This year’s NABERS annual report shows that the rating system, lauded as a global pacesetter in reducing emissions, is only accelerating and amplifying its impact.
For the past 25 years NABERS has stormed the office market with its energy rating system that has slashed greenhouse gas emissions and sharpened competitive fervour among leading property investors in Australia.
Alongside the environmental benefits has come the financial rewards.
In the past two decades the commercial property ecosystem has removed 15 million tonnes of CO2 emissions from Australia’s mainly CBD buildings at the same time as it’s generated savings of more than $2 billion in energy bills.
But while the office sector in Australia’s big cities has been the dominant focus of attention, that’s changing – radically.
This year’s annual report from NABERS reveals an exciting expansion of the ecosystem with entrants from a range of new sectors either fully engaged or readying at the gates.
They’re responding to the rising awareness from owners, investors, financiers, asset managers, tenants and a broad range of stakeholders that we need to “measure and manage” our use of critical natural resources – from energy to carbon water and waste – if we are to meet urgent net zero and sustainability targets.
This year’s annual report includes regional properties, hotels, schools, data centres, shopping centres, warehouses and cold storage facilities on the NABERS journey.
Even the administrators of the NABERS program, the New South Wales government, has signalled it wants to lift its leadership targets in key areas. For instance it wants to go from 5 stars to 5.5 stars in office Energy ratings, from 4 to 5 stars in Office Water and it’s set new targets of 4 stars for Office Waste and 4.5 star for Office Indoor Environment ratings.
If the name of the game is bigger influence and bigger impact then this annual report from NABERS shows it’s outperforming on vision and mission.
Key achievements:
- 87% increase in Data Centre ratings
- 44% increase in Warehouses and Cold Store ratings
- 33% increase in Apartment buildings ratings
- 55% of total ratings came from first time NABERS raters
- 40% increase in certified Hotels ratings
- 7% increase in Office ratings, including 27 per cent increase in Office Waste
- 5% increase in Shopping Centre Energy and Water ratings
- first NABERS Energy Performance Indicator certification for a childcare centre
Regions are rising
A significant shift in the office sector this year is that, for the first time, the star spotlight has shifted away from the CBDs to the regional city of Wollongong, south of Sydney, with the family-owned investor Quality Green Group, taking out the prize for Australia’s highest-rated NABERS Energy portfolio.
It’s a watershed moment that signals that big offices owned by the biggest investors are well and truly mature in their sustainability journey and reached close to peak.
The big jumps in performance are now likely to come secondary tiers and adjacent sectors.
Andrew Buchel, acting head of market development at NABERS, said that driving industry and policy makers alike are the growing awareness of the urgency to achieve our net zero and renewable energy targets.
“The overarching sense here is that as we get closer to the 2030, 2035, 2040 targets, NABERS is continuing to grow and evolve.
“Policymakers are seeing the need to accelerate work in the built environment to meet our targets.
“From our perspective that’s great because that’s been our mindset for a while.”
Hotels join Sustainable Portfolio Index
Among hotels, sustainability has been a tough call. The industry is challenged on several fronts. Just one is the absence of a clear and visible link between sustainability improvements and guest experience.
But regardless NABERS now has two champions leading change, the Australian based Schwartz Family Company and the Singapore based CapitaLand, with 6000 rooms between them.
Buchel says that learnings from other sectors have helped to assist the sustainability evolution in the sector and NABERS is exploring partnerships with existing sustainability ratings, such as with Ecotourism Australia, Earth Check and Green Key, in order to utilise synergies between programs.
And the recognition is going international, with NABERS ratings for hotels now recognised and identified by Travalyst and Google Travel with its “Eco-certified” tag.
“It makes sense for our ratings to plug into their systems so we can reduce the barriers for hotel owners and streamline the process,” Buchel said.
Large increase in data centre certification
Data centres is another sector with urgent need for attention given the rapid advance of AI and its voracious appetite for energy.
Owners and operators are keenly aware they need to prove these centres are operating as efficiently as possible and this is reflected in an 80 per cent surge in certification for the sector.
The focus is on power usage effectiveness (PUE), which is the total building usage over the ratio of the IT equipment energy.
But Buchel says that energy efficiency is only telling half the story. Water for instance is still not measured but consumed in huge amounts in order to cool the data centre racks.
Given the forecast that data centres capacities in Australia will more than double by 2030, this is an emerging priority sector, Buchel said.
New tool for shopping centres
Shopping centres are another area that consumes a great deal of energy given its need for open doors and comfortable indoor environments. Buchel said interest and engagement from property owners and managers in this sector was also rising.
The expansion of the Co-Assess tool from offices to shopping centres has helped. This allows shopping centre base building and multiple retail tenancy ratings to be assessed, audited and certified in one streamlined lodgement, with individual NABERS certificates issued for each space rated, Buchel said.
Individual retailers can still separately sign up to use the retail tool.
“We are seeing good achievements in this sector – the leading shopping centre portfolio, QIC Real Estate, achieved 99.77 per cent base building electrification across their three assets.”
Warehouses and cold storage facilities
This year NABERS reported it was working with another energy hungry sector, the retail-aligned warehouses and cold storage facilities, and are pleased to say that the Supply Chain & Logistics Association of Australia had joined the NABERS National Steering Committee.
Thousands of schools receive first rating
In another important development, the NABERS annual report also pointed to 3500 public schools receiving their first Schools ratings across Victoria, New South Wales and the Northern Territory.
Embodied carbon can now be rated
But perhaps most keenly awaited of all the ratings news was on embodied carbon.
This is an area of sustainability development that has increasingly focused attention, but it’s been plagued by a raft of competing rating systems with confusing results.
So last year’s launch of the Embodied Carbon tool by Josh Wilson, Assistant Minister for Climate Change and Energy, was keenly received.
“By providing a standardised methodology, the tool gives project teams confidence to estimate, plan and deliver carbon reductions, and enable policymakers to set credible targets for the first time,” Buchel said.
Of course, it will take a few years for buildings and major refurbishment and expansion projects to be completed, so we look forward to seeing the results in the future, he pointed out.
Consolidating the future
The work will continue, Buchel said.
“As net zero targets grow closer, we will continue to work with industries in the transformation to increase electrification and measure embodied carbon.”
2024 Annual Report highlights:
- Record growth in certifications: 120% increase in certified ratings compared to FY24, led by public school portfolio assessments across multiple jurisdictions (3,500 ratings) and a 40% rise in Hotel ratings
- Launch of NABERS Embodied Carbon tool: A new benchmark enabling measurement of upfront embodied carbon, supported by rules, a national database, a calculator and trained assessors
- Sustainable Portfolios Index expansion: 67 portfolios across 30 companies and 500-plus assets, with 20 hotels joining for the first time and new indicators for renewable energy and electrification
- Sustainable finance: NABERS supported the launch of Australia’s Sustainable Finance Taxonomy and released version 2 of the NABERS Sustainable Finance Criteria, helping align buildings with green investment benchmarks and streamlining access to sustainability-linked finance
- Operational excellence: 11,000 ratings certified in FY25 (98% within 10 days), 86 new Assessors onboarded, and streamlined processes through NABERS Perform
- Co-Assess expansion to Shopping Centres: Supporting sector leaders and streamlining the rating lodgement process to increase efficiency for both Assessors and NABERS internal team
- Hotels sector recognition: NABERS Hotel ratings now visible on Google Travel with an “eco-certified” tag and accepted by Travalyst’s global sustainability platform
- International growth: NABERS UK relaunched with strong uptake (42 new Design for Performance projects, 92 Assessors), while NABERS NZ grew 14% in Energy ratings and launched a Water rating tool for offices.
