The buzz word is 'green'. Everybody wants to be green, build green and be rated green.
The trouble is that, at present, there is little understanding of what the practical issues are in going green and achieving a green rating. Recently, Mr Ché Wall, the Managing Director of Lincolne Scott and a founder of the Green Building Council of Australia (GBCA) summed up the issue when he said:
'The work now to be done in driving the shift to green buildings is no longer technical, but rather commercial and contractual and sadly, one of the biggest roadblocks is operational rating tools'
In the March and June editions of On Site, we outlined the two most commonly used tools for rating the environmental sustainability of buildings in Australia, being:
Australian Building Greenhouse Rating (ABGR) which is administered by the NSW Department of Environment and Climate Change (DECC), and rates a building's greenhouse emissions and energy efficiency; and
Green Star which is administered by the GBCA, and rates a building's impact on the environment having regard to eight environmental categories and innovation.
Many of the rating tools have inherent flaws, which make their application to any given project or building problematic. Take for example weather. As there are only limited weather stations, the temperature against which a building is measured for rating purposes may not reflect the usual temperatures in that particular location if there is no nearby or relevant weather station.
Similarly, there may be a particular spike in the weather in a specific period, during which the rating is being assessed, that will have an impact on the rating.
Whilst each rating tool has its own strengths and pitfalls, the ABGR tool, due to the fact that it is one of the most commonly used tools, causes the most concern. Reasons for concern include:
whilst many lessons have been learnt since the ABGR tool has been in use,
ABGR is unable to take into account changes in the behaviours of tenants and occupiers of a building. If the original parameters of a building regarding its use and occupation change from the time that the Commitment Deed with the DECC is signed, the tool is unable to adjust for those changes, and the rating is assessed against the original anticipated parameters rather than actuals and reality;
use of the ABGR tool does not necessarily drive the desired behaviours in the project participants. To achieve a desired ABGR rating, all project participants need to buy-in at the outset of a project. However, as the ABGR tool measures greenhouse emissions in the operational phase, project participants may not turn their attention to the relevant and critical issues until it is too late;
the tool is applied inconsistently across the various regions in Australia with the result that the same building in a different state would not necessarily achieve the same ABGR rating. For example, if a building in New South Wales achieved a 4.5 star ABGR rating, that same building would only achieve a 4 star rating in Victoria; and
use of chilled beams in cooler climate areas such as Melbourne (over Sydney or Perth) does not provide any benefit under the ABGR scheme. As a result, a building in Melbourne which has chilled beams will, from a rating point of view, achieve a lesser rating than the same building in Sydney or Perth.
Contractual and legal response
Project participants and contracting parties need to be careful in their contractual arrangements to agree to penalties for failure to achieve a specified rating. Careful consideration should be given to what factors could influence the ability to achieve a specified rating. If a party agrees to a penalty for failure to achieve the specified rating, there should be appropriate carve-outs if the failure arises due to a matter beyond that party's control.
It is useful in the project documentation to clearly articulate the occupational parameters around which proposed rating is to be obtained, for example:
number of women versus men;
hours of operation; and
All project participants (be they consultants, contractors, tenants, facilities managers) need to agree at the outset of the project to have regard to and abide by those parameters.
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This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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