The Fifth Estate is constantly bombarded with press releases on the perceived sustainability wins of residential building projects that, when push comes to shove, are really doing nothing more than meeting the already pretty low minimum standards set by government.

In most jurisdictions, a 6 Star NatHERS rating is now the absolute minimum in terms of a building’s thermal performance. But to many plucky PR firms and developers, it’s an achievement to scream from their poorly performing rooftops.

In NSW where a National Construction Code variation means residential buildings are hitting on average 4.5 stars (and sometimes much less) we’re often furnished with press releases positively glowing about hitting five stars.

We usually put it down to overeager PR firms looking to apply a coat of greenwash for their client, and consequently ignore, but when NAB recently added financing 6 Star NatHERS properties to its low carbon investment achievements, it raised more than a few eyebrows here. It seemed a bit more significant than the usual annoyance confined to a press release.

On face value NAB had eclipsed the rest of the Big Four banks, providing a massive $13.4 billion in financing “to address climate change, and support the transition to a low-carbon economy” (almost double that of closest competitor Westpac on $7 billion). A look at the footnotes, however, revealed that most of the finance – $8.5 billion – was lending to “support development of 6 Star residential properties”.

We were a little confused as to how funding minimum standard residential development was helping the climate, rather than just being business-as-usual practice. You could just as well fund a car company, and say you were actively improving safety because the cars had brakes and met minimum safety standards.

So maybe something else is going on if such a huge corporation can get it wrong. Maybe it’s not greenwash. Maybe it’s plain old confusion.

Looking at the other building rating tools on the market, perhaps the confusion explanation is not such as stretch: 6 Star Green Star? Brilliant. 6 Star NABERS? Industry-leading. 6 Star NatHERS? Bare minimum.

We approached the administrator of NatHERS – the federal Department of Energy and Environment – to see what they were doing to communicate how NatHERS worked to stakeholders and the general public, and whether they were highlighting that a 6 Star NatHERS rating is typically minimum standard. What’s being done to address the confusion?

The answer: not our problem.

“The National Construction Code has a minimum requirement of 6 stars for the majority of climate zones in Australia, although some jurisdictions have varied from this requirement,” a spokesperson said.

“The responsibility for providing advice on minimum requirements are a matter for each state and territory government.”

Saying that, the spokesperson did point to a number of resources NatHERS used for engagement, such as a biannual newsletter, news releases, YouTube videos, an annual face-to-face stakeholder update, and presenting at residential building events and consumer events like Sustainable House Day.

Is it enough, though?

NatHERS has been criticised for poor stakeholder engagement in the past. Last year, an independent review into NatHERS governance by ACIL Allen Consulting found that the body’s communications efforts were widely regarded as substandard, with the need to improve stakeholder engagement on an “urgent basis”.

The spokesman said that NatHERS had responded.

“In accordance with the response from states and territories to the governance review, the NatHERS administrator has, among other things, established the NatHERS Service Charter and a Stakeholder Consultative Group. The Stakeholder Consultative Group had its inaugural meeting in October 2017 and a Terms of Reference for this group will be published on the NatHERS website shortly.”

Although not an issue as big as, say, buildings not even meeting the minimum standards they are legally obliged to, we still hate to see already too low minimum standards promoted as sustainability achievements.

How would you solve the problem? Better engagement of lay stakeholders and the general public? Rescaling the entire NatHERS star rating system? Let us know!

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  1. The system is broken and they know it they just don’t care. I recently designed and constructed a residence that achieved 6 stars and it is performing at 9.5 stars as i designed it to and expected it to. Contrast that with the 8-9 star buildings that perform in reality at 5-6 stars. Sure I could have paid thousands of dollars to prove the standard rating systems are not accurate but why should i have to. Most importantly the building has massive amounts of low “E” glass so it can take advantage of the fantastic views. Moreover it does not look like a chook shed.

  2. One of the fundamental confusions regarding NatHERS stars is that the impact of 1 star difference varies greatly depending on location. In the extreme zones of Cabrramurra and Darwin, one star can have a significant impact on heating and cooling demand, unlike say Carnarvon the most moderate climate zone. Mascot and Brisbane will only show a relatively modest impact moving from say 6 to 7 stars.
    Regarding the comment re NSW, with the increase in stringency introduced in July this year, BASIX is arguably the most stringent regime in the country, since it requires complaince to balance both heating and cooling caps, not just a star rating, energy reduction of 50% and water of 40%.

  3. The lay stakeholders and public would be more engaged if Residential Building mandatory disclosure was adopted nationally. A mandatory energy rating for existing houses sold or rented would shake up the real estate industry and the public would then be more exposed to the issue of thermal performance. What a national RBMD scheme would look like of course is conjecture and models exist in the now 7 years ago Allen RBMD RIS.

    NatHERs has its critics ( will likely always have both on the scientific/technical and regulation/administrative side) however a NatHERS style rating for ALL house sale and lease transactions would clearly better engage the public on what is written in the stars for thermal comfort and energy performance.

    1. I would like to add that NSW Basix has a much more powerful performance criteria than a 6 star rating -NSW Basix has minimum heating /cooling cap requirements -so, wheras 6 stars is a product of averages -it is very possible that the 6 star home is a good performer in winter but bad performer in summer or vice versa but with the Basix system -cooling /heating caps ensures that the house will perform well all year round -NSW Basix has the best performing thermal performance criteria in Australia -which is much better that 6 stars … and the NatHERs system has improved our housing stock markedly -it wasnt long ago that builders were constructing walls without ANY insulation now we have good performing homes -go NatHERS

      1. Hi Mike, again, the story was not about the value of the various rating tools, but simply that 6 star NatHERS sounds like the best possible performance, given that’s what it usually means. But since NatHERS has 10 stars possible, it’s confusing for people who don’t understand 6 is the minimum legal standard in most states. Here’s the question for boffins: can NatHERS rescale so that its 10 stars becomes a 6 and so on?

        1. Hi Tina, The article certainly stimulated some debate but (again) barely scratched the surface of the widespread issues in this space (for example regarding: compliance standards, design outcomes, & confusion between thermal comfort outcomes and actual energy end use for whole of home versus predicted energy use (let alone GHG impacts)for space heating and cooling).

          Regarding your observation “the story was not about the value of the various rating tools”, i think that is contestable given that the original article implied that NSW ‘standards’ were lower as a result BASIX, but as at least one reply points out, the introduction of separate heating and cooling caps in NSW is (just one of several) significant differentiators. In fact reporting on star ratings in NSW remains irrelevant as the NSW code simply does not express a residential ‘Energy Efficiency’ outcome in terms of stars – and for good reason. NSW was an early adopted of the Star-based scheme but quite quickly diversified to a “whole of home energy end use” approach.

          More generally, and leaving aside any of the frustrations about BASIX governance, targets or tool functionality, its a real concern that, over a decade since its introduction, there is still no national web-based scheme that achieves what BASIX delivered so long ago in terms of the capture of data, its provision to interested parties and the web-delivery mode. Certainly its in need of a refresh, but the tool and the policy are readily and easily improved with proper allocation of resources to the task. something that the adoption by NSW govn of the Climate Change Fund package (3 days short of a year after submissions closed) could facilitate (sigh … that is the sound of breath not being held).

      2. “NSW Basix has a much more powerful performance criteria than a 6 star rating” – not really when BASIX continues to approve black-roofed, minimal eaved, west-facing houses with no north facing windows – how can that possibly be even 6 star??

  4. The banks usually use the Climate Bonds Initiative methodology to determine what constitutes a high performing building within a specific market. This standard suggests that if there is a metric used in the local building regulations it should be used (so NatHERS gets used) and that the top 15% of building are ‘high performing’. Given that 2% of building stock is added each year, and we have had a 6 star standard for seven years, that means 6 star is a convenient defacto for the top 15% of the Australian building stock right now. NatHERS has many flaws but I do get tired of it being used as the ‘fall guy’ for everything.

    Over time as 6 stars becomes more than 15% of the market the banks will need to adapt their methodology and the standard will rise.

    In this case I suspect the bank has taken an established methodology (the CBI methodology), used the most credible metric we have (NatHERS) and drawn a conclusion the author doesn’t like. A little more research by the Fifth Estate may have meant this article informed the market, and raised interesting questions about various methodologies and benchmarks and how we all plot a course to very high performance homes. Instead it chose the easy path of criticising the most effective mainstream residential energy efficiency standard we have. NatHERS needs criticism to improve but it doesn’t need baseless accusations and NAB’s behavior here is unlikely to have been caused by misunderstanding NatHERS star ratings.

    1. Hi Anthony,

      This article is not so much a critique of NatHERS as it is a critique of how ‘6 Star’ is used by marketers and others to sell the idea of sustainability – of going above and beyond when it usually stands for nothing more than demonstrating compliance.

      We’re not questioning the validity of the tool at all, rather asking our readers whether more can be done to inform lay stakeholders of what ‘6 star’ means.

      Thank you though for your insight into the CBI methodology. With the trajectory towards net zero by 2050, hopefully it’s not too long before meeting bare minimum standards doesn’t qualify you to make a song and dance about how sustainable your business is.

  5. 6 stars as a minimum is confusing for the general public, as in other realms like electronics 6 stars is really efficient. How about we change it to 1 star for compliance (currently 6 star), and 0 stars with a Mj/m2 rating for anything that rates up less. Then just go up to up to 5 stars (currently 10)
    There will be some confusion in the change, but the airconditioner industry re-calibrated a few years back when increased performance technology meant getting high stars was too easy, and now no-one remembers the old system now.
    That would help stop the “6 star home!” marketing greenwash, and make people stop and think, “do I really want to buy a 1 star house?” There’s no point having a star system if the minimum also sounds good.

  6. Great article. Does the greenwash come from ignorance of the people putting statistics together or do they know what they are writing is misleading. Should they be misleading in their annual reports is this a legal issue for them?
    One large Super fund recently reported the sqm of the buildings under their solar panels. So the large sqm noted in their report was the office and retail being ‘supplied power’ by the solar. The fact that the solar supplied a small fraction of the power was not noted. They should put a single panel on every building then they could say their renewable energy installations supply power to their whole portfolio. Misleading?

  7. Lay stakeholders just don’t have any incentive to care, and, really, they have enough to think about. They deserve some reassurance, though, that their homes meet the minimum legal compliance. It is irrelevant to them that that has a star against it.
    Anyone who wants 6 Star merely wants to know they got the minimum quality assured. Anyone who knows what 7+ stars even means is your educated consumer.
    The issue isn’t educating the lay person. The issue is building audits for minimum compliance in the as-built product. If people saw any difference between low and high performing products, they’d quickly learn. As it is – there is none!

  8. The variety of Stars is indeed confusing and a problem in many parts of the market not just NatHERS. One observation,and a critical one, is that the article did not address the lack of auditing of the results in a meaningful way. Although some efforts have been made of late to try an get control there are still many simulations that are not appropriately checked by those who can audit and the certifier takes the certification at face value. I wonder how many 6 star homes are really performing at 6 stars

  9. By dumping it completely? Unlikely, but the system is broken and fails to recognise construction. Look up domain or when you will find plenty of real estate agents touting six star credentials like they mean something.WERS, AFRC, ABSA, BDAV, CSIRO, Energy Inspection, etc are all doing ok I expect…not to mention the recent increase in certification costs. The administrators are too weak to do anything beyond letting the market deal with it!