and Commit to a minimum 4 star* rating when undertaking major upgrades.

– Agencies that build new government offices are to commit to a 4.5 star* rating for the new building.

Where an agency is a tenant, the agency must:

In the long term, the benefits flow firstly, from reduced vacancy periods, because tenants are more likely to renew leases or, if they depart, a replacement tenant is found more quickly; and, secondly, from reduced capital outlay required to remedy obsolescence.

In 2006 tenant demand was being driven largely by the state government.

By considering the property needs of just two state governments, a picture of the enormity of government office accommodation requirements develops.

For instance, the New South Wales Government occupies more than 1.1 million m2 of office accommodation and incurs an annual gross rent in excess of $270 million for that space. Queensland Government accommodation exceeds 840,000 m2, and is located in more than 200 government-owned buildings and 500 private sector leased buildings.

In relation to this accommodation the Queensland Department of Public Works manages a total rental revenue stream exceeding $180 million and a combined office-building works program of $32 million annually.

As well as the spatial requirements for office accommodation, most state and territory governments also have accommodation guidelines which clearly identify sustainability as a key component of their property requirements. These guidelines, listed in Table B are accurate as of July 2008.

– Achieve a minimum 4-star* tenancy rating by 1 July 2006.

– Commit to a 4.5 star* tenancy rating for major fit outs and refurbishments.

– Endeavour to occupy premises where the building is rated at least 3 stars* (this will increase to 3.5 stars from 1 July 2006).

– Require disclosure of the accredited rating for the building when seeking information about the building for leasing purposes. * NABERS Energy SOURCE: www.gamc.nsw.gov.au Victoria The following Green Star rating shall apply to all new office accommodation built for government tenancies: – Green Star – Office Design 5 stars (Australian Excellence) for the base building; – Green Star – Office As Built 5 stars (Australian Excellence) for the base building; and – Green Star – Office Interiors 5 stars (Australian Excellence) for the fit-out.

Plus the following NABERS Energy ratings are required: – 4.5 stars for base building of new office buildings built for government accommodation; – 4 stars for base building of existing office buildings; and – 5 stars for tenancies of new offices.

SOURCE: Victorian Government Office Accommodation Guidelines 2007 www.dtf.vic.gov.au

Table B. Green State Government Office Accommodation Guidelines

38 - 39

SOURCE: Department Transport Energy & Infrastructure Green Plan: A Response to Greening of Government Action Plan, 2007 www.buildingmanagement.sa.gov.au Western Australia The Western Australian Sustainability & Government Accommodation includes: • A - Energy – From 1 July 2006 WA will only consider proposals to accommodate an agency in premises that achieve 3.5 ABGR Base Building Rating • B - Other Sustainability Measures which include conserving building materials; minimising waste; and enhancing indoor air quality.

SOURCE: Office Accommodation Policies, Policy 14: Sustainability & Government Accommodation 2004. (Note: Green Star is currently under consideration for inclusion in the new accommodation guidelines which are expected to be released in 2008). www.dhw.wa.gov.au Queensland Queensland Department of Public Works will target: – a minimum of 5 Star Green Star rating for its new office buildings including fitouts and for all green leases; – minimum 4 Star Green Star rating for office fitouts and refurbishments of existing office buildings in excess of 2,000m2.

The Department will also target: – a minimum 4.5 Star NABERS OFFICE Energy rating for its new office buildings, refurbishments, fitouts and for leases in excess of 2,000m2.

– a minimum 4 Star NABERS OFFICE Water rating, 3 Star NABERS OFFICE Waste rating and 3 Star NABERS OFFICE Indoor Environment rating within its Government office building portfolio.

SOURCE: Queensland Department of Public Works’ Sustainable Office Building Rating Policy 2007. www.build.qld.gov.au

“ The growing demand for green buildings will continue worldwide, as environmental and health emerge as key factors affecting business decisions…we are aiming for green building design to be selected for the majority of new commercial buildings in Victoria… and for Victoria to be a world leader in green buildings by 2010.” 21 Tony Arnel - Victorian Building and Plumbing Commissioner and GBCA Chair

In short, where a building owner or manager wishes to have a government tenant, the building will have to conform to a number of green building requirements and in the states of Victoria, South Australia and Queensland this includes a Green Star rating.

In 2008, not only has government demand increased but so too has demand from industry. According to Paul Day from Savills Queensland, “all tenants want to be a part of the green solution, even small tenants which has led to an unprecedented number of new buildings register and achieve a Green Star rating in Queensland. Mr Day believes, however, that it’s not the new stock under threat, it’s the old stock that will have to be taken off the market and retrofitted to Green Star”20.

Some of the major tenants demanding Green Star in Australia include: • • • • • • • • • •

Accenture Rabobank IAG ANZ Bank Energex Macquarie Bank Coca Cola Myer Fujitsu Google

5.1.3 HIGHER RETURNS ON ASSETS AND INCREASED PROPERTY VALUES

The impact of the benefits on building returns, risk and the valuation of green buildings has been the subject of much debate within the industry.

The difficulty was recognised in the 2006 Dollars and Sense Report, which pointed to the need for a greater understanding among valuers of life cycles, lower vacancy rates and operating costs, as well as reduced risk, and the positive impact of soft gains, such as productivity and other corporate advantages.

Developers and investors have strongly criticised valuers for failing to properly reflect the value of green building elements in their valuations, as traditional methods should be able to include such attributes to adapt to the market.

There is now growing, but not universal, acceptance that ‘green’ is being reflected in values, although there is still some unfounded scepticism about green buildings.

Some investors and valuers have pointed to a lack of market comparables and a high level of subjectivity in valuations although surveys confirm that the market recognition of the enhanced risk and return characteristics of green buildings.

The BCI Australia survey for the Green Building Market Report 2008 found that the main triggers for committing to green buildings included:22 •

•

•

•

•

•

•

•

•

•

•

Rising energy costs: 77% (up from 74% in 2006) Client demand: 65% (up from 56% in 2006) Government regulations: 62% (up from 60% in 2006) Availability of green building technology: 60% (up from 5% in 2006) Worsening of environmental conditions: 57% (up from 27% in 2006) Lower lifecycle costs: 53% (down from 58% in 2006) Superior performance of a green building: 51% (up from 35% in 2006) Industry rating system: 48% (down from 53% in 2006) Increased education: 46% (up from 2% in 2006) Competitive advantage of green projects: 45% (up from 37% in 2006) Government rating system: 41% (down from 43% in 2006)

These factors impact on value and the survey provided empirical evidence that green is being translated into value.

More recent commitments by governments and private tenants to rent, lease or own green buildings (some such as ANZ and IAG injecting additional capital to aim for higher ratings) is firm evidence of green being valued.

Acting on the recognised need to improve valuation techniques and industry knowledge, in early 2008, the Green

5. THE BENEFITS OF GREEN BUILDINGS

Building Council of Australia released a report titled "The Valuation of Green Buildings." 23 The main aims of the valuation report were to: •

•

•

demonstrate how a Green Star rating can affect property value; review the techniques available for the valuations of Green Star buildings; and provide assistance to professional valuers.

The report included a review of worldwide literature, and a survey of Australia’s leading property owners, valuers and developers. These were supplemented by case studies of completed Green Star buildings.

A key GBCA objective was to determine if a Green Star rating had a positive impact on value and, if so, use this finding as a catalyst to accelerate the adoption of sustainable building practices. The valuation study found that: 1. ‘Green Value’ was starting to be felt in property valuations.

2. In the face of rapid change and limited evidence, valuers need to make judgements on the extent of the value of the advantages enjoyed

by Green Star buildings.

3. The majority of investors indicated that they would pay more for a Green Star building, even though a rental premium had not been proven.

4. In the longer term, industry expectation is that rental growth, tenant retention and operating cost savings will be the key drivers of the market value of green buildings. Improved marketability is also a key feature.

5. The Discounted Cash Flow (DCF) valuation method is considered to be the most suitable because it provides the valuer with the facility to factor in the specific variables.

No conclusions were reached on the extent of value increases for ‘green’, although respondents to the survey typically quoted annual operating cost savings of $5 per m2.

The report notes the findings of a US Study on green buildings by McGraw Hill: • Operating costs decreased by 8% to 9%; • Building values increased by 7.5%;

40 - 41

• ROI improved by 6.6%; • Occupancy ratio increased by 3.5%; • Rent ratio increased by 3%.

The valuation study confirmed the diverse level of knowledge and perceptions within the investor and valuation communities.

For example, while some investors attached little or no importance to green building attributes, about two thirds would pay more for a green building. Given that a green building is one with higher quality design and construction or refurbishment the finding is not surprising.

Of concern is that some investors and valuers still appear to think of green buildings as a separate or different category. They make comparison with ‘conventional’ buildings (meaning old generation).

The overall message from the valuation study is that there is still a knowledge gap and this is causing a widespread misunderstanding of green buildings.

The result is a lack of understanding on the part of many valuers and investors to properly evaluate the benefits and therefore the risk and return characteristics of green buildings.

In the 2006 Dollars and Sense report, the Green Building Council of Australia highlighted several studies that had been undertaken on the link between building green and returns on assets and property values.

In 2006 the Royal Institution of Chartered Surveyors’ report, (RICS report)24 was highlighted as the most definitive study linking increased property value to building green. This is still the case today. The report, titled ‘Green Value: Growing Buildings, Growing Assets’ concluded that the market value of commercial property is linked to its environmental friendliness.

The RICS report, in partnership with ten government and private organisations, studied buildings in North America and the UK to consider the financial value of green buildings and how they contribute to a sustainable community, balancing economies with the environment. Or, to put it another way, assess whether sustainable practices make money or not.

The report, which took more than two years to complete, found that green buildings earn higher rents, attract tenants and buyers more quickly, and cost less to operate and maintain. In summary the report found that green buildings are shown to improve an asset’s value, as green buildings can: • • • •

•

•

secure tenants more quickly; command higher rents or prices; enjoy lower tenant turnover; cost less to operate and maintain in most cases; attract grants, subsidies and other inducements to do with stewardship of the environment, increasing energy efficiency and lessening greenhouse gas emissions; and improve business productivity for occupants, affecting churn, renewals, inducements and fitting out costs amongst others.

If there is one major area in which green buildings can add value, it is the benefit to business and if this can be realised it can even exceed the value of the real estate.

The RICS report found examples of where such operating efficiencies do indeed draw demand and add value, not just to the business and the economy, but to investment and development.

The overall message from the valuation study is that there is still a knowledge gap and this is causing a widespread misunderstanding of green buildings.

The result is a lack of understanding on the part of many valuers and investors to properly evaluate the benefits and therefore the risk and return characteristics of green buildings.

5.1.4 ENHANCED MARKETABILITY

Regardless of the business case, the public generally perceives green buildings as modern, dynamic, and altruistic and organisations associated with green buildings will benefit from these perceptions through employee pride, satisfaction, and well-being.

The first Green Star rated buildings such as CH2, 8 Brindabella Circuit, 40 Albert Road and 30 The Bond are still experiencing high levels of free publicity and marketing opportunities.

Canberra International Airport, the owners of 8 Brindabella Circuit, say they could not put a financial figure on the amount of free publicity they have received from their green building, both through being the first Green Star certified project in Australia and the subsequent environmental awards they have won. Former Executive Director Tom Snow said it was a case of prospective tenants coming to them, causing them to completely rethink their marketing strategy. In fact the interest in the project forced the owners to create a waiting list for tenants.

This has not changed in the last two years and the challenge for the Green Building Council of Australia (GBCA) has been curbing the enthusiasm of building owners in marketing their Green Star credentials prior to actually receiving them. The competition to achieve a Green Star rating is fierce amongst owners and developers who realise the PR benefits and kudos. This led the GBCA to review their marketing standards for Green Star buildings prior to actual certification.

Many projects were publicly stating an intention to achieve a 4, 5 or 6 Star Green Star rating in an attempt to gain advance publicity. continued on page 44

5. THE BENEFITS OF GREEN BUILDINGS

City Central Tower 1

Description

Business case

City Central Tower 1 was South Australia’s first 5 Star Green Star Office Design rated building. It is also the largest Green Star development with more than 30,000m² of NLA over 21 storeys. The tower is the first stage of a major redevelopment of an under utilised city block.

The building was 62 % leased at practical completion (31 January 2007) with the office component of the property being 100% leased within 6 months of practical completion. The property attracted blue chip tenants from both the private and Government sectors.

WALE (weighted average lease expiry) by income as at 30 June 2007 stood at 8.5 years (by income) with the majority of tenants entering into 10 year leases.

42 - 43

Address: 11-29 Waymouth Street, Adelaide, South Australia Owner: Colonial First State Global Asset

Management Developer: Aspen Group Limited

(previously Caversham Property

Developments) Architect: Woods Bagot ESD Consultant: Advanced Environmental Building Services Lincolne Scott Engineer: Main Contractor: Baulderstone Hornibrook Structural & Connell Mott MacDonald Civil Engineer: Quantity Surveyor: Davis Langdon Tenants: SA Government, ABS, ATO,

Fatscia, DOHA, Deloites, Woods

Bagott, Lincolne Scott and ANZ Building Type: New Commercial Office

CASE STUDY 4

Green Star initiatives Management

Energy

Materials

Over 90% of the management credits achieved including:

•

•

•

•

•

• •

•

•

• Extensive commissioning, building tuning and handover to building owner, with an independent Commissioning Agent.

• Building User’s Guide to facilitate the building performing to its designed potential.

• 60% of construction waste diverted from landfill.

• The Contractor has an Environmental Management Plan (EMP) and is accredited under the ISO 14001 Environmental Management System, which has ensured environmental management of the construction site.

Indoor Environment Quality

• The ventilation rate is a 100% improvement on the Australian Standard.

• 100% fresh air supply with no re-circulated component.

• Electric lighting levels and high frequency ballasts improve occupant comfort.

• 30% of the NLA has a daylight factor above 2.5%.

• High thermal occupant comfort with PMV <±0.5 for 99 -100% of the year.

• Acoustic comfort design levels.

• Low levels of indoor air pollutants from low off-gassing carpets, adhesives, sealants and composite wood products.

• Removal of indoor pollutants from printing and photocopy areas is possible through a dedicated tenant exhaust riser.

A CO2 reduction better than the equivalent 5 star ABGR + 20%.

Highly efficient cooling system via passive chilled beams in the offices.

Low energy T5 fluorescent lighting with 2w/m² per 100 lux. Good occupant control with dimmable ballasts and zones of no more than 100m².

Extensive sub-metering for all major energy uses.

Highly efficient spectrally selective façade glazing with external shading.

Transport

•

•

80% reduction on local planning car-parking allowances, will achieve significant CO2 reduction by removing 770 cars permanently off the road.

City centre site within close proximity to public transport.

Water

• Five credits awarded for potable water consumption, this includes AAAA rated WC’s, waterless urinals and taps with a flow restrictor achieving 2l/min.

• Water meters on major uses and linked to the BMS for leak detection.

• Water efficient irrigation system for Colonnade planting.

• Cooling tower with six cycles of concentration.

Recycling facilities for office waste.

A speculative building that integrates over 30% of the building with a shell and core fit-out.

80% of the steel used in the building has 100% recycled post consumer content. This is for reinforcing in slabs, columns etc.

Sustainably sourced timber for internal joinery, loose and built-in furniture and formwork timber.

Land Use and Ecology

• Re-use of an under used city centre site.

Emissions

•

•

•

•

Refrigerants and thermal insulation with zero Ozone Depleting Potential (ODP).

Stormwater pollution management and treatment.

Efficient water fittings will reduce the flow to sewer.

No external upward light dispersion, in accordance with AS4282-1997.

Innovation

•

The inclusion of direct tower cooling, enabling the building to be efficiently cooled directly by the chilled beams circulating water through the cooling towers.

Case study. 4

“ These days you’ve got to have Green Star to market your building ” 25

5.1.5 REDUCED LIABILITY AND RISK

James Grose - Bligh Voller Nield

In response, the GBCA changed the rule that until a project actually received its Green Star rating it could only claim publicly that the project was “registered to achieve a Green Star rating”.

Since 2006, competition to achieve Green Star ratings has also extended beyond the office market into other sectors, with owners and developers wanting to achieve the first PILOT Green Star rating. This was particularly true for Mirvac which achieved the first 6 Star Green Star ratings under the Green Star – Shopping Centre PILOT (for Orion Springfield shopping centre) and the Green Star – Education PILOT (for Bond University) in 2008.

According to Bond University, the marketing of its green credentials into international markets has helped to attract international students and it has also led to the establishment of

several research partnerships with other prestigious universities. These research partnerships contribute to the financial bottom line of the university and provide an income stream that is far greater than the total energy and water costs for the new building. By incorporating consideration of these opportunities into the financing models for the Mirvac School of Sustainable Development, the Bond University finance team was also able to demonstrate sustainable financial returns on the investments to the University Council (refer to Case Study 8 for more information on this project).

According to an OECD report ‘Environmentally Sustainable Buildings’ 26 health problems from indoor air pollution have become one of the most acute problems related to building activities.

The report found that pollutants from building materials, ranging from paints to backing materials, lead to occupational health issues.

Considering 25% of an office worker’s life, or 40% of their waking hours are spent inside commercial buildings, there is now a realisation that conventional building practices expose people to raised levels of toxins.

‘Sick Building Syndrome’ lawsuits, whilst unheard of in Australia, are very common in the United States and the Canadian report27 states that owners and managers are increasingly facing legal action from tenants blaming the building for their health problems.

As more data is compiled on the risks of poor ventilation and air supply, and cross contamination of illnesses, tighter controls on the Indoor Environment Quality (IEQ) of commercial buildings in Australia could result.

Since property owners are responsible for IEQ, it is prudent for owners to reduce their liability. Tom Cantwell, Partner, Phillips Fox, believes it is “only a matter

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5.2 DEVELOPERS

One of the major obstacles to developers building green has been the tendency to hold a short term view, build it, sell it and move onto the next development.

Developers have much to gain from going green. By creating more desirable working and living conditions, green buildings can offer a handsome return on investment. The following opportunities have been identified for developers:

of time before property investors have to consider sustainability in the due diligence process to mitigate their risk.”

‘Future proofing’ is about profitability and what benefits and opportunities are ahead for organisations that anticipate and adapt rather than react.

By incorporating sustainable features now, building owners are future proofing for changes in the business and regulatory environment, therefore ensuring they will not be at a competitive disadvantage in the future. With governments and large corporate organisations increasingly incorporating green principles into their property requirements, tenants demanding green and investors using sustainability indexes to ascertain investments, future proofing investments makes good business sense.

By decreasing a building’s demand for water and energy through the incorporation of conservation and management measures, a building is better proofed against future utility price increases.

Green buildings that incorporate natural lighting and ventilation and internal energy and water generation, are less reliant on external networks, and less vulnerable to grid-related problems or failures such as brown-outs, black-outs or water shortages.

1. Capital Cost Savings Optimising building environmental systems to interact synergistically can lead to substantial savings in capital cost.

For example, downsizing HVAC systems through energy efficient design not only produces savings in ductwork but, by reducing the requirement for bulky mechanical equipment, more floor space can be made available for leasing.

2. Enhanced Value Green buildings have an enhanced ability to rent or sell space based on their superior indoor environment, lower operating costs and marketability. While this is yet to be proven in Australia given current market conditions (low vacancy rates), developers certainly take the view that this is a long term outcome.

There have been instances of Green Star rated buildings selling at higher than average market rates prior to construction.

For example, City Central Tower 1, which achieved one of the first 5 Star Green Star – Office Design ratings in Adelaide, was sold by Caversham Properties to Colonial First State for a record price in Adelaide before the cement was even poured.

3. Compressed Schedule An integrated team approach to design (as required when endevouring to acheive a Green Star rating) results in fewer design conflicts and subsequent change orders. For example on Workplace6, which achieved a 6 Star Green Star – Office Design rating, subcontractors were appointed at the same time as the design team, including electrical and mechanical engineers.

According to the Design Project Manager, Anika Spears from BuildCorp, this was instrumental in achieving their world leading environmental rating as well as a more efficient and cheaper process overall. “Using Green Star led to the early appointment and collaborative approach on this project which certainly influenced the final outcome of achieving the 6 Star rating.

It also led to better communication throughout the project between all disciplines, forcing us to make up front decisions and allocating responsibility sooner rather than later”.

5. THE BENEFITS OF GREEN BUILDINGS

4. Improved Marketability Building green creates a distinct product in the marketplace, which can be used to market the property to attract and retain tenants. Refer to section 5.1.4 for more information. According to Director of Brookfield Multiplex, Jeff Holloway, “there is a real expectation by tenants as well as property owners to now provide a high performance, sustainable working environment for office workers, and we are proud to be the first (in Western Australia) to have achieved this Green Star rating.” 28

5. Improved Public Profile and Community Relations Building green demonstrates environmental responsibility.

In some instances this can lead to shorter approval times from local planning authorities and stronger community support.

This is certainly true in Ipswich, Queensland, home of Orion Shopping Centre. At a GBCA Breakfast with the Stars event in Brisbane on 25 June 2008, the Mayor of Ipswich Mr Paul Pisale made the following comments: “Mirvac’s got a fantastic name in Ipswich because any project they propose we don’t get any objection because they’ve actually built up credibility with customers and the community.

That’s a key factor because the customers are getting a lot smarter in regards to green and sustainability.

“Mirvac want growth but they want to make sure its sustainable and they are leading the field and its going to make their path a lot easier as they are not going to get a lot of objections or delays in court as it will go straight through.” 29 According to an ongoing joint research project by the Green Building Council of Australia and Bond University Mirvac School of Sustainability (Bond University) 100% of the participating building owners and managers said, having a Green Star rated building had helped them gain a competitive advantage as they were seen as a sustainable leader in the industry.

6. Publicity Green buildings can generate media interest and publicity.

The increased marketing potential of a superior building can recapture some of the costs associated with green building through faster leasing and reduced costs for promotional advertising. The Green Building Council of Australia monitors Green Star generated media and in 2008 over 380 articles were written about Green Star buildings and/or the Green Building Council of Australia. This equates to $1.1 million worth of free advertising. Refer to section 5.1.4 for more information.

7. Operational Cost Savings Reduced lighting loads, high efficiency appliances, increased insulation, passive solar heating, passive ventilation, water conservation measures, and commissioning that uncovers and corrects inefficiencies all lead to savings in operational costs.

These cost savings can be used to market the project to prospective clients and tenants.

According to the survey conducted as part of the Green Building Council of Australia’s Valuing Green Report, respondents typically quoted annual operating cost savings of $5 per m2. A US study by McGraw Hill, inter alia reported that operating costs decreased by 8% to 9%.

8. Reduced Liability Risk In the USA, the insurance industry is becoming increasingly aware of lawsuits associated with building sickness and other indoor air quality issues, resulting in rising insurance costs and mold exclusion clauses. Some industry experts are predicting that insurance companies will start linking lower premiums to green buildings. There is still no evidence of this in Australia but it is only a matter of time. One insurance company, however, has introduced a new policy in Australia replacing non-green buildings with Green Star. Ace Insurance Limited announced in September 2008 a policy that provides customers with the coverage flexibility to incorporate green building features/ practices in the reinstatement of insured property in accordance with recognised green guidelines. In the event of a covered loss, the policy can provide insurance for improving a customers property through the installation of green certified products, improving insulation qualities, water saving devices and the like. The policy's value-added coverage will give customers the opportunity to achieve, or begin the process of achieving, Green Star certified properties. 30

9. Future Proofing Green buildings use less water and energy than conventional buildings, thereby providing a buffer against future increases in water and energy services costs and protecting against services shortages, another benefit that can be marketed to customers.

10. Higher Building Valuations Reducing operating costs, capturing lease premiums and building more competitive, future proofed projects provide a basis for higher valuations.

The Green Building Council of Australia’s Valuing Green Report found that ‘green value’ was starting to be felt in property valuations and in the face of rapid change and limited evidence, valuers need to make judgements on the extent of the value of the advantages enjoyed by Green Star rated buildings.

The report discovered that while some investors attached little or no importance to green building attributes, approximately two thirds of investors would pay more for a green building.

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5.3 INVESTORS

Since 2006, there has been an increasingly growing focus and investor demand for investment funds to demonstrate how they approach sustainability principles.

A recent US report ‘The Greening of U.S Investment Real Estate' by RREEF31 states that, “this ‘greening’ of business can be seen as part of a movement towards greater corporate accountability as major companies are now expected to promulgate ‘corporate sustainability report’ disclosing their impacts in various social and economic areas beyond their core business.” The report goes on to say many firms are finding their clients, customers and even business partners are demanding greener business practices and a related trend is the increasing demand for socially conscious investment vehicles.

The RREEF report says investment in socially screened funds have mushroomed tenfold within a decade, from an estimated $162 billion in 1995 to almost $1.6 trillion ten years later.

The investment industry has often confined environmentally and socially aware investment practices to Environmental, Social and Governance (ESG) and Socially Responsible Investment (SRI) themed funds.

It is evident that since the Dollars and Sense of Green Buildings 2006 report listed corporations are facing increasing governance and sustainability scrutiny by reputation organisations such as the RepuTex Index and The Corporate Responsibility Index, which list the sustainability performance of the top Australian companies. There is also an increasing number of sustainability assessments undertaken in the financial sector including the Dow Jones Sustainability World Index, Principles for Responsible Investment (PRI), Sustainable Asset Management (SAM) and, in Australia, the Banksia Environmental

Foundation Award for “Leadership in Socially Responsible Investment” as well as Ethical Investor magazine’s ‘Sustainability Award’ to name a few.

The property industry is also working towards a property sector supplement of the GRI (Global Reporting Index).

Green Building Council of Australia's members such as Stockland, Investa and Lend Lease, take CSR seriously.

Stockland has Corporate Responsibility and Sustainability Reports for 30 June 2007 and 30 June 2006 and has been involved in the Carbon Disclosure Project (CDP) in 2007 - CDP 5 and 2006 - CDP 4.

Investa has been recognised internationally for its focus on CSR and up until its delisting upon becoming a subsidiary of Morgan Stanley Real Estate in early September 2007, was rated number one on the Dow Jones Sustainability World Index (DJSI World) in both the real estate sector and the financial services super-sector.

In December 2006 Citigroup rated Investa equally best placed company on the ASX100 to withstand the future impact of climate change and the Group was one of only three Australian companies included in the Global 100 (G100) list of sustainable corporations announced at the World Economic Forum in Davos in January 2007.

Lend Lease Corporation’s leadership in disclosure to the investment community regarding its greenhouse gas emissions and its efforts to assess and manage associated impacts have been recognised

by Goldman Sachs JBWere. Lend Lease was included in the Climate Disclosure Leadership Index (CDLI) in 2007. Lend Lease was selected out of the 141 companies that responded to the Carbon Disclosure Project Report 2007 - Australia and New Zealand. Further, Lend Lease has again been listed on the Dow Jones Sustainability Index (DJSI World) for

2007/2008.

The Ethical Investor (July 2008 Issue 78) says ‘Investors play a critical role in changing market behaviour’. An article in The Australian32 points out that “climate change should be moved on to the mainstream investment agenda and the way it can affect the valuation of all asset classes should be considered. Further, investors need to understand how our decisions on where to invest our money exposes us to carbon risk”.

Out of all the asset classes, property is the most exposed to the two primary categories of climate change risk: physical and regulatory. It is estimated that property is the conduit for about half of total GHG emissions through its construction, use and demolition.

To date, property valuations and pricing by the market have been slow to reflect the benefits of low-energy buildings or account for the risks of accelerated obsolescence of energyinefficient buildings. However, this is starting to change. Most buildings are being equipped with higher-efficiency fittings, and governments are beginning to enforce energy standards to reduce waste.

As the Valuing Green Report found and The Australian article stated ‘investors should be aware that energy-efficient buildings may receive a valuation premium to those that aren't, or whose owners refuse to spend to upgrade and improve their carbon emissions.’33 The RREEF report identified a number of factors limiting green building investments including limited tenant and developer awareness and lack of experience to design and operate green buildings; a lack of a comprehensive set of data and reference material; misalignment between owner costs and tenant benefits. continued on page 50

5. THE BENEFITS OF GREEN BUILDINGS

Workplace6 Description Workplace6 is a waterfront Sydney development comprising of 18,000 sqm over six levels. It was the first 6 Star Green Star – Office Design certified building in New South Wales.

Business case Once complete, GPT Wholesale Office Fund (GWOF) will acquire the building, delivering a $21.4 million development profit to GPT. The building, to be developed at a total cost of $130 million, is anticipated to deliver a yield of over 7% (fully leased).34 The project cost around 10-11% more than a nongreen commercial office building, but was fully tenanted before construction was completed.35

Address:

Owner:

Developer: Architect: ESD Consultant: Building Services Engineer: Main Contractor: Structural / Civil Engineer: Tenants: Building Type:

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Pirrama Road, Pyrmont, Sydney, New South Wales GPT and Sydney Harbour Foreshore Authority Cita Property Group Nettleton Tribe BuildCorp Waterman AHW BuildCorp Taylor Lauder Bersten Google and Accenture New Commercial Office

It is estimated that workplace6 will produce carbon emissions equivalent to 138 cars on the road compared to the average non-green building which produces carbon emissions equivalent to 356 cars.

It will reduce water consumption to one Olympic sized swimming pool compared to the average non-green building which uses enough water to fill 14 Olympic sized swimming pools per year.35

Green Star initiatives Management

• •

•

•

• •

Green Star Accredited Professional.

Commissioning agent engaged at the beginning of the project and has ensured design allows for CIBSE commissioning.

The project has contracts with all the services contractors which includes one year post practical completion tuning.

The contractor has an environmental plan for this project and is currently registered for ISO 14001 certification.

Building Users Guide.

Diverted more than 80% of waste from landfill.

CASE STUDY 5

Indoor Environment Quality

Transport

Land Use & Ecology

•

• • •

• •

• 43 small car parking spaces.

• Close to public transport.

• Extensive cyclist facilities.

• Reuse of land.

• Use of contaminated land.

Low VOC paints, carpets, adhesives and sealants used.

Natural daylight through internal atrium.

External views.

Good lighting design – max 400 lux, high frequency ballasts.

Chilled beams for thermal comfort.

50% greater fresh air rates.

Energy

• • •

• •

Tenancy sub-metering.

Electrical sub-metering.

40% improvement on 5 Star NABERS Energy rating.

Office lighting zoning.

Peak energy demand reduction from co-generation.

Emissions Water

• • • •

•

Extensive water meters.

4 Star water fixtures and 6 Star urinals.

No cooling towers.

Blackwater recycling system which produces 45,000 litres of grey water per day.

Irrigation water for all of the building and 2 nearby parks.

Materials

• • • •

• • • •

No cooling towers.

Reduced flow to sewer.

Minimisation of light pollution.

Refrigerant leak detection.

Innovation

• •

•

Blackwater recycling system.

Innovative use of recycled concrete and SCMs in post tensioned concrete slabs.

Exceeding energy benchmarks.

Recycled content concrete.

Recycled content steel.

Use of sustainable timber.

Minimisation of PVC.

Case study. 5

The RREEF report said that investors are finally recognising the opportunity to make a profit from green building investments and are getting more comfortable with the product. This demand reflects both ‘push’ and ‘pull’ factors. Pushing investors into this arena have been the same societal forces propelling socially conscious investing.

The other side is the increasingly attractive investment opportunities presented by green buildings and the rising prevalence of green real estate funds suggests that a specialised market does indeed exist.

Drapac, has launched what it believes is Australia’s first fund dedicated to solely holding sustainable property assets.

PRI is an investor initiative in partnership with the UNEP FI and UN Global Compact, and is a voluntary and aspirational guideline for incorporating ESG issues into mainstream investment decisionmaking and ownership practices.

The first property investment company to sign up to the Principles to Responsible Investment (PRI) in Australia in 2006,

Drapac are members of the Australian Direct Property Investment Association (ADPIA) which is the peak national body

Dow Jones Sustainability World Index (DJSI World) Launched in 1999, the Dow Jones Sustainability Indexes are the first global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. www.sustainability-indexes.com Principles for Responsible Investment (PRI)

The Drapac Sustainability Fund aims to grow $200-$300 million in four years to acquire, develop and hold qualifying properties meeting a minimum 5 Star Green Star rating or equivalent.

Sustainable Asset Management (SAM) Headquartered in Zurich, SAM Group was founded in 1995 as an independent asset management company specialising in sustainability investments. Today SAM is one of the world's leading institutions in this sector.

Its clientele includes banks,

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ADPIA have also acknowledged that recent research and emerging industry response has confirmed there can be substantial benefits for investing in property with strong sustainability criteria. Such benefits may include: greater returns, tighter yields, better lease covenants, rent premiums, lower outgoings and long-term security.

insurance companies, pension funds, foundations and private clients. www.sam-group.com

Investor Group on Climate Change Australia/ New Zealand (IGCC)

Global Reporting Initiative

The IGCC represents institutional investors, with total funds under management of over $496 billion, and others in the investment community interested in the impact of climate change on investments. www.igcc.org.au

The Global Reporting Initiative (GRI) provides a generally accepted framework for reporting on an organisation's economic, environmental and social performance. www.globalreporting.org UN Global Compact

The Principles for Responsible Investment process is an effort to identify and act on the common ground between the goals of institutional investors and the sustainable development objectives of the United Nations.

The audience is global, but the focus is on the eleven largest capital markets, with a goal of protecting the long term interests of fund beneficiaries. www.unpri.org

representing the interests of its members in the unlisted property investment sector.

ADPIA has made a formal commitment to embrace sustainability and help its members understand, reap and promote the economic, environmental and social wealth benefits offered by sustainable property investment.

The Global Compact is a framework for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, the environment and anti-corruption. www.unglobalcompact.org Carbon Disclosure Project The CDP represents over 385 institutional investors with over US$57 trillion in assets under management globally. The number of Australian and New Zealand investors supporting the Carbon Disclosure Project (CDP) increased in 2008 by over 50% and represent nearly $1 trillion in assets under management. www.cdproject.net

The Responsible Investment Association Australasia (RIAA) RIAA is the peak industry body for professionals working in responsible investment in Australia and New Zealand.

Almost every financial adviser, fund manager and consultant working in responsible investment is a member of RIAA together with many other professionals who work towards similar goals. www.responsibleinvestment.org Fex Climate FEX Climate's role is to facilitate participation in the Carbon & Environment (C&E) Market which is only just emerging. It envisages a transparent, accessible and liquid C&E Market, directing investment towards businesses which use or produce clean

technologies, products and services. www.fexclimate.com The Association for Sustainable & Responsible Investment in Asia (ASrIA) ASrIA is a not for profit, membership association dedicated to promoting corporate responsibility and sustainable investment practice in the Asia Pacific region. ASrIA's members include investment institutions managing over US$4 trillion in assets, however membership is open to any organisation which has an interest in sustainable investment. www.asria.org Regnan Regnan represents institutional investors who recognise that environmental, social and corporate governance (ESG) factors affect long term shareholder returns. Regnan promotes strengthened ESG performance within the S&P/ ASX200 companies in which these institutions invest. www.regnan.com.au

Occupier Green Building Benefits

5.4 TENANTS

Tenants have become less focused on savings in operating costs, on the basis that the future benefits of these savings may be problematic due to uncertainty about likely cost increases and building management risk. Instead they are placing a higher value on the intangible benefits, which include productivity, staff attraction and retention, reduced sick leave and absenteeism and improved organisation culture, morale and wellbeing. The market is awash with examples of government departments and corporations accepting that other factors being constant, green buildings demonstrate large financial and social benefits when compared with non-green buildings.

Building Operating Costs

LOWER RATES OF Increase

Reduced COSTS

Internal Environmental Premises QUALITY

Premises Lighting Energy

Reduced Fit out, Churn & Reinstatement Costs

Energy Cost REDUCTION

Reduced COSTS

Reduction Sick Leave Absenteeism Recruitment Costs

Diagram B. Green Building Benefits

Flowing to Occupier

According to an article in the Australian Financial Review 36 which reported on a survey by Colliers International, more than half the tenants in Australia’s capital cities would pay higher rents to work in a more sustainable office space.

The Green Building Council of Australia has had a strong focus on tenants since the delivery of its Green Star – Office Interiors tool in 2005 which enables tenants to create a green fitout independent of the base building.

In response to industry feedback the tool is being revised to be released as version 2 once finalised. In 2006, the Dollars and Sense publication reported that 10 buildings were registered under this tool. As of 30 June 2008, over 119 buildings are registered (including the Green Building Council of Australia's own head office in Sydney) with another six already certified.

Fit out

Increase in Productivity

With developers, contractors and suppliers now able to demonstrate they can deliver green buildings, major tenants in Australia are demanding this from the outset and driving further uptake of green building practices as outlined in section 5.1.2.

The major benefits for tenants in occupying a green building are as follows:

Increased Business Net Profit & Reduced Risk

Increased Business Value

Tenant/Occupier

• Increased productivity; • Attracting and retaining talent; and • Reduced churn costs.

Measurement of the benefits and comparison of their value with building costs, requires an understanding of how the benefits flow through to property occupier. The nature of the flows are shown in Diagram B.

5. THE BENEFITS OF GREEN BUILDINGS

5.4.1 INCREASED PRODUCTIVITY

Productivity and staff benefits were a major component in the business case supporting the development of the 6 Star Green Star certified design of the CH2 office for the City of Melbourne (refer to Case Study 6 for more information).

A recent study37 undertaken after the building’s first year of operation confirms that it has exceeded expectations. Undertaken by Adrian Leaman of Building Use Studies, the post occupancy evaluation used 330 buildings globally and included 47 in Australia as benchmarks.

The main findings included: •

•

•

Productivity increased by 10.9%, far exceeding the forecast 4.9%; Overall building performance ranked in the top quartile of the benchmark data set, ranking highly in both comfort and satisfaction; and Annual cost savings of $ 2 million, against forecast $ 916,000.

An earlier comparative post-occupancy evaluation of 22 green ‘design intent’ buildings and 23 non-green buildings in Australia by Leaman, Thomas and Vandenberg (2007)38 showed that the best green buildings consistently outperform the non-green buildings from the occupant’s perspective in terms of comfort and productivity. On the other hand those that are poorly realised (often with insufficient attention to user needs), can be worse than equivalent buildings where there has been no deliberate green design.

The researchers identified significant associations between perceived productivity and overall comfort (lighting, ventilation, thermal comfort and noise), particularly between productivity and thermal comfort. It is noted that occupants find green buildings attractive because they tend to re-incorporate features that users like such as natural light, ventilation and outlook and more control over the individual workspace.

52 - 53

5.4.2 STAFF ATTRACTION AND RETENTION

Other studies, of two tenants in the 5 Star Green Star- Office Design certified 500 Collins Street in Melbourne who were in the building before and after refurbishment, have also shown a substantial increase in productivity and greatly reduced absenteeism associated with sick leave.

The benefits of green are seen in all building categories. For example, US research into the costs and benefits of greening America’s schools observed that 55 million students spend their days in schools that are too often unhealthy and restrict students’ ability to learn.39 The aim of the research was to answer questions about how much more do green schools cost and is greening schools cost effective.

The review of 30 schools found that green schools cost 2% more, the financial benefits were far greater than this initial cost and that green schools are extraordinarily cost effective in enhancing student learning and reducing health and operational costs.

According to the Bond University online staff survey40 Green Star certified buildings generally make occupants highly satisfied and help to produce highly motivated and productive employees. These findings are supported by occupants’ perception that the green office enhances their productivity.

84% agreed with the statement “I feel this office enhances my productivity”.

One of the respondents in this survey commented, “human factors create the biggest payback. Two thirds of return is staff related costs. A 4.9% productivity increase gives $1.1million a year”.

With regard to staff sick leave or absenteeism the survey found that a significant 80% of managers believed staff absenteeism had decreased since they moved into the new Green Star rated building.

In competitive recruitment markets such as professional and financial services, tenants are realising the benefits of a building’s environment in gaining a competitive edge in attracting talent.

A common view is that if you fail to understand what drives Generation Y you will fail to attract or retain the very people who hold the key to an organisation’s survival.

In a presentation about ’Managing Generations in the Workplace’ Roslyn Sayers41 stated that Generation Y (born between 1978-1994) has an increased awareness of environment, drought, climate change and environmental sustainability.

In her Green Cities keynote presentation in 2008 Professor of Architecture, Vivian Loftness introduced the argument that losing employees altogether is a significant issue. “What I think is the big sleeper is attraction/retention costs – [they are] about $5,300 per employee per year currently,” says Loftness. "And when your employee leaves, the cost usually comes in one big, often unexpected hit".

Loftness in her presentation used the US Department of Labor’s 2003 Job Openings and Labor Turnover (JOLTS) study which estimated that it costs around US$1000 (AU$1068) in administrative costs when an employee leaves, around US$9000 (AU$9614) to attract, locate and hire a replacement, and around US$15,875 (AU$16,958) in lost productivity while the new employee is located, hired and trained. This adds up to around US$25,875 (AU$27,644) every time an employee leaves – significant enough to be worth the effort of avoiding it.42 According to the Bond University online staff survey having a green building is likely to have a positive effect on

“In the war for talent, firms will still use a green tenancy as an advantage to retaining staff. The property industry can clearly reduce its footprint and we have to be a leader in reducing the impact on the environment” 43 Tony Cope - GPT

attracting and retaining employees as 93% of employees said it is important to work in a green office. This is reinforced by 66.6% of business managers stating they believed that renting /owning a green building has helped to attract and/ or retain their employees.

The survey revealed that the marketability and branding ability were the most recognised strengths of a green office by occupants. When asked about what they think of their employers who provide such workplace environment, the majority agreed that they are proud of their employers. The majority of respondents noted the high importance and positive psychological attributes that the green office had on them. Questions about their perception and value of Green Star rated buildings and its branding ability were consistently scored high and positive.

5.4.4 CHURN

Churn is defined as the frequency with which a building’s occupants are moved, either internally or externally, including those who move but stay within an organisation, and those who leave a company and are replaced. Churn is caused by business restructuring, staff increases, staff reductions, bad space planning and management whims.

The Facilities Management Association undertook a survey in 200144 which concluded that the potential cost of churn in Australia was $3.6B. The research found that the relocation of staff or the costs of churn was $2482 per person or $41 per sqm net lettable area.

They found that in 87% of organisations it is the Board or senior executive team that make the decision to create churn.

Most senior managers saw churn as part of doing business and 43% believe that it is a problem that should be minimised.

The costs associated with churn include: •

• •

• • •

management and other employee direct hours in planning and execution; consultants and legal fees; building contractors and other fitout costs; packing and removal costs; local authority approval fees; and specific employee time.

damage or loss during moving and so on. As a general guide, indirect costs are approximated as 25% of the direct costs, based on the survey data.

Green buildings can have a positive impact on churn : •

•

Green buildings can result in an actual decline in churn because of increased occupant comfort and satisfaction; and Green buildings often incorporate systems that reduce the costs of accommodating churn, such as moveable partitions designed to be disassembled and reused. Other systems include raised floors which utilise the spaces beneath the floor for cabling, electrical wiring, and ventilation, making it easier and less costly to relocate specific elements (such as electrical outlets or data ports).

Adaptability, modularity and flexibility of fitouts can also significantly reduce the environmental impact of churn upon materials consumption.

Indirect costs may include additional management time, staff downtime and productivity losses, disruption to other parts of the facility, additional energy consumption at weekends or evenings,

5. THE BENEFITS OF GREEN BUILDINGS

CH2 Description CH2 is a 10 storey office building with Gross floor area (GFA): 12,536m² comprising: 1995m² GFA basement areas; 500m² net letable area (NLA) – ground floor retail; 9373m² total NLA and 1064m² GFA – typical floor.

CH2 was Australia’s first 6 Star Green Star – Office Design rated building.

CH2 costs Total CH2 building cost = $51.045 million including: •

•

•

•

$29.9 million for the base building (2,334$/m2 or 58.5 per cent of cost). $11.3 million for sustainability features (884$/m² or 22.1 per cent of cost). $2.8 million on education and demonstration (218$/m² or 5.5 per cent of cost). $7.1 million on requirements specific to Council (553$/m² or 13.9 per cent of cost).

Business case The business case behind CH2 for the City of Melbourne was to provide a healthy and productive workplace for its occupants whilst reducing the building’s impact on the environment through excellence in design and innovation. It was originally estimated that CH2’s environmental features would pay for themselves within 10 years by improving staff productivity by 4.9% ($916,000). However, actual assessment has shown that staff productivity improved by 10.9% which results in a cost saving of over two million dollars and reduced the payback period to 7 years.45

54 - 55

Address: 200 Little Collins Street,

Melbourne, Victoria Owner / Tenant: City of Melbourne Architect: Design Inc ESD Consultant: Advanced Environmental Engineer: Lincolne Scott Main Contractor: Hansen Yuncken Building Type: New Commercial Office

CASE STUDY 6

Green Star initiatives Management

•

•

•

•

Building Users’ Guide for future building occupants.

Independent building commissioning and tuning.

Best practice Environmental Management and Waste.

Management Systems implemented for the construction phase

Indoor Environment Quality

•

•

•

• • •

•

•

Displacement ventilation system for fresh air delivery.

100% fresh air supply – no recirculated air.

Increased fresh air supply quantities three times the Australian Standard.

Occupant controlled air vents.

High thermal comfort performance.

Low level of indoor air pollutants from low off-gassing carpets,

adhesives, sealants, and composite wood products.

Glare control via shading which moves and responds to the sun.

80% of office occupants have access to view.

Energy

•

•

•

• •

•

•

•

87% reduction in greenhouse gas emissions compared to the existing Council House of similar size.

5 Star ABGR + 20% reduction in carbon dioxide.

Solar photovoltaic cells for electricity generation.

Building integrated wind turbines.

Phase Change Material (PCM) thermal storage.

Waste heat utilisation from electricity co-generation.

Low energy cooling system for offices via chilled ceilings.

Low energy T5 lighting system with small area zoning.

•

• • • •

Sub-metering for tenants and substantive energy uses.

Daylight responsive light dimming.

Shower towers for cooling.

Gas boosted solar hot water.

Night time cooling via natural ventilation.

Land Use & Ecology

• •

Built on an existing car park.

The change of use from an impermeable concreted surface to a building incorporating both horizontal and vertical gardens.

Transport

Innovation

•

• •

•

• •

• •

• •

25% of car parking spaces are for small cars.

Bicycle parking provided.

Cyclist shower and changing facilities provided.

Ample public transport facilities available for commuters.

Chilled ceilings.

Multi-Water Reuse (MWR) sewer mining plant.

Sprinkler water reclaim.

Phase Change Materials (PCM) thermal storage.

Shower towers for cooling.

Building integrated wind turbines.

Water

•

•

•

•

72% reduction in mains water consumption compared to the existing Council House of similar size.

Multi-Water Reuse (MWR) sewer mining plant.

Sprinkler water reclaim and rainwater collection.

4A rated fittings.

Materials

• • • •

Recycling facilities for office waste.

PVC minimisation.

Sustainably sourced timber.

Fully integrated with fitout.

Emissions

•

•

• •

80% reduction in sewer emissions through the Multi-Water Reuse (MWR) plant.

Refrigerants with zero Ozone Depleting Potential (ODP).

Refrigerant leak detection.

Stormwater pollution management.

Case study. 6

BREAKING DOWN THE BARRIERS TO BUILDING GREEN

SECTION|SIX

56 -57

6

6. BREAKING DOWN THE BARRIERS TO BUILDING GREEN

The property industry is well placed to deliver significant long term environmental improvements using a broad range of measures, by creating behavioural changes at all stages of its supply chain (planning, design, procurement, construction, management, operation and valuation).

Since the release of the original Dollars and Sense report in 2006, there are still barriers which inhibit the adoption of green building efficiency measures, despite the fact that the benefits of building green have been further recognised and accepted.

No matter how significant the environmental and tenant benefits of green buildings, there must be a translation into the hard economic realities that are the essence of business decisions, in particular, the issue of who pays versus who gains.

Until 2003 and the launch of the Green Star environmental rating system for buildings, Australia was without a national framework and metrics to support and quantify sustainability.

There still exists a general lack of education and understanding of the fundamental principles of sustainable development. There is a lack of value attached to the long term benefits of green buildings and too great a focus on short term low cost construction and a thirty year industry history of ‘build it cheap and demolish it in the future’.

Also, while there have been some advancements, there is still a lack of consistent government support and leadership at all levels, including insufficient incentives and uncoordinated regulation to break through the short

58 - 59

term and capital cost barriers associated with the split incentives of the development industry.

What also remains a major challenge confronting the greening of the industry is the predominance of existing building stock, and the cost of retrofitting and converting existing buildings to green assets. This issue has been given a stronger focus within this report with an entire section dedicated to the existing building challenge (refer to section 9).

The cost barrier is still perceived as a major issue although it is being increasingly debunked as baseless.

The Green Building Council of Australia (GBCA) has worked hard to demystify the costs to build green with hard statistics gathered from certified projects.

The difficulties in extracting this information and the confidentiality that surrounds costs have made this research extremely complex.

One area that has seen significant improvement since 2006 (but which needs further advancement) is the focus by manufacturers to supply appropriate green and reusable materials. Australian manufacturers have responded to industry demand to create greener products and this has become less of an issue compared to 2006. There is, however, still confusion and blatant green washing, but the market is certainly shifting in the right direction. The GBCA is also experiencing some resistance from manufacturers in certain sectors who do not support the emergence of the green building industry as they are reliant on raw materials and increased demand. One organisation that has taken up this challenge and is leading

the industry is InterfaceFLOR, for more information refer to Case Study 2.

A new challenge that has emerged since 2006 is ‘Green Tape’ accross all levels of governments and their various departments.

Finally, a challenge that continues to plague the industry is the confusion over rating tools. While the majority of the industry accepts the major tools to be Green Star for design, construction and fitouts and NABERS to monitor occupant performance, there still exists some demand for one unified system, particularly when it comes to existing building stock.

Another challenge confronting the Australian industry, which did not exist in 2006 is competition and confusion with the emergence of international rating systems.

“The market specification for Grade A office building has changed to meet the market demand for green.

There is no cost increase for ‘green’ because that is now the standard required”.

6.1 COST BARRIERS

Mark Quinn - Rider Levett Bucknell

The widespread and generally false perception that ‘green’ buildings can only be achieved at substantially increased cost relative to the benefits and financial returns, is perceived as a major barrier.

In 2008, 5 Star Green Star office buildings should incur no significant cost increase.

The skills, technology, materials and construction methods now exist to build any class of green building at minimal or no material cost penalty.

A 2008 industry survey by BCI Australia, in co-operation with the Green Building Council of Australia found that the single largest obstacle to the adoption of green was the perceived higher upfront costs, being mentioned by 92% of the Australian participants (compared with 82.7% across all countries surveyed).

Unfortunately experiences of cost penalties still occur due to the lack of knowledge and experience in the chosen design and construction team. But there is sufficient expertise within the industry for this to be avoided.

A global survey by the World Business Council for Sustainable Development also found that this negative perception poses the biggest barrier to building green.

Respondents to the survey thought that implementing green building practices boosted costs by 17%, whereas depending on the level of green it was more likely to be in the zero to 5% range. (The study also found that respondents perceived standard building GHG emissions to be less than half the actual level of 40%).

The perception that building green automatically results in large cost increases are false. In the early stages of the move to green there were cost penalties associated with green building construction or refurbishment, due to a perceived risk and lack of understanding of the performance criteria, products and design principles as well as professional knowledge. But with the rapid increase in knowledge, skills and availability of materials, costs have fallen.

By 2006 construction of a 4 Star Green Star office building was within the normal budget, and many 4 Star Green Star certified projects have been completed close to cost neutral.

Research by Davis Langdon in Australia and the United States confirms that for any reasonably sized sample of buildings there is a significant cost range depending on location, site dimensions and access, ground conditions, building design and configuration, façade treatment, type of services, construction techniques, materials, weather etc. Not only do green attributes or features fall within these usual building characteristics but the cost of green buildings also falls within the usual range. Refer to Diagram C (Page 60) which demonstrates the spread of cost between Green Star compared to nongreen buildings. This diagram shows there is no correlation between Green Star and cost.

While the poor selection of the professional team can be an obvious cause of a real but unnecessary cost increase, the perceptions about cost may also arise from: •

A failure to properly differentiate between the cost of green elements and increased specifications to increase quality in response to market demand and lifecycle/operating cost forecasts.

• Works or costs dictated by the site,

particular design, construction

techniques or existing building

structure and fabric.

• Specifications required under the

BCA, in particular section J. • Specifications reflecting the

market position of the building and

the desired Property Council of Australia grade.

• A failure to properly assess and

measure the benefits, including use

of an inappropriate discount rate.

The refurbishment of 500 Collins Street in Melbourne is an example of how the works are often dictated by the building structure and façade. Chilled beams were chosen because of the low slab to slab height and the need to replace all of the air-conditioning duct work. Similarly the cost of CH2 was increased by constraints of the site, including the ability to use only one crane.

While new environmental standards have become fundamental in new generation buildings the need to be green is an overlay on all of the traditional building characteristics such as location, building quality, image, amenity, market position, occupier demand and investment characteristics.

Mark Quinn, Director in international Quantity Surveyors Rider Levett Bucknell states that: “the market specification for Grade A office building has changed to meet the market demand for green.

There is no cost increase for ‘green’ because that is now the standard required”.

6. BREAKING DOWN THE BARRIERS BUILDING GREEN

Particular regional climatic conditions may require some different approaches to design, specifications and management in order to achieve the overall level of environmental performance and the target Green Star rating, but the cost of green is still within the cost range for good design and quality.

6.1 COST BARRIERS In office buildings, the changes now occurring have a parallel with those that took place in the late 1980’s/early 1990’s. The onset of the computer/PC age created demand for higher space per person ratios, energy supplies and heat loads. This led to a new generation of building with larger floors, increased slab to slab heights and riser duct sizes, and much higher air conditioning and power supply specifications. Although the new buildings were more costly to construct and operate, it was recognised that market demand was for buildings of that quality and specification, and developers met that demand. The increased costs and rents were not the subject of industry debate. Also, these higher specification buildings were treated as being the next generation.

$0/m

$1,000/m

Any general proposition that green buildings are more costly should be challenged.

Even cases where 5 or 6 Star Green Star buildings are purported to incur a cost penalty should be questioned as to the extent to which higher costs are due to being green or reflect the overall building quality, target market and other cost variables.

$2,000/m

$3,000/m

$4,000/m

Particular questions to ask are: •

•

•

•

• •

Are the environmental objectives and features established at the outset and integrated into the design?

Does the design team and builder have the relevant knowledge and experience?

To what extent do the costs reflect quality differences and site characteristics?

What are the green features replacing and what is the net effect?

(For example when co-generation plant replaces diesel generators for back up power).

What are the benefits?

Has the upfront cost been calculated with a whole-of-life cost of the building?

The Bond University research found that the Green Star certification process does not add a significant extra cost to the build: 80% of the participating buildings found that the Green Star application process did not add significant extra cost to the build.

$5,000/m

$6,000/m

KEY

6 Star Green Star

60 - 61

5 Star Green Star

4 Star Green Star

Non Green Building

Diagram C. Davis Langdon Australian Cost

Graph of Green Star vs Non-

Green Buildings

TIPS TO REDUCE GREEN STAR CERTIFICATION COSTS

Fractured Design

Retrofitted Design

Insufficient Expertise

A fragmented approach to design, where solutions individually address separate issues, is ineffective and can be costly to implement and operate. Keep the cost of your green project down by:

The further along the design process is when Green Star is considered, the more likely it is that the team will need to introduce expensive technology to meet Green Star criteria.

Encourage smart green solutions by:

Building green is new to many, but it has been done before. Avoid disappointment and reinventing the wheel by:

• Embracing holistic design to capture synergies through multi-pronged solutions.

• Using a performance based, rather than prescriptive, brief - allowing the design team to find the most effective and innovative solutions to achieve the most credits.

• Minimise implementation and operation costs by learning from an integrated team, eg involve the builder, the tenant and the facility manager early in the design process through charettes.

Retrospective Documentation

As Green Star assessment is a document verification procedure, even the strongest design will not achieve a Green Star rating without supporting • Allowing extra time, documentation. resources and training Collecting the for the certification documentation in process. hindsight is time• Including green consuming and may initiatives in the • Applying proven lead to forfeiting earlier stages of the tools for project applicable low brief to maximise management, team cost credits. Ensure opportunities for coordination and value successful document smart, low-cost contribution to the collection by: green solutions.

Green Star project.

• Managing the • Giving preference • Arranging a peer collection of all to passive, rather than review of the Green necessary evidence active, solutions in Star submission by an from the first day of all projects. experienced Green the project.

Star Accredited • Engaging experienced Professional.

• Incorporating Green consultants with green Star criteria into expertise at an early all standard practice stage in the project. documents, such as specifications and contracts.

• Ensuring that all relevant professions are contractually required to provide necessary evidence in the right format and timeframe, as well as seeking endorsement of any changes.

False expectations of the assessment

Every project team can potentially achieve the desired Green Star rating based on their first submission. Make sure your project team is well prepared, knowledgeable about the assessment process and achieves a high score in the first round of assessment by: • Arranging for the Green Star Accredited Professional to attend the Green Building Council of Australia Submissions Workshop early in the design process – this is complementary with each registration.

• Completing the Pre Submission Checklists thoroughly, to avoid the risk of the submission being returned without assessment.

• Submitting Credit Interpretation Requests (CIRs) whenever seeking permission for alternative but equivalent compliance – two are complementary with each registration.

6. BREAKING DOWN THE BARRIERS BUILDING GREEN

Continuing research is needed into the merits, costs and benefits of alternative green features, such as co-generation, photovoltaic cells and grey water.

Understanding the pros and cons is more important in states such as Queensland and Western Australia where currently on-site water treatment plants are prohibited.

There is a multiplicity of factors affecting the economics of green features.

Table C suggests the following indicative costs and payback periods for major items in large commercial office buildings.

Lack of knowledge and expertise is no longer a legitimate ground for higher cost because there is now an adequate supply of qualified professionals and builders with up-to-date knowledge.

A proper and rigorous tendering process will establish the qualifications and bona fides of the professional team as well as the extent of any cost premium due to a lack of knowledge.

Flinders Link Stage 4 Adelaide 5 Star Green Star - Office Design v2 5 Star Green Star - Office As Built v2

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Table C. Cost vs Sustainability Matrix of Common Green Building Initiatives

HIGH

SUSTAINABILITY

• Building user training program • Automatic HVAC switch off • Passive solar orientation • Fire test water retention • Reduction in photocopiers/printers due to dedicated rooms • T5 fluorescent lighting • Xeriscape landscaping • Zero ODP building insulation • Energy use targets and monitoring

• Detailed building users’ guide • Removal of cooling towers from design* • Rainwater storage and use • Constructed wetland stormwater filter • Dedicated recycling waste storage area • Interactive BMS • Electrical Sub-metering • High Induction Supply Swirl Diffusers • External shading devices

• Mixed mode HVAC • Photovoltaic system • Wind turbine • Biodiesel CHP plant • Gas trigeneration plant • Comprehensive deconstruction plan • Replacing glass to improve visual light transmission and daylight* • Modify existing air conditioning to create a skin system, improving comfort and saving base building energy • Reuse of existing building site • Low e double glazing*

• Compost system • Staff survey to incorporate business requirements in design* • Zero ODP refrigerants • Construction waste recycling • Reuse of furniture from previous tenancy • Joinery designed for reuse disassembly • Certified flooring products

• Occupancy based light/AC control • Certified or recycled timber • Water efficient fixtures and fittings • High Frequency Ballasts* • Environmental Management Plan • Increase outside air rates by 50% above AS1668.2-1991* • Efficient lighting design and zoning • Structural steel with 50% post consumer recycled content • Dedicated tenant exhaust riser*

• Chilled beam system • Displacement ventilation* • Grey water treatment system • Daylight sensor lighting* • Individual comfort control* • Water meters linked to BMS for leak detection

• Internal plants* • Subsoil landscape irrigation • Small car parking spaces • Carbon Dioxide Monitoring and Control* • Flat screens to reduce glare* • Laptops provided to individual workstations • Low VOC paints, stains, adhesives, sealants, carpets*

• PVC minimisation in materials • Bicycle storage, change rooms, showers • 80% of NLA with external views*

• Internal atrium* • Fire curtains to allow for internal atrium*

LOW LOW

COST

HIGH

* These initiatives provide substantial benefit to the indoor environmental quality, which can translate to higher levels of productivity and a healthier workforce.

DISCLAIMER: All items shown in this matrix are to be used as a guideline only and are subject to change.

6. BREAKING DOWN THE BARRIERS BUILDING GREEN

Description The Bishop See South Tower development involves the construction of a nine level commercial office tower which provides 17,696m2 NLA and three levels of basement car parking. Typical office floor plates are 2095m2. The design of the building’s façade contributed greatly to the achievement of the project’s Green Star rating. Features of the façade include full height floor to ceiling low-e double glazing, and effective external shading which rejects excessive solar heat gains and glare whilst maintaining high internal day lighting levels.

Bishops See – South Tower Business case

Address:

Owner/Developer:

Architect: ESD Consultant: Mechanical Engineer: Main Contractor: Structural / Civil Engineer: Tenants: Building Type:

64 - 65

235 St. Georges Terrace, Perth, Western Australia Hawaiian and Brookfield Multiplex Fitzpatrick and Partners Connell Wagner Connell Wagner Brookfield Multiplex Connell Wagner KPMG and Macquarie Bank New Commercial Office

The Bishops See project is an excellent example of how a 5 Star Green Star - Office Design can be achieved without the need of expensive high technology, by applying good engineering, construction procedures, and design. The estimated increase in cost to incorporate the green features in the project’s design was only about 4% over that of a standard A grade design.

Green Star initiatives

CASE STUDY 7

Management

•

•

•

•

• •

•

Green Star Accredited Professional on design team.

Commissioning in accordance with ASHRAE/CIBSE codes.

12 month building tuning and recommissioning following building practical completion.

Appointment of independent commissioning agent.

Building Users’ Guide.

Extensive Environmental Management Plan and the head contractor is ISO 14001 Accredited.

60% of construction waste reused or recycled.

Indoor Environment Quality

Air Conditioning System • 50% increase in outside air rates on S1668.2-1991.

• Air change effectiveness >0.95 for at least 90% of NLA through the use of high induction supply swirl diffusers (undertaken using computational fluid dynamics).

• Carbon dioxide monitoring and control.

Lighting • Daylight factor of 2.5% to approx.

67% of NLA throughout the building.

• High frequency ballasts to avoid low frequency flicker of light fittings.

• Maintained lighting levels of less than 400 Lux. Internal Environment • 72% of building NLA within 8m of external glazing to reduce eyestrain and provide visual connection to outdoor environment.

• Dynamic thermal simulation modeling undertaken to calculate a Predicted Mean.

• Vote (PMV) of within -0.5 to 0.5 for 98% of the year to maximise thermal comfort.

• Excellent acoustic control of building services and external noise sources.

• Low Volatile Organic Compound (VOC) content paints, carpets, adhesives/sealants used to reduce impact on occupant health and internal air pollutants.

•

•

Low emission formaldehyde composite wood products.

Dedicated floor-by-floor horizontal discharge tenant exhaust systems.

(4 No. per floor).

Energy

•

-

-

-

-

- -

-

•

•

•

ABGR base building rating of 4.5 Stars achieved by: Medium/low temperature VAV airconditioning system, significantly reducing fan energy.

Water cooled high efficiency oil-free, magnetic bearing chillers coupled with oversized cooling towers.

Dry-cooler tenant supplementary air conditioning system with heat exchanger to base-build cooling towers. This provides water saving equivalent of 65 domestic swimming pools per annum.

High efficiency T5 lighting throughout the building.

Variable volume, car park ventilation.

High performance, low “e” full height glazing.

Orientation of the building so the main axis runs east-west with external shading to the west, east and south.

Electrical Sub-metering of tenancies and main plant uses to facilitate energy monitoring.

Lighting power density within NLA areas < 2W/m2 / 100lux.

Office area lighting zoning does not exceed 100m2.

Transport

•

•

•

•

•

25% reduction in car bays from the total local planning allowance.

26% of total car-parking spaces provided for small cars.

Tenant cyclist facilities provided for 5% of tenants (60 secure bicycle storage bays, lockers and changing facilities and 6 showers located in the basement).

24 visitor bicycle bays located at plaza level near the main building entrance.

Excellent local public transport facilities, including bus, CAT bus, train and ferry provisions.

Water

•

• •

• •

•

First commercial grey water system in Perth (design approved in principle

by WA Dept. of Health), utilising waste water from showers and sinks to flush toilets.

Water efficient fixtures.

Water meters linked to Building Management System (BMS) for leak detection purposes.

Sub-soil landscape irrigation.

Efficient water treatment of cooling towers.

Fire system test water re-use.

Materials

•

• •

•

Dedicated 40m2 recycling waste storage area in basement.

100% of NLA integrated fit-out.

76% of structural steel to have a post-consumer recycled content of >50%.

Sustainable timber throughout the building.

Land Use and Ecology

•

• •

Conditional requirement that building is not located on an environmentally sensitive site.

Re-use of a previously built upon site.

No change in ecological value of site.

Emissions

•

•

•

•

•

•

100% of HVAC refrigerants have an Ozone Depleting Potential (ODP) of zero.

Refrigerant leak detection and recovery systems.

All storm water treated/filtered before leaving site.

Reduced flow to sewer due to grey water system use.

No light pollution from external lighting beyond the site boundary.

All building insulation materials have an ODP of zero in manufacture and composition.

Case study. 7

6.2 MULTIPLE RATING TOOLS

The overall challenge of quickly converting the building industry to an environmentally, economically and socially sustainable one and to make an appropriate contribution to Australiaâ&#x20AC;&#x2122;s GHG emissions abatement targets is daunting enough. The existence of multiple green building rating schemes and performance standards is an unwanted and unnecessary additional barrier to progress.

Green Star and NABERS are the best known and widely adopted rating systems but there are numerous others at state and local government levels.

The confusion between rating systems means there is difficulty communicating the benefits and characteristics of each system to the end user and the market at large. Both the GBCA and NSW Department of Environment and Climate Change are working to improve communication and the relevance of each system The Green Building Council of Australia and the NSW Department of Environment and Climate Change have both commissioned industry reports on how the tools can better work together to facilitate the best solution.

6.3 SPLIT INCENTIVES

Because the benefits of good sustainable building design incorporating systems that are both efficient and effective in environmental terms, do not flow directly to the developer or owner but in an operational sense largely go to the end user, any incentive to build green is diminished.

This disconnect and splitting of benefits between those who provide the capital investment and those who pay the ongoing operational costs, is termed split incentives.

For example, landlords may choose which heating system to install in a building, and pay the upfront cost.

However, tenants often pay the running costs of the heating system. This means that there may be insufficient incentive for the landlord to install a lower emission heating system, even if the total cost of the system is much lower over its lifetime.

Refer to Diagram D â&#x20AC;&#x201C; Circle of Blame which explains this barrier further.

While there is a rush towards more sustainable design in large CBD buildings mostly financed by fund managers and investment trusts, the slow uptake of green in the suburbs, shopping centres and industrial properties reflects the reality of the lack of investor incentive.

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OCCUPIERS “We would like to have ENVIROMENTALLY EFFICIENT buildings but there are Very few available”

INVESTORS “WE WOULD FUND ENVIRONMENTALLY EFFICIENT BUILDINGS BUT THERE IS NO DEMAND FOR THEM”

CONSTRUCTORS

CIRCLE OF BLAME

“WE CAN BUILD ENVIRONMENTALLY EFFICIENT BUILDINGS BUT THE DEVELOPERS DON’T ASK FOR THEM”

DEVELOPERS “WE WOULD ASK FOR ENVIRONMENTALLY EFFICIENT BUILDINGS BUT THE INVESTORS WON’T PAY FOR THEM”

Diagram D. Circle of blame

6. BREAKING DOWN THE BARRIERS BUILDING GREEN

6.4 EDUCATION, SKILLS AND INDUSTRY

Since 2006 much improvement has been made in the education of green building principles and their application to buildings.

By 2008 the vast majority of property industry associations have either incorporated green building principles, the ‘triple bottom line approach’ or made them a central theme of their educational seminars, events and conferences. This has helped the industry a great deal, although more work needs to be Industry education is a key activity of the Green Building Council of Australia and the number of participants in the GBCA’s Green Star Accredited Professional training courses has grown from 1,342 as at December 2005 to 9,504 as at June 2008. It is clear from these statistics that the industry is still thirsty for green building knowledge.

The challenge for the GBCA is in satisfying this thirst and further customisation of courses to suit various industry sectors and professions as new Green Star tools are released.

Beyond the obvious demands on the organisation’s time and resources, the challenges for the GBCA as property industry educators from 2006 to 2008 have not changed and include how to: •

•

•

•

convey a single coherent message in an environment where there seems to be a level of discord about what needs to be done and how; present Australian research in particular cost data where there is reluctance from the market to share this information (or even calculate it compared to non-green); reach the wide range of stakeholders in the industry; and keep the information up to date when the body of knowledge about sustainability and green buildings is changing fast and constantly being added to.

68 - 69

The other challenge in Australia is the shortage of individuals who understand the level of commitment and new thinking required to achieve Green Star rated buildings. Industry needs to be rewarded for recognsing the importances and educating there workforce in "green" building practices. This lack of knowledge and expertise drives up prices (particularly consulting fees) and creates a greater level of risk for first timers which may have an impact on their decisions moving forward.

According to a recent report titled “Growing the Green Collar Economy” by the Dusseldorp Skills Forum and the Australian Conservation Foundation which used the latest CSIRO modelling, over 251,500 “green collar” jobs will be created in the property and construction industry by 2025 representing 45% of the total number of jobs expected to be created overall.46 This report highlighted the skills shortage in Australia and stated that a very significant transformation of the nation’s skill base must be achieved if we are to reduce greenhouse gas emissions and improve environmental outcomes without endangering overall employment growth.

It recognised that the property and construction industry is one of the largest sectors to provide economic growth in this area and provided a number of recommendations to ensure these opportunities are realised including: 1. The independent statutory body Skills Australia should lead a national program to identify and stimulate the green skills, knowledge and work needed for a low carbon economy, with special emphasis on the building and construction, transport, agriculture and food, energy, and manufacturing sectors.

2. By the end of 2010, at least 40,000 training opportunities in the Federal Government’s Productivity Places program should be allocated to the development of green skills in

priority areas, like renewable energies, environmental sustainability auditing and accounting, building and construction trades and planning, design, architecture and facility management professions, manufacturing, infrastructure and engineering, agriculture and food.

3.

With support, training and incentives from government all large and medium enterprises should create ‘green teams’ to innovate and develop environmentally sustainable workplaces, products and services.

This should include the development of a national green mentoring program to help small enterprises and sole traders make similar changes.

4. Allocation of immediate funds for sustainability training, skills and workplace programs, to be boosted from 2010 with a proportion of revenues from Australia’s proposed emissions trading scheme.

5.

Australia’s universities, TAFE and training sectors should create ‘green collar partnerships’ to advance the workplace and industry skills, knowledge and innovations required for the transition to a low carbon economy.

BOND UNIVERSITY MIRVAC SCHOOL OF SUSTAINABILE DEVELOPMENT

One university in Australia that is advancing the skills and knowledge of the industry is the Bond University Mirvac School of Sustainable Development with a real life example of how to build green.

The aim of Bond University was made clear from the start of the project.

This was to be a world’s best practice educational building that epitomises the sustainable development curriculum that underpins the school. The project design and construction team were aligned to this aim from the very first day of the project when they were all invited to attend a design charrette at Bond University.

As the only private university in Australia, Bond University applies traditional business metrics to investments in their campus. Like most projects, capital budgets are set at commencement to provide some limits to the other variables such as floor area and finishes that can be incorporated into new buildings.

The Bond University Mirvac School of Sustainable Development was no different from this perspective.

What was different at Bond University was the decision making process used to analyse whether cost variations would be accepted.

At each decision point, the Bond University finance team considered the cost of variations along with the potential for the change to contribute to the world’s best practice vision for the school.

CASE STUDY 8

Whilst these decisions were impacted by the commercial realities of budgets and limits, the broader benefits to Bond University of being able to demonstrate leadership in tertiary education were not lost.

School of Sustainable Development and the associated courses focusing on the business sensibilities of sustainable development, Bond University has been able to establish an international reputation in this emerging discipline.

The result of this approach is that the Mirvac School of Sustainable Development has incorporated many design elements and technologies that would not normally be seen in university buildings. For example, the performance modelling of the vertical axis wind turbine demonstrated that the energy generated over the life of the machine would never allow Bond University to recoup the capital cost to supply, install and maintain the unit. Despite this, Bond University recognised the value in being able to include consideration of micro-wind generation technologies in their curriculum and the opportunity for students of the school to be able to research the performance of this technology, particularly in sub-optimal urban environments was considered more valuable than the energy produced by the machine.

As well as attracting international students, this international reputation has also led to the establishment of several research partnerships with other prestigious universities. These research partnerships contribute to the financial bottom line of the university and provide an income stream that is far greater than the total energy and water costs for the new building. By incorporating consideration of these opportunities into the financing models for the Mirvac School of Sustainable Development, the Bond University finance team were able to demonstrate sustainable financial returns on the investments to the University Council.

This methodology has proven to be particularly successful for Bond University when engaging with businesses and universities in other countries. Approximately half of the students enrolled at Bond University are international students. Overseas markets in North America, Asia, the Middle East and Europe are important sources of international students. By demonstrating international leadership in the development of the Mirvac

The Bond University Mirvac School of Sustainable Development has been certified by the Green Building Council of Australia as Australia’s first six star Green Star – Education PILOT project.

This independent certification confirms that Bond University’s aims for their new school are being realised.

Case study. 8

6.4.1 OUTDATED VALUATION TECHNIQUES

In 2006 the Dollars and Sense report noted that the financial/ valuation sector did not seem to fully comprehend or appreciate the benefits of green buildings, and therefore neither did prospective buyers.

This meant that the benefits were probably not being properly reflected in selling prices or lease rates, so the potential benefit to developers, owners and managers could not be realised.

This observation was further investigated in the Valuing Green Report47 commissioned by the Green Building Council of Australia and released in February 2008. According to this report there is still a knowledge gap which is causing widespread misunderstanding of green buildings. The result is a lack of understanding on the part of many valuers and investors to properly evaluate the benefits and therefore the risk and return characteristics of green buildings.

6.4.2 LACK OF RESEARCH

The Valuing Green Report found that: • ‘Green Value’ was starting to be felt in property valuations.

• In the face of rapid change and limited evidence, valuers need to make judgements on the extent of the value of the advantages enjoyed by Green Star buildings.

• The majority of investors indicated that they would pay more for a Green Star building, even though a rental premium had not been proven.

• In the longer term, industry expectation is that rental growth, tenant retention and operating cost savings will be the key drivers of the market value of green buildings.

Improved marketability is also a key feature.

•

The Discounted Cash Flow (DCF) valuation method is considered to be the most suitable because it provides the valuer with the facility to factor in the specific variables.

Until the financial sector understands the benefits of being green to the net value of an asset, financing calculations will not incorporate green into their decisions. It can thus be appreciated that a lack of understanding of what constitutes value in a green building is still a significant barrier to greater adoption by the investment community.

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There is a lack of compiled local data which would provide the valuable evidence of cost and financial benefits for green building in Australia. There is also limited sharing of knowledge and experience about green building practices in Australia. Many in the industry are either reluctant to share their knowledge or no longer have the resources to collate the lessons learnt and benefits.

The majority of development projects are completed when the individuals that could contribute valuable information on the costs and benefits have moved onto a new project. As such the opportunity to capture knowledge and share it is a challenge for the property sector.

6.5 GREEN TAPE

Government has an important role in driving the shift to sustainable development by providing leadership.

This is reinforced by the international experience and evidence from the Green Building Council of Australia’s Benchmarking the States Report which found that where government leadership existed (for example Victoria and South Australia) so did the majority of green building activity.48

MFB - Burnley Complex Victoria 5 Star Green Star - Office Design v2

However, while governments can be tremendous instruments for change, they can also impede the spread of green practice through the creation and implementation of uncoordinated and often contradictory codes, regulations and requirements. Burdensome reporting requirements are a particularly common problem, particularly where there are multiple and overlapping requirements in a given piece of legislation. Another often-cited problem is obtaining approval for water conservation technologies, water harvesting solutions and greywater recycling. This phenomena, commonly referred to as ‘Green Tape’, is already becoming an issue within the industry and Governments have become keenly aware of the need to balance the requirements that go hand in hand with robust legislation whilst not diluting the value of these initiatives through unnecessary obligations placed on industry.

planning approvals are delayed.

As the proliferation of various local, state and federal schemes and initiatives increase, the willingness of industry to participate and work towards the success of these government sponsored schemes will dissipate if it involves added regulatory burden or further reporting requirements. For some in the industry, the burden is already too heavy and clearly this will increase as more schemes and initiatives are introduced, such as the Carbon Pollution Reduction Scheme and the Government’s Mandatory Reporting legislation.

Regulatory Impact Statements provide a degree of protection from unnecessary regulation however governments also need to review their general approach to reporting requirements and other obligations that are placed on industry, particularly in the context of what industry is already forced to deal with.

Increasingly local governments are also adding to the proliferation of sustainability demands, producing checklists and requirements that, although well meaning, often do not guarantee an environmental outcome and, with the costs of administration, can be the very reason

6. BREAKING DOWN THE BARRIERS BUILDING GREEN

6.6 BUILDING PRODUCTS & MATERIALS

Designing green requires a credible green products and materials supply chain, to follow good design principles. Surprisingly this remains one of the greatest challenges faced by green designers and specifiers in Australia.

There are a number of Australian organisations such as Ecospecifier and Good Environmental Choice Australia (GECA- formally the Australian Environmental Labelling AssociationAELA) that publish product and material guides to assist the industry in identifying green products. These organisations use a simplified approach to Life Cycle Analysis (LCA) by identifying the most relevant environmental attributes of a product or material category. They then assess products against identified benchmarks for environmental performance and use the product assessment results to produce lists and databases of environmentally preferable products. This information is then made available to designers and specifiers to assist them in their product selection processes.

The Green Star suite of rating tools address material selection through its Material Category where the main product and material components of a typical building are addressed (e.g. timber, steel, concrete, PVC, loose furniture and fitout items such as walls, floors and joinery).

The approach taken by the Materials Category is to target the most widely recognised environmental load of the material life cycle. This might include the need for certification of forest products in order to minimise the varied environmental impacts of timber harvesting, the specification of Portland Cement replacement in concrete in order to lower the embodied energy of buildings, or the specification of interior fitout items that carry environmental third party certification or can otherwise demonstrate their environmental credentials. Certain Green Star credits reward use of products that have been designed for disassembly or which carry with them product stewardship obligations that require a supplier to collect the product for reuse, recycling or reprocessing whenever the customer no longer requires its service.

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In addition, building designs which incorporate dematerialisation initiatives or reuse existing façades and structure are rewarded for achieving net reductions in the total amount of new materials required for construction. Efficient building design can reduce the mass of steel and concrete structures, reduce the amount of decorative finishes and cladding, and generally reduce the environmental footprint of the building as a whole.

Through the credit review processes the Green Building Council of Australia aims to adjust the material-based credits so that these reflect market-based, technological and scientific advances.

Detailed material LCA tools are becoming more popular in Australia and overseas.

These aim to address the environmental preference of materials by assessing a broad range of environmental loads from the material extraction phase to the end of the materialâ&#x20AC;&#x2122;s useful life. The adoption of these in Australia, however, has been limited to date. This is often attributed to the lack of comprehensive data specific for Australia, the absence of agreed Australian specific LCA and data collection methodologies, and the high cost of such assessments, and the size of the Australian market.

Solutions to these issues are on the horizon and will offer a significant improvement in the availability of userfriendly LCA design tools that are founded on credible LCA data. It is envisioned that further development and uptake of such tools will play a fundamental role in mobilising designers and specifiers to more readily make material selection decisions which are based on environmental attributes.

6.6.1 COMPREHENSIVE LIFE CYCLE ANALYSIS

Although the Green Building Council of Australia supports the concept of whole-of-life product frameworks, a substantial amount of research is needed to assess all the materials that are used in buildings. In addition, such a framework must be applied by the building industry without requiring significant increases in time, documentation and financial resources that would make it untenable.

The Green Building Council is participating in stakeholder engagement initiatives relating to several LCA building and fitout materials related projects. These include RMITâ&#x20AC;&#x2122;s Building Assemblies and Materials Scorecard (BAMS) project which aims to provide a methodology of identifying environmentally preferable approaches to materials use over the life of the building.

BAMS is one of several tools that are being developed by RMIT to use LCA data for design decision making. (www.cfd.rmit. edu.au/content/view/full/464)

different materials sectors. Pending the successful navigation of these challenges, the development of user-friendly full LCA tools will almost certainly present an attractive option for offering level playing field product comparisons based on environmental impacts. Such tools will also be able to assist manufacturers and suppliers of products and materials in their efforts to demonstrate the environmental performance of their products thus allowing greater access to credible information for architects, designers, specifiers and others.

Another project is the building and construction products component of the Australian National Life Cycle Inventory Database Initiative (AusLCI). The AusLCI project will bring together industry, government and academia stakeholders to help develop a methodology which will define and develop consistent guidelines, principles and methodologies for the collection of LCI data, along with protocols for LCA processes for different sectors. (www.auslci.com) These projects aim to provide Australianspecific public databases containing credible and transparent environmental information on a wide range of materials from a life cycle perspective.

Full LCA Tools are an area of development to watch closely as they may have the potential for adaptation into Green Star Material Category credit requirements in future versions of Green Star rating tools. The LCA approach has not been scheduled for implementation into Green Star as yet, given the breadth of stakeholders to be involved in feedback, consultation and comment on such proposals. Any LCA approach must be based upon scientifically sound, best practice principles and methodologies for the collection of LCI data, and on protocols for LCA processes across

6. BREAKING DOWN THE BARRIERS BUILDING GREEN

international developments

SECTION|SEVEN

74 -75

7

7.1 WORLDWIDE GREEN BUILDING COUNCILS Since the first Dollars and Sense report was published in 2006 the spread of the green building movement around the world has increased rapidly.

In 2008 the World Green Building Council (WorldGBC) acts as the umbrella organisation for 12 member Green Building Councils, is active in almost 50 different countries, and mentors emerging Green Building Councils around the world.

Since its establishment in 2002 the World Green Building Council has provided an important global forum for the discussion and promotion of the sustainable transformation of the global property industry. The WorldGBC supports the creation of culturally, climatically, and economically-appropriate rating tools, the design and construction of demonstration green development projects, and other collaborative green building efforts, in both developed and developing countries.

The founding countries include Australia, Canada, India, Japan, Mexico, Spain and the United States. Within this framework, member councils are working to share knowledge, resources, and common principles, as well as to support emerging councils.

The Green Building Council of Australia has played a prominent role in the World Green Building Council. Ché Wall, one of the founders of the GBCA and a current GBCA Board Director was the founding Chairman for five years from 2002-2007.

In 2008, current GBCA Chair Tony Arnel was elected chair of the WorldGBC. As well as providing strong support to the WorldGBC, the Green Building Council of Australia also provides ongoing advice and assistance to emerging and established Green Building Councils. In 2006, the GBCA worked collaboratively to support the establishment of the Green Building Council of New Zealand and more recently the Green Building Council of South Africa. Both Councils have adopted the Green Star rating tool and modified it for the unique conditions of their countries.

australia Current Situation The Green Building Council of Australia was established in 2002.

Rating Tool Green Star Website www.gbca.org.au

ARGENTINA Current Situation The Argentinean Green Building Council has recently been formed but is not yet formally recognised by the World GBC. Rating Tool Local adaptation of LEED (Leadership in Energy & Environmental Design) Website www.argentinagbc. com.ar

BRAZIL Current Situation The Green Building Council of Brazil was established in 2008.

Rating Tool Local adaptation of LEED Website www.gbcbrasil.org.br

CANADA Current Situation The Canadian Green Building Council was established in 2002.

Rating Tool LEED Canada Website www.cagbc.org

CHINA Current Situation

76 - 77

In 2008, Qiu Baoxing, China’s vice minister of housing and urban-rural construction announced the launch of the China Green Building Council.

It will be in charge of developing a local green building labelling system which is designed to complement existing international rating tools. China GBC is not yet formally recognised by the WorldGBC. Rating Tool Under development.

Website Not launched.

GERMANY Current Situation The German Sustainable Building Council (Deutsche Gesellschaft für nachhaltiges Bauen) was established in March 2008.

Rating Tool German Label for Sustainable Building (under development).

Website www.gesbc.org

HONG KONG Current Situation Hong Kong has three bodies involved in greening buildings, but at the time of writing did not have a central Green Building Council.

The three bodies are the Professional Green Building Council; the Buildings Department of the Hong Kong Special Administrative Region government; and the Business Environment Council (BEC).

Rating Tool HKBEAM

Website www.hkpgbc.org or www.bec.org.hk or www.bec.org.hk/eng/ cs_be_beam.aspx

INDIA Current Situation The India Green Building Council is a part of the Consortium of Indian Industries (CII). It was established in 2001.

Rating Tool LEED India Website www.igbc.in

JAPAN Current Situation The Japan Sustainable Building Consortium was established in April 2001.

Rating Tool CASBEE (Comprehensive Assessment System for Building Environmental Efficiency) Website www.ibec.or.jp

KOREA Current Situation The Korea Green Building Council was founded for evaluating and testing the Korean Green Building Rating Standard (GBRS) with the aim of introducing it as a new method of assessing environmental performance of buildings in Korea.

The Korea GBC is not formally recognised by the WorldGBC. Rating Tool GBRS (Green Building Rating Standard).

Website www.gbc-korea.co.kr

MEXICO Current Situation The Mexico Green Building Council (Consejo Mexicano de Edificaci贸n Sustentables) was established in 2004.

Rating Tool LEED. Also currently developing SICES (Sistema de Calificaci贸n de Edificaciones Sustentables Sustainable Building Rating Tool).

Website www.mexicogbc.org

NEW ZEALAND Current Situation The New Zealand Green Building Council was established in 2006.

Rating Tool Green Star New Zealand Website www.nzgbc.org.nz

SINGAPORE Current Situation In 2005, the Building and Construction

Authority (a government agency) developed the Green Mark for Buildings rating tool to promote sustainable development for the construction industry by raising environmental awareness among developers, designers and contractors during project concept and design, as well as during construction.

Rating Tool Green Mark Website www.bca.gov.sg/ GreenMark/green_ mark_buildings.html

SOUTH AFRICA Current Situation The Green Building Council of South Africa is the first GBC to establish itself in Africa.

The Green Building Council of Australia has been working closely with them to assist in their formation and it is expected they will be formally recognised by

the WorldGBC in 2008.

Rating Tool Green Star South Africa Website www.gbcsa.org.za

TAIWAN Current Situation The Taiwan Green Building Council was launched in 2005.

Rating Tool EEWH (Ecology, Environment, Waste reduction and Health) Website taiwangbc.org.tw

UNITED ARAB EMIRATES Current Situation The Emirates Green Building Council was established in 2006.

Rating Tool Local rating tool under development.

Website www.emiratesgbc.org

UNITED KINGDOM Current Situation The United Kingdom Green Building Council was established in 2007.

Rating Tool The rating tool for the UK is BREEAM which is administered by BRE (not the UKGBC).

Website www.ukgbc.org or www.breeam.org

Climate Change Adaption Network and is a rapidly emerging council that is aiming to be a full member of the WorldGBC by 2010.

Rating Tool SCCA (Sustainable Climate Change Adaption) Website www.vsccan.org /vgbc

UNITED STATES Current Situation The U.S. Green Building Council was the first GBC to be established in 1993.

Rating Tool LEED Website www.usgbc.org

VIETNAM Current Situation The Vietnam Green Building Council operates under the Vietnam Sustainable

7. International developments

7.2 OTHER WORLDWIDE ORGANISATIONS

7.2.2 CLINTON CLIMATE INITIATIVE

7.2.3 SUSTAINABLE BUILDINGS AND CONSTRUCTION INITIATIVE

As well as the World Green Building Council there are several other organisations that have been established to address climate change issues in the built environment.

The Clinton Climate Initiative is trying to make a difference in the fight against climate change in practical, measurable and significant ways, by working with 40 of the worldâ&#x20AC;&#x2122;s largest cities to reduce their greenhouse gas emissions. CCI is assisting partner cities to make energy-savings improvements to buildings, transit systems, lighting and waste management.49

This Sustainable Buildings and Construction Initiative (SBCI), hosted by the United Nations Environment Program (UNEP), aims at realising the full benefit from sustainable development to society and to the sector itself.

7.2.1 INTERNATIONAL INITIATIVE FOR A SUSTAINABLE BUILT ENVIRONMENT International Initiative for Sustainable Built Environments (iiSBE) is an international non-profit organisation whose overall aim is to actively facilitate and promote the adoption of policies, methods and tools to accelerate the movement towards a global sustainable built environment. iiSBE brings a large network of researchers and practitioners and a strong track-record in advancing the sustainable building agenda through the Sustainable Building series of conferences and the GB/SBTool . The iiSBE Sustainable Building conference, is one of the premier international sustainable building events and in 2008 will be hosted by Melbourne, Australia. The World Green Building Council and Green Building Council of Australia are auspicing partners of this major event and have played a crucial role in the further development of the conference with the introduction of a Special Forum program stream focusing on buildings.

For more information go to: www.iisbe.org

The City of Sydney and City of Melbourne are both part of the Clinton Climate Initiative.

For more information go to: www.clintonfoundation.org

The first challenge SBCI has proposed is to address is that of energy efficiency and CO2 emissions from buildings.

By working on the development of baselines for the sector on this issue, the SBCI will contribute to developing a common and well-understood approach, which will, through the implementation of pilot projects and interactions with the other stakeholders (public, governmental, financial and international), aim at influencing the way the sector is contributing to sustainable development.50 The World Green Building Council is a member of SBCI as is the US Green Building Council. Lend Lease and the Property Council of Australia represent Australia.

For more information go to: www.unepsbci.org

7.2.4 WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT

The Council provides a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, non-governmental and intergovernmental organisations.

The World Business Council for Sustainable Development (WBCSD) is a CEO-led, global association of some 200 companies dealing exclusively with business and sustainable development.

Members of this group from Australia include: ANZ; BHP Billiton; GHD; Insurance Australia Group; Lend Lease; and Woodside Energy.51 For more information go to: www.wbcsd.org

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7.3 FOCUS ON ASIA PACIFIC

The Green Building Council of Australia is working with partners in India and China to help promote awareness of the opportunities to green Asia’s mega-cities. Under a grant from the Federal Government (as part of the Asia Pacific Partnership) the GBCA is fostering links between Australian property companies and their counterparts in India and China aimed at recognising the shared economic, environmental and political interests of the nations of Asia-Pacific.

Green building is not only the most cost-effective method in the world for reducing greenhouse emissions and addressing other environmental issues, it is also the key to action on urban poverty and health in the emerging mega-cities of Asia.

Australian companies with expertise in buildings and infrastructure can play a part in transforming Asia’s megacities to a sustainable growth path.

The real success in Australia in recent years on building sustainably and profitably, outlined in this Dollars and Sense Report, can be adapted to the even bigger challenges facing our neighbours.

The phenomenal growth of Asia’s cities has become known as hyperurbanisation. It is an extraordinary phenomenon summarised as follows: •

•

•

•

Nearly 1 million people per week move into urban environments – creating demand the equivalent to building a city the size of Perth every week; There will be 1.1 billion more people in urban areas of Asia by 2030 – 53% of the world’s urban population; Nearly one third of the urban poor have no safe water and more than two-thirds do not have adequate sanitation; World Health Organisation (WHO) estimates health costs from air pollution are about $200 million annually in each mega-city; and

The biggest cities include Beijing, Tianjin and Shanghai in China; Mumbai and Calcutta in India; and Bangkok, Jakarta and Manila in South East Asia. These cities alone are projected to have a population equivalent to that of the United States by 2020. China has already overtaken the US as the largest source of greenhouse emissions.

2008 from the Federal Government under the Asia-Pacific Partnership, to organise a series of workshops in China and India to explore opportunities for collaboration. The workshops involve local and Australian participants from Government and industry to examine strategies and opportunities for sustainable development. There are also opportunities for Australian companies to showcase their capabilities in green building and to learn about local Chinese and Indian business conditions.

The aspirations of the populations of these cities to mimic the unsustainable lifestyles of the West are understandable but frightening. It is, for example, the air-conditioning of the commercial offices and residential apartment blocks of these cities that is driving the construction of coal-fired power stations across the region, more so than even the factories of industrial production.

The workshops are creating nascent networks spanning governments, industry professionals and academics in Asia-Pacific that can support long term market transformation, such as is already underway in Australia. The Green Building Council is hoping to partner with the Indian Green Building Council and the emerging China Green Building Council on initiatives including:

We must help them to avoid the mistakes that we have made in developed nations, where economic growth has conflicted with environmental and social objectives.

•

• •

•

• Resource inefficient building stock and poor infrastructure are the fundamental constraints.

The building and construction industry is one sector that can improve both economic and environmental outcomes and most importantly social outcomes.

The IPCC identified that available building technologies offer the best opportunity to make significant reductions in Greenhouse emissions, with a positive economic payback. In Australia, a recent 2007 ASBEC report estimated that buildings could reduce the costs of tackling climate change by almost 14 per cent and increase GDP by approximately $38 billion annually by 2050.52

Identifying and finding support for demonstration projects; Regulatory action; Capacity development in industry through training and education; and Support for development of rating tools and broader sustainability frameworks for urban development.

This opportunity has already stimulated activity in developed nations around the world, particularly in Australia as this report has highlighted.

But the mega-cities of Asia pose a challenge on a scale several orders of magnitude larger. Australia recognises a collective responsibility and interest to help Asian nations find ways to put their mega-cities onto the path of sustainable development – greenhouse emissions pay no respect to national borders.

To address this challenge the Green Building Council of Australia with support from the Property Council of Australia were awarded funding in

7. International developments

GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION SECTION|EIGHT

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8

8.

GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION

As governments take action on climate change they must ensure this does not lead to a proliferation of green initiatives that become burdensome on industry and themselves. Governments must ensure a balance between robust regulation, incentives and policies whilst not diluting the value of these initiatives through unnecessary obligations placed on industry. Above all, government in Australia must take a nationally coordinated approach which to date has not occurred.

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However, federal, state and local governments are exerting a major influence on the environmental standards in the new or refurbished buildings they own or lease through the minimum standards in their accommodation guidelines.

The introduction of minimum environmental standards has caused owners and developers to adopt these as minimum specifications for new construction and for the refurbishments of buildings considered as having the potential for government occupation.

Even where market demand is primarily from the private sector the minimum government standards are often adopted from an occupancy insurance viewpoint.

The following chapter outlines some of the various federal, state and local initiatives impacting on the built environment. These have been broken up into four categories: incentives; leadership; policies and programs; and regulation.

8.1 FEDERAL GOVERNMENT 8.1.1 INCENTIVES The Federal Government’s Carbon Pollution Reduction Scheme (CPRS)53 will commence operations in 2010 and represents the main effort to reduce greenhouse gas emissions in Australia.

As expected, the scheme is targeted at the energy producers (wholesale) and the built environment, as an energy end user, is not included in the compliance scheme.

The Government has allocated $240 million to Clean Business Australia to establish a partnership with business and industry to deliver energy and water efficient projects with a focus on productivity and innovation.

By putting a price on carbon, the scheme provides a financial incentive to drive supply-side abatement. While the built environment is not included in the scheme, the Green Building Council of Australia has been working with Government and industry to identify a range of complementary measures which

will encourage the more rapid uptake of green building practices and unlock the considerable abatement potential that rests within Australia's buildings.

In August 2008, Prime Minister Rudd acknowledged the role of the built environment when he said: “The Government continues to work on additional energy efficiency measures.

Some we committed to prior to the last election concerning what can be done in households in particular. But, we recognise fully that there is a much broader set of measures to be embraced by both households and by businesses in order to make a significant contribution to drawing down overall energy usage, and therefore greenhouse gas emissions."54

1. $90m Green Building Fund

2. The Climate Ready program

3. Re-Tooling for Climate Change

Aims to directly fund upgrades to existing buildings to improve their energy performance. This represents the first, large scale effort on the part of the Federal Government to directly fund building upgrades to improve energy efficiency performance and reflects an acknowledgement on the part of the Government that buildings represent a significant abatement opportunity. GBCA has been working with the Government to ensure the scheme is appropriately targeted.

Is a competetive grants program ($75M over 4 years) providing grants from $50,000 up to $5M on a matching funding basis to support research and development, proof-of-concept and early-stage commercialisation activities to develop solutions to climate change challenges.

This program ($75M over 4 years) will be targeted at assisting Australian manufacturers improve their production processes, reduce their energy use and cut carbon emissions. Australian small and medium sized manufacturers will be able to apply for grants from $10,000 to $500,000 for initiatives such as investing in energy efficient manufacturing tools, small scale co-generation plants and water recycling.

The program opened for applications on 28 July 2008. The following are the closing dates for the first four rounds: • • • •

Round Round Round Round

1 2 3 4

-

4 September 2008 4 December 2008 12 March 2009 25 June 2009.

There are three elements to Clean Business Australia:55

These initiatives are available to access now and details can be found the AusIndustry hotline on 13 28 46 or hotline@ausindustry.gov.au

8. GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION

8.1.2 LEADERSHIP

8.1.3 POLICIES AND PROGRAMS

Federal government leadership has been demonstrated largely by the Department of Defence which specifies the adoption of Green Star rating tools on all relevant office accommodation projects (new buildings and major refurbishments).

The Department’s RAAF Richmond project was the first to achieve a 5 Star Green Star rating for its design, construction and fitout.

The Environmental Performance in the Built Environment Initiative a national program launched by the Local Government and Planning Ministers Council, the Building Ministers’ Forum and the Ministerial Council on Energy, will provide a framework for national sustainability performance measures, including for the building industry. Final reports from the Initiative are to be submitted to the Council of Australian Governments (COAG).

Reports under the Initiative were scheduled to be completed by the end of 2007, covering Climate Change, Climate Change Adaptation, Development Assessment Reform and Building Regulation Reform.

Work is also underway to enhance the delineation between planning and building controls and apply this to

environmental performance measures for the built environment.

National collaboration on planning issues is proceeding through the Intergovernmental Planning Officials Group, which is developing Sustainable Communities – A National Action Plan for Urban Australia.

Energy efficiency, water, materials, internal environmental quality and adaptation to climate change are being considered.

The National Framework for Energy Efficiency (NFEE) involves all government jurisdictions in a programme promoting energy efficiency that has targeted residential and commercial buildings.

It aims to unlock the economic potential associated with the increased uptake of energy efficient technologies and processes across the Australian economy.

8.1.4 REGULATION Since 2003, provisions for energy efficiency in buildings have been progressively introduced into the BCA. On 1 May 2006, energy efficiency provisions for all remaining types of commercial buildings were introduced, with some transitional arrangements, into Section J of the BCA. Commercial building classes include: • Class 5 – Commercial office building • Class 6 – Shop or other retail building • Class 7 – Car park or wholesale goods facility • Class 8 – Laboratory or industrial building • Class 9 – Public building: health care facility, school, assembly building The proposed measures require commercial and public buildings to achieve minimum levels of energyefficiency through performance-based provisions. The measures are designed to reduce the use of artificial heating and cooling, improve the energy performance of lighting, conditioning

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and ventilation, and reduce energy loss through air leakage.

Provisions include: • Building fabric – includes requirements for roof, wall and floor insulation, and area and thermal performance of roof lights.

• External glazing – provides a maximum glazing allowance under different circumstances related to climate, orientation of the building, type of glazing and amount of shading.

• Building sealing – includes requirements for sealing chimneys and flues, roof lights, external windows and doors, exhaust fans and during construction of roofs, walls and floors. Requirements apply only in certain circumstances.

• Air movement – includes requirements intended to increase natural ventilation and reduce the need for mechanical cooling.

• Air-conditioning and ventilating systems – includes requirements for

•

•

minimum levels of energy-efficiency for heating, ventilation and airconditioning equipment installed.

Artificial lighting and power – Provides requirements that limit the illumination density of artificial lighting systems. The maximum limits vary by building type, allowing more lighting for retail spaces, car park entries and health-care examination areas.

Access for maintenance – provides requirements for adequate space and access to facilitate maintenance of equipment.

The building fabric, glazing and sealing measures do not apply to non-heated or cooled Class 7,8 and 9b buildings.

The BCA’s green building standards will continue to be developed and in a recent Inter-Governmental Agreement, “sustainability” has become an additional goal of the BCA. The GBCA is engaging directly with Government to ensure the minimum standards in the Building Code reflect the need to improve building

8.2 STATE GOVERNMENT 8.2.1 INCENTIVES Australian Capital Territory (ACT)

Queensland (QLD)

There are no direct incentives in the ACT for green buildings, however, the 200809 Budget saw the ACT Government commit $242m over five years to address climate change including $1.6m over four years to achieve carbon neutrality in ACT schools.

Since 1999, the Queensland Sustainable Energy Innovation Fund (QSEIF) has provided financial support to the development and commercialisation of technologies that save energy and water. EPA Queensland is also supporting research into areas that include looking at in low-energy options for high-rise buildings.

New South Wales (NSW) The bulk of the New South Wales state programs which support an improvement in the sustainability of buildings are funded through the $340m Climate Change Fund established in July 2007.56 The Climate Change Fund incorporates the expanded Water and Energy Savings Funds, the Climate Action Grant Program and funding from the Environmental Trust.

The Sydney Harbour Foreshore Authority (SHFA)57 has created an ESD Fitout Guide for their commercial and retail buildings to reduce the impacts of tenants and their fitouts on the environment and maximise the social benefits derived from ‘green’ buildings.

The Guide addresses environmental impacts at levels above those required by current minimum standards and regulations. It also addresses items not currently legislated for but that still have wider environmental and social implications. Using the framework of Green Star the ESD Fitout Guide breaks up initiatives that are ‘mandatory’ or ‘encouraged’. In the Guide SHFA offers rent abatement for new leases if tenants enter into a formal Green Star agreement and register their fit-out to achieve a Green Star – Office Interiors rating to offset the costs of the formal Green Star process.

In terms of financial incentives, the Queensland Government through its EcoBiz program has provided financial assistance for the implementation of innovative technology in businesses throughout Queensland. A key example of this can be found in the 6 Star Green Star rated Orion Shopping Centre, Ecobiz provided financial support to Mirvac which enabled them to install energy-efficient air conditioning as well as to GPT for the refurbishment of cooling towers.

in operation. These projects have included the new Bendigo Bank Headquarters (5 Star Green Star – Office Design), the Metropolitan Fire Brigade, Burnley (5 Star Green Star – Office Design); Bordo International Headquarters (5 Star Green Star – Office Design), Scoresby; Kangan Batman TAFE (5 Star Green Star – Office Design) and 40 Albert Rd (6 Star Green Star – Office Design). COBEII is supported through the VictorianGreenhouse Strategy.

The State government has also allocated $3.9 million to upgrade hospitals and aged care facilities to save energy and water under its Greening Victoria’s Hospitals program.

Western Australia There are currently no direct incentives in Western Australia for green buildings.

South Australia There are currently no direct incentives in South Australia for green buildings.

Victoria Victoria introduced the first incentive program in Australia to drive the uptake of green building practices and achieve a Green Star rating.

The Commercial Office Building Energy Innovation Initiative (COBEII) is a program designed to encourage and show the viability of sustainably designed commercial buildings. Sustainability Victoria partnered with the developers of a number of important projects to develop sustainable solutions that will significantly reduce energy consumption

8. GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION

8.2.2 LEADERSHIP Australian Capital Territory (ACT) As the home of the Federal Government, the ACT has clearly benefited from the need to provide accommodation for Government Departments, all of which must meet high standards for sustainability in their buildings.

As such, the Environmentally Sustainable Development (ESD) principles which apply to government office accommodation have a much larger scope, and therefore impact on industry than they would in a less government dominated market.

Some of the ESD principles which apply include; sound energy management practices; contributing to the reduction of greenhouse gas emissions in the ACT through building energy management initiatives; introducing measures to ensure reduced water consumption; and lease procurement guidelines that include assessments of access to public transport, provisions for bicycle users, energy ratings, floor plate proximity to glazing, and core-to-glazing distance. This has assisted in ensuring a generally high level of visibility in the ACT for Green Star rated buildings.

The ACT is also currently undertaking planning work for the Eastlake Development which is planned to be a showcase for precinct level environmentally sustainable development.

The Green Building Council is actively engaged in assisting with that planning work.

The ACT Government will soon make a decision on whether to build a large commercial development which will house ACT Public Servants. In a strong commitment to green building, the Government announced that the project, if built, will aim to achieve a Green Star rating.

New South Wales In NSW authorities such as Sydney Harbour Foreshore Authority and Sydney Olympic Park authority are displaying the greatest amount of leadership having adopted a minimum 5 Star Green Star standard for buildings going beyond other NSW agencies which have only focused on energy performance targets.

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Sydney Harbour Foreshore Authority achieved the first 5 Star Green Star – Office Design v2 rating on a existing heritage building, 88 George Street and also influenced (as the landowner) the first 6 Star Green Star – Office Design v2 rating in NSW, Darling Island State 3 or workplace6.

Sydney Olympic Park Authority is achieving similar outcomes with buildings achieving Green Star ratings on their land including Quad 4 which achieved a 5 Star Green Star – Office Design v2 rating.

Both the Sydney Harbour Foreshore Authority and Sydney Olympic Park Authority are signatories to the Green Star Business Partnership.

Queensland Queensland EPA is requiring an equivalent 4 Green Star rating as the minimum standard for new staff facilities.

Buildings or fitouts already being designed to this standard include the EPA Customer Service Centre, the Tewantin Office and the District Office at the Manly Boat Harbour.

South Australia The State Government was the anchor tenant for the 5 Star Green Star – Office Design v1 City Central Tower 1 building and the new SA Water Head Office will be in the 6 Star Green Star – Office Design v2 rated VS1 building. Regional centres too have demonstrated leadership with Forestry SA now occupying their 5 Star Green Star – Office Design v2 rated Head Office in Mt Gambier.

Victoria The Victorian Government Major Projects agency initiated the Melbourne Convention Centre (which was supported through COBEII) project which has been awarded a 6 Star Green Star design rating under the Green Star – Convention Centre PILOT tool. This has been a clear demonstration to industry that it is possible to construct a world class convention centre and still meet a very high environmental standard.

Western Australia The WA Government has committed to occupy 22,000 square metres of office accommodation in a new building that will be constructed to demonstrate development excellence according to the principles of sustainability. This project is registered for Green Star – Office Design and As Built with the Green Building Council of Australia. Occupancy is planned to commence in 2010.

The Department of Housing and Works has working with the Department of Education to apply a sustainability framework to the standard pattern primary school design. This framework is based on the Green Building Council of Australia’s Green Star – Education Pilot rating tool and covers such aspects of sustainable building design as indoor environment quality, energy and water use, pollutant emissions and transport.

A trial of these measures to an equivalent 4 Star Green star standard is expected in 2008/09.

The proposed Fiona Stanley Hospital (FSH) site master planning, conceptual design and ancillary services will aim to achieve a Green Star (Healthcare) rating under the Green Building Council of Australia scheme (currently in PILOT).

8.2.3 POLICIES AND PROGRAMS Australian Capital Territory The ACT Government recently released its strategy to tackle climate change, Weathering the Change, the ACT Climate Change Strategy 2007-2025,58 which includes a range of policy measures to address climate change involving the built environment such as: •

• • •

The Greenhouse Gas Abatement Scheme; ACT EnergyWise and HEAT programs; Energy Efficiency Ratings; and Planning Practices that encourage sustainable development.

New South Wales The NSW Government was an early leader in the development of environmental rating tools, which have become national standards. These include the residential energy and water system known as BASIX and the Australian Building Greenhouse Rating Scheme (now NABERS Energy) which is an operational rating scheme for assessing the energy performance of commercial buildings. The NSW Government has been developing the National Australian Building Environmental Rating Scheme (NABERS) on behalf of the Federal Environment Department.

All of these tools are administered through the NSW Department of Environment and Climate Change.

In 2006, the Iemma NSW Sate labour Government announced its Renewable Energy Target which requires a reduction of Greenhouse Gas Emissions to 2000 levels by 2025 and a reduction of 60% by 2050. This announcement also required high end energy users to prepare Water and Energy Savings Action Plans.

This included businesses in NSW using more than 10 gigawatt-hours per year at a site; all local councils in NSW with populations of more than 50,000 people and all NSW Government agencies which use more than 10 gigawatt-hours per year at one specific site.

The Sydney Harbour Foreshore Authority has implemented a Sustainability Outcomes Strategy, focusing on the

future sustainability of the Authority and its precincts that are aligned to the way they conduct business. This strategy will incrementally work towards the achievement of the following targets: •

•

•

•

By 2020, all precincts will have reduced carbon footprint by 80% from a 2000 baseline; with a 20% reduction by 2012.

By 2020, all precincts will have reduced consumption of potable water by 80% on a 2000 baseline; with a 20% reduction by 2012.

By 2020, 80% of waste generated precinct-wide will be diverted from landfill for recycling and composting.

By 2020, 80% of products and materials procured within both its own operations and precincts will be derived from recycled materials or from other sustainable sources.

Queensland The Queensland Department of Public Works’ Sustainable Office Building Rating Policy59 demonstrates the Department’s commitment to ensuring that the ‘principles of ecologically sustainable development’ are incorporated into government programs, environmental strategies and initiatives while working towards carbon neutrality for Queensland Government office buildings by 2020.

The policy identifies that the Department will target a minimum of 5 Star Green Star rating for its new office buildings including fitouts and for all green leases, office fitouts and refurbishments of existing office buildings in excess of 2,000m2 the target will be a minimum 4 Star Green Star rating. This policy move is welcomed as it sends a strong message to the industry as well as being a positive example of government leadership.

The Queensland Government, in its recently released ClimateSmart 2050 strategy, has introduced a new obligation that will require commercial office buildings to achieve a 4 Star NABERS Energy rating from 2010. In addition, the Environmental Protection Agency (EPA) is developing a program to support the refurbishment of existing buildings, which will help to drive further changes.

South Australia The South Australian Government has committed to all new government owned buildings being 5 Star Green Star rated buildings. As the occupant or owner of 25% of the Adelaide CBD market the state government is a strong influencer on the market.

Their commitment has resulted in 13 certified Green Star Buildings in SA to date with approx 350,000sqm of office accommodation either certified or registered for certification.

As part of the South Australian Government Strategic Plan targets have been set to improve energy efficiency for government buildings by 25% from 2000-01 levels by 2014. In addition the government has committed to achieve the Kyoto target by limiting the state’s greenhouse gas emissions to 108% of 1990 levels during 2008-2012, a first step towards reducing emissions by 60% (to 40% of 1990 levels) by 2050.

This has resulted in the SA government’s commitment to existing building tune ups. The South Australian Government has allocated $2 million over four years for a Government / Property Council of Australia initiative to extend the operation of a Green Buildings Tune Ups Program, as part of a broader agreement to improve the sustainability of the built environment. The program flows from a recently finalised Sector Agreement under the State’s Sustainability legislation and supports the State Government’s Strategic Plan aspiration to attain sustainability.

Launched in 2004 and updated in 2007, the South Australia Strategic Plan includes the objective of Attaining Sustainability. The Strategic Plan identifies the need to engage with local government, regional groups, businesses and their associations, unions, community groups and individual South Australians in order to deliver on the targets and relevant individual agencies have developed their own planning based on the required deliverables.

The Greening of Government (GoGo) Action Plan has been embedded into all agencies reporting and key agencies like

8. GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION

the Department for Transport, Energy and Infrastructure (DTEI) have responded formally. DTEI has published their Green Plan which outlines specific initiatives that will be implemented in response to GoGo. Victoria The Victorian Government was the first to implement a policy to adopt a minimum 4 Star Green Star rating for government owned or tenanted buildings. In 2007 they updated this policy to 5 Star Green Star as follows: • Accommodation built for government tenancies:

a. 5 Star Green Star – Office

Design (Australian Excellence) for the base building;

b. 5 Star Green Star – Office As

Built (Australian Excellence) for the base building; and

c. 5 Star Green Star – Office

Interiors (Australian Excellence)

for the fit-out.

In addition to Green Star they also mandated NABERS Energy ratings of 4.5 Stars for base building of new office buildings built for government accommodation; 4 stars for base building of existing office buildings; and 5 stars for tenancies of new offices.

The Victorian Government has targeted existing buildings through its ResourceSmart: Commercial Buildings Program, run by Sustainability Victoria.

The program will assist owners of large office building portfolios (over 75,000 sq m net lettable area) to improve building performance over a three year period through environmental benchmarking, opportunity identification, feasibility and business case assessment, and implementation of energy and water saving initiatives across their existing building stock. Buildings will also be rewarded for investing in strategic and technical innovation to manage their environmental impact and improve their bottom line. Financial support is available for high energy and water saving initiatives.

Another initiative by the Victorian government has been the introduction of WaterMAP,60 the Water Management Action Plan, which is supported by $2 million in Government funding over

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the next four years. This program is now mandatory for all non-residential customers who consume more than 10 million litres p.a. and covers over 1,850 customers in Victoria. WaterMAP requires those eligible to assess water usage, identify inefficiencies and opportunities for water savings, prepare an action plan to implement water conservation activities and then report annually on the implementation of water conservation activities.

The Victorian Government helped to establish and it continues to, support the Melbourne Forum, a regular seminar and networking event for green building practitioners.

Western Australia In August 2004, the Department of Housing and Works released the ‘Office Accommodation Policies: A Guide to the Procurement and Management of Western Australian Government Office Accommodation.’61 These policies are applicable to the majority of government agencies in WA (it is currently undergoing revision for 2008).

The Department of Housing and Works is using market based voluntary sustainability rating tools such as NABERS and the Green Building Council’s Green Star to support green design initiatives across the range of buildings procured by the Department. The tools are generally applied on a project specific basis by using targeted benchmarks and do not mandate accredited outcomes.

The Department has incorporated sustainability clauses into its standard shell for contract documents issued for works contracts, so that consultants designing and constructing public buildings are required to consider issues such as energy and water efficiency, waste minimisation, building materials, and durability. A checklist has been included in the standard contract to provide feedback. The Strategic Asset Framework, approved in 2005, requires all Government agencies to develop a business case for any capital works project over $1 million, including an environmental and sustainability impact assessment.

All new public housing is constructed to minimum 5 star energy standards

under the Building Code of Australia.

From 1 September 2007, all new public housing will be compliant with the provisions of the 5 Star Plus codes.

The Department of Housing and Works (DHW) is currently in the process of developing a policy, which will require all DHW procured government buildings (schools, hospitals, police stations etc) to achieve a sustainability benchmark of 4 Star or 5 Star Green Star under the applicable Green Building Council rating tools. The policy will remain in draft form while pilot projects are analysed to ensure that the rating tool delivers practical outcomes satisfying and improving on existing sustainability requirements.

A specific benchmark will be identified on a project by project basis and included in project procurement documents.

DHW is leading a consortium of public and private organisations in the Perth Solar City (PSC) project. The PSC project focuses on engaging people and communities to achieve energy efficiency and cost savings through community based social marketing techniques.

PSC is an innovative project aimed at reducing household electricity demand, particularly during peak demand periods, through a large-scale trial of demand side energy management measures including cost reflective pricing, smart metering and cost effective energy efficiency devices. Distributed solar energy generation and solar hot water systems will also feature as a component of the program.

The WA State Government has implemented the Energy Smart Government program which seeks to reduce energy consumption in government buildings and services, and achieve a cultural shift in how energy is consumed in the public sector.

Results for the 2005-06 financial year show the program has reduced the energy consumption of participating agencies by 7.8% towards a final target of 12% by 2007. The program has reduced associated greenhouse emissions by 3.6%.

Victoria

8.2.4 REGULATION New South Wales BASIX is an on-line program that assesses a house or unit design and compares it against energy and water reduction targets. The design must meet these targets before a BASIX Certificate can be issued. It is a requirement that every development application for a new home in New South Wales must be submitted to Council with a BASIX Certificate.

Any changes to the design of the house post the issuing of the BASIX Certificate requires a second assessment to be conducted and a second certificate issued.

BASIX sets a single environmental standard across all Council areas in New South Wales but does incorporate regional variations such as soil type, climate, rainfall and evaporation rates.

Queensland Since 1 January 2008, the Queensland Development Code has been amended to clarify the situations where greywater re-use is allowed in all classes of building.

Clarification has also been provided about the process that the Queensland government is taking to trial blackwater recycling in a limited number of buildings in sewered areas.

South Australia In February 2008 the SA Government legislated for South Australian householders and small energy consumers using solar panels to be paid twice the value of electricity they put back into the electricity grid.

In addition the Residential Energy Efficiency Scheme (REES) went into consultation phase at the same time with the intention of formal implementation in February 2009. This scheme is open to all SA households and places the onus on energy retailers in assisting households in the reduction of energy use.

New energy-efficiency requirements were adopted into the BCA 2006 effective from 1 May 2006. The new measures require commercial and public buildings to achieve minimum levels of energyefficiency through performance-based provisions. The measures are designed to reduce the use of artificial heating and cooling, improve the energy performance of lighting, conditioning and ventilation, and reduce energy loss through air leakage.

Since July 2005, new houses and apartments in Victoria must be built to meet the energy efficiency and water management requirements of the 5 Star standard. This requires buildings to meet a 5 Star energy efficiency rating for the building fabric, use water efficient taps and fittings and install either a rainwater tank for toilet flushing or alternatively install a solar hot water system.

The 5 Star standard is designed to be a flexible standard - it is performance based rather than prescriptive, allowing creativity in meeting the requirements.

Most houses are able to achieve the 5 Star standard via a few simple improvements to the standard design and construction of a home, including but not limited to increasing the level of insulation, better orientation and exterior shading, better seals and draughtproofing and the use of high performance glazing. Requiring a 5 Star energy rating for renovations and relocated homes from 1 May 2008 brings Victoria into line with the national standard in the Building Code of Australia.

houses readily adaptable to alternative water supplies and grey water recycling, and will require larger houses, or houses on larger lots to reduce scheme water demand by fitting an alternative supply.

5 Star Plus is the Government’s response to industry requests for straightforward ‘deemed-to-satisfy’ solutions rather then the more complex approach of tools such as BASIX. The Department of Housing and Works is currently examining how to apply 5 Star Plus to existing houses.

The WA State Government will introduce major reforms to building regulations in WA, including the creation of a building commission and a new Building Act. The new act will combine the various, and currently discrete, building industry regulatory processes.

The Building Commission will operate as an independent agency to regulate the built environment for the benefit of the community. Its purpose is to ensure efficient building regulation in Western Australia and that buildings meet community needs and expectations.

The commission will also manage building and technical standards.

The Building Commission and Act are expected to become operational from 1 July 2009.

Western Australia The Department of Housing and Works (DHW) has implemented the BCA 5 star energy efficiency standards for new housing, which require houses to use passive solar orientation, good ventilation and effective insulation to minimise energy used in heating and cooling.

In addition, the Premier’s Climate Change Action Statement committed WA to 5 Star Plus standards in new houses. 5 Star Plus is an extension of the BCA in WA which requires all new houses to have low greenhouse water heating, and water saving measures such as high efficient toilet, tap and shower fittings. Stage 2, to be introduced in 2008 will make

8. GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION

SYDNEY HARBOUR FORESHORE AUTHORITY

As an organisation with Australia’s first 5 Star Green Star Office Design rating for a heritage-listed building and Sydney’s first 6 Star Green Star building under its belt, Sydney Harbour Foreshore Authority is an example of how government agencies can lead the green revolution.

1.

With a clear vision for its precincts, the Authority has identified the need for sustainability, social responsibility and economic viability at the very core of its place management of Darling Harbour, The Rocks and Barangaroo.

These two Green Star firsts are examples of the Authority’s commitment to sustainable management. Last year the organisation released ambitious targets to be carbon neutral by 2010 and to reduce the carbon footprint of its precincts by a massive 80 per cent by 2020.

1 . 2.

86-88 George Street, The Rocks, Sydney was Australia’s first 5 Star Green Star - Office Design state heritage-listed building.

The organisation aims to achieve this by setting tangible goals not only for emission reductions, but also other key areas of sustainability including the recycling or composting of 80 per cent of all waste and reducing potable water consumption by 80 per cent across all its precincts. In addition two new sustainability guides were released in March this year to help tenants in The Rocks and Darling Harbour reduce their carbon footprint.

Integral to this sustainability strategy is the pledge the Authority made last year to the Green Star Business Partnership to adopt a minimum Green Star rating for all new buildings and major refurbishments.

The Authority is one of only ten landowners, property developers and investors to become signatories to the partnership.

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2.

To make The Rocks’ 100 heritage-listed buildings ‘green’ was, for many years, thought to be impossible without destroying their value. However one of the great virtues of these buildings is that they were built to last with thick walls to keep the heat in during winter and out in summer, and large operable windows for natural ventilation.

The Authority expected the refurbishment of 88 George Street (refer to case study 1 - Old Bushels Warehouse) to score a four star rating, however with some relatively simple changes including improved lighting and the provision of bicycle storage facilities, the building achieved Australia’s first 5 Star Green Star - Office Design rating in December 2007.

Furthermore achieving a 5 Star rating was not considerably expensive—the rating added a 5 per cent premium to the $7 million project budget.

The building’s large windows provide natural light, and its open-plan design means no worker will be more than 12 metres from a window. Reopening these windows has allowed for a mixed-mode form of air conditioning. Other sustainable initiatives include tenant sub-metering of water and energy; use of low-organiccompound paints, sealants and adhesives; and air exhaust risers in every tenancy to help eliminate indoor air pollutants.

A key design innovation is the ability to link the building’s air conditioning system to the future district cooling system which will exchange heat between a number of buildings in The Rocks and the harbour and negate the need for cooling towers.

At Barangaroo, the Authority has an opportunity to plan a sustainable future for the 22-hectare former stevedoring site as a mixed use office, parkland and residential precinct.

With 88 George Street the Authority learnt that it was possible to aim high and achieve it and in doing so set a new benchmark for the green design of heritage buildings.

In order to successfully deliver exceptional environmental and social sustainability outcomes for Barangaroo, the Authority will need to provide necessary support and leadership. In particular it will need to focus on developing partnerships that:

The same philosophy has been applied to Workplace6 at Darling Harbour (refer to case study 5). The Authority initially targeted a minimum Star Green Star rating for this third stage of the Darling Island development and included this as a tender requirement.

•

•

•

The Authority negotiated improved sustainability outcomes through the tenderrprocess and Workplace6 actually achieved a 6 Star Green Star rating.

The design includes a harbour heat exchange system and chilled beams for air conditioning, a co-generation plant for electrical energy and a black water recycling facility to provide for all the non-potable water needs of both the building and 2 hectares of surrounding parks. The black water recycling facility will be accessible to the public for educational purposes.

The Authority is in the process of setting the strategic framework for Barangaroo and is seeking a prospective development partner to ensure it becomes a world leader in sustainable urban renewal.

look beyond the boundaries of individual buildings and adopt a precinct-wide approach; provide innovative and integrated infrastructure systems; and clearly understand the social needs and context of the site.

For businesses like Sydney Harbour Foreshore Authority, the challenge will be to remain a leader, identifying new environmental and social sustainability targets and setting even higher standards to ensure exemplary outcomes are delivered.

Case study. 9

8.3 LOCAL GOVERNMENT 8.3.1 INCENTIVES

8.3.2 LEADERSHIP

Brisbane City Council’s Sustainable Development Grants program is the best example of government incentives in Australia. It provides financial incentives to developers of Green Buildings in Brisbane that achieve Green Star – Office As Built certification. Brisbane City Council has allocated over $12.7m over the next four years to this program and is looking at a similar incentive for multiunit residential dwellings.

Brisbane City Council has demonstrated leadership by example by leasing 5 Star Green Star rated office space for 85% of its white collar workers.

Furthermore, the Brisbane Square development in the Brisbane CBD and the Green Square development in Fortitude Valley have both been awarded 5 Star Green Star certification from the Green Building Council of Australia.

The City of Perth (CoP) is looking at amending their City Planning Scheme to encourage the development of green buildings within the City of Perth.

This proposed Amendment (No. 2) will offer plot ratio density bonuses to new Green Star certified office buildings.

The Gold Coast City Council provides plot ratio bonuses for new developments able to demonstrate outstanding urban design and architectural merit components or attributes.

This includes assessment of Ecologically Sustainable Development (ESD) addressing energy, water, materials and community standards.

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City of Melbourne has provided clear leadership in the field of sustainable building and has shared some of the key lessons they have learnt through the construction of Council House 2 (CH2), the first building in Australia to achieve a 6 Star Green Star – Office Design v1 rating. CH2 is registered for a Green Star – Office As Built rating. The City of Melbourne has also signed up to the Clinton Climate Initiative.

Hume City Council is another local Victorian council which is an acknowledged leader in environmental sustainability having won the Keep Australia Beautiful Victoria Sustainable Cities Award and the United Nations Association of Australia World Environment Day Award for Overall Environmental Management. Hume City Council has been an active supporter of sustainable buildings, with their new council office achieving a 5 Star Green Star – Office Design v2 rating in May 2006. The Council has also joined the Mayor’s for Climate Protection Program.

8.3.3 POLICIES AND PROGRAMS Various local councils including Sydney, Parramatta, North Sydney, Melbourne, Adelaide, Perth and Brisbane have joined the City Switch: Green Office62 (formerly 3CBDs), a national tenant energy management program which aims to improve office energy efficiency and reduce CO2 emissions. Under this project, commercial office occupants commit to improve energy efficiency in their office premises by writing to their local Mayor outlining their energy goals. Progress is measured annually using the NABERS Energy scheme.

The City of Adelaide is partnering with the South Australian State Government in the Building Tune Ups Program which targets energy efficiency in existing buildings.

Further to this initiative the City of Sydney has embarked upon its Sustainable Sydney 2030 strategic plan which provides a vision for the sustainable development of the City to 2030 and beyond. Sustainable Sydney 2030 has a vision of a Green, Global, Connected City including the following concepts: •

GREEN with a minimal environmental impact, green with trees, parks, gardens and linked open spaces, green by example and green by reputation.

•

GLOBAL in economic orientation, global in links and knowledge exchange, global and open-minded in outlook and attitude.

•

CONNECTED physically by walking, cycling and high quality public transport, connected ‘virtually’ by world–class telecommunications, connected to communities through a sense of belonging and social well being.

BENCHMARKING THE STATES REPORT To find out where the States are in terms of policy development and establish a base from which to assist them in future policy and green building initiatives, the GBCA commissioned the Green Building in Australia – Benchmarking the States – survey and report, August 2007.

It is hoped that the report will help Governments see the scale and economic benefits from the green building industry – borne out by the growth already experienced overseas – and the policy and resource allocation priorities that are needed.

The Report notes that – •

•

Co-operative evaluation of states’ policies and sharing of the outcomes, taking into account local climatic and market conditions, would be of considerable value.

The IPCC Fourth Assessment Report finding that buildings represent the best opportunity to make a significant reduction in GHG emissions while maintaining economic growth – estimating that CO2 emissions could be reduced by 29% by 2020 at no net cost.

• The opportunities for Australian companies that have been successful in the domestic green building market to play key roles in developing and implementing sustainable building strategies in the rapidly growing Mega-Cities of Asia.

The survey of policy instruments used (as the basis for comparison) the twelve most commonly used instruments in Australia and internationally.

The extent to which policy instruments, have been adopted and implemented varies widely with Victoria and South Australia leading the way and Tasmania having taken little action.

Clearly there is a great need for increased effort from governments around Australia to elevate green buildings as a main priority in tackling climate change.

The Benchmarking report recognises the Building Code of Australia (BCA) as the key unifying regulatory framework for the development of the national green building industry.

8. GOVERNMENT INCENTIVES, LEADERSHIP, POLICIES AND REGULATION

THE EXISTING BUILDING CHALLENGE SECTION|NINE

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9

9. THE EXISTING BUILDING CHALLENGE

With new buildings making up only about 3% of the total stock at any point in time, the greening of the 97% of the older building stock is critical to the industry’s success in reducing GHG emissions. The IPCC,63 McKinsey,64 ASBEC,65 Vattenfall,66 OECD67 and Stern68 reports have all pointed to the fact that the existing building stock offers not only the easiest and cheapest emissions abatement opportunities but also the quickest. Little new technology is needed. The necessary insulation, demand reduction and other energy efficiency measures are available now.

The scope for GHG abatement is enormous and can be realised at low or negative cost. The 2007 ASBEC report states that electricity use in residential and commercial buildings can be halved by 2030 and reduced by 70% by 2050, principally through energy efficiency.

The compelling social and economic cases for ‘greening’ the existing building stock are supported by the Australian Greenhouse Office, which projects that estimated GHG emissions from the operation of commercial buildings will increase by 94% in the period 1990 to 2010.

Currently only six existing buildings have received a Green Star – Office Design rating, including: • 6 Star Green Star – 39 Hunter St (Sydney), Trevor Pearcy House (Canberra) and 40Albert Rd,(Melbourne).

• 5 Star Green Star – 88 George St (Sydney) and 500 Collins St (Melbourne).

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• 4 Star Green Star – 50 Pitt St (Sydney).

Three tenants in existing buildings have improved the environmental performance of their building via a Green Star- Office Interiors fitout rating including: • Investa, 121 Phillip Street, Sydney (5 Star Green Star).

merits of ‘green’ and the case for bringing forward capital expenditure to improve the energy efficiency and environmental performance of buildings may often be less compelling because: • There are doubts about demand and the financial benefits.

• Charter Hall Sydney Head Office (4 Star Green Star).

•

• RICS Oceania, Suite 16.02, 1 Castlereagh Street, Sydney (4 Star Green Star)

• Occupiers look to technical solutions to emissions abatement rather than change their behaviour.

Over 120 projects are currently registered to achieve a Green Star – Office Interiors rating including the Green Building Council of Australia’s own head office at 179 Elizabeth St, Sydney. The majority of these are within existing non Green Star buildings.

•

At the lower end of the market tenants are generally in less profitable businesses and rent is a critical factor.

Hence they will resist a building upgrade that increases the rent.

•

The productivity increases, staff retention and internal environmental quality associated with green buildings appear to have a lower priority for tenants in older lower grade buildings.

•

Practical and legal impediments (central plant, lease structures, remaining lease terms and options) may make building upgrades more difficult, time consuming and expensive.

•

Landlord – tenant relationships are often adversarial and have a narrow legal and cost focus. This ‘them and us’ approach takes little or no account of higher order social and economic gains.

These buildings only represent a small percentage, so why is there not a stampede to ‘greening’ the existing stock?

According to the RICS publication “Transforming Existing Building: The Green Challenge Final Report March 2007” most efforts to improve environmental performance have been targeted on new buildings and opportunities to improve the sustainability performance of older buildings is seen as either too hard or too costly.

Another reason is the differing owner and tenant perspectives. Viewed from the stance of the building owner the

Many tenants still do not understand or take seriously the links between climate change and the operation of their building.

•

•

There is less market pressure on buildings not suited to Government tenants, subject to accommodation guidelines.

Many owners lack both personal knowledge and trusted external advisors.

• There are insufficient financial and tax incentives to bring forward capital expenditure.

• There is less regulatory pressure compared with other issues such as fire safety.

•

Some leasing agents, valuers and other advisers lack the knowledge to properly advise owners and evaluate the benefits and costs.

the building owner or occupier to set individual targets, time frame, return on investment and capital contribution.

The Property Council of Australia (PCA), working with Arup consultants, has recently released an ‘Existing Building Survival Strategy’ (June 2008); a guide to greening existing buildings with details of incremental and major changes, and references to the cost, efficiency, implementation and impact of some of the sustainability measures which can be introduced to older buildings.

This strategy is a useful starting point in assessing the changes which might be implemented.

For the above reasons, office buildings are usually comprehensively upgraded at the end of their useful economic life, (20 – 30 years) when large areas or the whole building may have become vacant.

With about 97% of the stock having been built without any emphasis on ‘green’ there is an urgent need to create effective government policies and financial incentives to bring about the wholesale upgrade and retrofitting of the building stock within an accelerated time frame. This time frame should also recognise the incremental upgrade of existing buildings and take a tiered approach to identify priority areas first, followed by recommended areas and finally aspirational areas for upgrade.

Some owners and tenants such as the Victorian Government are undertaking works using an Energy Performance Contracting (EPC) system recommended by the Australian Energy Performance Contracting Alliance, a Directorate of the Clean Energy Council and finance group specialising in green building works.

The Victorian Government initiative is financed by the William J Clinton Foundation’s Climate Initiative.

Also current regulatory pressure needs discussion and refining to produce useful and informed direction. For example while there are minimum energy standards under Section J of the BCA these can be circumvented by staged refurbishment – the BCA requires compliance where there is substantial refurbishment, generally taken as more than 50% over a rolling three year period.

Over 170 projects across Australia have used the EPC model, which allows

The Green Building Council of Australia is adopting an integrated

In shopping centres there appears to be almost no pressure from tenants to green the premises or tenancies.

existing building strategy focusing on opportunities for incremental change, reuse and refurbishment potential and design improvements as well as targeted educational and communication programmes.

At the forefront of this strategy is the Green Star - Office Existing Building rating tool which examines and assesses the idiosyncrasies of older buildings whether they are five 55 or 105 years old. This rating tool has been in extended pilot format since 2007, gathering indepth and detailed information about the needs of the market and the methods of documenting sector-specific credits for older building stock. This feedback has been used to influence the final version of the rating tool, which when released, will assess the attributes of commercial office buildings older than 24 months.

It can be used for individual buildings or entire portfolios and similar to other Green Star commercial office rating tools it will be both holistic and complementary to other rating systems such as NABERS. The Green Star - Office Existing Building rating tool will provide a more streamlined approach, identifying opportunities for improvements, prospects for incremental change, better communication between parties concerned (including owners, investors, tenants, facility managers, consultants, designers, developers) and will use a set of measurables which can be readily understood across the market. At the very least, the Green Star - Office Existing Building rating tool can be used as a list of guidelines, for projects to examine the credits against which a building might be assessed, and highlight significant areas for progress.

9.THE EXISTING BUILDING CHALLENGE

9. THE EXISTING BUILDING CHALLENGE

The Green Star – Office Existing Building tool will complete the Green Building Council’s range of tools available for the different stages of a commercial office building’s lifecycle. Recognising that older buildings are constrained and may not be able to achieve a 4, 5 or 6 Star rating, this tool will certify buildings at 1, 2 or 3 Star Green Star, which might be the maximum rating an existing building can reach unless it is completely refurbished given it was not originally designed with sustainability in mind.

As with all new rating tools, the Green Building Council of Australia will develop professional training courses and communication materials to educate the commercial office sector on the application and implementation of the Green Star – Office Existing Building rating tool.

This tool will be available for existing commercial office assets from early 2009 but will evolve into other sectors such as retail, healthcare, education, multi-unit residential and industrial, in line with the Green Building Council of Australia’s strategic goal for Green Star to be the rating tool of choice and to answer the demands of the industry.

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Together with the Green Star – Office Existing Building rating tool, the accelerated ‘greening’ of the building stock needs a new mix of regulation, incentives, assistance and knowledge sharing. The following should be considered as part of that mix: •

Regulation – amendments to BCA including strengthening the performance standards in Section J; require compliance with Section J.

• As parts of the buildings become vacant, following lease expiry or an owner-occupier vacating or by 2020:

Incentives including:

• accelerated depreciation rates on plant and equipment; • the embodied energy in the structure or fabric of the building stock should be revalued, based on the replacement cost of structures, and capital (write off) allowances should be introduced (in Division 43 of Tax Act) as offsets against building upgrades. The present rate of 2.5% should be increased to 4 to 5%; • Investment allowances for ‘green’ should be reviewed: • Energy and water authorities should provide incentives reflecting delayed infrastructure investment.

Ratings including:

• Rating for water, sewerage and drainage should be on user pays basis – currently Tasmania assesses water rates on basis of property value: • Land Tax assessments based on the (unencumbered) highest and best use of a site can be a disincentive for the retention and upgrade of existing structures.

Advice and Knowledge Sharing

• Government and private agencies use the Green Building Council Australia or similar entity as a vehicle for the gathering and dissemination of information on the green building industry: • Education through use of the Green Building Council of Australia as an ‘Innovation Forum’ through which to access the best methods, practices, designs and guidance available.

CASE STUDY

Charter Hall Fitout

10

Description

Business case

Green Star initiatives

The Charter Hall fitout is a leading example of what can be achieved within an existing 40-year-old building.

The transformation of the previous dilapidated internal environment into a high quality fitout demonstrates that it is possible to convert Sydney’s existing building stock into healthy and happy indoor environments.

The total cost for the 730m2 fitout was approximately $1.115M per m2. The total cost of $1.12M to complete the fitout as a Green Star project was estimated to be an additional 8% in comparison to a standard fitout. Following the completion of the project a value assessment of the awarded Green Star points was completed to determine the costs associated for each of the initiatives (weighted points). The biggest investment was in the materials category followed by the management category.

Since completion in March 2007, the Charter Hall Group has reported that the fitout has had a very positive response from staff who believe that the fitout provides a healthy indoor environment.

• • • •

• • • • •

•

• •

•

Address:

Owner: Interior Architect: ESD Consultant & Engineer: Project Manager: Building Type:

Cyclist facilities; Sub-metering; Efficient lighting design and zoning; Natural daylighting and external views; Indoor plants; Internal blinds; Flat screens to reduce glare; Laptops to individual workstations; High quality finishes and furniture with reduced environmental impacts; Reuse of existing furniture items from previous tenancy; GECA certified flooring products; Joinery with reduced environmental impacts, designed for disassembly and modularity/reuse; High fitout density.

333 George Street, Sydney, New South Wales Charter Hall Group Pike Withers Connell Wagner Sheldon Commercial Interiors Existing Commercial Office

Case study. 10

CASE STUDY 11

Trevor Pearcey House â&#x20AC;&#x201C; Australian Ethical Investment

Address: Traeger Court, Bruce, Australian Capital Territory Owner / Tenant: Australian Ethical Investment Architect: Collard Clarke Jackson ESD Consultant: Viridis E3 Construction Manager: Cobul Constructions Mechanical / Bassett Elec Engineer: Commissioning Agent: Sustainable FX Building Type: Existing Commercial Office

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Description Trevor Pearcey House, the new head office of Australian Ethical Investment, is a leading example of sustainability in the refurbishment of an existing building.

The original two-storey, 1100 m2 (GFA) building is some 20 years old and is part of a body corporate. The refurbishment covered base building and fitout and has involved a complete overhaul with a focus on simple, passive systems and reuse of materials.

Some of the recycling led to inspired elements within the building such as two feature walls made from old timber palettes and, most notably, art work made from old computer floor tiles.

The Architects and Construction managers worked collaboratively to ensure as many materials as possible were reused in the construction, resulting in not only an interesting and unusual feature of the refurbishment but also managing to keep costs at a minimum.

Business case The total refurbishment cost of the building was $1.7 million.

The refurbishment was delivered on a conventional budget ($1700/m2) and demonstrates that significant environment improvement can be achieved in existing building stock and that simple, passive systems can deliver comfortable and productive work spaces.

Using simulation modelling to estimate the savings in energy use and greenhouse gas emissions.

The original building was operating at an average 2 Star NABERS Energy existing building rating.

It has been calculated that after the first year of operation greenhouse gas emissions have fallen by about 2/3rds from the 2 Star NABERS Energy benchmark.

Compared to its previously occupied building, Australian Ethical Investment estimates that it is currently saving about $17,000 per annum or 52% in energy bills.

Water use has been reduced by over 80% and after completing a staff productivity survey the building ranks in the top 11% of Australian buildings for staff amenity.

Green Star initiatives Management

Water

•

•

•

• •

Comprehensive commissioning of all services.

Extensive reuse and recycling of waste.

Dual flush toilets, low flow showers and water efficient urinals.

Rainwater capture for toilet flushing.

Air-cooled chillers (no cooling towers).

Indoor Environment Quality

Materials

• •

•

• •

• Reuse of existing façade and structure.

• Fully integrated fitout.

• Recycled steel and sustainable timber.

High levels of natural ventilation.

Natural daylight with effective external shading.

Individual control of comfort systems for over half of users.

Avoidance of VOC emitting materials.

Reduction in formaldehyde emissions using recycled or E0 board.

Land Use and Ecology

• Reuse of existing built land (refurbishment).

• No topsoil removed from site.

Energy Emissions

•

•

•

Greenhouse emissions 47% lower than 5 Star NABERS Energy.

Extensive energy and tenancy submetering.

High efficiency (T5) lighting system with local switching.

• Zero ODP refrigerants.

• Retrofit of pollutant traps to existing stormwater system.

Transport

•

• •

Minimised car parking with small car spaces.

Dedicated cyclist facilities.

Close proximity to public transport.

Case study. 11

RESEARCHING PERFORMANCE OF GREEN STAR RATED BUILDINGS

SECTION|TEN

102103 -

1

10

10. RESEARCHING PERFORMANCE OF GREEN STAR RATED BUILDINGS

The discussion over ‘design of sustainable attributes’ versus ‘measurement of environmental performance’ has long been debated within the Australian property industry. It has now become obvious that both must be achieved; building sustainably and then managing responsibly to minimise environmental impacts. In this way, the industry can ensure that buildings are performing as they were designed. In 2008, with the focus on the environment, this concept is one that is putting pressure on owners to improve reporting and monitoring standards and operate buildings at their optimal efficiency.

The shift in the Australian industry to adopt Green Star for new or refurbished buildings is undisputed. What is currently under scrutiny, however, is whether these buildings are actually performing to their design and construction Green Star certification. It is an important question, given the industry is applying new technologies (and sometimes old) into commercial offices that have not previously been tested. To ensure the industry continues to move forward and guarantee that our future building stock is meeting its environmental promises we must better understand what is and isn’t working. If we can design and construct our buildings correctly in the first place, their operational performance becomes much easier to manage and less costly in the long term.

To address this concern, the Green Building Council of Australia was approached by The Bond University Mirvac School of Sustainable Development to undertake a 5-6 year

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study to evaluate the performance of Green Star rated buildings and to test if they are as green as their Green Star certification purports them to be.

The research objective is to: a. Examine how Green Star certified buildings are actually performing (energy, water, materials, maintenance, financially, human health and productivity). Are they matching up to their Green Star rating? b. Identify what green systems, processes materials and products are working / not working. c. Identify strengths and weaknesses with the Green Star rating tool and its application process and examine whether Green Star buildings have produced any other side benefits, such as if overall environmental awareness has increased amongst occupants both at work as well as at home.

The findings of this research will assist in further education of the industry and help building owners and tenants to understand advantages and disadvantages that come with Green Star rated buildings in particular.

Thus, the industry can be more aware of things to expect and areas where they have to pay significant attention in order to “get it right”. The outcome is also expected to facilitate understanding of perceptions and experiences of occupants who are working in a Green Star workplace.

At the time of writing this report, six Green Star rated buildings (including two interior fitouts) had taken up the

opportunity to participate in the research project. This chapter will summarise the findings and recommendations from this small pool of projects. The Green Building Council would like to thank the participants including: • The Australian Research Council, Canberra: 5 Star Green Star – Office Interiors v1 • Szencorp, 40 Albert Road, Melbourne: 6 Star Green Star – Office Design v1 • Investa, 121 Phillip St, Sydney: 5 Star Green Star – Office Interiors v1 • City of Melbourne, CH2, Melbourne: 6 Star Green Star – Office Design v1 • CB Richard Ellis, 151 Pirie, Adelaide: 4 Star Green Star – Office Design v1 • Brisbane City Council – Brisbane Square: 5 Star Green Star – Office Design v1 Given the research is still in its early stages (year one) the findings have been summarised in Table C. Despite the fact that the data pool was small, the findings are still important and indicate where owners and tenants of Green Star buildings can improve and learn from the early adopters. It is envisioned that once a larger data pool has been researched the full findings will be released as an official report.

According to the researchers, “by observing the data patterns gathered so far it seems as though Green Star certified buildings are indeed matching up to their Green Star ratings, or at least they are in the majority of areas.

In addition, the Green Star rating tool and its application process appear at this stage to be working satisfactorily but with potential for for improvement”.

Table D. Green Star Building Performance Research Findings

CATEGORY

RESEARCH FINDINGS

RECOMMENDATION FOR FURTHER IMPROVEMENT

Energy

According to the data, 2 buildings were under performing, 2 buildings were matching and 1 building was over performing its Green Star design intent.

It is recommended that energy performance be continually monitored as it is possible to outperform a Green Star design rating from this perspective.

The Green Star rating tools award credits for reducing a building’s operational energy consumption and greenhouse gas emissions. It does so by giving points for energy performance based on the predicted NABERS Energy rating (previously known as ABGR, the Australian Building Greenhouse Rating), electrical sub metering, efficient lighting density and zoning and peak energy demand reduction.

All Green Star certified buildings have a conditional requirement of a minimum energy performance of 4 NABERS Energy stars.

On average, the buildings that are underperforming are doing so by approximately 6% compared to their design intent. The average design performance was 4.9 NABERS stars and the average operational performance was 4.6 NABERS stars.

However, despite not matching up with their design intent, these buildings were still 40% more energy efficient compared with the current average Australian office building which has an average score of 2.5 NABERS energy stars (NABERS, 2008).69 It is also notable that all of the participating buildings operational performance were at least equal to or better than the conditional requirement of 4 NABERS energy stars.

Water The Green Star rating tools award credits for systems which reduce water consumption (for example water efficient toilets, urinals, showerheads, taps, landscape irrigation systems, efficient or non evaporative water cooling towers and the installation of water meters).

Only one building was able to provide water data - it performed at 44% above its design intent (that is, it was 44% more water efficient).

Materials

What worked well

The Green Star rating tools give credits for using materials and systems that enhance the buildings sustainability performance and occupants’ health.

This can include using materials with recycled content, low embodied energy, PVC free, low Volatile Organic Compounds (VOC) and Formaldehyde, using FSC certified or post-consumer re-used timber as well as using products and systems that promote energy and water efficiency.

The questionnaire included an open ended question (to building owners and tenants) regarding which sustainable materials and systems are working well. The most frequently mentioned were: • lights/lighting controls • low VOC modular carpet; • recycled timber.

Occupants were also very positive about the abundance of natural light, plants, and ‘green’ feeling of office décor.

What didn’t work well The open ended question regarding what materials and systems were not working well had as their most frequent responses the: • • •

grey/black water recycling systems; air conditioning and new “trial” technologies (for example fuel cells for heat pumps).

Owners and developers need to implement water monitoring systems and give this the same high priority as monitoring energy usage.

Since these buildings were certified water efficiency has become a lot more important particularly in states like Queensland. It is expected that this will improve substantially on more recently certified projects.

The early adopters of green building have certainly taken the majority of the risk in testing innovative systems which were not previously used in commercial offices.

There are always going to be some fine tuning to be done when installing grey or blackwater treatment systems or alternative energy systems.

The best recommendation to be made is make sure it is installed and serviced correctly. It is one thing to install these systems but a completely different story when it comes to their ongoing maintenance and servicing. Building owners and facility managers must be aware of how much attention these systems require and potentially sign up to servicing contracts to ensure they are correctly monitored and commissioned.

Occupants also expressed their dissatisfaction about air conditioning and temperature and the lack of personal control to ‘suit their liking’.

10. RESEARCHING PERFORMANCE OF GREEN STAR RATED BUILDINGS

CATEGORY

RESEARCH FINDINGS

Materials (cont)

What needed replacing

RECOMMENDATION FOR FURTHER IMPROVEMENT

In the open ended question regarding which materials and systems had to be replaced, one of the participating buildings had replaced nothing, two buildings had replaced the grey water recycling system, one of the buildings had replaced the windows self watering system (a design issue), and another building had replaced the recycled rubber flooring (an issue with the installation).

Indoor Environment Quality

The Green Star rating tools give credits for using materials, systems and measures which promote healthy indoor environments.

For example increased outside air rates, carbon dioxide monitoring, good levels of daylight, reduction of glare, thermal comfort, individual comfort control and reduction of Volatile Organic Compounds (VOC), formaldehyde and mould.

Only three of the buildings participated in this part of the research which was via an occupants’ survey distributed online. It asked questions about a respondent’s general profile, satisfaction level, knowledge about their green workplace environment, usability, reputation, marketing and brand ability and what they thought of their organisation or employer that had provided such a workplace.

According to the findings, Green Star rated buildings and offices have produced generally higher satisfied occupants, as well as proud and appreciative occupants who feel positive about their workplace. The survey revealed that the marketability and branding ability were the most recognised strengths of a green office by occupants. When asked about what they think of their employers who provide such workplace environment, the majority agreed that they are proud of their employers

Owners and tenants should ensure staff are educated about the office, its Green Star rating and attributes to ensure greater productivity and motivation.

Staff should also be educated about how the office environment differs from non green buildings they have worked in the past as this may take some getting used to eg greater temperature bands (and dressing accordingly), open plan office rules, noise levels etc.

The online staff survey indicated that Green Star buildings generally make occupants highly satisfied and help to produce highly motivated and productive employees.

These findings are supported by occupants’ perception that the green office enhances their productivity. 84% agreed to the statement “I feel this office enhances my productivity”. Responses, however, were mixed and negative responses were noticeably evident when occupants were asked if their productivity and health had improved since they have moved into their Green Star rated buildings.

Transport The Green Star rating tool promotes the utilisation of alternative modes of transport by awarding points to buildings with limited availability of car park spaces, providing adequate cyclist facilities (secure bicycle storage, showers and lockers) and being within proximity and having good access to public transport with frequent services.

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According to the research public transportation is used about twice as much by Green star building occupants compared to average Australian capital city commuters. However, no significant difference has been observed when it comes to motor vehicle use, walking and cycling to and from work.

The provided cyclist facilities with secure bicycle storage, showers and lockers are frequently used. However, quite a high percentage had not used the facilities because they did not know they existed.

The key to improvement in this area is in staff education and programs to promote cycling or walking to work as well as effectively communicating the existence of the bike racks, shower and locker facilities.

Setting up a car share scheme would also be a good initiative to promote people driving less (especially those who need to drive to catch a train or bus) and linking up people who live in the same suburbs.

CATEGORY

RESEARCH FINDINGS

RECOMMENDATION FOR FURTHER IMPROVEMENT

Management

Commissioning

The Green Star rating tools award credits for projects that provide commissioning, creating a tenant guide, or the adoption of an Environmental Management System and Construction Waste Management plan. The management team of each and every green building plays a crucial role in determining if a building will realise its fullest green potential.

There is scope for management to become involved all the way from the very beginning of the design and construction phase through to the every day running of the building once it is finished and occupied.

The research found that building owners that do 12 months or more of commissioning reap high rewards in terms of improved performance.

The most important recommendation is to undertake ongoing commissioning and fine-tunings (especially every new season in the first year) in order to achieve ultimate building performance. A number of buildings have been able to continuously improve their performance beyond their first year of operation via a system of ongoing monitoring and verifications as well as refinement.

Cleaning With cleaning maintenance, the study found that Green Star buildings require less maintenance than the participant’s previous buildings.

Lighting and lighting controls This study found that maintenance for lighting and lighting controls is less in Green Star rated buildings compared to the average Australian office building.

Ventilation, heating and cooling This study found that maintenance requirements for ventilation, heating and cooling differ greatly amongst the participants. This is obviously highly dependent on the various systems used.

Green Side Benefits The study also looked into if having a Green Star rated building has helped to produce complementary green side-benefits (i.e. having sustainability measures and outcomes that are not required or measured in the Green Star rating tools).

100% of participating buildings owners and managers thought that undertaking a Green Star rating had helped produce other green side-benefits.

For example, 100% of buildings had organised recycling pickups (for paper, glass, metal and plastic), 67% had signed up to Green Power, 50% had started undertaking green procurement practices, 32% had inspired tenants/ occupants to be more green at home (for example, procurement of Green Power, replacement of light fittings, reducing water use, take public transport or to ride/run/walk to work).

Secondly, more education is required.

As well as promoting the buildings’ green features and run programs to reduce water, energy and general wastage as well as distributing the Tenant Guide (also known as the Building Users Manual) owners of Green Star buildings should also run seminars or workshops to educate tenants and staff about how the office’s green features work.

Occupants will also become more environmentally aware if they are surrounded by more visual signs and if incentives are provided by the company.

It is recommended that all building owners and tenants take up additional environmental programs that go beyond the rating system to not only enhance the buildings performance but also staff productivity, buy in and well being.

Essentially, getting a Green Star rating is but one step in what should be a long term strategy.

This study indicates that Green Star rated offices do inspire the people working in the building to live more sustainable lives. However, a higher Green Star rating (for example 6 star) does not inspire staff more than a lower Green Star rated building such as a 4 star building.

10. RESEARCHING PERFORMANCE OF GREEN STAR RATED BUILDINGS

40 Albert Road

Description 40 Albert Road South Melbourne is a 1,200m2 office building. Built in 1987 and regenerated during 2004-05, it was the first existing office refurbishment in Australia to be awarded a 6 Star Green Star â&#x20AC;&#x201C; Office Design rating.

Address:

Owner:

Architect: Engineer: Main Contractor: Tenant: Building Type:

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40 Albert Road, South Melbourne 40 Albert Road Commercial Pty Ltd SJB Architects and Interiors Connell Mott Macdonald Construction Engineering Szencorp Group Existing Commercial Office

Business case The business case behind 40 Albert Road is focused on operational cost savings and productivity of staff. The building has now been operational for two years and has been closely tracking its use of energy, water and gas.

The latest figures show savings of 72% of its energy (compared to 61% in the first year) and 94% of its water (compared to 90% in the first year), compared to the industry average.70

Green Star initiatives

CASE STUDY 12

Management

•

•

•

•

Independent building commissioning and tuning.

Building Users’ guide for building occupants.

Comprehensive environmental management plan (EMP) based on section 4 of the NSW Environmental Management Systems Guidelines (1998).

Comprehensive waste management plan (WMP) recycled and reused 80% of waste by weight during construction.

Indoor Environment Quality

•

•

•

•

•

• • •

Automated ventilation system using outside air, linked to a weather station.

Building Management System controls internal temperatures and ventilation based on occupancy.

Increase in indoor ventilation rates to 2.6 times the Australian Standard.

High performance glazing, operator controlled blinds and shading screens.

High frequency dimmable ballasts and smart lighting systems.

High thermal comfort performance.

Decrease in internal noise levels.

Low-VOC (volatile organic compound) content used throughout for insulation, carpets, adhesives, sealants, composite wood products and paints.

Energy

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•

•

5 Star ABGR + 20% reduction in carbon dioxide.

Integrated sensor and management system for occupancy lighting, HVAC and security control.

Ceramic fuel cell to generate lowemission, off-grid energy with potential of providing for >30% of building’s energy requirements onsite.

•

•

•

•

•

Two solar PV grids (one amorphous) generating 5.5kW, which (with the ceramic fuel cell) will potentially provide zero grid energy consumption in future.

Australian first permanent commercial office installation of natural gas VRV engine air conditioning units.

Increased ceiling height (reclaimed from the old building plenum) allowing use of thermal mass for improved energy efficiency.

70% reduction in energy use compared to conventional offices.

Reduction in office lighting power density.

Transport

•

•

•

Provision of new bicycle, shower and locker facilities.

Size and total number of car spaces reduced and 28% of car parking spaces are for small cars.

Central location next to a tram terminus with good links to train and bus networks.

Water

•

• •

•

•

Low flush toilets, waterless urinals, electronic on-demand taps and showers.

Solar hot water.

Grey water recycling and rainwater collection.

Potable water reductions of 82% compared to similar offices.

Cooling tower water consumption eliminated.

Land use and ecology

• Refurbishment – no major impact on site ecology Emissions

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•

•

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•

Near-zero indoor air pollutants from Australian first use of Drykor dehumidification unit, which removes 94% of all micro-organisms and 77% of particles larger than 5 microns from airspace, helping to overcome “sick building syndrome.

Zero Ozone Depletion Potential (ODP) of all refrigerants and thermal insulants.

Refrigerant leak detection and monitoring system.

Management of all stormwater onsite up to a 1-in-20 year rain event.

Sewer discharge reductions of 72%.

Innovation

•

•

•

Sensor-controlled air and fan coil movements, including CO sensors located in the car park.

Two solar PV grids (one amorphous) generating 5.5kW, which (with the ceramic fuel cell) will potentially provide zero grid energy consumption in future.

Australian first permanent commercial office installation of natural gas VRV engine air conditioning units.

Materials

• •

•

•

•

Recycling facilities for office waste.

Forest Stewardship Council (Greenheart) certified timber.

Reuse of existing roof, facades and building structure.

Provision of flexible shell and core with fully integrated fit-out.

High recycled content of structural concrete.

Case study. 12

THE WAY FORWARD

SECTION|ELEVEN

110111 -

11

11.1 GREEN STAR RATING TOOLS

Australia is a leader internationally in green buildings and a range of actions have been identified as providing a way forward in the greening of new and existing buildings in Australia. This has been vastly expanded from 2006 has been graphically represented in the beginning of this document as the Green Building Council of Australia Roadmap.

The Green Building Council of Australia has identified five distinct areas on which to focus on in order to transition the Australian property industry towards sustainable cities, this includes: 1. Green Star rating tools; 2. Education, research, innovation and skills; 3. Industry leadership; 4. Government leadership; and 5. Collaborative partnerships.

The Green Building Council of Australia will continue to facilitate the shift to a sustainable property industry and through its leadership play a key role in charting the change needed.

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11.1.1 NATIONAL RATING TOOL OF CHOICE The Green Star rating system is recognised as the tool of choice for the environmental design and construction of new commercial office buildings and interior fitouts.

Within the next 12 months the Green Star rating system will be similarly recognised for other building types including retail shopping centres, educational and healthcare facilities, also multi-unit residential, industrial and public assembly buildings.

Overseas experience has demonstrated that success in greening the property industry has only come where there is clarity about rating tools.

The most successful and effective environmental rating tools are those which are clear in their objectives and comprehensive in scope, technically robust, yet simple to apply.

As the only national comprehensive environmental rating system which is internationally recognised, Green Star should be acknowledged as the national voluntary environmental rating system for Australian buildings.

The Green Building Council will continue to work with other rating tools to ensure that the tools can exist alongside each other in the marketplace, providing complementary functions and coexisting to provide the best possible opportunities for greening buildings.

11.1.2 BEYOND SINGLE BUILDINGS

11.1.3 EXISTING BUILDINGS

11.1.5 GREEN STAR ENERGY

By 2010 the Green Star rating system could be accepted as the standard for whole precincts and mixed use developments. Now that Green Star has progressed from being simply a rating tool for commercial office developments, and has produced rating tools addressing education, healthcare, retail centre, multi unit residential and industrial facilities, numerous opportunities exist to combine property types and aspire to mixed use ratings. Already the GBCA has launched the Green Star Mixed Use PILOT rating tool, which combines Office, Retail Centre and Multi Unit Residential components, in order to assess the attributes of many of the mixed use projects being developed around Australia.

The Green Star rating system will respond to the existing building challenge and provide a way forward for portfolio owners and governments to incrementally upgrade existing building stock to meet benchmark environmental standards.

It has become evident that Australia needs a clear and simple way of evaluating the energy requirement, use and efficiency components of buildings, for different building types such as offices, educational, healthcare and residential buildings. Whilst there are already rating tools which can assess operational or performance issues for offices and residential buildings, the attributes of all buildings which relate to energy climatic conditions, consumption of energy and thus the related greenhouse gas emissions, have not been as easy to assess.

Once rating tools for each of these property types have been released, it will be a natural evolution to look at how we assess multiple use developments, which incorporate many different property types, and whole precincts. The goal of 'one Green Star rating tool', which builds in elements of each property types within a development, will be possible once all of these rating tools have been realised. The move to assess precincts, with elements of neighbourhood and community consideration, will involve many cross-sectoral stakeholders in order to capture the most relevant criteria and establish a tool which can be widely accepted and adopted.

Green Building Council of Australia to develop Green Star beyond a single building rating tool to enable precinct and mixed use applications. In doing so the Green Building Council of Australia will improve the Green Star interface and certification processes.

Green Building Council of Australia to release Green Star Office Existing Building Version 1, that addresses requirements for upgrades to existing buildings and therefore seeks collaboration and endorsement of the tool from key institutional and government owners. The Green Building Council will continue to work with government on modernising the Australian Building Code, incentives (such as accelerated depreciation of assets), and assistance to facilitate knowledge sharing for improving the environmental performance of existing buildings.

11.1.4 INTERNATIONAL RATING TOOL FRAMEWORK Given that the transition to green buildings is a global trend, it is important that rating tools should allow international comparison.

In order to ensure the Australian property keeps pace with international developments, and can be measured against them, there needs to be agreement about an international rating tool framework. The Green Star rating system is based on international rating systems and will be continually monitored against these systems to ensure it remains relevant and cutting edge.

The Green Star rating system evaluates energy based on calculations, modelling, designs or data. An alternative route for offices only is a certified ‘NABERS Energy’ rating. With the introduction of the Green Star - Energy, an element of the Green Star suite which can be used as a standalone component or an integrated part of the Green Star rating tools, it will be possible to assess any buildings energy efficiency and greenhouse gas emissions. By entering in building details and all relevant data, an easy-to-communicate measure of the property's energy attributes can also be produced, alongside a common measure of greenhouse gas emissions.

The Green Building Council of Australia will provide a clear and simple way of evaluating the energy use and efficiency components of buildings and promote its Green Star – Energy calculator for all of its rating tools.

The Green Building Council of Australia will work with the relevant members of the World Green Building Council to agree to a common international rating tool framework.

11. THE WAY FORWARD

11.1.6 GREEN STAR CARBON

11.1.7 TECHNOLOGY

11.1.8 FOCUS FROM GREEN STAR DESIGN TO AS BUILT

With the impending introduction of the Federal Government's Emissions Trading Scheme, the Carbon Pollution Reduction Scheme, the focus on carbon and reporting has increased and will continue to do so in the lead up the scheme's planned introduction in 2010.

The Green Building Council of Australia will continue to reward and encourage innovation and new technology within the Australian context. Many members of the GBCA are working on projects, designs, methods or products which incorporate new technology.

The Green Star rating system recognises these solutions with clarity and flexibility through its certification process. As well as operating as an Innovation Forum (see 11.2) the GBCA will recognise all advances which help to keep Australia at the forefront of the green building movement.

The focus on design ratings in Australia is a step in the right direction. The industry recognises that achieving Green Star - Office As Built or Green Star – Office Interiors which are post-practical completion ratings demonstrates that the project has delivered on the design promises. Post-completion projects must demonstrate what has been delivered, and hence the correct and realised documentation is essential, rather than design specifications alone.

The Green Building Council of Australia is developing a methodology that will allow building carbon output to be measured and allow asset owners and managers to monitor the greenhouse gas emissions.

The Green star – Carbon tool will have the dual benefit of allowing owners and tenants to meet greenhouse gas emission reporting obligations and also provide a cost effective easy to audit report.

The development of Green Star Carbon tool, complements the existing range of Green Star tools which benchmark the design and construction of buildings against environmental performance standards.

The Green Building Council of Australia will provide a clear and simple way of reporting the greenhouse gas emissions of buildings and promote its Green Star – Carbon tool.

Whilst new technology can be rewarded within Green Star credits and within its Innovation category, where appropriate, it is important that the GBCA helps to overcome the obstacles and barriers within the industry by raising awareness of new technologies and solutions.

GBCA must also rely on constant dialogue to ensure that the Green Star rating tools stay abreast of innovation, remain relevant and scientifically robust.

The Green Star tools will include new technology to ensure that online capabilities, learning capacity and communication also stay up-to-date.

Around the country, where advances are being made in technology from management techniques to solar harvesting, the GBCA will stimulate demand wherever possible so as to facilitate the transition of the market towards better practice. Although a smaller market than across other continents, the Australian property industry is a fast adopter and the GBCA will endeavour to support and empower these new technologies.

The Green Building Council of Australia will support the emergence of new technologies and solutions via effective communication and education strategies.

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The industry is cautious to enter into an agreement to achieve post-completion Green Star ratings as contractors have traditionally not had to provide documentation to prove what was designed or specified is actually what was built.

The GBCA is working to ensure that the documentation requested for a Green Star - Office As Built and Green Star – Office Interiors ratings is both rational and credible. Additional education will be provided to contractors and subcontractors on how to achieve Green Star – Office As Built and Green Star - Interior ratings. The educational material will note how their involvement is an essential part of the process. To encourage greater participation and facilitate education of contractors and subcontractors governments should attach incentives to achieve a Green Star - Office As Built rating rather than Green Star – Office Design rating, where they are considering implementing such encouragement.

More education must be delivered to contractors, subcontractors and the building trades on how to achieve Green Star ratings. Government incentives could facilitate education and uptake by the builders.

11.1.9 PRODUCTS AND MATERIALS The Green Building Council of Australia is currently participating in stakeholder engagement initiatives for two life cycle assessment projects. These first is the Royal Melbourne Institute of Technology’s ‘Building Assemblies and Materials Scorecard’ (BAMS) project which aims to provide a methodology of identifying environmentally preferable approaches to materials use over the life of the building. The second is the building and construction products component of the ‘Australian National Life Cycle Inventory Database Initiative’ (AusLCI). The AusLCI project will bring together industry, government and academia stakeholders to help develop a methodology which will define and develop consistent guidelines, principles and methodologies for the collection of data, along with protocols for processes for different sectors.

The development of full life cycle assessment tools will be watched closely by the GBCA as they may have the potential for adaptation into the Green Star tools (Materials Category).

The Green Building Council of Australia will continue to engage with and facilitate research into improvements to the Green Star tools.

11.2 EDUCATION, RESEARCH, INNOVATION AND SKILLS A slow pace of public and professional education of green buildings and their benefits is still hampering the greening of commercial buildings in Australia. More focus should also be placed on research into the benefits of green building as well as how to better support innovation in the industry.

11.2.1 PUBLIC EDUCATION The OECD report 71 noted that demand for green buildings increased where there was evidence of an educational program which identified the benefits.

A green building educational program for all Australians would increase the demand for green buildings and accelerate the greening of the existing stock with particular emphasis on publicly owned buildings such as schools, universities and hospitals.

Individuals should also be educated on how to support greener buildings in their community and ensure future developments have a stronger environmental focus.

A national public education program on the benefits of green building should be vigorously pursued. Governments have the opportunity to lead in green building awareness campaigns which are not only nationally beneficial but would also facilitate international recognition of Australia’s commitment to green its buildings.

11. THE WAY FORWARD

11.2.2 PROFESSIONAL EDUCATION

11.2.3 RESEARCH

The construction sector in Australia continues to spend the least amount of any sector on professional development and life long learning72.

More professional education is required to improve industry knowledge and lack of skills in green building practices and technology.

More research and case studies are required to continue to highlight the challenges and opportunities of green buildings in particular financial analysis and productivity gains.

Industry education is a key activity of the Green Building Council of Australia and the 9504 individuals (as at 30 June 2008) who participated in the Green Building Council’s Green Star Accredited Professional training course makes it clear that the industry is thirsty for green building knowledge.

The GBCA also compiles educational resources on to its website and enewsletter. The demand for these resources has grown substantially since 2006 with the website visited by over 1000 individuals daily (based on sessions not hits) and registrations for the enewsletter at over 11,000 recipients.

In 2007, the GBCA launched its Green Cities conference and exhibition showcasing the latest green building thinking and innovation. In its first year the conference attracted 280 individuals which grew to 900 in 2007 and 1300 in 2008, which demonstrates the growth in the willingness of the industry to learn and educate themselves on the latest green building knowledge and skills.

The Green Building Council of Australia to introduce a continuing professional development program to enhance the Green Star Accredited Professional scheme.

Relevant government agencies and departments should provide support to extend existing green building educational programs for industry professionals particularly for small and micro organisations.

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In 2006 the Dollars and Sense Report highlighted key research provided in the Californian73, Davis Langdon74 and Canadian75 reports. These have played an important role in driving the shift to building green in the United States.

In 2008 the Green Building Council of Australia commissioned Davis Langdon (Australia) to compile a similar report, however the data was very difficult to extract from the industry who were either unwilling to share or disclose the costs or simply did not do a cost comparison at the time of construction to extract the green building initiatives. A small data sample has been put together for this report which can be found in Diagram C. This analysis by Davis Langdon clearly shows that the market perceptions that building green results in large cost increases are generally false. In the early stages of the move to green there were cost penalties associated with green building construction or refurbishment, due to lack of understanding of the performance criteria, products and design principles as well as professional knowledge. But with the rapid increase in knowledge, skills and availability of materials, costs fell.

By 2008 the Australian industry is proving that 5 Star Green Star office buildings incur no significant cost increase. The skills, technology, materials and construction methods now exist to build any class of green building at minimal or no material cost penalty.

While international studies have provided impressive statistics on the linkage between productivity, health and well being and improved indoor environmental quality, more Australian based research is required to overcome the reservations that are currently prevalent within the Australian property industry when it comes to the link between green building and productivity.

As a key potential benefit of green buildings, research into productivity gains including the measurement of employee productivity, the monitoring of building use would contribute significantly to both the business case and improve the way buildings are design and function.

Governments should direct funding to facilitate: •

•

•

the development of green building case studies which quantify the economic, social and environmental benefits in a way that the financial sector can understand and report on them; post-occupancy research into productivity and other benefits from green buildings; and R&D funding to develop the technology that will enable low carbon, water and waste buildings.

The Federal Government should also address the barrier to R&D funding for the property sector.

The industry applies R&D to a specific building project and it is therefore difficult to demonstrate continual investment in R&D year on year due to the nature of project activity. This barrier should be removed.

11.2.4 INNOVATION The Green Building Council of Australia has identified the need for an Innovation Forum within the industry, as a means of recognising, rewarding and encouraging great innovation around Australia. By providing such an Innovation Forum in the following three sections, accessible through the Green Building Council of Australia website, it will be possible to both provide organisations with the necessary catalysts to overcome different barriers and to celebrate innovative strategies: •

Innovation within Green Star certified projects around Australia, providing details of how certified projects have achieved Innovation points and the environmental impacts of each of the measures outlined, so as to champion the projects which have lead the way and broadcast the message about green building methods;

• Innovation being developed around Australia by member organisations, representing innovative strategies, designs, technologies, products and methods which might help in green buildings and Green Star projects; these will outline the environmental benefit on a credit-by-credit basis and provide a link to the organisation's website rather than directly market products to users, and will be decided upon by the Innovation Committee; •

Innovation in green buildings around the world, from projects in design phase to those fully completed, to highlight the strategies being used elsewhere in sustainable practice; in this way the Green Building Council can inspire developments in Australia and push for a greater recognition and understanding of how global knowledge can be adapted to the local context.

11.2.5 SKILLS SHORTAGE By acting as an innovation hub, and celebrating the successes of Green Star certified projects, member organisations, and sustainable developments around the world, the Green Building Council of Australia will provide leadership in educating the market, identifying opportunities, and connecting industry stakeholders.

According to the Dusseldorp Skills Forum and the Australian Conservation Foundation report titled “Growing the Green Collar Economy” a significant transformation of the nation’s skill base must be achieved if Australia is to reduce greenhouse gas emissions and improve environmental outcomes without endangering overall employment growth76.

There currently exists a skills shortage in the property and construction industry, in particular individuals who understand the level of commitment required and new thinking to achieve Green Star rated buildings. This is a particular issue in emerging green building markets such as Queensland and Western Australia.

This lack of knowledge and expertise drives up prices (particularly consulting fees) and creates a greater level of risk for first timers which may have an impact on their decisions moving forward.

It has also been recognised that the property and construction industry is one of the largest sectors to provide economic growth in this area but support is required to ensure these opportunities are realised.

The Green Building Council of Australia supports the report recommendations including: •

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The independent statutory body Skills Australia should lead a national program to identify and stimulate the green skills and knowledge.

Federal Government’s Productivity Places program should be allocated to the development of green skills in priority areas of the built environment.

All large and medium enterprises should create ‘green teams’.

Australia’s universities, TAFE and training sectors should create ‘green collar partnerships’.

The Green Building Council to introduce a continuing professional development program to enhance the Green Star Accredited Professional scheme.

The Green Building Council to introduce a continuing professional development program to enhance the Green Star Accredited Professional scheme.

Relevant government agencies and departments should provide support

Relevant government agencies and departments should provide support

11. THE WAY FORWARD

11.3 INDUSTRY LEADERSHIP 11.3.1 CARBON STRATEGY

11.3.2 IMPROVED VALUATION TECHNIQUES

The Green Building Council is currently developing a Carbon Strategy, the centrepiece of which will be our tool, Green Star - Carbon.

The carbon tool will integrate with the existing suite of Green Star tools and calculators to ensure commonality within the Green Star family of tools.

In countries around the world, valuers are often asked to value in accordance with cost-based accounting standards. But green building benefits such as lower operating costs, reduced lifecycle and higher occupancy may not be properly reflected in the assessed capital value.

The Carbon Strategy will comprise the Green Star - Carbon tool integrated with our Existing Buildings Strategy which will enable measurement and reporting of greenhouse gas emissions for buildings.

Cost approaches can skew how a value is placed upon sustainable practices.

Such approaches account for the often higher capital investment of green buildings, but in effect ignore the resulting benefits to occupiers and market value. This can slant accounts against green buildings, deter green investment, and prove unhelpful to companies for whom sustainability is central to their corporate ethic.

The strategy is designed to meet market demand and provide the industry with a Green Star tool which measures a building's performance and allows owners and tenants to confirm their property is performing to design specifications.

The Green Building Council of Australia will launch its Carbon Strategy and contribute to ongoing carbon abatement research.

Valuation approaches were investigated in the Green Building Council of Australiaâ&#x20AC;&#x2122;s Valuing Green Report which was released in February 2008. According to this report there still exists a knowledge gap which is causing a widespread misunderstanding of green buildings. The result is a failure on the part of many valuers and investors to properly evaluate the benefits and therefore the risk and return characteristics of green buildings.

The Valuing Green Report study found that the Discounted Cash Flow (DCF) valuation method is considered to be the most suitable because it provides the valuer with the facility to factor in the specific variables.

Until the financial sector understands the benefits of being green to the net value of an asset, financing calculations will not

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incorporate green into their decisions.

It can thus be appreciated that a lack of understanding of what constitutes value in a green building is still a significant barrier to greater adoption by the investment community.

The benefits, such as energy and water savings and reduced let-up and vacancy periods should be looked at through a whole of life income and life cycle cost methodology, not just evaluated in terms of upfront or initial capital costs.

From a life cycle savings standpoint, savings from investment in green design, material procurement and construction dramatically exceed any additional upfront costs.

Because valuation is based on comparison with historic evidence from transactions, the effect of new building features and technology will always be difficult to determine. But, an understanding of the following factors will assist in a more accurate assessment of value for green buildings: •

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Life cycle costing and their effect on value; The effect of lower building and occupancy risk on capitalisation rates, discount rates and terminal yields; Rentals, and growth rates; Lower operating costs lower risk of cost increases and the net effect on the asset value; The impact upon letting up, vacancy rates, tenant retention and lease incentives; The financial ‘soft’ gains such as increased productivity, improved morale and lower absenteeism flowing to the tenant and then to rental value; and The financial impact of improved corporate image and marketing benefits.

11.3.3 INDUSTRY KNOWLEDGE SHARING There is also limited sharing of knowledge and experience about green building practices in Australia. Many in the industry are either reluctant to share their knowledge or no longer have the resources to collate the lessons learnt and benefits. The majority of development projects are completed when the individuals that could contribute valuable information on the costs and benefits have moved onto a new project. As such the opportunity to capture knowledge and share it is a challenge for the property sector.

Green Building Council of Australia will actively share knowledge and seek to partner with government to facilitate in-depth research into the costs, productivity and innovations achieved by green buildings.

The Green Building Council of Australia's Valuing Green Report calls for the Australian Property Institute and the Royal Institution of Chartered Surveyors to ensure green initiatives are fully considered by valuers, and continue their education programs for members.

11. THE WAY FORWARD

11.3.4 LABELLING OF PRODUCTS AND APPLIANCES The general consensus is that environmental labelling schemes would improve building performance indirectly through changing the behaviour of consumers. This in turn is changing the behaviours of manufacturers and product supply chains.

A four year OECD research project suggests that environmental labelling schemes directly encourage manufacturers to produce materials that are better for health77. The study noted that a ‘simple seal of approval is easy for consumers to understand’, however whilst ‘labelling schemes may help those who have incentives to choose environmentally friendly products to make the right choice, they cannot create the incentives themselves.’

The certification bodies responsible for developing best practice health and environmental product standards carry with them a responsibility to advocate for and market the adoption of best practice initiatives. The necessity to perpetuate incentives for best practice and to create awareness of these practices for consumers to choose extends beyond their core business tasks of standards development and product certification.

Green Star rating tools have created a framework in which building owners are rewarded for choosing environmental best practice products and materials for their projects.

These product-related incentives have, to date, revolved around exclusive recognition of one international and two Australian-based product labelling organisations within various Green Star credits. These organisations include the Forest Stewardship Council (FSC) for third party certification of sustainable timber products; Good

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11.3.5 DISCLOSURE AND REPORTING Environmental Choice Australia (GECA) for loose furniture and fitout items such as, walls, floors and joinery; and the Water Efficiency Labelling Scheme (WELS) for taps, toilets and showers.

The Green Building Council of Australia has initiated a third party product certification project which aims to expand the number of ecolabelling schemes recognised in Green Star rating tools.

This will be done through collaborative development of an assessment framework based on environmental best practice criteria for product ecolabelling standards. This initiative will enable recognition of internationally-recognised environmental labelling schemes and offer both domestic and internationallymanufactured products and materials broader options for third party environmental certification.

The Green Building Council of Australia will establish a framework through which appropriate levels of recognition may be given to a wider range of Australian and international environmental labels to be referred to within Green Star rating tools.

The Federal Government will soon release details of their proposed mandatory disclosure regime which will require the performance of buildings to be disclosed, most likely at the time of sale or lease.

This will considerably broaden the base of performance reporting in Australia.

The industry has led the way on disclosure and reporting for some years now and with the proliferation of new reporting regimes and obligations on industry, it is vital that governments ensure that industry is not burdened with overlapping or contradictory reporting requirements. Such reporting obligations can be counterproductive and slow down the uptake of the kind of behaviour that mandatory disclosure and other reporting is designed to encourage.

All levels of Australian government should adopt a modern approach to Regulatory Impact Statements that more accurately tests the costs and benefits of proposed legislation, particularly in the context of current reporting requirements that exist at a local, state and federal level.

The recommendations of Regulatory Impact Statements should ensure the environmental benefits are realised.

11.3.6 LOW CARBON GREEN BUILDINGS The concept of 'Carbon Neutral' and how this relates to sustainability in the built environment is an issue that requires exploration and clarity.

Green buildings are designed, constructed and operated in ways that minimise their impact on the environment and on the building occupants, but they are not necessarily carbon neutral.

Conceptually, it is perceived that a carbon neutral building is one that has no net negative impact on the environment over its lifetime. It will have a zero carbon footprint.

In practice, the term carbon neutral is generally restricted to operational energy.

The UK Green Building Council considers a carbon neutral building as one with zero average actual carbon emissions over the year, taking account of typical behaviour. Embodied energy, transport, industrial and manufacturing emissions are excluded.

12 - 14 The Circuit, One Airport Drive Brisbane Airport 4 Star Green Star - Office Design v 2

In Australia, the building industry has started the journey towards the ultimate goal of being low carbon or what may become known as â&#x20AC;&#x153;Carbon Liteâ&#x20AC;?.

The Green Building Council of Australia's Green Star rating system has set down practical and achievable performance standards which provide a framework for progress.

The Green Building Council of Australia in partnership with members of the World Green Building Council will provide clarity and direction on low carbon built environments including definitions and policy requirements to achieve low carbon solutions.

11. THE WAY FORWARD

11.4 GOVERNMENT LEADERSHIP Federal Government leadership and partnership with industry would support the industryâ&#x20AC;&#x2122;s uptake of green building practices.

State and Local Government support is also vital as many of the imposts on property rest with these administrations. Targeted tax relief and other support at the State and Territory level will go a long way to encouraging and rewarding best practice when it comes to building design, construction and operation.

11.4.1 NATIONAL STANDARDS

11.4.2 LEADERSHIP BY EXAMPLE

The 5 Star residential standards introduced into the Building Code of Australia (BCA) in 2005 and the minimum energy efficiency standards for non domestic buildings included as Section J in May 2007 were a welcome development but are still low by international standards.

The performance standards need to be progressively strengthened in line with overseas, in particular, European levels.

As well as setting co-ordinated and consistent standards (6.1.2), all levels of government (federal, state and local) have a major influence on the demand for green buildings through the vast amount of space they occupy and own.

Also, with the IPCC, McKinsey and Vattenfall reports all confirming that building emissions can be reduced with positive net benefits, and owners of existing buildings should be required to commit to building specific programmes for buildings to be brought into compliance with the BCA. The precedent has long existed for fire safety compliance. These and other reports also highlight the importance and effectiveness of appropriate regulation in addressing climate change through the built environment.

In the face of a continuing proliferation of state and local government standards, the BCA should be bolstered to provide a co-ordinated national standard.

The Green Building Council of Australia is a supporter of the National Building Code of Australia being expanded in line with the higher minimum environmental standards embodied in the best practice metrics within Green Star.

A nationally consistent building code is needed to respond to the mitigation and adaptation and health benefits that come from

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Government standards have always been a catalyst for change and governments should lead the industry and the wider community by setting aggressive green building standards for their own building, procurement and fitouts.

They can also show leadership by including whole of life cycle cost and income accounting in all government tender contracts, and by using the costbenefit approach to make key contract decisions.

It is essential that all government departments move beyond a narrow focus on energy targets for their buildings and/or tenancies and include water, materials, indoor environment quality and transport, as well as other holistic green building strategies that reduce the environmental impact of development.

All governments should follow the leadership of the Victorian, South Australian and Queensland Governments in committing to a Green Star rating in green building standards for all government buildings, procurement and tenancy fitouts.

Whole of life cycle cost-benefit accounting should be included in all government tender contracts with whole of life costing used to make key contract decisions.

11.4.4 FINANCIAL INCENTIVES

11.4.3 EMISSIONS TRADING SCHEME AND CARBON POLLUTION REDUCTION SCHEME (CPRS) Carbon Trading will be a fact of life from 2010 when the Federal Government's Carbon Pollution Reduction Scheme (CPRS) comes into effect. The CPRS will be the Federal Government's principle policy initiative in reducing greenhouse gas emissions by putting a price on the carbon generated by industry.

There is a wealth of evidence that demonstrates the very significant abatement potential within the built environment. The 4th IPCC report indicates that buildings represent the single largest, cost-effective opportunity for abatement, greater than the industry, transport and energy sectors combined.

Even though the built environment has not been included as a covered sector in the CPRS, there is nevertheless tremendous opportunity for the Federal Government to introduce complementary measures that will encourage the further uptake of green building practices to ensure the significant greenhouse gas emission abatement potential that exists within the built environment does not go untapped.

While the uptake of green building practice has been relatively strong for new construction in recent years, there is still a large percentage of building stock, both new and existing, that is not green.

One of the challenges facing the industry and government is how to improve the environmental performance of that section of the market that has not adopted green practice.

Australia's efforts to reduce its greenhouse gas emissions for example, will be significantly boosted if a range of measures are introduced that improves environmental efficiency in as large a proportion of buildings as possible.

These concepts are detailed below.

Accelerated or 'Green' Depreciation Accelerated or 'Green' Depreciation represents one of the most valuable tools available to Government to incentivise green building practice. Accelerated depreciation provides a significant financial incentive to the market on a widespread basis and therefore will be very effective in increasing the uptake of green building practice.

Previous Government's have used accelerated depreciation as a mechanism for industry development and so a precedent exists and the policy should be once again adopted as not only a vehicle for industry development but also as a valuable addition to the range of initiatives introduced to address climate change and Australia's greenhouse gas emissions.

Division 43 Division 43 of the Income Tax Assessment Act 1997, sets out deductions for capital works, enabling property investors to offset the hard construction costs of their investment property against their assessable income.

Hard construction costs may include items such as concrete, brickwork and common property items that are not plant and equipment, and even excavation.

11. THE WAY FORWARD

The Division 43 allowance is a non-cash deduction which means the money does not have to be spent up front to claim it. It is not a depreciation allowance as such, but it is a concession on the initial construction cost. It remains with the use of the property until exhausted.

This concession has been used in the past to encourage investment in particular property sectors (e.g. for Commercial Property the rate is 2.5% where as for Hotels it is 4.0%).

A change in Division 43 rates would promote a green building focus. An increase would reward the reduction of environmental impact by concentrating on non-plant items of buildings. Division 43 of the Income Tax Assessment Act should be amended to offer a green building incentive, to encourage the development and application of green building technology.

Research & Development Concessions

To encourage Research and Development (R&D) activities in Australia, the government has provided a number of tax concessions to companies that incur expenditure on such activities.

Companies that incur expenditure on R&D may claim a number of tax concessions subject to qualification: • Expenditure incurred in relation to the acquisition of core technology.

• Accelerated depreciation.

• Accelerated write off of up to 125% for expenditure incurred directly on R&D activities.

• Incremental write off of up to 175% is available where companies increase their level of R&D expenditure.

• Refundable Tax Offset.

• Small companies can elect to claim a refundable tax offset instead of an R&D deduction. This measure benefits small companies that are tax losses.

The consensus is that the current R&D concessions do not provide a significant effective incentive for Australian companies to invest in green building R&D activities.

R&D tax concessions could be increased from 125% to 250% to provide additional incentive for innovation in green building practices.

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State taxes and council concessions Concessions to council rates and state taxes, such as stamp duty and land tax, could be made to encourage building owners to build/renovate or purchase property that meet certain green building requirements.

For example, a rebate on council rates could be provided for qualifying expenditure based on a percentage of expenditure incurred.

The Green Building Council of Australia will engage with government to address complementary measures as a way of unlocking the greenhouse gas abatement and economic and health benefits. The Green Building Council of Australia will work with government to undertake the necessary research to build the case for the built environment to be included in the next generation of the complementary measures.

11.4.5 COST SHARING WITH UTILITIES Traditionally, utilities which will ultimately benefit from green building initiatives often require developers to pay for all infrastructure levies, penalising not rewarding green buildings.

Utility providers will ultimately benefit greatly from onsite energy generation and water recycling as these initiatives reduce the burden on the Utilities plant and avoid costly upgrades and expansions. Developers who seek to install these on site green facilities are being advised that they will need to pay the full cost of public infrastructure levies /headworks charges and the like even though their initiatives are not placing a burden on public infrastructure.

State and local government support must be enlisted to approach utility companies to provide incentives and rewards to use less energy and water. Utilities need to recognise the benefit of on site facilities and not only waive the levies/ headworks charges and the like but provide fiscal incentives to the installations. The Green Building Council of Australia will engage with governments to discuss policy instruments that would enable the development of distributed clean energy generation solutions in property developments.

Existing bureaucratic and administrative structures do not always lend themselves to the type of rapid, whole-ofgovernment effort that is required to meet these targets.

11.4.6 PLANNING CONCESSIONS Planning concessions are powerful tools for encouraging achievement of a standard. Planning concessions such as density bonuses, green offset and transferable floor space schemes – similar to the City of Sydney’s heritage floor space scheme – could be introduced using Green Star to assess and benchmark performance (e.g. water and energy efficiency). There is also evidence of the success of planning concessions overseas.

Local government should actively consider the introduction of planning concessions for Green Star buildings such as bonus density and fast tracked development assessment approval.

11.4.7 NATIONAL TARGETS AND DELIVERY MODELS

Stand-alone agencies, established with the specific purpose of meeting set targets, that report directly to the Executive should be considered as appropriate delivery models which provide the authority and Ministerial support that is required to focus and harness the collective effort of government. The London Climate Change Agency is one such model where the body was established under a clear and simple charter - to meet London's target for renewable energy and greenhouse gas output reductions.

This body is funded appropriately and reports directly to the Mayor. 79

In August 2005 the House of Representatives Environment Committee released the Sustainable Cities Report. According to committee Chair, Dr Mal Washer: “The message of the report is that sustainability is the responsibility of every Australian, but mechanisms need to be put in place for the Commonwealth, together with the States and Territories, to promote a ‘blueprint’ for our cities of the future.” 78

There are a range of State and Commonwealth agencies which have been established in the past to deliver a specific task where it has been recognised that standard departmental structures are inappropriate to the task. Climate Change and the meeting of domestic targets is one such area that needs to be considered in similar terms.

To achieve this, a key recommendation of the Sustainable Cities Report was for the establishment of an Australian Sustainability Charter, to be agreed by a Council of Australian Governments (COAG), to set key national objectives and targets for the built environment.

The setting of national targets would provide important leadership for the industry.

Australian Governments should review their existing structures and policy delivery frameworks to ensure they are appropriate delivery models for meeting established climate change targets.

In addition to developing a priority plan for climate change mitigation and adaptation of buildings and infrastructure.

In the context of emissions trading and the general need for Australia and the world to reduce its greenhouse gas emissions, targets for carbon reduction have become a feature of national, state and in some instances, local government policy. There are now targets at all levels of government in a range of areas such as reduction in carbon output and the percentage of total energy output that is sourced from renewable energy.

These targets are vital for providing a basis for action and a measure of success, however, the targets in and of themselves are not a policy instrument. It is even more vital that governments implement realistic structures, policies and programs that will actually deliver on the targets.

11. THE WAY FORWARD

11.4.8 REDUCING GREEN TAPE, ACHIEVING CONSISTENT PLANNING AND ELIMINATING OUTDATED REGULATION Green Tape is an emerging issue in the property and construction industry as governments attempt to respond to community pressure to take action on climate change.

This is leading to a proliferation of green initiatives through the creation and implementation of codes, regulations, planning and reporting requirements which can be uncoordinated, contradictory and burdensome on industry (refer to section 6.5 for more information).

CITY OF SYDNEY HERITAGE FLOOR SPACE SCHEME

CASE STUDY 13

Governments must ensure a balance between robust legislation whilst not diluting the value of these initiatives through unnecessary obligations placed on industry.

As the number of various local, state and federal schemes and initiatives increase, the willingness of industry to participate and work towards the success of these government sponsored schemes will dissipate if it involves added or overlapping regulatory burden or further reporting requirements.

For some in the industry, the burden is already too heavy and clearly this will increase as more schemes and initiatives are introduced, such as the Carbon Pollution Reduction Scheme and the Government's Mandatory Reporting legislation.

The Heritage Floor Space (HFS) Scheme provides an incentive for the conservation and ongoing maintenance of Schedule 1 heritage items within Central Sydney.

Once conservation works to the heritage item have been completed, the owner of the heritage item may be awarded HFS. This HFS may then be allocated (sold) to a site which requires the purchase of HFS as part of an approved development application.

The monies raised help conserve the heritage item.

How HFS Works There are two components in the HFS scheme: Award of HFS & Allocation of HFS: 1. Award The owner of a Schedule 1 heritage item may elect to apply for an award of HFS (if the relevant criteria is met) or alternatively the heritage item can be part of a development which relates to the land occupied by the heritage item.

2. Allocation Developments can only achieve a certain development potential if HFS is transferred (allocated) to the development from the bank of awarded HFS.

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Government should: • Undertake an audit of current planning regulation and adopt the development assessment forum (DAF) leading practice model for improving the quality and speed of development assessment processes; Contribute to the creation of a policy framework for local government that provides for consistent base planning policies and regulations but also allows for leadership amongst individual jurisdictions;and • Review existing and proposed policies (through Regulatory Impact Statements) to ensure they: - provide a net benefit to the environment; - do not unnecessarily add to the regulatory or reporting burden; and - Integrate with other existing schemes, policies and programs.

Award Of Heritage Floor Space (HFS) Heritage Floor Space may only be awarded to a heritage item if it is: • listed as a Schedule 1 heritage item pursuant to Central Sydney Heritage Local Environmental Plan 2000; and • is located within the City Centre or City Edge zones of the Central Sydney Local Environmental Plan 1996.

Amount Of HFS To Be Awarded The formula used to calculate the amount of HFS to be awarded is (for rateable buildings in private ownership): • •

• •

•

HFSh= 0.5As x FSRh HFSh = the maximum amount of heritage floor space which may be awarded (in square metres) As = site area FSRh = the FSR for the site of the heritage item The formula varies for non-rateable buildings, and is HFSh= 0.5 x FSAh

Note: The Council may reduce the amount of HFS to be awarded if there are elements of the building, existing or proposed, which detract from the significance of the building, or by an amount equal to any additional floorspace.

11.5 COLLABORATIVE PARTNERSHIPS

11.5.1 BUILT ENVIRONMENT MEETS PARLIAMENT

11.5.2 GREEN STAR BUSINESS PARTNERSHIP

Built Environment Meets Parliament (BEMP) is an annual conversation between parliamentarians and industry leaders that showcases the relationship between Australian communities and their built environment.

The Green Star Business Partnership is an initiative by the Green Building Council of Australia to promote industry and government leadership.

Organisations can become Green Star Business Partners by committing to supporting sustainability within the built environment by:

BEMP offers an opportunity to explore the economic, social, environmental and governance issues that help shape national prosperity.

BEMP is hosted by the Planning Institute of Australia, Australian Institute of Architects, Green Building Council of Australia, Property Council of Australia and the Association of Consulting Engineers Australia.

•

Ensuring all newly constructed buildings in its property portfolio meet a Green Star rating, using Green Star – Office Design and Office As Built rating tools it owns, and Green Star – Office Interiors for buildings it occupies.

•

Raising the performance of new and existing established buildings in its portfolio that undergo a major refurbishment.

•

Transparently reporting the performance of its office property portfolio – owned or occupied – against the Green Star criteria.

There are currently ten signatories of this initiative (refer to page 30).

The main goals of BEMP are to: •

•

•

Discuss changing community needs, industry trends and issues critical to meeting the aspirations of Australians.

Discuss public policy ideas that can help build community wealth.

Provide a showcase for leading industry and professional practices operating in the built environment.

Government should continue to participate in the annual Built Environment Meets Parliament forum to identify relevant goals and achieve mutually agreed objectives

Green Building Council of Australia will expand its Green Star Business Partnership and work closely with signatory organisations to achieve Green Star certified projects.

11. THE WAY FORWARD

11.5.4 ASIA PACIFIC PARTNERSHIP 11.5.3 MEMBERSHIP The Green Building Council of Australia is a member based organisation made up of a diverse cross section of organisations from all sectors of the property and construction industry including developers, owners, contractors, manufacturers, agents, architects, engineers, project managers, sub-contractors, government (all levels), tenants, NGOâ&#x20AC;&#x2122;s, professional associations, universities, facility managers, financial institutions and utilities.

According to the 2006 Green Building Market Report members of the GBCA are more educated about sustainability in the built environment than those who are not. They are also more willing to implement green building initiatives and assist the GBCA in its mission to transitioning the built environment towards the adoption of sustainable building practices.

Green Building Council of Australia will continue to work closely with its members on its Green Star rating tools and in delivering its educational programs to assist the industryâ&#x20AC;&#x2122;s transition to sustainable building practices.

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In early 2008 the Green Building Council of Australia was awarded a grant from the Commonwealth Department of Innovation, Industry, Science and Research (DIISR) under the Asia Pacific Partnership (APP) to support collaborations on high performance buildings and developments.

APP aims to accelerate the reduction of greenhouse gas emissions across the Asia Pacific and comprises Governments from Australia, India, China, the United States, Japan, Korea and Canada.

The GBCA will continue to undertake a series of collaborative workshops in India and China under the banner of Green Cities Asia Pacific. It will also deliver several workshops, trade shows and continuing professional development programs including programs in the World Sustainable Building Conference, SB08 in Melbourne during September 2008.

The Australian Government should continue to support the Asia Pacific Partnership and examine opportunities to expand the scope and objectives of the program.

The Green Building Council remains committed to the objectives of the partnership.

11.5.5 WORLD GREEN BUILDING COUNCIL The World Green Building Council (WorldGBC) was founded in 1999 to provide a federated ‘union’ of national Green Building Councils whose common goal is the sustainable transformation of the global property industry.

The WorldGBC supports the creation of culturally, climatically, and economically-appropriate rating tools, the design and construction of demonstration green development projects, and other collaborative green building efforts, in both developed and developing countries.

The founding countries included the United States, Australia, Canada, Spain, Japan, India and Mexico.

Within this framework, member councils are working to share knowledge, resources, and common principles, and to support start-up councils. For more information about members of the WorldGBC refer to Chapter 7.

11.5.6 AUSTRALIAN SUSTAINABLE BUILT ENVIRONMENT COUNCIL The Green Building Council of Australia is one of the founding members of The Australian Sustainable Built Environment Council (ASBEC), which is the peak body of key organisations committed to a sustainable built environment in Australia.

ASBEC members consists of industry and professional associations, nongovernment organisations and government observers who are involved in the planning, design, delivery and operation of the built environment, and are concerned with the social and environmental impacts of this sector.

ASBEC’s objective is to ensure built environment sustainability issues are central on government agendas working in collaboration with the three levels of government to produce a prioritised action agenda for the future.81 Green Building Council of Australia will continue to be involved with industry forums such as ASBEC.

The Green Building Council of Australia plays an active role as a member of the WorldGBC. GBCA Founding Director, Mr Ché Wall is the immediate past chair of the WorldGBC. Mr Tony Arnel, Victorian Building Commissioner and chair of the GBCA is Australia’s WorldGBC representative, was elected chair of the WorldGBC in September 2008.

The GBCA is currently working with the WorldGBC to establish an international framework for rating tools. It has also worked closely with the WorldGBC to establish neighbouring green building councils in New Zealand and South Africa.

Green Building Council of Australia will continue to support the valuable work of the World Green Building Council - in particular to support the formation of other country councils within regions in close proximity to Australia.

11. THE WAY FORWARD

CASE STUDY 14

QUAD 4

Description

Business case

Quad 4 is a new A Grade commercial office building at Sydney Olympic Park.

The project is the last building in the Quad Campus development which comprises a total of four office buildings that have been master planned around the garden circle café.

Capital Value - $34m (excluding land as at June 08).

Commercial Returns - initial yield in excess of 8%; development IRR in excess of 20%; development profit in excess of 10%.

Rental & Outgoings - Quad 4, a speculative development, was 100% leased within six months of completion. The net rental achieved enabled GPT to meet its required commercial requirements, refer Commercial Returns. The outgoings at Quad 4 provide a superior indoor air environment to that of a lesser rated building. The superior indoor air environment provides tenants with the benefits of improved productivity and less sick days.

The superior technology in the building and solar design also provides the tenant with greater control of energy usage, thereby reducing the outgoings, particularly for after hours air conditioning.

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Green Premium - GPT’s commitment to achieve a 5 Star Green Star design was made when Quad 4 was in the early stages of development.

This was at a time when industry knowledge, experience and material alternatives to achieve Green Star was minimal and more often than not non-existent.

Achieving the 5 Star Green Star – Office Design rating did increase the capital cost of the development.

The additional cost, however, was factored into the development feasibility and GPT were still able to achieve the required commercial returns. It is expected that on the next development (of similar scale) GPT would not anticipate that there would be a green premium.

Address:

Owner/Developer: ESD, Electrical & Hydraulic Engineer: Architect: Structural Engineer: Civil Engineer: Main Contractor & QS: Tenants:

Building Type:

8 Parkview Drive, Sydney Olympic Park NSW 2127 The GPT Group Lend Lease Design Cox Richardson ARUP Hyder Bovis Lend Lease Samsung Electronics Australia, Triple M Group of Companies,Walltech Buiding Systems, Kids Company (Childcare Centre) New Commercial Office

Green Star initiatives

Management

• Green Star Accredited Professional engaged from the commencement of the design phase.

• Extensive commissioning in accordance with ASHRAE and CIBSE Standards.

• Quarterly commissioning tuning to be carried out after handover.

• Appointment of an Independent Commissioning Agent to review, orchestrate and manage commissioning process.

• Provision of a Building Users’ Guide to all building staff.

• Comprehensive Environmental Management Plan implemented by Bovis Lend Lease.

• Waste Management Plan to divert of 80% of construction waste from landfill.

Indoor Environment Quality

• Office space cooled with passive chilled beams to improve IEQ. • Outside air rates 50% above Australian Standard requirements.

• Swirl diffusers used to ensure effective delivery of air into the office space – CFD modelling carried out to demonstrate.

• Once through 100% fresh air system – no recirculation of air.

• Glare control through external shading devices.

• High frequency ballasts to increase workplace amenity.

• Approximately 70% of NLA within 8m of vision glazing.

• High thermal comfort performance.

•

•

•

• •

Building fabric and services designed to maintain acoustic comfort.

Use of low off gassing materials throughout building including paint, carpet, adhesives and sealants.

Use of low-emission formaldehyde products.

Active humidity control.

Tenant exhaust riser sized to effectively remove indoor pollutants.

Energy

•

•

• •

Passive chilled beams, premium efficiency plant, and high performance façade and building fabric design to achieve predicted ABGR performance (measured in terms of CO2 emissions) of 5 Stars plus 20%.

All major base building electricity uses and tenant power sub-metered to allow for effective monitoring and management of electricity consumption.

Efficient lighting design.

Lighting zones no greater than 100m2.

Transport

•

•

Cyclist facilities provided for 5% of building staff as well as visitors to the building.

Good public transport with train and bus services available to the site with links to nearby major transport hubs.

Water

•

•

•

•

•

All WCs to be flushed with recycled water provided by the Water Reclamation and Management Scheme (WRAMS).

Water meters for all major water uses and interfaced with the BMS for monitoring and management of water consumption and to provide a leak detection system.

Efficient landscape irrigation system using only recycled water supplied by the WRAMS. Cooling towers designed to achieve greater than 6 cycles of concentration and use only recycled water supplied by the WRAMS. All fire system test water to be reused.

Land Use and Ecology

•

•

Development is not on land with a high ecological value.

No threatened flora or fauna located on the development site.

Emissions

•

•

•

•

•

100% of refrigerants to have an ODP of zero.

Refrigerant leak detection and recovery systems to minimise negative impact from refrigerant leaks.

All stormwater collected, treated and filtered through the WRAMS. All greywater and blackwater collected, treated and made available back to the site through the WRAMS. External lighting designed to minimise light pollution.

• High efficiency fixtures and fittings including waterless urinals.

Case study. 14

12. ABOUT THE CONTRIBUTORS

132 - 133

The major contributor of this report is Leslie Jones who was a founding director of Urbis (formerly A T Cocks and Partners), one of Australia's leading independent property consultancies which specialises in urban planning and design, property economics and valuation, social research and planning. He left Urbis in 2007, after 30 years at the firm.

Leslieâ&#x20AC;&#x2122;s interest and concern for environmental matters stems from his earlier career in farming. Over the past 10 years, he has been seeking to understand the likely impact of climate change on the built environment and in particular, market demand, supply and the investment performance of property.

Over the past seven years Leslie has been a guest speaker and participant in green building seminars sponsored by the City of Melbourne, PCA and API and attended the Sustainable Building Leaders' Workshop at Mt. Eliza in February 2006 at which the Sustainable Building Pathway was formulated. He is a member of the API Sustainability Committee.

This report also makes use of original information from the 2006 version which was written by Romilly Madew, who is currently the CEO of the Green Building Council of Australia. It would also not have been possible without the contribution of GBCA staff in particular, Suzie Barnett, Executive Director.

LIST OF COMPANIES A

B

C

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Accenture AMP ANZ Argentinean Green Building Council Arup Asia Pacific Partnership AusIndustry Australian Building Codes Board Australian Building Greenhouse Rating Australian Competition and Consumer Commission Australian Conservation Foundation (ACF) Australian Direct Property Investment Association Australian Energy Performance Contracting Alliance Australian Greenhouse Office Australian Life Cycle Inventory Australian Property Institute (API) Australian Research Council Australian Sustainable Built Environment Council

www.accenture.com

Banksia Environmental Foundation BCI Australia Bendigo Bank Bligh Voller Nield Bond University Bond University Mirvac School of Sustainable Development Bordo International Brisbane City Council Brookfield Multiplex BT Financial Group Buildcorp Building Performance Directive Implementation Advisory Group (EU) Built Environment Meets Parliament (BEMP) Business Council of Australia

www.banksiafdn.com

Canada GBC Canberra International Airport Carbon Disclosure Project Carnegie Mellon University (US) Cascadia Region Caversham Properties CB Richard Ellis Challenger Financial Services Group

www.cagbc.org

www.amp.com.au www.anz.com www.argentinagbc.com.ar www.arup.com www.ap6.gov.au www.ausindustry.gov.au www.abcb.gov.au www.nabers.com.au www.accc.gov.au www.acfonline.org.au www.adpia.com.au www.aepca.asn.au www.greenhouse.gov.au www.auslci.com www.propertyinstitute.com.au www.arc.gov.au www.asbec.asn.au

www.bciaustralia.com www.bendigobank.com.au www.bvn.com.au www.bond.edu.au www.bond.edu.au/sdev www.bordo.com.au www.brisbane.qld.gov.au www.brookfieldmultiplex.com www.bt.com.au www.buildcorp.com.au www.diag.org.uk www.bemp.com.au www.bca.com.au

www.canberraairport.com.au www.cdproject.net www.cmu.edu www.cascadiagbc.org www.cavershamproperty.com.au www.cbre.com.au www.challenger.com.au

C

D

E F G

H

Citigroup City of Melbourne City of Perth City of Sydney Clean Energy Council Climate Disclosure Leadership Index Clinton Climate Initiative (a part of the William J Clinton foundation) Coca Cola Amatil Colliers Colonial First Star Global Asset Management Connell Wagner Corporate Responsibility Index Council of Australian Governments (COAG) CSIRO

www.citi.com

Davis Langdon Department of Defence Department of Environment and Climate Change (NSW) Department of Housing and Works (WA) Department of Innovation, Industry, Science and Research Dexus (previously DB RREEF) Dow Jones Sustainability Index: Sustainable Asset Management Drapac Dusseldorp Skills Forum

www.davislangdon.com

Ecospecifier Emirates GBC Energex Ethical Investor Sustainability Award

www.ecospecifier.org

Facilities Management Association (FMA) Forest Stewardship Council Fujitsu

www.fma.com.au

Green Building Council Brazil Green Building Council New Zealand Green Building Council South Africa German Sustainable Building Council Global Reporting Initiative Gold Coast City Council Goldman Sachs JBWere Good Environmental Choice Australia (formally the Australian Environmental Labelling Association) Google energy GPT Corporate Green Cities

www.gbcbrasil.org.br

Hindmarsh Hong Kong Professional GBC Hume City Council

www.hindmarshgroup.com

www.melbourne.vic.gov.au www.cityofperth.wa.gov.au www.cityofsydney.nsw.gov.au www.cleanenergycouncil.org.au www.cdproject.net/climateleaders.asp http://www.clintonfoundation.org/what-we-do/ clinton-climate-initiative www.ccamatil.com.au www.colliers.com www.colonialfirststate.com.au www.conwag.com www.corporate-responsibility.com.au www.coag.gov.au www.csiro.au

www.defence.gov.au www.environment.nsw.gov.au www.dhw.wa.gov.au www.innovation.gov.au www.dexus.com www.sustainability-indexes.com www.drapac.com.au www.dsf.org.au

www.emiratesgbc.org www.energex.com.au www.ethicalinvestor.com.au/ethical_awards

www.fscaustralia.org www.fujitsu.com/au

www.nzgbc.org.nz www.gesbc.org www.globalreporting.org www.goldcoast.qld.gov.au www.gsjbw.com www.geca.com.au www.google.com.au/intl/en/corporate/green/index.html www.gpt.coRm.au www.greencities.org.au

www.hkpgbc.org www.hume.vic.gov.au

I

Inbuilt Consulting Indian GBC Industry Superannuation Property Trust (ISPT) International Initiative for Sustainable Built Environments ING Insurance Australia Group (IAG) InterfaceFLOR Intergovernmental Panel on Climate Change Investa Property Group

www.inbuilt.co.uk

J

Japan Sustainable Building Consortium Jones Lang LaSalle

www.ibec.or.jp

K

Kador Group Kangan Batman TAFE Korea GBC

www.kadorgroup.com.au

L

Lend Lease London Climate Change Agency

www.lendlease.com

M

Macquarie Group Australia Major Projects Victoria McGraw Hill Construction McKinsey & Company Metropolitan Fire Brigade Mexico GBC Mirvac Group Myer

www.macquarie.com.au

National Australian Built Environment Rating System (NABERS) National Framework for Energy Efficiency

www.nabers.com.au

O

Organisation for Economic Co-operation and Development (OECD)

www.oecd.org

P

Phillips Fox Property Council of Australia

www.dlaphillipsfox.com

Q

Queensland Department of Public Works

www.publicworks.qld.gov.au

R

Rabobank Reputex Rider Levett Bucknell RMIT Centre for Design Rocky Mountain Institute Royal Institution of Chartered Surveyors (RICS)

www.rabobank.com.au

N

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www.igbc.in www.ispt.net.au www.iisbe.org www.ing.com.au www.iag.com.au www.interfaceflor.com.au www.ipcc.ch www.investa.com.au

www.joneslanglasalle.com.au

www.kangan.edu.au www.gbc-korea.co.kr

www.lcca.co.uk

www.majorprojects.vic.gov.au www.construction.com www.mckinsey.com www.mfb.vic.gov.au www.gbc.org www.mirvac.com.au www.myer.com.au

www.nfee.gov.au

www.propertyoz.com.au

www.reputex.com.au www.rlb.com www.cfd.rmit.edu.au www.rmi.org www.rics.org

S

Savills Skills Australia Stockland Sustainability Victoria Sustainable Asset Mangement Sydney Harbour Foreshore Authority Sydney Olymplic Park Authority Szencorp

www.savills.com.au

T

Taiwan GBC

www.taiwangbc.org.tw

U

UK GBC United Nations Environmental Program Finance Initiative (UNEP FI) United Nations Environmental Program Sustainable Buildings and Construction Initiative (UNEP SBCI) United Nations Global Compact United Nations Principles for Responsible Investment (UN PRI) US Department of Labor US Green Building Council

www.ukgbc.org

Vattenfall Victorian Building Commission Vietnam Green Building Council

www.vattenfall.com

Water Efficiency Labelling Scheme (WELS) Westpac William J Clinton Foundation World Business Council for Sustainable Development (WBCSD) World Economic Forum WorldGBC World Health Organisation (WHO) World Sustainable Building Conference â&#x20AC;&#x201C; SB08

www.waterrating.gov.au

V W

www.governmentskills.com.au www.stockland.com.au www.sustainability.vic.gov.au www.sam-group.com www.shfa.nsw.gov.au www.sydneyolympicpark.com.au www.szencorp.net

www.unepfi.org www.unepsbci.org www.unglobalcompact.org www.unpri.org www.dol.gov www.usgbc.org

www.buildingcommission.com.au www.vsccan.org/vgbc

www.westpac.com.au www.clintonfoundation.org www.wbcsd.org www.weforum.orRg www.worldgbc.org www.who.int www.sb08.org

14. REFERENCES ACT Climate Change Strategy 2007-2025 “Weathering the Change” www.tams.act.gov.au/live/sustainability/ climate/weathering_the_change ACT EnergyWise and HEAT programs (ACT) www.tams.act.gov.au/live/sustainability/climate/heatenergy_wise ASBEC “Capitalising on the Building Sector’s Potential to Lessen the Costs of a Broad Based GHG Emissions Cut”, September 2007 www.asbec.asn.au/files/Building-sector-potential_Sept13.pdf AusIndustry www.ausindustry.gov.au Australian Greenhouse Office Australian Commercial Building Sector Greenhouse Gas Emissions 1990-2010 Executive Summary Report 1999 Australian National Life Cycle Inventory Database Initiative (Aus LCI) www.auslci.com Baier, R.D. 1999 Customer service made easy: deliver what office tenants want.

HPAC Engineering, September, Pages 41-45.

BASIX (NSW) www.basix.nsw.gov.au BCI Australia and Green Building Council of Australia “Green Building Market Report” 2007 and 2008.

Carter (Simon) “Lifeblood Report”, Colliers International , March 2006 Commercial Office Building Energy Innovation Innitiative (COBEII) www.sustainability.vic.gov.au/resources/documents/COBEII_EOI.pdf Commonwealth of Australia 2005.

ESD Design Guide for Australian Government Buildings Edition 2, ISBN 0642551316 Commonwealth of Australia, Government Department of Environment and Heritage The Mays Report, ‘Corporate Sustainability — an Investor Perspective’ www.deh.gov.au/ settlements/industry/finance/publications/mays-report/pubs/ mays-report.pdf Commonwealth of Australia, Department of Prime Minister & Cabinet “Securing Australia’s Energy Future” www.pmc.gov.au/publications/energy_future/chapter 6 CoreNet global “Corporate Real Estate 2010 Sustainability & Corporate Social Responsibility www2.corenetglobal.org/learning/core2010 Davies (Dr Ross) “Green Value: Green buildings, growing assets” Royal Institution of Chartered Surveryors (RICS) 2005 www.rics.org/greenvalue

Benchmarking the States Report (draft) compiled by the Green Building Council of Australia, 2008.

Davis Langdon “Examining the Cost of Green”, October 2004, page 3. www.davislangdon.com

Bowman (Richard) and Wills (John) “Valuing Green” Green Building Council of Australia February 2008

Department of Defence www.defence.gov.eu under heading Green Buildings and Infrastructure

City of Sydney Heritate Floor Space Scheme www.cityofsydney.nsw.gov.au/Development/HeritageInformation/ HeritageFloorSpace.asp

Department of Housing and Works Western Australia Office Accomodation Policies, Policy 14: Sustainability & Government Accomodation 2004 www.dhw.wa.gov.au

City Switch Green Office - www.cityofsydney.nsw.gov.au/cityswitch/ Climate Change Action Statement (WA) www.portal.environment.wa.gov.au/portal/page?_ pageid=54,5690266&_dad=portal&_schema=PORTAL Climate Change Fund (NSW) www.environment.nsw.gov.au/grants/ccfund.htm ClimateSmart 2050 (QLD) www.climatechange.qld.gov.au/response/2050review.html Cole (Dr Raymond) ‘Why Build Green: 10 questions answered’ Joint project by the Greater Vancouver Regional District and the School of Architecture, University of British Columbia www.gvrd.bc.ca/buildsmart/pdfs/whybldgrntenkeyquest.pdf

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Department Transport Energy & Infrastructure Green Plan: A Response to Greening of Government Action Plan 2007 www.buildingmanagement.sa.gov.au Design Intelligence “Leaders Roundtable: Success in Asia-Pacific” March 2003 www.di.net/article.php?article_id=210 Dusseldorp Skills Forum and the Australian Conservation Foundation “CSIRO Sustainable Ecosytems, Growing the Green Collar Economy”, June 2008. www.dsf.org.au/papers/204.htm EcoBiz (QLD) www.epa.qld.gov.au/environmental_management/sustainability/ ecobiz_queensland

EcoBuild “Time for governments to take leadership on greener buildings” January 2006

Lawther (Peter) Robinson (Jon) and Low (Sowfun) The Business Case for Sustainable Design – the City of Melbourne CH2 Project Draft 8 – October 2005 Page 24

EcoSpecifier www.ecospecifier.org under the section “About EcoSpecifier”

Leaman (Adrian) www.informedesign.umn.edu/WebcastArchive.aspx

Energy Smart Government (WA) www.sedo.energy.wa.gov.au/pages/energy_smart_gov.asp

Leaman (Adrian) ‘Building Performance: What the users say’ published as “Within these Walls”, Safety and Health Practitioner (SHP) November 2005

Facilities Management Association “Office Churn: The Management of Physical Workplace Change”, 2001.

GPT workplace6, Sydney - Office Fact Sheet www.gpt.com.au/content.aspx?urlkey=office_developments Green Building Council Ideas paper “Policies that could be implemented to stimulate the adoption of efficient practices and green buildings in Australia” Prepared by RSM Bird Cameron on behalf of the GBCA 18 March 2003 Greener Buildings www.greenerbuildings.com/backgrounders, “The benefits of Greener Buildings”.

The Greening of Government (GoGo) Action Plan (SA) www.zerowaste.sa.gov.au/greening_government/pdf/GoGOActionPlan.pdf Hanscomb Means Report “Rating Sustainability – How green is your building?” International Construction Intelligence, Jul/Aug 2005, Volume 17, No 4 Page 1-4 Hargroves (Karlson ‘Charlie”) & Smith (Michael), The Natural Advantage of Nations, Earthscan, James & James January 2005.

Hilderson (Peter) Jones Lang La Salle “Commercial Property Going Green” a Jones Lang La Salle paper, www.joneslanglasalle.com, April 2004 House of Representatives Standing Committee on Environment & Heritage (August 2005) “Sustainable Cities report” The Parliament of the Commonwealth of Australia, Canberra www.aph.gov.au/house/committee/environ/cities/ Intergovernmental Panel on Climate Change Fourth Assessment Report: Working Group III “Mitigation of Climate Change”, 2007. www.ipcc.ch/ipccreports/ar4-wg3.htm or specifically page 3 on www.ipcc.ch/pdf/assessment-report/ar4/wg3/ ar4-wg3-chapter11.pdf Intergovernmental Panel on Climate Change Working Group III contribution to the Intergovernmental Panel on Climate Change Fourth Assessment Report Climate Change 2007: “Mitigation of Climate Change, Summary for Policymakers”.

Kats (Gregory) “Greening America’s Schools: Costs and Benefits”, Capital E, October 2006. www.cap-e.com/ewebeditpro/items/O59F12807.pdf Kats (Gregory) The Costs and Financial Benefits of Green Buildings, A report to California’s Sustainable Building Task Force, October 2003 www.usgbc.org/Docs/News/News477.pdf

Leaman (Adrian) & Bordass (Bill) “Productivity in buildings: the killer variables 2005” material provided by Adrian Leaman Leaman (Adrian), Thomas (Leena) and Vandenberg (Monica) “'Green' buildings - What Australian building users are saying” www.yourbuilding.org 2007 Lucuik (Mark) A Business Case for Green Buildings in Canada, Morrison Hershfield, Ontario, March 2005 Maguire, P and Robinson J Building evaluation by prospective lessees, 2000.

Matthiessen (Lisa Fay) & Morris (Peter) Examining the Cost of Green October 2004, David Langdon, Seattle, USA, www.davislangdon.com Mays (Shaun), Corporate Sustainability - An Investor Perspective, Department of Environment and Heritage, 2003.

McGraw-Hill Construction “McGraw-Hill Construction Greening of Corporate America SmartMarket Report” , McGraw-Hill Construction Research and Analytics group, 2 May 2007.

McKinsey & Company “An Australian Cost Curve for Greenhouse Gas Reduction”, February 2008.

Mills (Evan) “Going Green Reduces Loses”, Reinsurance Magazine, March 1997 No 12 Vol 27, 1997 National Australian Building Environmental Rating Scheme (NABERS) www.nabers.com.au National Framework for Energy Efficiency www.nfee.gov.au NSW Government Asset Management Committee www.gamc.nsw.gov.au/default.asp?PageID=4 OECD (2003) Environmentally Sustainable Buildings: Challenges and Policies.

A report by the OECD. www.oecd.org/dataoecd/19/5/2715115.pdf Paevere (Phillip) and Brown (Stephen) “Indoor Environment Quality and Occupant Productivity in the CH2 Building: Post-Occupancy Summary Report No. USP2007/23” CSIRO and City of Melbourne March 2008 Perth Solar City project www.emrc.org.au/environmental.asp

Property Council of Australia “A Guide to Office Building Quality”, www.propertyoz.com.au/Article/Resource.aspx?media=501.2005.

Queensland Department of Public Works’ Sustainable Office Building Rating Policy 2007 www.build.qld.gov.au Queensland Development Code (clarifies use of grey water) www.dip.qld.gov.au/building/queensland-development-code.html Queensland Sustainable Energy Innovation Fund www.epa.qld.gov.au/qseif Quinn (Mark) “Tax Concessions a palatable incentive for promoting ESD” drafted June 2002. Mark Quinn works for Rider Hunt, drafted this paper and made it available to the GBCA

Sustainable Sydney 2030 (City of Sydney) www.cityofsydney.nsw.gov.au/2030 Sydney Harbour Foreshore Authority ESD Fitout Guide www.shfa.nsw.gov.au/uploads/documents/Sustainable%20 Development%20Guide_02.pdf Sylvan (Louise) Green marketing and the ACCC, ACCC, May, 2008 www.accc.gov.au/content/index.phtml/itemId/826938/fromItemId/8973 Schuck (Dr Stephen) Sustainable Energy Innovation – a new era for Australia, Carolen Barripp publisher, 2002, Page 96 The Greenhouse Gas Abatement Scheme (ACT) Page 20 www.tams.act.gov.au/__data/assets/pdf_file/0003/63624/ Climate_Change_Strategy.pdf

ResourceSmart: Commercial Buildings Program (VIC) - www.sustainability.vic.gov.au/ www/html/1472-resourcesmart-commercial-buildings-program.asp?intL ocationID=1472#anchor1472

Vattenfall “Global Mapping of Greenhouse Gas Abatement Opportunities up to 2030: Buildings sector deep-dive”, June 2007. www.vattenfall.com/www/ccc/ccc/Gemeinsame_Inhalte/ DOCUMENT/567263vattenfall/P0272861.pdf

RMIT Building Assemblies and Materials Scorecard (BAMS) www.cfd.rmit.edu.au/content/view/full/464

Victorian Building Commission “Indoor Environment Quality” Discussion Paper, Melbourne Australia, June 2004

Royal Institution of Chartered Surveyors (RICS) “Transforming Existing Building: The Green Challenge Final Report” March 2007

Victorian Government Office Accomodation Guidelines 2007 www.dtf.vic.gov.au

Rocky Mountain institute under the heading “Green Development Services” International Netherlands Group (ING) Bank Amsterdam, Netherlands. www.rmi.org/sitepages/pid208.php Rudd (Kevin) www.pm.gov.au/media/Interview/2008/interview_0434.cfm S Sayers (Roslyn) “Managing Generations in the Workplace”, Women in Finance Breakfast, September 2005.

Stern, (Sir Nicholas) “Stern Review on the economics of climate change, Office of Climate Change”, October 2006. www.hm-treasury.gov.uk/independent_reviews/stern_review_ economics_climate_change/stern_review_Report.cfm Sustainable Communities A National Action Plan for Urban Australia – being developed by the Intergovernmental Planning Officials Group www.aiqs.com.au/Publications/QuickDownloads/Sustainable%20 Communities.pdf Sustainable Development Grants program (Brisbane City Council) www.brisbane.qld.gov.au/bccwr/forms/documents/cc10428_ sustainable_development_grant_offices_application_forma.pdf Sustainable Office Building Rating Policy (QLD) www.build.qld.gov.au/research/research07.asp

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George Wilkenfield and Associates (GWA) “Guide to preparing Regulation Impact Statements for the National Appliance and Equipment Energy Efficiency Program (NAEEEP)”, The Wilkins Review 2005, prepared for the Australian Greenhouse Office, May, Sydney.

Yates (Alan) “Quantifying the Business Benefits of Sustainable Building (Draft for discussion)”, Centre of Sustainable Construction, BRE, UK, February 2001 Yudelson (Jerry) “The Insider’s guide to Marketing Green Buildings” November 2004, Green Building Marketing, Portland, OR, www.yudelson.net VicSuper ‘What in the world has sustainability got to do with superannuation?’, VicSuper Sustainability Report, 2004.

WaterMAP (VIC) www.ourwater.vic.gov.au/saving/industry/watermap Western Australian Office Accommodation Policies: A guide to the Procurement and Management of Western Australian Government Office Accommodation www.housing.wa.gov.au/Files/asset_commproppolicy.pdf World Business Council for Sustainable Development, “Energy Efficiency in Buildings: Business Realities and Opportunities”, www.wbcsd.org/DocRoot/kPUZwapTJKNBF9UJaG7D/EEB_Facts_Trends.pdf

15. ENDNOTES 1 2 3

4

Lang (Dr Robert) Breakfast with the Stars Seminar 7 March 2008 Sydney Hilton Hotel

20 Day (Paul) “Trouble on the Horizon” Property Australia

Garnaut (Ross) “Garnaut Climate Change Review Draft Report” Commonwealth of Australia June 2008

21 Arnel (Tony) Media Release "Green building the key to a

Organisation for Economic Co-Operation and Development “Environmental Sustainable Buildings Challenges and Policies” 2003 ASBEC “Capitalising on the Building Sector’s Potential to Lessen the Costs of a Broad Based GHG Emissions Cut” September 2007

Tuesday 8 April 2008 Page 72 sustainable future"12 July 2005, Victorian Building Commission www.buildingcommission.com.au 22 BCI Australia “Green Building Market Report” 2008 page 25 23 Bowman (Richard) and Wills (John) “Valuing Green” Green

Building Council of Australia February 2008 24 Davies (Dr Ross) “Green Value: Green buildings, growing assets”

5 Intergovernmental Panel on Climate Change, Fourth Assessment

Royal Institution of Chartered Surveryors (RICS) 2005

Report: Working Group III “Mitigation of Climate Change” 2007 page 3

25 Grose (James) "Building on a greener future" Queensland

6

McKinsey & Company “An Australian Cost Curve for Greenhouse Gas Reduction” February 2008

26 Organisation for Economic Cooperation and Development

7

Enkvist (Per-Anders), Naucler (Tomas), Rosander (Jerker) "A cost curve for greenhouse gas reduction" The McKinsey Quaterly 2007 Number 1.

8

BCI Australia “Green Building Market Report” 2008 pages 11-12

9

Property Council of Australia “A Guide to Office Building Quality” 2005

10 McGraw-Hill Construction “McGraw-Hill Construction Greening

of Corporate America SmartMarket Report” McGraw-Hill Construction Research and Analytics group 2 May 2007 11 Carter (Simon) “Lifeblood Report” Colliers International

March 2006 12 Sylvan (Louise) “Green Marketing and the ACCC”

8 May 2008 page 6 13 Organisation for Economic Cooperation and Development

(OECD) “Environmentally Sustainable Buildings Challenges and Policies” 2003 14 Ruthven (Phil ) “Building A Society” Qantas magazine August

2008 pg 203 15 Built Environment Meets Parliament 2008 flyer,

www.bemp.com.au 16 Paramor (Greg) Breakfast with the Stars Seminar 25 June 2008

Sofitel Brisbane 17 Hilderson (Peter) “Commercial Property Going Green”

Jones Lang La Salle April 2004 18 Quinn (Matthew) "Building on a greener future" Queensland

Business Review page 72 15 March 2008 19 Yudelson (Jerry) “The Insider’s guide to Marketing Green Buildings

Green Building Marketing, Portland November 2004

Business Review page 72 15 March 2008 (OECD) “Environmentally Sustainable Buildings Challenges and Policies” 2003 27 Lucuik (Mark), A Business Case for Green Buildings in Canada,

Morrison Hershfield, Ontario, March 2005 28 Holloway (Jeff) “Bishops See is first to achieve 5 Star Greenstar rating” Brookfield Multiplex Media Release 4 June 2008 29 Pisale (Paul) Breakfast with the Stars Seminar Sofitel Brisbane 25 Jun 2008 30 Eye on ACE Newsletter “Ace Australia Launches Green

Insurance Product” 4 September 2008 31 Nelson (Andrew) “The Greening of U.S Investment Real Estate”

RREEF Research Number 57 November 2007 32 The Australian “How green is your portfolio”, 30 July 2008 33 Bowman (Richard) and Wills (John) “Valuing Green”

Green Building Council of Australia February 2008 34 www.gpt.com.au/content.aspx?urlkey=office_developments 35 Spears (Anika) Breakfast with the Stars Seminar 7 March 2008

Sydney Hilton Hotel 36 Cranston (Matthew) “Tenants will pay to be Green” Australian

Financial Review 21 August 2008 37 Paevere (Phillip) and Brown (Stephen) “Indoor Environment Quality

and Occupant Productivity in the CH2 Building: Post-Occupancy Summary Report No. USP2007/23” CSIRO and City of Melbourne March 2008 38 Leaman (Adrian), Thomas (Leena) and Vandenberg

(Monica) “'Green' buildings - What Australian building users are saying” 2007 39 Kats (Gregory) “Greening America’s Schools: Costs and Benefits,”

Capital E, October 2006.

40 Bond University Mirvac School of Sustainability “Enhancing

Performance of Green Star Rated Buildings” September 2008 41 Sayers (Roslyn) “Managing Generations in the Workplace”,

Women in Finance Breakfast, September 2005.

42 Loftness (Vivian) “Green ROI: Eager little grean beans”

by Sue Robinson Property Australia 2008 43 Cope (Tony) “Tenants will pay to be green” by Matthew Cranston

Australian Financial Review 21 August 2008 44 Facilities Management Association “Office Churn:

The Management of Physical Workplace Change” 2001 45 Paevere (Phillip) and Brown (Stephen) “Indoor Environment Quality

and Occupant Productivity in the CH2 Building: Post-Occupancy Summary Report No. USP2007/23” CSIRO and City of Melbourne March 2008 46 Dusseldorp Skills Forum and the Australian Conservation

Foundation “CSIRO Sustainable Ecosytems, Growing the Green Collar Economy”, June 2008.

47 Bowman (Richard) and Wills (John) “Valuing Green” Green

Building Council of Australia February 2008 48 Bevage (Lindsay) “Benchmarking the States” Green Building

Council of Australia 2008 49 www.clintonfoundation.org 50 www.unepsbci.org 51 www.wbcsd.org 52 ASBEC “Capitalising on the Building Sector’s Potential to Lessen

the Costs of a Broad Based GHG Emissions Cut” September 2007 53 www.climatechange.gov.au/greenpaper/index.html 54 Rudd (Kevin)

www.pm.gov.au/media/Interview/2008/interview_0434.cfm 55 www.ausindustry.gov.au/content/azindex.cfm?Keyword=clean%20

business%20australia 56 www.environment.nsw.gov.au/grants/ccfund.htm 57 Sydney Harbour Foreshore Authority “ESD Fitout Guide” 2008 58 ACT Climate Change Strategy 2007-2025 “Weathering the

Change” www.tams.act.gov.au/live/sustainability/climate/ weathering_the_change 59 Queensland Department of Public Works’ Sustainable Office

Building Rating Policy 2007 – www.build.qld.gov.au 60 WaterMAP ( VIC) - www.ourwater.vic.gov.au/saving/

industry/watermap 61 Western Australian Office Accommodation Policies: “A guide

to the Procurement and Management of Western Australian Government Office Accommodation” 2004

142 - 143

62 City Switch: Green Office - www.cityofsydney.nsw.gov.au/

cityswitch/ 63 Intergovernmental Panel on Climate Change Fourth Assessment

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64 McKinsey & Company “An Australian Cost Curve for Greenhouse

Gas Reduction” February 2008 65 ASBEC “Capitalising on the Building Sector’s Potential to Lessen

the Costs of a Broad Based GHG Emissions Cut” September 2007 66 Vattenfall “Global Mapping of Greenhouse Gas Abatement

Opportunities up to 2030: Buildings sector deep-dive” June 2007.

67 Organisation for Economic Co-Operation and Development

“Environmental Sustainable Buildings Challenges and Policies” 2003 68 Stern, (Sir Nicholas), “Stern Review on the economics of climate

change, Office of Climate Change”, October 2006.

69 National Australian Building Environmental Rating Scheme

(NABERS) - www.nabers.com.au 70 www.ourgreenoffice.com/news_archive.html 71 Organisation for Economic Co-Operation and Development

“Environmental Sustainable Buildings Challenges and Policies” 2003 72 Australian National Training Authority 2003

www.dest.gov.au/sectors/training_skills/policy_issues_reviews/ key_issues/nts/ 73 Kats (Gregory) The Costs and Financial Benefits of Green Buildings,

A report to California’s Sustainable Building Task Force, October 2003 www.usgbc.org/Docs/News/News477.pdf 74 Davis Langdon, “Examining the Cost of Green”, October 2004,

page 3. www.davislangdon.com 75 Lucuik (Mark), A Business Case for Green Buildings in Canada,

Morrison Hershfield, Ontario, March 2005 76 Dusseldorp Skills Forum and the Australian Conservation

Foundation “CSIRO Sustainable Ecosytems, Growing the Green Collar Economy”, June 2008.

77 Organisation for Economic Co-Operation and Development

“Environmental Sustainable Buildings Challenges and Policies” 2003 78 Washer (Dr Mal) Media Release “Sustainable Australian Cities”

12 September 2005 79 www.lcca.co.uk

80 www.asbec.asn.au/about_us/aims_and_objectives