Worldwide progress in creating sustainable building regulations is slow ⁰

The level of transparency in the reporting of the environmental performance of commercial real estate is growing across the world, but the pace of new sustainable building regulations remains slow. That is the key finding of JLL’s Real Estate Environmental Sustainability Index, which measures the availability of a range of environmental transparency tools in 37 countries. Whilst 17 countries have improved their overall scores since the last survey two years ago, 13 have remained static and three have declined. Half of all country index improvements have been driven by the introduction of voluntary minimum energy efficiency standards for existing buildings. This year France topped the Index for the first time, thanks to the consistent roll-out of mandates to transition to a low carbon economy. Japan has moved up from the transparent group to join France, Australia and the UK in the highly transparent group.

Another leadership example is shown by Dubai, which has moved into the semi-transparent group for the first time, thanks to the introduction of mandatory sustainable building specifications for new constructions of residential, commercial and public buildings in the Emirate.

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Franz Jenowein, director and head of global sustainability research at JLL commented: “Clearly defined carbon reporting frameworks and obligations for companies are missing in too many countries. It can only be hoped that the success of the Paris Agreement on climate change, last December in Paris, will stimulate a wider introduction of standardised carbon reporting instruments.”

The Real Estate Environmental Sustainability Index analyses 37 markets that represent 97 percent of global direct commercial real estate investment volumes in 2015. The index tracks the following sustainability measures:

• Carbon reporting
• Energy consumption benchmarking
• Financial performance
• Green building certification
• Green lease clauses
• Minimum energy standards (existing buildings)
• Minimum energy building standards (new build)

Other key country movers:

• Finland, one of the four new entrants along with Malaysia, Taiwan and Thailand, has gone straight into the ‘transparent’ tier and is now alongside more advanced markets such as Singapore and Germany.
• The U.S. and Switzerland have moved from the semi-transparent group into transparent.
• Slovakia, Romania and South Korea have moved from low transparency up to semi-transparent.

The most ubiquitous environmental transparency instruments, and cornerstones of environmental performance transparency, are minimum energy efficiency standards for the design of new buildings (mandatory in 87 percent of all countries) and market-specific green building certification schemes are publicly available in 65 percent of all countries in the Index.

The least available transparency instrument continues to be the financial performance indicator for green buildings, which is available in only four of the 37 analysed countries – France, Canada, New Zealand and Australia.

Another ‘rare’ transparency tool is carbon emission reporting frameworks, established as a mandatory obligation in four markets and as a voluntary tool in seven countries around the world.

Click here to access the Global Real Estate Transparency Index in full, as well as interactive tools and multimedia content.