You've probably come across terms like Green Star, WELL, NABERS, and Net Zero when discussing sustainability, but what do they mean, what sets them apart and why should they matter to you as a commercial tenant?
As sustainability becomes a central focus for office occupiers and accounting purposes, knowing the difference between the certifications and frameworks is essential for making informed decisions.
Let's break down some of the most commonly used terms, including Green Star, WELL, Zero Carbon, NABERS, ESG, CSR, Sustainability and Net Zero, to help you understand how they work and impact the environment and building occupants.
Green Star is Australia's leading sustainability rating system for buildings. Administered by the Green Building Council of Australia (GBCA), it evaluates a building's design, construction, and operational performance across various environmental impact categories, including:
Projects are rated on a scale of 1 to 6 stars, with 4 stars (45-59 points) signifying ‘Industry Best Practice’, 5 stars (60-74 points) denoting ‘Australian Excellence’, and 6 stars (75+ points) representing ‘World Leadership’ in sustainability.
Unlike some rating systems, Green Star certification does not expire, and, to date, over 50 million sqm of space has been certified under various Green Star rating tools. Developed in Australia, it has become the de facto rating system of choice nationwide and is recognised globally for its rigorous standards.
NABERS (National Australian Built Environment Rating System) is a national sustainability rating system. Unlike Green Star, which focuses on design and construction, NABERS focuses on the actual performance of a building across key areas such as energy use, water consumption, indoor environment quality (IEQ), and waste management. The NSW Government administers this system and uses a 1 to 6-star rating scale, with 5 or 6 stars indicating strong performance in sustainability metrics.
For office buildings, a NABERS rating is required when leasing or selling any space larger than 1,000 sqm, and the rating must be renewed annually to remain valid. The NABERS Energy Tenancy Rating—which evaluates the energy efficiency of office interiors—remains voluntary but can provide valuable insights for businesses seeking to improve sustainability within their leased spaces.
NABERS has been in use for over 25 years in Australia and has gained international recognition, with the program now being used in countries like the UK and New Zealand.
Administered by the International WELL Building Institute, WELL is the world's first health-centric building rating system. Developed after seven years of extensive medical and scientific research, it assesses how building design and operations impact the health and wellness of its occupants across several categories, including:
Buildings earn certification at the following performance levels:
WELL is recognised globally as the premium certification for health-focused organisations, with nearly 500 million sqm of space certified across more than 130 countries. Its standards are upheld through on-site testing and laboratory validation, ensuring that every health-related initiative is scientifically supported.
As the certification of choice for health-conscious organisations, WELL has been adapted to local contexts worldwide, making it the leading standard for those prioritising occupant well-being. The certification must be renewed every three years to keep the health and wellness features of a building current and effective.
Zero Carbon certification provides third-party verification that a building or project produces net-zero carbon emissions over a year. This means the amount of carbon dioxide released into the atmosphere from building operations (like heating, cooling, and electricity use) is completely offset or eliminated through renewable energy or carbon offsets.
Zero Carbon is reached by offsetting both operational carbon (the emissions produced by a building during its use) and embodied carbon (the emissions generated during the construction process and from building materials). The result is Net Zero Carbon, meaning that the building's total carbon footprint has been effectively neutralised.
While some projects have already achieved operational carbon neutrality, the industry is still progressing towards fully addressing carbon emissions.
ESG refers to a set of externally regulated criteria that companies use to measure and report their environmental and social impact and their internal governance practices. What sets ESG apart is that it's quantitatively measured and directly tied to a company's financial performance and overall business valuation.
A key feature of ESG is that it is linked to measurable, company-wide goals, with progress reported in audited financial reports. Because of this integration with a company's financial structure, ESG performance is closely scrutinised and tracked against annual targets. It is not just about doing good; it's about ensuring that sustainability and social responsibility are embedded in the company's core operations and have a measurable impact.
Focus areas:
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CSR is a broader concept that includes a company's efforts to contribute to societal goals, often by supporting sustainability or charitable initiatives. Unlike ESG, CSR initiatives are typically qualitative and self-regulated, meaning they are not tied to a company's financial performance or annual targets. Instead, CSR focuses on social and ethical responsibilities and is often implemented through a company's culture, values, and brand management.
While CSR may not directly affect a company's business valuation, it contributes to the broader benefit of society, enhancing a company's reputation and building goodwill. These initiatives are more about fostering positive relationships with communities and stakeholders rather than achieving specific financial outcomes.
Net Zero refers to the goal of completely eliminating or offsetting a building's carbon emissions, not only in operational energy use but also in the materials and construction processes. A Net Zero building should offset all emissions associated with its lifecycle, including construction, operation, and end-of-life disposal or demolition.
Sustainability in commercial real estate refers to practices directly linked to a project or building’s certification targets. It takes into account both qualitative and quantitative factors, blending self-regulation with external verification to ensure measurable impacts. While often related to financial performance and business valuation, sustainability also promotes long-term resilience in business operations.
A key part of sustainability is balancing immediate needs with future growth. As the UN World Commission on Environment and Development famously defined it: “sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
This approach integrates CSR and ESG principles, creating a comprehensive strategy that benefits both the environment and the bottom line.
As sustainability continues to gain traction, it's evident that it's more than just a passing trend—it’s becoming a cornerstone of responsible business growth and is critical for companies looking to secure their place in the future.
Understanding the distinctions between frameworks like Green Star, WELL, Zero Carbon, NABERS, ESG, CSR, and sustainability can empower organisations to make informed decisions that benefit both their operations and their long-term goals.
If you're seeking commercial office space that aligns with your sustainability objectives, engaging an independent tenant representation specialist like Tenant CS is the best approach.
With our expertise in commercial tenant representation and a deep understanding of sustainability credentials and practices, we are well-positioned to help you find your best-fit premises for your business.
Book a call with our team today to see how we can help you.
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