Five underestimated facts about sustainability certificates for real estate

At a glance, it is clear to everyone that the grade 1 has always stood for top performance in German schools. At second glance, however, it becomes clear that the performance criteria for awarding grades are constantly changing, and not everyone is aware that teachers today are not allowed to award a grade 1 under the same conditions as just a few years ago. The situation is similar when it comes to assessing sustainability in real estate: the framework conditions for green buildings are constantly changing. Let's take a look at five currently underestimated facts on the certification market. We have derived them from 450 existing certifications and around 100 new-build certifications that we have carried out for all types of use, from individual properties to portfolios across all countries.

1. replacing and supplementing the top dogs

When it comes to green building certificates, most market participants think first of the long-established LEED, DGNB and BREEAM. But new systems are constantly being added. Some owners or developers now consider supposedly peripheral areas to be mandatory for sustainability and ESG and certify them accordingly: Fields include the health impact of a building (WELL certificate), the resilience of the digital infrastructure (WiredScore) or even the smart building qualities (SmartScore) - the latter two often grouped under ESG resilience. All in all, the potential of young certificates to displace or at least complement the old top dogs should not be underestimated. We are monitoring developments and advising accordingly on which systems are promising for which case. It will also be interesting to see which labels best address the issue of EU taxonomy in both existing and new buildings and integrate it into their systems, thereby offering a conformity check.

2. existing building certificate for new buildings

Project developments are certified as new buildings - logical, right? The fact is that the advantages of deliberately certifying a project development as an existing building immediately after completion are often underestimated. This is particularly true for existing owners' own (re)developments, whose focus is on property operation and the utilization phase. This also builds a bridge to CSRD reporting, as there are certain overlaps in the required data and its plausibility. It should not be forgotten: From this year onwards, around 15,000 companies in all sectors in Germany will be successively obliged to prepare an annual ESG report. The constantly growing and changing requirements placed on the real estate industry will also tend to be easier or quicker to incorporate into the portfolio systems due to their lower complexity. With regard to the portfolio certification of new buildings, it should also not be forgotten that the monetary outlay for the property owner is 10 to 20 times lower than for new-build certificates. At this point, it should be mentioned that new building systems naturally have a much more detailed depth of penetration and a higher level of detail, which justify the additional expense.

3. multiple certifications for landmark and trophy builds

They have become rarer in practice: Multiple certifications. But they still exist. Especially for landmark and trophy buildings with national and international appeal, it is still a good idea to certify both LEED and DGNB, for example. The same goes for WiredScore and SmartScore. In our experience, the efficiency levers that are associated with bundling in a central point of contact are often underestimated in practice: Depending on the certificate, the data to be obtained overlaps by 30 percent or more. Bundling therefore avoids duplication of work. An additional argument for project developments is that construction meetings are usually already bursting at the seams with too many participants. It is better to have just one person responsible for four certificates instead of four for four.

4. quantity before quality

Keyword: information to be obtained: We have observed that many owners' inventory certificates produce a worse result than they should. The reason is that not all the necessary data is available. In some cases, there is a lack of elementary basics such as floor plans of the buildings. What's more, although a lot of information is available, it is distributed in such an atomized way across different departments at the owner and their service providers that nobody can compile it on the side in day-to-day business. We have observed this not only in Germany, but also in Stockholm, Marseille, Zurich, Vienna and Paris, where we have managed certifications. As a rule, the completeness of the data already contributes 60 percent to a good result. The fact that quantity actually comes before quality up to a certain point is almost always blatantly underestimated by owners and asset managers. As a first step, committed sustainability managers therefore request the missing information, for example on energy consumption, from the utilities and bundle decentralized data in any new data rooms that are set up. Once again, this is particularly important for portfolios of ten or more assets and cross-border holdings: A "single point of contact" is advantageous. It saves the owner and their asset manager time and nerves if dozens of different auditors do not request the same data for different buildings or contacts with service providers.

5. ability to be BIM-readiness

Building Information Modeling (BIM) has been regarded for years as the key to more efficient planning, construction and operation of real estate - in simple terms, it is a digital communication and data collection point. With the help of AI, it can, for example, identify planning conflicts between individual specialist engineers and help to run through usage simulations for different architectural scenarios. Even if the big breakthrough is unfortunately still a long way off, especially in terms of the quality of BIM models, there are definitely more and more developers and architects who are setting up and working with BIM as a process platform for all those involved. For sustainability consultants who accompany planning processes for certification, this means that they receive a consistent data basis for the creation of life cycle assessments, energy and daylight simulations, etc., which they can use to optimize projects holistically across all impact areas. This increases efficiency throughout the entire planning process.