Planning for Certification – Cost and Task Heads-up
So you are ready to or have been tasked to certify your building under one of the big schemes, BREEAM or LEED for improving your ESG compliance scores… and now you need to set up a financial plan for it.
This is where a lot of uncertainty is usually discovered down the road as there tends to be a rather large gap between the official certification costs associated with the certifying body, versus the total costs to achieve the desired level of certification. This inevitably leads to a frustrating experience and more importantly additional costs not originally budgeted for.
As part of our Myth-Busting series of articles on green building certification, we’ve summarised below a kick-starter on the financial basics associated to these systems:
A. Official certification costs = up to 5%
BREEAM, LEED, WELL fees for registration & verification/certification by a 3rd party.
B. Certification management/audit = equivalent to 20%
Fees for an accredited professional to guide you through the certification process, manage the document collation (LEED) and audit your property (BREEAM).
C. Further expert surveys = + 25%
Both BREEAM and LEED have mandatory and also some optional topics that require specialist studies to be carried out; such as condition survey, climate resilience, fire & flood risk assessments, ecology & biodiversity studies, a commissioning agent or energy audit, ASHRAE energy model, LCA study, acoustician, environmental engineer for monitoring construction and so on.
D. Low/No ROI investments = Min + 50%
Most existing sites require some basic energy & water metering & monitoring installations, or workspace and back-of-house improvements; neither of which tend to be picked up through direct financial return focused projects.
In summary at least 75% of the costs tend to be unknown or hidden at project start and keep piling up, once you have already committed to achieve certification.
These ratios are a good rule of thumb in our experience for the majority of mainstream new and existing projects aiming for a mid-level certificate (i.e. Very Good for BREEAM or Silver for LEED), but will of course need to be adjusted to the chosen system, rating level, existing status of the design or the finished building and investments done to date.
To manage these uncertainties well in advance, at Watts-ON Consultants we recommend to follow 3 basic and well-proven principles:
1. Start with a GAP analysis, or sometimes referred to as a pre-assessment, to identify the right system to be used and the missing milestones and opportunities for improving key performance indicators which need to be budgeted for prior to closure of the certification. In other words, gain an insight into the small print, prior to jumping on the certification bandwagon.
2. Manage, engage and support the client team throughout the certification process and not just cold drop in to audit the building and its management team’s performance. The best feedback we received so far related much more to our ability to turn the otherwise dry auditing process into a personally adjusted learning experience for owners, technical and managing staff alike.
3. Identify topics with indirect benefits, be that enhanced customer feedback through improved staff satisfaction, lowered insurance premiums thanks to risk management or higher perceived value due condition & travel & green infrastructure improvements; we identify it together with Your team, to make sure all are on board with the sustainability certification journey!