Why environmental performance ratings are good for business: Part 1

November 4, 2019

We’re kicking off a CIM podcast series this week covering some of the hot topics in building operations management. As such, we thought it fitting to start with a subject that is close to our hearts - the environment.

The building sector has a huge opportunity to use technology to operate large buildings— such as airports, shopping centres and commercial offices—as efficiently as possible to reduce carbon emissions, make buildings environmentally friendly and directly contribute to the fight against climate change.

Initiatives such as the Better Building Partnerships Climate Change Commitment recently launched in the UK demonstrates widespread recognition from industry leaders of the urgent and collective action required to reduce the built environment’s carbon footprint.

Before long, these commitments will gain greater traction across the industry as it becomes clearer that what’s good for the environment is also good for tenants, building owners and investors too. What I mean by this, is that energy-efficient buildings that operate at their peak operational performance gain the street cred they deserve by achieving better environmental ratings and higher asset valuations. They also create a more comfortable environment for the thousands of people who live, work and visit them, making for happier occupants too.

In the first episode of our Building Peak Performance podcast series, long-time CIM customer Bill Jenkings, director of the private Australian property investment and development group Kyko Group, joins technology journalist Anthony Caruana and CIM Senior Engineer Scott Beauman to discuss environmental ratings and how they benefit his business, as well as share some practical steps to achieve (or even exceed) a good rating.

Here’s a high-level summary of what they had to say.

What are environmental ratings and why are they important?


As Scott puts it, environmental ratings are “essentially a carbon intensity score for buildings”.

Rating schemes such as NABERS in Australia and BREEAM in the UK are effective industry benchmarking tools that measure and compare a building’s environmental performance to similar buildings.

Environmental ratings add an element of peer pressure and competition that drives better overall performance across the whole industry. In Australia, for example, the average NABERS Base Building Office Rating has increased from 3.2 stars in 2011 to 4.5 stars in 2019, largely driven by owner and occupant expectations of building performance and mandatory disclosure of ratings.

For Kyko Group, operating resource-efficient and environmentally responsible buildings are at the core of the company’s ethos. Achieving better performance ratings, as a result, is also great for business as higher ratings increase property attractiveness and valuation.

Obtaining a good environmental performance rating however, is not easy and requires significant preparation. These ratings are based on actual operational performance data which an accredited assessor examines to give a building an energy efficiency score. Providing observations from contractors or supplying the limited building performance data from your Building Management System (BMS), just won’t cut it. Replacing old equipment and undertaking expensive capital upgrades is not the answer either.

To really measure and improve a building's energy efficiency, you firstly need visibility into how your building is actually performing. This is where building analytics comes into the picture. Building analytics collects, monitors and analyses your live and historical building data then provides you with real-time, data-driven insights to help you pinpoint and fix operational inefficiencies in your existing equipment and systems. For Bill and his team, this level of insight was indispensable.

“It was hard for us to really measure our energy efficiency so that's where CIM became useful for us. They are the experts in understanding how changes in the operation of buildings directly affect NABERS.”

A four-star increase for Kyko Group


At 99 Elizabeth Street in Sydney, CIM and Kyko Group were able to increase the building’s NABERS star rating by four stars in three years, which for Bill and his team was an outstanding result.

“In terms of the quantum reduction in energy consumption, CIM’s PEAK platform has exceeded our expectations. At this site, energy consumption has been reduced by 15% since 2016. This is a massive improvement especially in an environment where energy prices continue to rise.”

“We had an indicative NABERS rating of 1.5 stars on this building and we were targeting 4.5 stars, so we brought CIM in to help. Once the team implemented PEAK, we were able to lift our NABERs rating in 2017 to five stars. In 2018 we lifted it again to 5.5 out of six stars and we have retained that rating again in 2019.”

In Scott’s experience, “a 5.5 score is certainly not easy to achieve, and a six-star rating is even harder.”

Kyko Group would need to reduce their energy a further 30% in order to achieve a six-star rating, which they are targeting with the help of the PEAK platform and CIM’s dedicated team of engineers.

Learn more about how CIM and Kyko Group achieved these results at 99 Elizabeth St without CAPEX investment by listening to the podcast and reading our case study.

Stay tuned for part two of this blog post next week in which I will add my own insights to Bill and Scott’s and provide you with practical steps you can take to increase your building’s energy efficiency.


About Kyko Group:

Founded in 1989, Kyko Group is an Australian property development and investment group that operates primarily in the office, retail, residential and hospitality sectors. Kyko has a development ethos in which innovation and sustainability are highly valued. The properties acquired by Kyko provide a mix of stable yield-generating investments and value-add development opportunities. The Kyko team is led by Bill Jenkings who is responsible for setting strategy, funding and sourcing investment opportunities.  Kyko has built its reputation on being direct, prompt and commercial in their property dealings.

CIM Team
November 4, 2019