Energy efficiency is not like other building attributes. You can’t see it. That’s why, come Monday, the world is about to look very different for most owners of Australian commercial property.
From Monday 1st November pretty much anyone who seeks to sell or lease more than 2,000 square metres of office accommodation will be required to disclose their building’s energy efficiency rating.
Mandatory disclosure has been a long time coming. Ever since the Australian Building Greenhouse Rating (now called NABERS) launched in 1999 there’s been a sense that eventually building owners would be required to rate and disclose their energy performance. It’s a credit to the industry that many owners have been voluntarily disclosing ratings (high and low) for many years now.
The legislation says a building’s NABERS Energy rating must be publicly accessible on the online Building Energy Efficiency Register and be prominently displayed in ‘for lease’ and ‘for sale’ advertisements. There are harsh financial penalties for failing to comply.
It’s widely accepted that transparency makes markets efficient. So if we accept that carbon emissions matter to buyers and tenants of buildings (and I’m finding that increasingly they do), mandatory disclosure should help make commercial property markets function better. An important question, however, is: what’s behind this growing interest in the energy efficiency of office buildings? One of the major contributors has to be a growing concern about climate change among the workers who occupy the buildings. Leading employers often cite young people as being particularly concerned about such issues (though, if Investa staff surveys are anything to go by, I think it may be more widespread). Office ‘green teams’ are springing up everywhere. Their demands shape the leasing requirements of their employers. Those leasing decisions influence the value of buildings because the commercial value of a building is simply a multiple of how much money it can make.
So will mandatory disclosure strengthen the hand of the office workers that shape the industry? The answer is: maybe; indirectly. They would have to be pretty savvy to notice a difference when they turn up to work next week. If they’re working in a building that isn’t ‘for sale’ or ‘for lease’ the answer is: probably not. Currently most office workers can see the rating online if they look for it, but it doesn't have to be displayed in the building when it is not for sale or lease. Generally, most building occupants don't have an easy way to find out how well their building is being run week-to-week, or how well it is being run relative to its potential.
This is a shame.
Through our research with the Investa Sustainability Institute, we are finding that greater transparency (via initiatives such as the Datalyzer) leads to clearer accountability and then on to better building performance. The datalyzer is a fully interactive way to investigate emissions, energy, water, gas, complaints and more from commercial office buildings in Australia.
Is that an argument for mandatory datalyzing? Not yet!
Image: 595 Collins Street Melbourne - which can be interrogated in the data tools.
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