Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
The contemporary concept of green building dates to the development of the Building Research Establishment Environmental Assessment Method (BREEAM) in the late 1980s and the release of the first version of BREEAM for Offices in 1990. This pioneering tool was followed by the launch of the Leadership in Energy and Environmental Design (LEED) rating system in 1998. They have since been joined by many tools to define, evaluate, and recognize superior buildings.
Despite significant differences, most of these tools fundamentally share a similar purpose and theory of change. They provide a multifaceted definition for high performance, green buildings (a rating system or scheme) and a framework to evaluate consistency with this definition (third-party review and certification). These values are usually underpinned by stakeholder input and some kind of governance process (e.g., to manage change over time).
Here, I consider one aspect of these tools: when, where, and how performance is defined and measured. Reflecting on the last 30+ years of practice, we can see that approaches to setting and measuring performance have been closely tied to technology and data availability. In broad brush, the green building movement has seen three “performance periods”:
- Pre-2010 Prescriptive Period
- 2010-2020: Transition Period
- Post-2020: Performance Period
The following short sections explore each of these fundamental periods:
Prescriptive Period: Pre-2010
Green building started with prescriptive Best Practices. Critically, this did not reflect a lack of appreciation for operational performance; rather, the property industry as a whole did not have the information infrastructure to collect, manage, analyze, and share performance data across the lifecycle of spaces, buildings, and places.
Prescriptive requirements developed during this period represented a practical effort to set ambitious, but achievable, goals for a large number of issues despite limited capabilities for real world data collection and exchange. Consequently, green building practice focused on documenting the implementation of practices and the development of rules to control when, where, and how much “credit” was given for various actions.
During this period, performance was defined at two scales. First, performance meant exceeding minimum requirements for individual practices. Second, performance meant implementing larger sets of practices. All of these were intended to provide real world benefits, some of which might eventually be measured on-site. The principal data generated about projects during this period related to implementation, including designs, models, and purchasing records.
On the whole, this approach promotes better buildings. It helps project teams focus on sustainability, while providing accountability within the control of project team members. It helps sustainability champions “win” battles to keep specific features that might otherwise be lost to competing interests or priorities.
Transition Period: 2010-2020
After more than a decade of practice, the green building industry came to see a converging set of challenges. Documentation was becoming voluminous and costly. Prescriptive rules were becoming increasingly complex. Limited data on real world performance did not reliably match design and engineering expectations.
These trends pointed toward the need for change in the industry. This was met by a number of innovations, including the rise of new rating systems specifically designed for existing buildings and an ecosystem of tools, systems, and policies focusing on operational building performance. At the same time, the capability to collect, manage, and share large volumes continued to grow. The number vendors and the quality of solutions increased. This was accompanied by new expectations for transparency and measurement.
In practice, this resulted in a fragmented approach to performance. Most new construction continued to use prescriptive documentation. This was sometimes supplemented by requirements for operational measurement. This might be required by a progressive owner or, more rarely, a jurisdiction. In parallel, new existing building rating systems substituted measured performance, such as ENERGY STAR scores or similar benchmarks. However, these activities largely occurred in parallel, with few overt linkages between “performance” measurement for new and existing buildings.
Performance Period: Post-2020
The new, emerging era might be called the Performance Period. This is a time when the rationale for the long-dominant Prescriptive Period reverses. The Performance Period was based on the assumption that real world data was scarce and expensive, while documentation was cheap, easy, and accessible.
This has changed. For an increasing number of projects, real world, operational performance data is readily available and tools to manage it are increasingly inexpensive. Conversely, labor-intensive documentation is seen as increasingly perceived as costly and cumbersome. This is all on top of the growing sense that operational performance is the true measure of project success.
This flip will turn the industry upside-down. Operational performance data will be increasingly common, and, ultimately, prescriptive documentation will be reserved for issues and instances where performance data are not available. In effect, this change will move the goalposts from the prescribed actions to measured operational performance.
The emerging Performance Period is reflected in path-breaking projects like the series of buildings on the US National Renewable Energy Laboratory (NREL) campus in Golden, Colorado. These facilities were developed using an innovative acquisition process that established quantitative operational performance targets as the foundation of the design process. In turn, practices were selected and implemented based to achieve these goals. The result was operationally-verified zero net energy buildings delivered at or below prevailing market rates. Each successive building performs better than its predecessors. Operational experience has informed design and engineering, and managers have used these insights to create spaces that are better for people and the environment — the essence of high performance, green building.
It is useful to understand the green building industry has a long-term relationship with performance, one that has coevolved with technology and data access. Green building pioneers recognized the importance of real world measured performance. However, the capabilities and circumstances of the period made prescriptive rules and documentation the practical choice. This calculus has changed. The Performance Period represents a durable new paradigm that is reinforced by demand for real world performance and an increasing mature set of supporting technologies.
Recommendations for GRESB stakeholders
Investors can use this perspective to ask critical questions about the property companies they invest in. Where, exactly, are they in their evolution? Are they lagging in the Prescriptive Period? Muddling through the Transition Period? Leading the market by embracing the Performance Period?
Companies stuck in the Prescriptive Period may communicate with green building checklists. Transition Period companies may have a bit of real world data from their best projects. Performance Period companies will have data on all their projects, and they will be comfortable talking about real world outcomes and key performance indicators.
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This article was written by Chris Pyke, Senior Vice President at Arc Skoru.