Green certificates were something sufficient years ago, but in the present market reality, they fail to cover the social and governance parts of the ESG principles. Some of them are also seriously outdated – this is how one can summarize a panel discussion on developments at last month's European ESG Property Forum 2023 in Warsaw.
The conference was placed in Warsaw, one of the leading cities in the world in terms of the number of office buildings with green certificates. As Katarzyna Chwalbińska-Kusek, Head of ESG & Sustainability at Savills Poland stated, it is currently in fifth place, preceded only by the agglomerations in the United States. „It's quite impressive that we have a relatively new office stock, and all the new buildings have been certified. Certificates are important, they're a great example of the realization of the ESG strategy. But they are definitely not enough. They focus on different aspects. At the moment, none of the certificates covers all the regulatory elements and what we need to face as challenges in the years to come, in order to make sure that our assets will not be stranded before they are even built”, said Chwalbińska-Kurek.
According to Kinga Nowakowska, COO and Board Member of Capital Park Group, green certificates were a good foundation for the change of mindset, when thinking about the ecological impact of the buildings, but now they are going to be replaced by other, more complex and powerful tools: „The popularity of the certificates is excellent, but it is just the first step. It`s great that we have so many certified buildings now – 10 years ago, when we tried to certify one of our first office buildings, Eurocentrum, our architects and partners tried to convince us that it was not a good idea. ‘No one will pay for that, it will be just costs, we shouldn't do it’, they said. So I think the certificate changed our mindset, but as I said, it`s just the first step. Now when the ESG reporting comes in, we really try to focus on what's happening right now in our certified buildings. And we realize how much more we can do on a daily basis”, commented Nowakowska.
Oana Stamatin, ESG Chief Officer for CEE & Romania at Colliers pointed out, that most of the certifications systems are falling behind the market reality with their low number of updates and actualizations: „Choosing the most actual version of the certification standard may be a real issue. I`ve been working in the property market for the last 12 years and witnessed just two or three updates of BREEAM, a leading certification standard. Some certification processes in the LEED standard still use the default version of 2009, which is not very accurate. How to compare this certificate with some other, more recent standard? The systems are perfect and unfortunately, the market is still learning how to compare the certified buildings”, said Stamatin.
One of the few certification standards that are updated on a regular basis is WELL, a global rating system that recognizes buildings designed and constructed to support the health and well-being of their occupants. „We often get accused of probably changing things too often; version one moved to version two, then the pandemic happened and we started bringing out ratings, I think things have settled now. But we have advisory groups, and we're very conscious of trying to keep up to date with what the market wants and needs. And it can be a double-edged sword. But we see that at the moment, from a health safety rating perspective, since the pandemic we've taken on an additional 2.2 billion square feet. So the uptake is there, the market is present, wanting to evolve”, said Richard Le Sueur, Director | EMEA, International WELL Building Institute
The moderator of the panel, CEO of Polish Green Building Council Alicja Kuczera underlined, that green certificates focus mostly on the letter „E” in the ESG abbreviation, leaving social and governance issues behind. Dávid Jakab MRICS, Managing Partner, at Realiscon was of a similar opinion: ”I tend to agree that the certifications are just not enough. ESG is much more than that. For sure, the environmental considerations are probably the most important. And the certification systems are based on how we assess energy performance, material use and so on. But ESG is still not there. So I think we need to understand how social and governance considerations are supporting the building and becoming aligned with the environmental considerations", commented Jakab.
