Billions of dollars of key logistical and industrial buildings could become ‘stranded assets’ if they cannot show they are low or zero carbon, a recent report by the Australian and New Zealand Green Building Councils has warned.
‘Green Star in focus: The case for sustainable industrial buildings’ highlights that new Green Star certified industrial buildings produce 66 per cent fewer greenhouse gas emissions than standard buildings and shows that a minimal 2 per cent upfront cost to support green design can result, on average, in lifecycle savings of 20 per cent of total construction costs.
The report underscores that the technology, design, materials and expertise are available now to build more sustainable buildings which will meet investors’ growing demand for future-proofed investments that uphold environmental and social governance principles.
CEO of the Green Building Council of Australia (GBCA), Davina Rooney, said the forecast growth in the industrial sector, driven largely by the expanding online retail market, creates a valuable opportunity to build better assets which are designed and built to minimise embedded carbon and carbon emissions in operation.
“The sheer size of industrial facilities means they can play a big role in increasing rooftop solar PV capacity,” Ms Rooney said.
“If we put solar panels on all industrial facilities in Australia, we could almost double our capacity – from the current 6,500 megawatts (MW) to 12,800MW.”
The report warns that key logistical and industrial buildings being built in New Zealand and Australia between 2020 and 2030, spanning tens of millions of square feet, and potentially worth trillions of dollars, could risk becoming stranded assets, undesirable for use or investment, if sustainable building and design practices are not embraced and independently certified.
Ms Rooney said as we accelerate towards a low-carbon economy and society, low and zero-carbon buildings are the only choice for investors that don’t want to be left with stranded assets.
“We must act swiftly to ensure our industry plays its part in global efforts to avoid catastrophic global warming,” she stated.
“To remain competitive in the Asia-Pacific region and meet Paris Agreement commitments, Australia and New Zealand must shift to a significantly less polluting, lower carbon economy and society by 2050.”
“The science is clear, and there is growing financial pressure, political will, public demand, and legislation driving us towards a zero-carbon world. As this shift occurs, buildings that are not zero-carbon have a real risk of becoming stranded assets.”
Chief Executive of the New Zealand Green Building Council (NZGBC), Andrew Eagles, said healthier, more efficient, low carbon buildings are on the way.
“They’re being backed by large financial institutions, international agreements, national legislation, and by businesses who can see the all so obvious benefits. Most importantly, less polluting buildings are backed by the people working in them.”
“Industrial buildings play a major role in providing our businesses and our families with the goods and services they need. And our families, our businesses, and our economy need to slash climate pollution and be zero carbon as soon as possible. Industrial buildings have a key part to play to achieve this,” Mr Eagles said.
He noted that Frasers Property Industrial understands the benefits of Green Star certification – having committed to certifying all of the company’s assets under Green Star performance and achieving certification for over 30 industrial buildings under Green Star Design and As-Built.
According to Ian Barter, General Manager – Northern Region from Frasers Property Industrial, Green Star industrial facilities save tenants an average of $1.11/sqm per year in operational costs when compared with competitors’ non-certified warehouses.
“In a 20,000 sqm warehouse, this is a saving of around $22,000 per year,” he said.
“Obtaining Green Star certification is an incredibly important part of our business and demonstrates to customers that we are very serious about not only protecting the environment, but also creating greater energy efficiencies for customers to reduce their overall costs. Green Star highlights an alignment with customers’ Corporate Social Responsibility programs, manifested in a physical building.”
“As more customers seek validation for sustainability initiatives, Green Star certification provides proof of performance. Green Star contributes to a more resilient building which makes a portfolio of Green Star buildings more attractive to investors, particularly those seeking to invest in REITs that prioritise good environment and social governance activities,” Mr Barter commented.
In addition to the lifecycle cost benefits and added protection for investors, the report also identifies other pragmatic benefits from Green Star-certified industrial assets including the ability to tap into green loans and the health, retention and satisfaction of employees.
Green Star has played a pivotal role in transforming Australia’s built environment since it was launched by the GBCA in 2003. It is Australia’s only national, voluntary and independently certified rating system for buildings and communities.
The upcoming release of the GBCA’s next generation of Green Star rating tools is expected to raise the benchmark. Buildings will need to be designed to withstand climate-related risks, have exceptional resource efficiency, and be carbon positive to achieve the highest possible ratings.
‘Green Star in focus: The case for sustainable industrial buildings’ can be found online here.