The increasing scope and sophistication of ‘Green’ building obligations in both new build and fitout contracts

There has been widespread adoption of Green Star ratings for commercial, retail, social infrastructure and precinct-wide developments since the beginning of the rating system in 2003. Over the subsequent 22 years, the scope of Green Star ratings has widened significantly in terms of:

• the types of buildings able to be rated, from an initial focus on commercial offices, to cover buildings typically constructed and operated by hospitals and universities.
• the ability to rate precincts, not just individual structures.
• the types of features of relevance to the ratings matrices and consequently ‘scored’ by the rating tools.  

At the same time, the ratings have raised their level of ambition by imposing more stringent tests to achieve the relevant star ratings.

The recent Green Star Buildings v1.1 tool, to be implemented in 2025, ‘raises the bar’ in terms of sustainability compliance by incorporating an increased focus on:

• carbon minimisation through use of low carbon materials, types of refrigerants used and the mandatory use of fossil fuel-free energy for heating, cooling, ventilation, cooking and power;
• whole of life assessment, including consideration of the potential for adaptive reuse and disassembly of the structure;
• nature positivity, concerned with the location of the structure (greenfield or remediation of degraded site), impact on waterways, and access of occupants to nature; and
• occupant amenity, including avoidance of volatile organic compounds, access to natural light and ventilation, and occupant control of zoned areas.

The justified focus on new structures should not, however, overshadow that  occupiers of property (even as tenants) can achieve better sustainability outcomes when making decisions about fitout and strip out of building interiors. 

There is also an increasing focus on the adverse sustainability impact of ‘make good’ clauses in commercial leases.  ‘Make good’ clauses require tenants to restore the leased premises to their original state at the end of the lease term. Tenants and commercial lessors are recognising the need to divert strip out waste from landfill by taking deliberate steps to encourage reuse, repurposing or recycling of furniture and building interiors (eg partitions, ceiling tiles and carpet), backed by audited waste diversion metrics included in fitout contracts ^[1].