Criticism of the government for failing to slash carbon emissions from New Zealand commercial buildings is "right on the button" a leading property expert says.
Peter Mence, chief executive of NZX-listed Argosy Property Ltd, says buildings account for about 20 per cent of New Zealand's carbon footprint but central and local government has been slow to get a handle on this: "Climate change is a big issue, I would say even bigger than the (Covid-19) pandemic."
Argosy manages a $2b commercial property portfolio of which 23 per cent meets the internationally recognised sustainability Green Star rating system. The company is aiming to lift this percentage to 50 per cent by 2031.
Mence's comments follow the release of the New Zealand Green Building Council (NZGBC) report which hit out at the government's failure to adequately cut the carbon emissions of the country's buildings, a failure it says threatens its ability to meet international climate change obligations.
The report says while the government has taken some measures, these "lack both the ambition necessary to deliver a zero-carbon environment and, where measures exist, they are being implemented too slowly."
NZGBC chief executive Andrew Eagles was especially scathing. "In the last couple of years we've heard some fine words from them (the government) but………when it comes to actual, timely, ambitious delivery of the necessary emissions cuts, the government is failing."
Mence says this view is "on the mark as far as I'm concerned. It is astonishing that in this time of climate emergency there is no mandated requirement to build a Green Star rated building and there remains inadequate focus on embodied carbon.
"We have safety requirements for importing cars and we have exhaust emission requirements, but we don't do this with buildings," he says. "Any new or upgraded building ought to be green, and meet energy efficient standards."
Mence says it is essential central government should be engaging with the commercial property industry to achieve ambitious environmental and social initiatives.
"The industry ought to be seen as a key partner and enabler of change and it is counterproductive for governments to alienate it (the Property Council of New Zealand) through lack of consultation or consideration."
Mence says climate change requirements are not discretionary. "It's a have to; we have declared a climate emergency at national level and New Zealand has to make changes. The country is only about 10 per cent along the way of where it needs to be in the green building revolution – even though at Argosy we are well ahead of that."
Buildings cause climate change in two ways. The first is when construction materials such as steel or concrete are produced while the second is when the buildings use energy for everyday things like heating, lighting, watching television and boiling the jug.
Mence says there are many ways a building can be turned green – rainwater harvesting/recycling on site, the use of solar and/or wind energy and the installation of more efficient air conditioning and heating systems among them.
Argosy's portfolio includes 35 industrial, 16 office and three large format retail properties and Mence says a growing number of its tenants (and potential tenants) are looking for green buildings especially in Auckland. There is also strong interest among young people (those under 40) many of whom want to know they are working for an environmentally friendly company.
"There are strong economic benefits in going green," he says. "We've found you get an improved rate of return through better rentals, happier tenants, less employee absenteeism, longer leases and fewer vacancies."
Although he agreed some tenants may question the costs of creating a green building, in the end they stack up well. Even a building that is being upgraded can, in most cases, be refitted with solar panels for example, a move he says is likely to pay for itself in five to six years (over half of Argosy's green building stock have been upgrades rather than new builds).
"But we find almost always tenants are on board with the concept, there are none that think it is a bad idea.
"The property industry needs to play its part in helping the country achieve these emission goals (the recent Climate Change Commission report has called for a 63 per cent reduction in long-lived greenhouse emissions by 2035 and up to 47 per cent reduction in biogenic methane by 2050)," Mence says.
"We have a responsibility to educate everyone on why sustainable buildings make good sense, especially to tenants," he says. "Buildings are our business and tenants should be able to rely on us to provide efficient, effective and innovative solutions to support the long-term sustainability of their businesses and the environment.
"Ignoring sustainability and environmental issues is simply not an option."