About half of Australia’s office space – around 80,000 office buildings – is being scrutinised by the Green Building Council of Australia as part of a federal government-commissioned energy productivity pathway.

The federal Department of Industry, Innovation and Science commissioned the GBCA (in partnership with Sustainability Victoria, City of Melbourne and EY) to coordinate a project that would quantify the energy productivity opportunities of mid-tier (B, C and D-grade) commercial buildings and identify the barriers to implementation of energy-efficiency initiatives.

These buildings, which are generally found in capital city CBDs and suburban centres and tend to be under 10,000 square metres, have historically had a lower level of energy efficiency than premium (or A-grade) assets, due in part to being older buildings with original HVAC systems, minimal controls and outdated lighting. These buildings also tend to have higher vacancy ratings and short lease terms.

However, following the publication of a preliminary research report by EY, GBCA held an interactive workshop with 50 industry stakeholders to inform a national pathway to improving energy productivity within this building sector.

Mid-tier commercial office buildings in Australia: A national pathway to improving energy productivity, released today, identifies the barriers and opportunities that exist to encourage better development. It is intended the report and pathway document be used by industry and government to “guide and inform the development of future policies and programs, including through the National Energy Productivity Plan”.

It states that the uptake of energy efficiency improvements in the mid-tier sector – which makes up half of all Australia’s office space – has been slow due the fact that tenants are predominantly small- to medium-sized organisations with no corporate sustainability agenda and “limited knowledge of energy efficiency”, are run by those who have difficulty accessing capital, and owned by hard-to-reach people, such as foreign investors).

Mid-tier buildings also tend to have lower rental returns from smaller/older buildings, and reactive maintenance of plant equipment and lighting.

The pathway suggests a range of actions that could be taken to improve the energy efficiency of mid-tier buildings. These include:

  • developing a “robust and trusted evidence base” for energy efficiency upgrades
  • developing and promoting tools to improve energy performance and aid decision-making
  • building a “compelling an quantified” business case for retrofits
  • promoting innovative financing mechanisms
  • reviewing the scope of the current Commercial Buildings Disclosure program to encompass smaller office buildings
  • conducting further research to better understand the sector and its stakeholders
  • establishing a sector network to increase collaboration, innovation and exchange

As well as making these offices more sustainable and cost-efficient, energy efficiency improvements could also provide other positive outcomes, such as happier and healthier tenants.

GBCA chief executive Romilly Madew said: “Twenty three per cent of our CBD office stock is now Green Star-rated, and the industry has been extremely effective at tackling the energy efficiency of premium and A-grade building stock.

“However, a large portion of the market has lagged behind due to a range of barriers, split incentives, lack of skills and expertise. While pathways had been identified in the past – such as changes to regulation and innovation in green building – this pathway document outlines the challenges and opportunities, and charts a new course for the industry.”

Launching the report at the National Energy Efficiency Conference in Melbourne, GBCA director of advocacy Katy Dean added: “Improving the energy efficiency of buildings is widely regarded as one of the most cost-effective opportunities to cut greenhouse gas emissions.

“The mid-tier office sector presents huge opportunities, and our industry can be an exemplar for energy efficiency and greenhouse gas emissions reduction around the world.”