SCN – What’s in store with New Green Star Buildings?

New Green Star Buildings ratings tool was released in October 2020, which was one of the positive outcomes in a year that was certainly strange for many.

Having been involved in the process in the expert reference panels for Nature and Place it was a pleasure to see the result coming out with a heightened appetite to transform and lift the expectations for clients in the built environment sector. When we look at this tool in the context of Retail what do these new changes mean and what impact may they have on stores of the future here in Australia?  What does the tool enable and what is the tool failing to achieve for our retail assets?

Green Star has long been the ‘go-to’ certification standard for commercial and retail buildings with buildings striving for 4,5 and 6-star ratings. The two rating options have been Green Star Design and As-Built for new buildings and major refurbishments and Green Star Performance for in-use operations.  Green Star tools have accelerated the shift to sustainable buildings having notched up more than 3000 project certifications with 40% of retail space in Australia being Green Star certified[i] and 1.3 million people visiting a Green Star-rated shopping centre each day.  

Changes in consumer buying patterns and an increased desire for retail stores to become places for community health and resilience have driven the increasing penetration of Green Star certification into the retail market. Stores such as T2, Country Road, and Kathmandu have set precedents and are leading the way in terms of responding to what their customers are asking for and Green Star has been the tool that has enabled them to do so. We have also recently seen a rise in uptake of Green Star within the back of house supply chain in retail. Industrial built assets – Industrial buildings, such as warehouses and cold-store facilities, have been looking to Green Star for their certification to meet their investor requirements and demonstrate their corporate sustainability commitments. The future proofing of these industrial assets for climate change and low carbon economies is vital and green star offers a pathway for this to happen.

With its last major revision being in 2014, Green Star Design and As-Built were beginning to fall short as a benchmark for Australian excellence and world leadership. We were starting to see industry players racing ahead, innovating, and lifting the bar on sustainability. Case in point is the Burwood Brickworks project in Melbourne where Frasers Property opted not only to target 6 Star Green Star but also the Living Building Challenge, widely regarded as the most ambitious sustainability rating in the world.  But the new Green Star Buildings tool is a complete refresh and represents a serious step up in ambition for any project targeting a rating for new buildings and refurbishments.  Currently optional, Green Star Buildings will replace the legacy tool beginning in December 2021.

What has not changed in Green Star Buildings is a certification based on design and construction, as opposed to in-use performance.  We know from significant research that the complex, bespoke nature of buildings and variability in user behaviour means that in-use performance often does not live up to the design intent – a phenomenon known as the performance gap. It is for this reason that tools like Living Building Challenge, WELL, and NABERS are based on actual measured performance. We have, however, seen a significant broadening in categories to include areas such as people, place, and nature and a shift towards recognising the importance of place and people based design and striving for targets that encourage biophilic design and actions for biodiversity.

So how much of a stretch is the new Green Star Buildings tool?  Assuming a target of a 6 Star Green Star rating let us consider the requirements that impact the building’s carbon footprint.  In the legacy Green Star Design and As-Built tool, the only requirement was for an energy efficient building, exceeding the building code by around 20% depending on the compliance pathway.  Under Green Star Buildings it will be a whole new ball game.  There will be an expanded set of requirements within what is called the Net Zero Carbon in Operations meaning that buildings must be fossil fuel free, renewably powered, highly efficient (20% beyond code) with lower upfront emissions and refrigerant global warming impacts eliminated or offset. And here is the kicker.  In 2023 this requirement applies to all 5 Star Green Star ratings and in 2026 to all buildings seeking certification.  While this might seem challenging, these requirements have been developed to be consistent with the Paris Agreement and climate action being taken by government and industry.

Whether Green Star Buildings represent a compelling business case remains to be seen.  Achieving a 5- or 6-Star Green Star rating for a retail development represents approximately 1.7% of a typical project budget[i]. It would be reasonable to assume that Green Star Buildings will have a significantly higher capital cost, but that this will reduce over time as leading design practices become mainstream over time.  It is true, however, that a Green Star rated building will cost significantly less to operate, present a more attractive tenancy, raise property values and generate positive visibility in the market, all of which contribute to the business case.

While Green Star Buildings will accelerate the shift to sustainable buildings it can also be a double-edged sword.  All too often the process of targeting a rating can degrade into a point chasing exercise, divorced from a more thoughtful, collaborative, and holistic sustainable design process. Getting the most value from a Green Star rating means using the tool appropriately and recognising that it is not a design tool or a design process.  For example, don’t kick-off sustainable design by walking the project team through each Green Star credit.  Instead spend time understanding the value drivers for the project and how this translates into a vision and set of principles for sustainability.  This becomes the project’s north star, guiding design and establishing the sustainability story which inspires and engages the team and your community.  Then establish an integrated design process that brings the project team together to encourage whole systems thinking and facilitate design collaboration.  Use Green Star as a benchmarking resource and a means of driving accountability and verifying outcomes.  Keep in mind that Green Star isn’t the only game in town and that tools like Leadership in Energy and Environmental Design (LEED), Living Building Challenge, NABERS, WELL, and Climate Active could be used as an alternative or in conjunction with Green Star.

Whilst this new tool is a step in the right direction, it is essential to recognise that there will be a steep learning curve and it is not a golden bullet for the retail industry. A Green Star scorecard cannot continue to be the sustainable design process for buildings. For Green Star to have the intended transformational effects across the sector there needs to be a robust design process that sets out the sustainability priorities and principles for the project early in the briefing stage. It’s then a case of matching the tool that best fits with the project vision to provide the metrics for certification.  The vision and principles for the project need to drive the design decisions, not the scorecard. If we can get that right and lead projects with sustainability at the core of the project strategy then change will happen. One of the biggest opportunities for retail is a mindset change from seeing sustainability as a compliance cost to creating business value. By setting this up from the very start and bringing the whole team along for the journey we will be in a position to support sustainability as a critical long term investment.

[i] Green Star – A Year in Focus – FY 2019 report https://new.gbca.org.au/news/gbca-news/2019-green-star-annual-report/

This article by Associate | Regenerative Development Lead Claire Bowles and Sustainability Manager at Northrop Consulting Engineers Chris Buntine was published in the number 1, 2021 of SCN magazine.