How should green building labelling work?

This week, with my usual impeccable timing, I managed to be out of the country for not only the Green Deal Consultation Response, but also the BREEAM for Domestic Refurbishment scheme launch. I was presenting at a conference in Tallinn, Estonia, on green building labelling, and much of the discussion centred around the business cases for local green building councils owning and operating schemes versus licensing from bodies such as BREEAM.

We heard from the CEO and managing director of the Finnish and Latvian green building councils, both of whom have approached the matter in very different manners - their experience will ultimately help inform how Estonia approach both forming a green building council and which (if any) labelling system they adopt.

All this discussion triggered a fundamental question: “why?”. Why is a building labelling system necessary? And then how should it be funded and operated? Ultimately, where does the value lie?

That BREEAM Domestic Refurbishment has been announced in the same week as the finalisation of Green Deal detail is more than mere coincidence. BRE has drafted the scheme to be ‘Green Deal ready’, so the labelling system and the ‘incentive’ complement each other.

Carol Atkinson, chief executive BRE, says of the scheme: “It pinpoints those elements of the refurbishment that will bring the greatest returns and provides a methodology, software tool and certification for those responsible for the delivery of sustainable domestic refurbishment projects.”

BRE is often criticised for holding a monopoly over building labelling in the UK. I would argue that it’s less of a monopoly and more that BRE hold the dominant position in an uncompetitive market. The doors are open for competitors (most planning policies which require BREEAM will have the equivalent of an ‘equal or approved’ clause), but no-one has successfully entered the market. That’s not to say there aren’t plenty of alternative frameworks for sustainability floating around - most major architectural or engineering practices can pull one out of their intranet - but this in itself is telling - why has no-one successfully commercialised one of these in competition to BREEAM?

The government this week has confirmed that there will be no fees for registration or oversight of Green Deal for installers, assessors and providers of services. Unfortunately, BREEAM Domestic Refurbiushment does not have this luxury and there will be costs both to the assessors and to certify the buildings. These costs probably won’t be enough to cover the back office costs (being relatively low) and will likely be supplemented with training income.

The key to success for the scheme will partly be in finding the balance between administrative costs and attracting a large enough market. While the scheme can cover one off private householder refurbishments, the pricing structure, which gives discounts the greater the number of dwellings assessed, suggests the market will more likely be landlords refurbishing stock, such as RSL’s or care homes.

Will the value in BREEAM for Domestic Refurbishment be realised? This depends very much on either the market recognising it’s benefits or alternatively, some manner of mandatory requirement. To date, Code for Sustainable Homes certification has been driven by ‘push’ mechanisms - both planning and funding requirements. The ‘pull’ mechanism of end buyers recognising the value in it is not evident. Should local authorities start requiring BREEAM for Domestic Refurbishment for planning submissions, this will drive the market. Indeed, if the complementary mechanisms between the scheme and Green Deal materialise, this too could be a driver. And the higher the ‘value’ the market affords the scheme, the more viable the funding of the scheme becomes.

It is a tricky balance, one that my new friends in the Nordic and Baltic are grappling with too. I don’t envy them their task.

Mel Starrs is associate director at PRP Architects