NABERS’ Sustainability Portfolios Index for environmental performance has again revealed outstanding performance by Australia’s property owners in commercial and shopping centre buildings. And there is kudos to the industry as a whole as more investors join the fray to disclose how they rank against their peers.
According to NABERS director Carlos Flores, Australia stands head and shoulders above global competition for the unique quality of its transparency. It’s the best antidote to greenwashing he says.
But according to Flores there’s even more exciting news with government departments and property managers starting to join private sector SPI participants to see how they measure up.
This year he says, the SPI is thrilled to announce the debut of Victoria’s public health portfolio to the index. It’s been six years in the making but now Victoria’s entire stock of 133 public hospitals – new, refurbished and older buildings – have put themselves up for public disclosure on their performance.
It’s a big move and not easy to do, Flores says.
“When it comes to energy use, emissions generation, water consumption, waste generation, they are much bigger emitters than the biggest of the office portfolios that we see out there” he says of public hospitals.
“They have millions of people using them.
“This is the first time we’ve seen one state bringing in all its public hospitals, certifying all of them, disclosing them to the public – the ones that are doing great, and also the ones that have a long way to go.”
To understand the scale of the potential environmental impact of this it’s worth doing a comparison between the hospitals and the office portfolios that he reminds us include giants such as Lendlease and GPT. Total office buildings covered in the SPI is 417 buildings over 7.4 million square metres. Victoria’s hospitals, he says, cover 3 million sq m, about 40 per cent of the former.
The average NABERS Energy rating for the hospitals was 4.1 stars which reflects above average performance compared to other hospitals. This achievement is the result of years of hard work and preparation, Flores says.
“They’ve worked so hard on improving their performance and it’s a real testament to the leadership of the Victorian government in setting the target, empowering the sustainability teams and literally becoming the leaders in the country by doing just great work.”
The Victorian health team have opted for full transparency by sharing the performance of the entire portfolio of public hospitals which range from 6 stars down to 1 and 2 stars. NABERS hopes to see other states follow in the path of Victoria and disclose their portfolio ratings in the coming years.
A lot of room for easy improvement
Scores of 1 or 2 stars are not unusual in the office sector either.
When Flores stared with NABERS just before the Commercial Building Disclosure regime kicked in, about 20 per cent of office buildings tracked at the lowest level. Today it’s at 10-15 per cent.
Ironically and on the optimistic side, it means there is a lot of “very cheap and easy improvements” that could be made.
“With very little money, just with a bit of care, a little bit of investment you can get a really big payback.”
And the winners are…?
At the top of the office energy sector was Parramatta Square in Sydney developed by Walker Corporation.
Topping water performance was Barangaroo International Towers, developed by Lendlease.
And with waste, which is a relatively new sector in NABERS, and a tough nut to crack, Cbus Property came first in the field with 4.4 stars – which would have been difficult to achieve, Flores said.
In shopping centres there was a tie for energy performance between Active Super and Cbus Property at 5.1 stars. Flores notes both winners are related to super funds, showing that the growing pressure from investors for their money to be leading to greater sustainability is starting to work its magic.
But quite apart from the individual winners the big outstanding win for the entire industry is its willingness to disclose how each fund is performing and to be transparent.
“You can only have one winner,” he said, “but they are still willing to disclose.
“They are being really transparent, putting their data in a place where they know they’re going to be compared against their competitors. And they know that some of their competitors are going to be doing better than them this year, yet they are still willing to participate in that they’re still willing to be transparent.
“It’s why the Australian market, in commercial buildings has led global sustainability in the last decade,” he said,
“It’s part of our secret sauce.”
“What I’d love to see in the future is that this transparency in leadership is not just confined to shopping centres and offices. We want to see this in government with, hospitals and schools and offices, we want to see this from the accommodation sector and hotels, we want to see this transparency from the data centres and technology industry.”
And yes data centres have special privacy and disclosure challenges thanks to the unique nature of their operations managing confidential private and commercial information, he said, But they too need to step up.
See the full Sustainable Portfolios Index
