Green building certificates – competitive advantage or bureaucratic hurdle?

What are green building certificates?

The topic of green building has become extremely important in recent years – not only in view of increasing demands for sustainability, but also due to the clear economic advantages. Green building certificates serve as recognised quality standards that evaluate buildings according to ecological and social criteria. These certificates are becoming increasingly relevant: while only around 550 buildings in Germany were awarded such a seal in 2013, this figure had risen to an impressive 2,800 by the end of 2022. This means that around 250 new certified buildings are added every year – a clear sign that more and more companies are focussing on sustainability. Financial interest in sustainable properties has also risen sharply. In 2022, turnover of around €11.2 billion was realised in transactions involving certified buildings. The figures make it clear that green building certificates such as DGNB, LEED and BREEAM have now become important factors in the property market and help companies to position themselves sustainably within the framework of the EU taxonomy and similar regulations.^[1]

Which green building certificates are available?

There are various green building certificates around the world, each with different focuses and requirements. Among the best known are LEED (Leadership in Energy and Environmental Design), which is particularly widespread internationally, as well as DGNB (German Sustainable Building Council) and BREEAM (Building Research Establishment Environmental Assessment Method). While DGNB plays a leading role in Germany, LEED in particular has established itself as an international standard. It can be applied flexibly for different building types and is therefore particularly popular with global companies. Each certificate evaluates different aspects of sustainability and offers property companies the opportunity to position themselves on the market as a sustainable and future-oriented player.

What are the different LEED certifications?

How can sustainability in a building be made measurable? LEED uses a flexible points system that categorises buildings into Certified, Silver, Gold or Platinum levels depending on their sustainability performance. The more ecological and social criteria a project fulfils – ranging from energy efficiency and water management to the choice of materials – the higher the certification. LEED adapts to different types of buildings, be they new builds, interiors or existing properties. As a result, depending on the project and objectives, companies can strive for the appropriate certification and thus clearly document and communicate their sustainability strategy to the outside world.

What is required for LEED certification?

To obtain LEED certification, property companies must fulfil a number of requirements, which are assessed using the points system. Various areas such as energy efficiency, water management, air quality and choice of materials are examined. Applicants collect points in these categories, with the overall result determining the certification level – from Certified to Platinum. An important component is the sustainable construction method, which reduces energy consumption and minimises CO₂ emissions. In addition, companies must submit extensive documentation to prove compliance with the criteria. Although the process is demanding, it offers the opportunity to comprehensively optimise the ecological and economic performance of a building.

How do property companies benefit from green building?

Studies show that green buildings tend to achieve higher rents and sales prices, which makes them particularly attractive to tenants and investors.^[2] LEED and other sustainability certifications help increase the value of properties. For example, certified buildings often have lower operating costs, higher energy efficiency and offer an improved indoor climate – factors that tenants increasingly value and for which they are willing to pay more.^[3] Studies document rental premiums of up to 20 per cent and sales premiums that can be even higher. These premium values are primarily the result of the increasing demand for sustainable, future-proof properties.^[4]

What should landlords look out for?

Green building certificates play an important role for landlords, but they should keep a few points in mind. Firstly, it is crucial that sustainability measures are implemented consistently not only during construction planning, but also during ongoing operations. Energy efficiency and resource conservation must be guaranteed in everyday life through efficient systems and clear communication with tenants. Landlords should also ensure that sustainable buildings remain not only environmentally friendly but also financially attractive for potential tenants. In addition to compliance with regulations and standards, close coordination with tenants offers the opportunity to maximise the benefits for both sides.

What are the challenges of green building?

Despite the many advantages, property companies also face some challenges when it comes to green building. One of the biggest hurdles is the often high initial investment required for sustainable materials, technologies and certification processes. Although these costs are amortised in the long term through lower operating costs, not every company has the financial means to make such payments upfront. In addition, the certification process itself can be very complex and time-consuming, as strict documentation and verification requirements must be met. Not all markets have an equal focus on sustainability either – in some regions there is a lack of demand or incentives for green buildings. These factors can become an obstacle for smaller companies or projects.

Conclusion: competitive advantage or bureaucratic hurdle?

Green building certificates offer property companies clear advantages: they increase the market value, reduce operating costs in the long term and improve their image in a society that is increasingly aligned towards sustainability. But getting there is not always easy, with high initial investments and the complex certification process often presenting difficult obstacles. Digitalisation can play an important role here. Modern software solutions facilitate the management and tracking of sustainability data and can thus significantly reduce the bureaucratic burden. Smart tools make property management more efficient and transparent, making it easier for companies to achieve their sustainability goals and use green building certificates as a real competitive advantage. A digitalisation service provider plays a major role here – nobody has to go down the long and sometimes challenging path towards digitalisation alone. Contact us – we can help you take the next step towards more sustainable and efficient property management!

1. BNP Paribas Real Estate (2023): Market report on the investment market for green buildings. Link: https://www.realestate.bnpparibas.de/en/market-reports/green-building-investment/germany-market-focus-2023
2. World Green Building Council (2013): The Business Case for Green Building. Link: https://worldgbc.org/wp-content/uploads/2022/03/Business_Case_For_Green_Building_Report_WEB_2013-04-11-pdf
3. ACEEE Summer Study on Energy Efficiency in Buildings (2018). Link: https://buildings.lbl.gov/sites/default/files/Raising%20the%20Rent%20Premium%20ACEEE%20SS18.pdf
4. Jiang, Zhao, XU, Zhang, Men & Hu (2024): Costs and Pricing of Green Buildings; in Zuo, Shen, Chang (2024): Circular Economy for Buildings and Infrastructure.
   

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