2013 01 31 PWC LRouach Presentation LuxReal FORUM Sustainability January 2013

Business Unit
A comparison of green
building certifications in
Europe: How does it
apply to practice in
Luxembourg
31 January 2013
LuxReal FORUM Sustainability
Contents
Contents
1
What is an environmental certification

scheme?
The certification process : Construction and

In-use certification
Current trends in building certification in

Europe and Luxembourg
18
The economic benefits of environmental

performance certifications
29
A comparison of green building certifications in Europe: what implications for Luxembourg? LuxReal FORUM Sustainability
PwC
31 January 2013
What is an environmental
certification scheme?
PwC
31 January 2013
1
Section 1 What is an environmental certification scheme?
Introduction
PwC
31 January 2013
2
What are the benefits of environmental certification

schemes?
Reducing environmental impacts of buildings
Providing a credible environmental label
As a consequence
Differentiating buildings based on their environmental performance
Allowing a transparent comparison of buildings
And finally
Stimulating demand for sustainable buildings
Helping companies to demonstrate their social responsibility commitments and

achievements
PwC
31 January 2013
3
Environmental certification schemes are increasingly

developed and used across the world
2008
DGNB
2002
(Germany)
2009
SB Alliance
(Core set of
KPI)
HQE
1998
LEED
(US and
Canada)
(France)
CASBEE
(Japan)
1990
BREEAM
(UK)
PwC
31 January 2013
4
How do environmental certification schemes work?
Voluntary approach
Establishing criteria and standards going beyond national and local legal obligations
They cover a broad range of environmental impacts :

BREEAM
Management
Health & well being
Energy
Transport
Water
Materials
Waste
Land Use & Ecology
Pollution
Innovation
LEED
Sustainable site
Water efficiency
Energy & Atmosphere
Materials & Resources
Indoor environmental quality
Innovation & Design Process
Adapted strategy depending on asset context
Assessor (or PoC)
Scoring and certificate
DGNB
Ecological quality
Economical quality
Socio-cultural quality
Process quality
Site use
HQE
Eco-construction
Eco-management
Comfort
Health
PwC
31 January 2013
5
Comparing the different schemes

BREEAM
Target
buildings
New building
Extension
Existing building
Major renovation
Shell & Core
Scoring
International
Schemes
LEED
DGNB
HQE
New building
Extension
Existing building
Major renovation
Shell & Core
New building
Existing building
Renovation
New buildings
Renovation
In-Use
Unclassified
Passable
Good
Very good
Excellent
Outstanding
Certified
Silver
Gold
Platinium
Bronze
Silver
Gold
Office
Retail
Industrial
Specific purposes
BREEAM In-Use
Bespoke
Offices,
Commercial Interior
LEED ND
LEED Existing
Buildings
Offices,
Retail
Industrial
Specific purposes
Passable
Very good
Excellent
Exceptional
Tertiary
Renovation
In Use
PwC
31 January 2013
6
Comparing the different schemes
Fees
(on m2)
BREEAM
LEED
DGNB
HQE
Registration
BRE Quality Assurance
Assessor
Registration
US GBC fees
Registration
DGNB fees
Auditors fees
Registration
Certiva Fees
(AMO)
Exp on 10.000m2
(AMO)
(AMO)
(AMO)
**
****
***
Complexity
of the
process
Medium-
Medium-
Complex
Medium+
Certification
BREEAM assessors
BRE QA
(LEED accredited professionnal)

USGBCI
DGNB auditors
DGNB
HQE auditors
Certiva
PwC
31 January 2013
7
The certification process :

Construction and In-use certification
PwC
31 January 2013
8
Section 2 A focus on the BREEAM certification scheme
The certification process: a focus on the BREEAM

scheme
The first method for assessing the environmental performance of buildings

Established in 1988 and officially published in 1990
Used in more than 50 countries worldwide
PwC
31 January 2013
9
The BREEAM construction certification process:

stages of assessment
The scheme can be used to assess the impacts at different development stages
Draft
Preassessment
APS / APD
Design Stage
Interim
Certificate
Realisation
Fit-out
Post
Construction
Stage
Fit-out
Final
Certificate
Fit-out
Certificate
PwC
31 January 2013
10
The BREEAM construction certification process:

stages of assessment
Pre-assessment
Evaluation of the potential score
Identification of potential improvements
Design Stage DS & P: Evaluation of the design by the assessor
Assistance to the design team
Evaluation of environmental aspects of the building: studies, choice of materials, energy consumption,
Improvement actions to increase the environmental performance
"Interim Certificate
PwC
31 January 2013
11
The BREEAM certification process: stages of assessment

Post Construction Stage
There are 2 types of performance evaluation of a building:
Post- Construction Review (PCR)
Control the execution of works

Performance check of DS&P
Confirmation of the rating obtained by DS & P
Final certificate
Option for the Shell & Core evaluation (closed structural work ...)
Option for the Fit-out evaluation
Post-construction Assessment (PCA)
Evaluation of the building performance without DS&P

Limited influence on the performance of the building, low possibility to increase the score
Evaluation scheme and similar process to classic BREEAM scheme
PwC
31 January 2013
12
The BREEAM In-Use certification process

Inception
Action Plan
Implementation
Improve your
business
Pre-Assessment
Review
Certification
PwC
31 January 2013
13
The BREEAM In-Use certification process

Standard approach for the provision of environmental performance information encompassing
three parts. Each part can be carried out independently.
Part 1: Building Asset rating
Inherent performance characteristic of building based on built form, construction and services
Part 2: Operation of building - Building Management Rating
Management policies, procedures and practices related to the operation of the building
Consumption of key resources (energy, water and other consumables);
Environmental impacts such as carbon and waste generation
Part 3: Occupiers activities - Organisational effectiveness
Understanding and implementation of management policies, procedures and practices
Staff engagements
PwC
31 January 2013
16
The BREEAM In-Use certification process : aims

The BREEAM In-Use certification aims at:
Improving environmental performance of existing buildings
Helping building managers to reduce running /operational costs
Enhancing the value and marketability of property assets
Providing a transparent platform for negotiating building improvements between landlords,

tenants and property managers
Ensuring compatibility with environmental legislation and standards, such as energy

labelling and ISO 14001
PwC
31 January 2013
14
The BREEAM In-Use certification process : Use

The BREEAM In-Use certification can be used by owners to improve the value of the building.
It allows owners or tenants to:
Manage and monitor the sustainability of the asset
Evaluate management practices and the organisation of activities within the building
Develop action plans for sustainable management of the building and its operation
Develop action plans to improve the sustainability of asset and its occupation / operation.
PwC
31 January 2013
15
Current trends in building

certification in Europe and
Luxembourg
PwC
31 January 2013
17
Section 3 Current trends in building certification in Europe and worldwide
The stock of certified buildings is expected to increase

significantly in the coming years
Existing stock:
1% certified properties in Europe (2010) (1)
2% certified properties in Europe (2015) (2)
16% certified properties in Luxembourg (2012) (3)
85% of the new properties which will be completed in 2013 in Ile de France will be
certified.
(1) (2) Pike

(3) PwC
Research
Research
PwC
31 January 2013
19
Current trends in green retrofitting and new

construction in Europe
Source RICS, Going for Green May 2012
PwC
31 January 2013
20
Certified buildings in Europe: state of play

Certified and registered buildings in
Europe (May 2012)
4 332
1 001
731
278
238
DGBN
649
550
134
LEED
Certified buildings
BREEAM
HQE
Registered buildings
Source RICS, Going for Green May 2012
PwC
31 January 2013
21
Certified buildings in Europe: state of play

Certified and registered buildings in
Europe (May 2012), dominated by
BREEAM
But, outside the birth country, LEED is

leading
731
4 332
1 001
731
278 238
DGBN
649
134
Certified buildings
21
BREEAM
145
550
134
LEED
166
HQE
13
DGBN
Outside Germany
LEED
in Europe
Certified buildings
BREEAM
Outside England
HQE
Outside France
Source : RICS
PwC
31 January 2013
22
Certified buildings in Luxembourg : figures
Certified office buildings in Luxembourg (%)
Certified office buildings in Luxembourg (No. buildings)

28
HQE
15%
DGNB
13%
BREEAM
60%
Valideo
6%
LEED
2%
Triple
Certification
4%
BREEAM
HQE
DGNB
Valideo
Triple
Certification
LEED
* The data presented in this section covers certified buildings for which information is publicly available as well as
those buildings that will be certified in the future and for which PwC has access to confidential information.
Copyright PwC, novembre 2012
PwC
31 January 2013
23
Certified buildings in Luxembourg : targets

Certified buildings in Luxembourg by project type
Renovation
11%
New
72%
In Use
8%
Extension
9%
PwC
31 January 2013
24
A broad coverage of the city districts
Localisation of certified buildings*

7
7
6
Luxembourg
1
Windhof
Kayl
Am Bam
Strassen
Merl
Kirchberg
Howald
Hamm
Gare
Cloche d'Or
Dudelange
Diekirch
Belval
CBD
No. certified buildings
Periphery
* The data presented in this section covers certified buildings for which information is publicly available as well as
those buildings that will be certified in the future and for which PwC has access to confidential information.
PwC
31 January 2013
25
Certified buildings in Luxembourg: Kirchberg
PwC
31 January 2013
26
Certified buildings in Luxembourg: CBD
PwC
31 January 2013
27
Certified buildings in Luxembourg: Gasperich
PwC
31 January 2013
28
The economic benefits of

environmental performance
certifications
PwC
31 January 2013
29
Section 4 The economic benefits of environmental performance certifications
What is green value?
Green value can be defined as the net additional value a

green building can obtain on the market with respect to non-green
buildings.
Evidence suggests that green certified buildings may be able to
obtain a premium compared to non certified buildings with same
characteristics (location, size, comfort).
PwC
31 January 2013
30
Risks for the market value of a non-green building
Market rent
Higher owners operating costs to maintain the building at market level
Higher risk premium
Lower owners earnings growth
Higher depreciation
PwC
31 January 2013
32
Environmental determinants of the market value of

rental properties
Changes in tenants expectations (+)

Lower share of operating costs (+)
Lower costs of fittings (+)
Market value
Lower costs for maintenance and servicing

activities (-)
Lower investments to sustain building at
market level (-)
Lower rent waivers (-)
Net operating income (=market rent owners operating costs)

Yield (= risk free rate + risk premium growth + depreciation)
More cash flow (-)

Improve marketability (-)
Shorter vacancy (-)
Competitiveness (+)
Rising energy costs (+)
Sustainability hype (+)
Longer life span (-)

Longer compliance with
increasingly stringent
legislation (-)
Source : D. Lorentz in Bullier et alii. Assesing Green Value, a Key to Investment in Sustainable Buildings. June 2011
PwC
31 January 2013
31
A few extracts from the literature on green value of

buildings
The Energy Star and LEED certified buildings have on average a 3% higher rent, a 6% higher
rental revenue (rent multiplied by the occupation rent) and a 16% higher resale price.
Eichholtz P. et al., (2009), Doing Well by Doing Good? An Analysis of the Financial Performance of the Green Office Buildings in the
USA, Maastricht University and California University
Higher difference in rent, equal to 6%. Their figures are more surprising for resale values: over
31% for Energy Star buildings, over 35% for LEED buildings.
Fuerst F., McAllister P. (2009), New Evidence on the Green Building Rent and Price Premium, Reading University .
Resale price difference over 6% for Energy Star, plus 10% for LEED
Miller N., Spivey J., Florance A. (2008), Does Green Pay Off? , San Diego University, CoStar Data Basis
PwC
31 January 2013
33
Green Value : Different figures
PwC
31 January 2013
34
Thank you for your attention.
Laurent Rouach
Partner
Sustainability
laurent.rouach@lu.pwc.com
+352 49 48 48 5762
This publication has been prepared for general guidance on matters of interest only, and does
not constitute professional advice. You should not act upon the information contained in this
publication without obtaining specific professional advice. No representation or warranty
(express or implied) is given as to the accuracy or completeness of the information contained
in this publication, and, to the extent permitted by law, PricewaterhouseCoopers, Socit
cooprative, its members, employees and agents do not accept or assume any liability,
responsibility or duty of care for any consequences of you or anyone else acting, or refraining
to act, in reliance on the information contained in this publication or for any decision based on
it.
2013 PricewaterhouseCoopers, Socit cooprative. All rights reserved. In this document,
PwC refers to PricewaterhouseCoopers, Socit cooprative Luxembourg, which is a
member firm of PricewaterhouseCoopers International Limited, each member firm of which is
a separate legal entity.

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Business Unit

LuxReal FORUM Sustainability

What is an environmental certification

The certification process : Construction and

Current trends in building certification in

The economic benefits of environmental

Section 1 What is an environmental certification scheme?

Section 1 What is an environmental certification scheme?

What are the benefits of environmental certification

Reducing environmental impacts of buildings

Providing a credible environmental label

Differentiating buildings based on their environmental performance

Allowing a transparent comparison of buildings

Stimulating demand for sustainable buildings

Helping companies to demonstrate their social responsibility commitments and

Section 1 What is an environmental certification scheme?

Environmental certification schemes are increasingly

Section 1 What is an environmental certification scheme?

How do environmental certification schemes work?

They cover a broad range of environmental impacts :

Adapted strategy depending on asset context

Assessor (or PoC)

Scoring and certificate

Section 1 What is an environmental certification scheme?

Comparing the different schemes

Section 1 What is an environmental certification scheme?

Comparing the different schemes

(LEED accredited professionnal)

The certification process :

Section 2 A focus on the BREEAM certification scheme

The certification process: a focus on the BREEAM

The first method for assessing the environmental performance of buildings

Used in more than 50 countries worldwide

Section 2 A focus on the BREEAM certification scheme

The BREEAM construction certification process:

Section 2 A focus on the BREEAM certification scheme

The BREEAM construction certification process:

Section 2 A focus on the BREEAM certification scheme

The BREEAM certification process: stages of assessment

Post- Construction Review (PCR)

Control the execution of works

Post-construction Assessment (PCA)

Evaluation of the building performance without DS&P

Section 2 A focus on the BREEAM certification scheme

The BREEAM In-Use certification process

Section 2 A focus on the BREEAM certification scheme

The BREEAM In-Use certification process

Section 2 A focus on the BREEAM certification scheme

The BREEAM In-Use certification process : aims

Improving environmental performance of existing buildings

Helping building managers to reduce running /operational costs

Enhancing the value and marketability of property assets

Providing a transparent platform for negotiating building improvements between landlords,

Ensuring compatibility with environmental legislation and standards, such as energy

Section 2 A focus on the BREEAM certification scheme

The BREEAM In-Use certification process : Use

Manage and monitor the sustainability of the asset

Current trends in building

Section 3 Current trends in building certification in Europe and worldwide

The stock of certified buildings is expected to increase

(1) (2) Pike

Section 3 Current trends in building certification in Europe and worldwide

Current trends in green retrofitting and new