Growing green trend in sustainable offices

Corporate entities are moving towards green initiatives and their office space is a crucial part of the drive towards reducing emissions.

Many businesses that are savvy about ESG - environment, sustainability and governance criteria -understand that being a good corporate citizen is good for the planet and the bottom line.

In New Zealand, sustainability is at the front of mind for companies as they evaluate their office space and look ahead to a post-Covid-19 environment.

Many firms have aspirational net zero targets by 2030, while the Government has the goal of net zero by 2050, underpinned by their recent announcement of the Emissions Reduction Plan, marking a commitment to a greener future.

Davina Henderson, Commercial Director of Real Estate Management Services at Colliers, says a notable local trend is the demand from prospective tenants for Green Star-rated buildings.

“Organisations are aware of their ESG responsibilities and are embracing a move towards sustainable business practices and their office space is a major part of that,” Henderson says.

“Many firms, including Colliers, have also formed sustainability committees to drive internal cooperation towards their sustainability goals. Landlords are keen to partner with the right asset managers with capability and experience to ensure operational excellence.

“Landlords are committing to pathways for continuous improvement such as performance rating tools, collection of utility data, tenant wellness programmes, education around waste management best practice, solar panels and electric vehicle charging stations, and transparency through real-time energy reporting. This drives tenants to examine their sustainability initiatives and what they can do to play their part.

“We have also seen growing enthusiasm for Earth Hour, a global power-saving initiative where approximately 270,000sq m of floor space managed by Colliers across New Zealand took part earlier this year.”

This week, Colliers released its 2021 Global Impact Report highlighting the firm’s performance and ongoing commitment to deliver resilient buildings, inclusive workplaces, and spaces that promote health and wellbeing for its professionals, clients, and communities.

Looking further afield throughout the Asia-Pacific region, an emerging trend is electrifying buildings through green resources.

Lisa Hinde, Head of Sustainability for Asia Pacific Real Estate Management Services at Colliers, says keeping corporate eyes on the renewable energy prize helps companies focus on combating reliance on existing power grids that historically burn fossil fuels.

“Many existing buildings are currently cycling out equipment that consumes gas on-site and committing to electrification as part of their development strategy,” Hinde says.

“This is supported by industry frameworks such as Green Star ratings mandating electrification as the only pathway to a 6-star rating.

“The question is no longer is this realistic – it is how do we do this in a cost effective and practical way.”

Hinde notes that as renewables become a larger percentage of the grid, buildings powered by electricity will naturally decarbonise.

“Colliers’ reporting systems are now set up to recognise this transition. They allow organisations with net zero targets to capture cost savings associated with electricity-based consumption.”

In Australia, the National Australian Built Environment Rating System (NABERS) has recently announced changes to emissions factors in 2025 and 2030 that will reflect the growing presence of renewable energy in the grid. This will make it increasingly difficult to maintain existing NABERS ratings in buildings that retain gas systems.

According to NABERS, a 4.5-star rated building today that is 100 per cent electric will improve, whereas a building with 50 per cent gas contribution will fall incrementally.

This may impact access to green finance and meeting obligations under green lease schedules, putting buildings with gas systems at higher risk in these categories than 100 per cent electric buildings.

Rick Thomas, Managing Director of Emerging Markets for Colliers, says electrifying buildings through green sources is universally beneficial.

“Landlords and occupiers that get on board now will reap huge dividends in the long run as sustainable energy sources become more widely adopted to combat climate change,” Thomas says.

“This is not just a nice environmental initiative to pursue. This strategy, if executed during the appropriate time frames, will be far more cost effective in meeting or exceeding net zero targets. By working with market forces and understanding occupier demand, landlords can turn this trend into a lucrative investment strategy for their portfolio.”

- Article supplied by Colliers