The groundswell of sustainable development is rapidly gaining pace with providers of capital and regulators increasingly emphasising the transition from carbon intensive resources. With the built environment generating 40% of annual global CO2 emissions, developers and landlords have now, more than ever, a unique opportunity to become more competitive through green development practices.
This is because tenants – especially multinationals – are increasingly discerning about the environmental footprint of the space they occupy. Rising costs of energy is further consideration, where more efficient buildings have a direct positive impact on overheads and running costs without affecting staff comfort. In some instances, local governments are even prepared to reduce rates based on green certified developments.
This trend is not only unique to the commercial real estate sector. Homebuyers are ever more concerned about their carbon footprint and alternative green energy sources available for residential use, both from a financial and environmental perspective.
Green development has therefore expanded beyond the ambit of environmental and financial considerations and is rapidly becoming a social imperative as well that needs to be governed responsibly.
As a responsible developer that cares about its clients and the environment, Balwin is a leader in building green, having registered the largest number of IFC (International Finance Corporation) EDGE (Excellence in Design for Greater Efficiencies) certified residential apartments in the world. As at 31 August 2022, the Group has registered a total of 19 784 IFC EDGE certifications with 12 126 being EDGE Advanced.
Balwin also currently holds nine six-star Green Star rated buildings, including its new headquarters in Gauteng, with a further two six-star ratings targeted in 2023 with the opening of the lifestyle centres at its Thaba Eco Village development south of Johannesburg and Greenbay in the Western Cape.
It was therefore a natural next step for Balwin to align itself with the objectives of the Green Building Council of South Africa (GBCSA) and sponsor the development of the holistic Green Star rating tool that, in addition to environmental considerations also takes social and governance matters into consideration.
The new rating tool will be updated to international best practice with more emphasis on social and responsible governance and management. This creates further touchpoints with Balwin, considering the group’s strong focus on access to education as well as vocational skills development through the Balwin Foundation.
Whereas previously different assets had to be assessed through various tools, the updated Green Star rating tool will cater for the assessment of several building types, including offices, residential developments as well as warehouse and logistics facilities.
This will provide landlords, developers and tenants with an internationally recognised rating that confirms alignment to international Environmental, Social and Governance (ESG) best practice standards. This independent, objective recognition gives stakeholders assurance around issues such as energy efficiency, sustainably sourced materials and ethical labour practices.
For developers, this will become the benchmark to develop against, whilst financiers will have comfort around verifiable comparisons to best practice benchmarks.
Homeowners too stand to benefit from greener developments, not only through greater energy efficiencies but from a funding perspective as well. In 2020 Balwin South Africa’s first green home loan where homeowners qualify for a reduced interest rate based on the green characteristics of the development. There is no reason why the GBCSA’s updated verification cannot be applied to the same effect in future.
The redeveloped GBCSA ratings tool is not only a showcase for what can be done in South Africa but will set the standard across the continent for the independent verification of ESG practice, which will raise the standard and focus on developing green.
Ultimately, funders, tenants and homebuyers will be able to differentiate between developers’ commitment to sound ESG practice, based on the new GBCSA Green Star rating tool.
