The purpose of this Guidance Note is to advise asset managers, property managers and facilities managers about the application and benefits of sustainability rating and certification schemes for real estate assets.
Ratings and certifications are used to evaluate the sustainability attributes of a property and to enable comparison against industry benchmarks.
Individual rating and certification schemes are designed to reflect the characteristics of particular property types, intended uses and life-cycle phases. Schemes reflect specific scopes of sustainability, which, in general, cover environmental, health and well-being issues. Many rating and certification schemes have begun to take account of recent developments, such as net-zero commitments and COVID-19.
Various rating and certification schemes have been developed in different parts of the world. For example, WELL and LEED are prominent in America, whilst BREEAM is popular in Europe.
Most often, participation in rating and certification schemes is voluntary. However, there are a number of schemes which have mandatory requirements, for example Energy Performance Certificates. Occasionally, achieving a target rating within a specified scheme, for example BREEAM New Construction, may be required as a planning condition.
Rating and certification schemes can:
The table below summarises the key activities associated with ratings and certifications, and highlights where asset managers, property managers and facilities managers are likely to have a responsibility or specific interest.
Step 1: Identify rating and certification schemes that are potentially suitable for a property
Step 2: Engage a competent individual to undertake pre-assessment and help prepare for assessment
Step 3: Consider the overall costs and commitments associated with the preferred scheme
Step 4: Prepare for the assessment with pre-assessment checks and outcome estimations
Step 5: Review assessment outcome and make arrangements for the ongoing certification lifecycle
Ratings and certifications involve a number of considerations. Usually, the decision to pursue a particular scheme is instructed by the asset manager and the process is coordinated by the property manager with input from the facilities manager.
Considering rating and certification schemes involves the following steps:
A selection ratings and certifications schemes are described below:
BREEAM is an assessment method administered by the Building Research Establishment which evaluates sustainability-related impacts for the built environment. Certifications are rated on levels from ‘Outstanding’ to ‘Unclassified’.
Three BREEAM certifications are of particular relevance:
BREEAM New Construction: Relates to the design, construction and intended use of new commercial and non-commercial building developments.
BREEAM Domestic Refurbishment: Relates to the design and works of an existing buildings’ refurbishment or fit-out, including new homes.
BREEAM In-use: Relates to the sustainability during the operation of an occupied building.
GRESB is the Global Real Estate Benchmark for Real Estate GRESB. GRESB assessments are guided by what investors and the industry consider to be material issues in the sustainability performance of real asset investments.
Following assessment, GRESB participants receive comparative business intelligence on where they stand against their peers, insight into the actions they can take to improve their ESG performance and a communication platform to engage with investors.
SKA is an assessment method administered by the Royal Institute of Chartered Surveyors which evaluates the sustainability of building fit outs. Certifications are rated on ‘Gold’, ‘Silver’ and ‘Bronze’ levels.
SKA Design and Construction: Relates to the design, planning and delivery of commercial fit outs.
SKA Operation: Relates to the sustainability performance of an occupied area in against the designed sustainability criteria.
Fitwel is a scorecard system administered by the Centre for Active Design which evaluates built environmental impacts on occupier health and wellbeing. Certifications are rated on three-star levels.
Fitwel Design and Construction: Relates to the assessment pathway for new construction and major refurbishment projects and is valid for three years.
Fitwel Build: Relates to the post occupancy assessment pathway for existing and recently completed occupied buildings, valid for three years.
WELL is an assessment method administered by the International Well Buildings Institute which evaluates the health and wellbeing impacts of the built environment. Certifications are rated on ‘Platinum’, ‘Gold’, ‘Silver’ and ‘Bronze’ levels.
WELL Building Standard: Relates to the health and wellbeing elements of a building’s policy, design and planning interventions, and the ongoing occupational arrangements.
WELL Building Core and Shell: Relates to the health and wellbeing elements of a building's base design and operation, includes all areas controlled by the building owner.
WELL Community: Relates to the health and wellbeing elements of inclusive and integrated communities, and high levels of social engagement.
WELL Health and Safety: Relates to the health and wellbeing elements of new and existing occupied buildings, focusing on polices, stakeholder engagement and emergency planning.
LEED is an assessment method administered by the U.S. Green Building Council to assess projects for green building strategies across several categories. Certifications are rated on ‘Platinum’, ‘Gold’, ‘Silver’ and ‘Bronze’ levels.
The National Australian Built Environment Rating System (NABERS) is an Australian-devised initiative for assessing the operational environmental performance of commercial buildings. Certifications are rated on levels from one to six stars.
The rating certification is valid for one year. A one-star rating essentially indicates that a building is performing considerably below the expected average, but has made a public commitment to make progress. A six-star rating demonstrates market leading performance.
The NABERS rating system is preparing to launch in the UK, with the introduction of “design for performance” to allow building developers and designers incorporate a similar methodology, based on indicative performance during the design stage.
As of 2021, NABERS report certification has been awarded for 78% percent of Australia’s office space with approximately seven million tonnes of CO2 emission saved.
The following Guidance Notes contain related information:
When DWS, a leading European asset manager, forward purchased* one of the UK’s most sustainable buildings, the company took early action to ensure 2 Redman Place’s design credentials translated into outstanding performance in use. Together with developer Lendlease, managing agent Savills and the occupiers, DWS is working proactively to close the performance gap before it emerges – optimising efficiency, reducing carbon emissions and improving the customer experience.
*DWS acquired 2 Redman Place on behalf of a real estate fund.
Transport for London (TfL) has completed a major RE:FIT project with E.ON and specialist partners to improve energy efficiency at its Palestra hub. Cost savings and CO2 reductions in the first year significantly exceeded E.ON’s performance guarantees and improvements have also helped improve occupant satisfaction. Read the case study here.
The international business of Federated Hermes has significantly exceeded its industry-leading 2020 target to reduce absolute landlord-controlled carbon emissions by 40% against its 2006 baseline. The team has achieved these results primarily through collaborating with property managers, occupiers and sustainability consultant Carbon Intelligence over several years, along with the rollout of smart optimisation. This success across a portfolio of 175 directly managed properties, up from 105 in 2006, demonstrates how carbon emissions can be decoupled from portfolio growth. Importantly, efficiency savings have gone hand-in-hand with wellbeing improvements. Read the case study here.
CBRE Global Investors has rolled out a new modular framework for managing environmental, social and governance (ESG) issues across its investment portfolio in the UK. Developed in consultation with institutional investors, fund managers and asset managers, the ESG programme sets out a three-year plan to drive progress on key issues identified through an extensive materiality review. Its innovative framework provides structure whilst being adaptable to the ambitions of different investors and to different types of funds and assets, as well as to changes in portfolios, markets, regulations and external standards. Read the case study here.
Hermes Investment Management, JLL and Carbon Credentials have collaborated to bring RESET Air to Europe. 33 Glasshouse Street in London has become the first Certified RESET™ Air - Core & Shell project in Europe and the third in the world. This empowers the facilities team to identify ongoing opportunities to improve indoor air quality and certifies it to an international standard. Read the case study here.
In 2014, Savills completed its first BREEAM In-Use certification at 5 Aldermanbury Square, for property owner Deka Immobilien. The building achieved BREEAM Very Good for asset performance and Good for building management. Building on this experience, Savills is now completing BREEAM In-Use assessments in 13 additional buildings. By undergoing third-party verified assessments of sustainability management and performance in the buildings it manages, Savills is emphasising its commitment to best practice in this area. Read the case study here.
Transport for London carried out a major fit-out of its new flagship Head Office in Southwark, the Palestra building, to dramatically reduce running costs and improve its environmental performance. This saw the installation of the UK’s largest, building-integrated fuel cell Combined Heat and Power plant, helping to cut the building’s CO2 emissions by up to 40%. Read the case study here.
Shaftesbury completed the refurbishment of 22 Ganton Street in London’s West End in 2014, delivering 11,670 sq ft of Grade A office space. The project exemplifies the company’s proactive approach to asset management and commitment to the long-term sustainability of its buildings. By retaining 99% of the building’s structure and 80% of its façade, Shaftesbury significantly reduced the amount of new materials required and cut construction waste, minimising environmental impacts and generating cost savings. In addition, upgrades to insulation, heating and lighting improved the building’s energy efficiency and operational costs. A species diverse green roof and wall are also providing an attractive area for occupiers and enhancing biodiversity in central London. Read the case study here.
Lendlease and LCR’s new building at International Quarter London, 2 Redman Place, has achieved one of the highest ever BREEAM scores in the UK for a commercial building, demonstrating sustainability leadership. The new home of Cancer Research UK and future occupiers British Council and FNZ, 2 Redman Place is also targeting WELL Certification, an international tool for advancing health and wellbeing in buildings. Spaces in the building are adaptable and designed to accommodate agile ways of working, combined with high levels of natural light and fresh air. Read the case study here.
In 2019, Savills piloted an evidence-based approach to improving indoor air quality in central London offices. The team aligned their approach with RESET™ Air – Core and Shell, a globally recognised standard. They installed RESET-accredited sensors in a multi-occupied building on a busy road and monitored performance against RESET targets. This yielded useful insights into air quality and empowered the building team to take action to improve performance. Read the case study here.