Sustainability is now a guiding principle in the construction sector. What started out as a desire to improve energy efficiency has grown into a comprehensive set of standards that span everything from a building’s carbon footprint to the health and wellbeing of its occupants. This is because, far from being a decorative facade, the business case underpinning sustainability is rock solid.
Demand for sustainable development has led to a proliferation in global standards, including Leed (Leadership in Energy and Environmental Design) and Breeam (Building Research Establishment Environmental Assessment Method).
To that we can now add the Home Performance Index, which provides a label for quality sustainable residential development that goes way beyond the BER (Building Energy Rating) standard.
As with all such standards, it allows the developer a shorthand way to communicate the quality of their building to buyers and planners.
In addition to the energy efficiency of a dwelling, HPI assesses water efficiency, indoor air quality, the quality of day lighting, the impact of the construction materials used and the ecological impact of the development. It even assess such things as how close the homes are to schools, shops and other services by walking and cycling, together with the availability of public transport and flood risk.
Speaking at the time of its launch, Irish Green Building Council executive director Pat Barry said that, internationally, banks are starting to encourage such labelling because their experience shows that it de-risks lending to both the developer and to the homebuyer. Says Barry: "A certified home is a pretty good indicator of the quality of the development. It adds to the home's asset value and generally means reduced energy, water and transport costs for the homebuyer and therefore reduced risk of mortgage defaults."
Green leases are also showing growth. "These include sustainability clauses such as setting a standard for energy usage and efficiency within the building, setting a more open line of communication between landlords and tenants and setting a benchmark for sustainability in the fit-out of the office space," says Oliver Held, associate director at Jones Lang LaSalle, a commercial real estate and investment management firm.
“More new buildings are rated with a green or sustainability tools such as Leed or Breeam to have an edge in an ever more competitive market place, both in terms of attracting tenants and also attracting employees,” says Held. “Once a rating has been awarded, this affects the leases that are granted to the tenants in terms of how the landlord requires the building to be operated and fitted out.”
According to the US Centers for Disease Control and Prevention, better work environments have multiple benefits, including higher productivity and healthier workforce.
Green leases align the financial and energy incentives of building owners and tenants “so they can work together to save money, conserve resources, and ensure the efficient operation of buildings”, says Brian Meldon of Meldon Chartered Surveyors.
He sits alongside Roisin Bennett of Reddy Charlton Solicitors and Eamonn Maguire of Maguire Chartered Surveyors on the SCSI's green lease working group.
Much of the interest in green leases is driven by what he calls the 90 per cent rules. These refer to the fact that 90 per cent of our time is spent indoors in work; 90 per cent of employees say there is a direct link between their attitude to work and the quality of their office space, and 90 per cent of business leaders worldwide are changing their approach to workforce rights and wellbeing in response to changing stakeholder expectations, according to PWC’s 19th Annual Global CEO Survey 2016.
On top of that, office-based businesses typically spend 90 per cent of their overhead costs on their employees and the remaining 10 per cent on building operation and maintenance costs.
“Just taking that last point,” says Meldon. “If between them the landlord and tenant can improve energy performance by 10 per cent it results in a 1 per cent saving of costs. But, by improving the health, wellbeing and productivity of the workers by 10 percent they can save a business nearly 10 per cent of costs. This is not only a very significant saving, it makes the building more attractive for the tenant as a business space and a better investment opportunity for the landlord. Both win.”
The term NZEB or Nearly Zero Energy Building has become increasingly commonplace too. In order to qualify as an NZEB a building must have very high energy performance. This means energy from renewable sources, including renewable sources produced on-site or nearby.
The European Energy Performance of Buildings Directive Recast (EPBD) requires all new buildings to be NZEB by the December 31st, 2020, and all buildings acquired by public bodies by December 31st, 2018.
“The Irish Government, to comply, intends to move directly to NZEB standard from the current regulations. This means that under the Technical Guidance Document coming into force during 2017, buildings will be required to use 40 per cent to 60 per cent less energy than current regulations,” says Meldon.
Globally green leases are widely used by large organisations and the initiative was led by landlords, their agents and facility managers. Currently, corporate culture is the primary driver, says Meldon.
“In future leases will not be called green but will typically contain green clauses as a matter of course as in Sweden at present. They will oblige both landlord and tenant to maintain the building to its certification or better. As surveyors, the onus is on us to educate our clients, both landlords and tenants as, to the benefits, both financially and environmentally, of green leasing. People think that to build green is expensive. It is not. If you plan it from the start, it is maybe 1 or 2 per cent more expensive, but the payback is enormous.”
And that payback is not only in terms of performance, but of the calibre of tenants you get. “Even in secondary areas you get better quality tenants with a green lease,” says Meldon.
Respect for the environment and architectural heritage
The ESB’s Dublin 2 headquarters on lower Fitzwilliam Street has hit the headlines for all the wrong reasons since the 1960s. This time around, the news is something to celebrate.
When a decision was made in 1962 to interrupt what was Dublin’s longest Georgian facade, stretching from Mount Street to Leeson Street, it led to a resistance campaign that culminated in street protests. In the end, 16 Georgian houses on the street were destroyed anyway.
When news came in 2010 that the ESB was redeveloping the site, it was seen by some as an opportunity to remedy the wound. However, while the new building will not in fact restore the old facades, it will, says the ESB, "respect" its architectural heritage.
Work on the €150m redevelopment commenced in June of this year and despite a doubling in size, to 45,000sqm, it will be an NZEB or near zero energy building. This will make it one of the most efficient and sustainable commercial office developments in Dublin city.
The project, which is being built by PJ Hegarty & Sons, involves the demolition of the existing buildings, the retention and refurbishment of a number of protected Georgian structures and the construction of a new seven-storey office block as designed by Grafton Architects and O’Mahony Pike Architects.
It will have sustainability baked in, with a building energy rating (BER) of A and a Breeam sustainability standard of excellent – one down from outstanding, the top level.
It achieves these on the basis of its use of innovative, sustainable technologies which will reduce carbon emissions and running costs. Rain water harvesting, attenuation and recycling will, for example, reduce water consumption by 70 per cent.
While it remains to be seen just how respectful it is to Dublin’s Georgian architecture, it will certainly be respectful of the environment.
