A portfolio can have a good environmental rating while still containing buildings where energy use, retrofit needs or transition risks remain poorly managed. Conversely, a building can improve its operation without its rating clearly explaining what changed.
The question therefore needs to be framed differently: what decisions were made in the buildings, what results did they produce, and what economic exposure did they reduce?
Certifications and environmental, social and governance (ESG) assessments can help answer this question. They give structure to sustainability practices, organise information and provide recognition that the market may value. However, the quality of a reporting submission, energy performance, climate risk reduction and the protection of real estate value must each be examined separately.
The GRESB 2028 Standard, published on 4 November 2026, is moving the assessment towards more emphasis on actual performance. This development deserves recognition. It also makes the question of execution more urgent: how can a new incentive lead to completed investments and lasting results? [1]
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Recognising an approach and demonstrating a result
LEED and GRESB do not assess the same thing. LEED certifies a project or building against a particular rating system. GRESB assesses entities and portfolios across several environmental, social and governance dimensions. Certifications can contribute to that assessment; GRESB is therefore not simply LEED’s successor. [2, 3]
Design and construction certifications must also be distinguished from operational certifications. Energy simulation assesses a design under defined conditions. Performance after occupation then depends on the installations delivered, their settings, building use and maintenance. LEED O+M addresses operation and requires a performance period, generally twelve months in recent versions. LEED v5 also strengthens the role of decarbonisation. It would be inaccurate to present all these approaches as statements of intent. [2, 4]
Depending on the rating system, requirements for metering, commissioning and performance can support practical improvements. Their effect depends on implementation and on maintaining the results in operation. [4]
The right question is what each form of recognition actually demonstrates. Certification can confirm that criteria have been met. A consumption record describes operation over a period. Verified savings establish an improvement against an adjusted baseline. These levels of evidence complement each other, but they are not interchangeable.
For an owner who needs to decide on works, the certification level alone does not answer the essential questions: which equipment needs attention, how much consumption can be avoided, and how can the result be maintained?
What the studies really show about LEED
A study published in 2023 by Karen Clay, Edson Severnini and Xiaochen Sun examines 60 retrofitted, LEED-certified US federal buildings, using data from 1990 to 2019. After comparison with similar non-certified buildings, the authors find no statistically significant additional energy savings on average. The central estimate is around −3%, with uncertainty consistent with a reduction of 12% or an increase of 6%. [5]
This conclusion does not mean that no building saved energy. The study also finds better results among buildings with higher scores in the energy category. It covers a specific building stock and historical versions of the rating system, and cannot be used to judge every LEED building or LEED v5. [5]
Average effect on energy intensity
LEED-certified federal retrofits compared with similar non-certified buildings.
Higher energy scores, lower energy intensity
Associated reduction for a one-standard-deviation higher energy-category score.
Source: Clay, Severnini and Sun (2023), pp. 10–12. Approximate percentages as reported by the authors, from a model of log energy intensity. Historical US federal buildings; data cover 1990–2019. [5]
| Issue examined | What the study finds | What owners should conclude |
|---|---|---|
| Scope of the evidence | 60 retrofitted, federally owned US buildings, using data from 1990–2019. More than half were certified under LEED Existing Buildings 2009. (pp. 2, 4–5) | Historical evidence for a specific building population. It cannot represent every LEED project, building type or market. |
| Additional savings | The researchers match certified buildings with comparable non-certified buildings and compare changes over time, accounting for building characteristics, weather and common annual effects. (pp. 5–9) | The test is whether the LEED process delivers additional improvement beyond the progress in comparable buildings. |
| Average energy effect | The estimated average effect on energy intensity is approximately −3%. Effects from −12% to +6% cannot be ruled out. The average result is not statistically significant. (p. 10; Table 4, p. 12) | The study establishes neither a reliable average additional saving nor an exactly zero effect. It does not demonstrate that every certified building failed. |
| Energy-specific credits | A one-standard-deviation higher energy-category score is associated with about 12.6% lower energy intensity, or 13.9% for offices. These associations are statistically significant. (Table 4 and §5.2, p. 12) | Energy-specific results matter. These are associations across scores, not guaranteed savings from obtaining an additional credit. |
| Credit choices and rating levels | Higher water-category scores are associated with higher energy intensity; the authors discuss possible budgetary trade-offs. The sample is too small for robust comparisons between certification levels. (p. 3; pp. 12–13) | An overall score combines different objectives. This does not show that water conservation inherently increases energy use, or establish an energy guarantee for any rating level. |
| Limits of the conclusions | The study does not evaluate LEED v5, Asian portfolios, GRESB, NOI/NAV effects or verified carbon reductions. Its principal outcome is energy intensity. (pp. 3–5, 12, 16) | Use the evidence to require asset-specific performance verification. Current standards, financial value and decarbonisation claims need their own supporting evidence. |
Another study, published in 2021 on 4,417 US office buildings, including 551 LEED-certified buildings, observes approximately 11% lower site (final) energy consumption per square metre in the certified group across the sample. However, it finds a weak relationship between the energy credits obtained and the savings observed. This comparison between groups does not, by itself, demonstrate that certification caused the difference. [6]
Energy performance must remain a result demonstrated at building level. The varying results in these studies call for an examination of consumption, interventions and building use, without attributing a guarantee to the certification level that it cannot provide on its own.
GRESB 2028 sets a real change in motion
In the 2026 GRESB assessment, a five-star rating corresponds to the top quintile of participants: 20% of entities receive this distinction. It is a relative position within a composite assessment. It does not, on its own, demonstrate an adequate carbon trajectory or efficient operation in every building. [7]
GRESB already includes consumption and emissions data, as well as performance indicators. Its assessment distinguishes operational assets, assessed in the Standing Investments benchmark, from projects covered by the Development benchmark. [3]
The standard published on 4 November 2026 significantly changes the incentives. For operational assets, the main developments include: [1, 8]
How GRESB is reweighting performance
Standing Investments · Energy and GHG performance · Building certifications (BC1)
Foundational management practices: 17 indicators become prerequisites, outside the score.
Assessment of results: greater emphasis on absolute performance and annualised improvement, with data quality applied as a multiplier. [8]
These changes concern Standing Investments. They should not be applied in full to Development. The 2028 assessment will use 2027 data, with historical data to assess improvement. Eligible simulations remain possible, so the score will not rely exclusively on verified measurements. [8]
The change in the framework is underway. The additional improvements it encourages will need to be delivered and then verified in buildings. GRESB also states that a score change during the change in methodology does not necessarily reflect a change in underlying performance. [1]
For owners, preparation should start with reliable historical data, the assessment of scenarios and the scheduling of interventions. The timetable requires attention to 2027 results before the 2028 submission.
Decarbonising and reducing transition risk
Certification can have real economic benefits. The 2026 RICS standard recognises its potential role in differentiating an asset, attracting tenants and supporting its marketing. However, it requires valuation to be linked to observable market evidence. A green premium or protection of value cannot be assumed. [9]
A certification can reduce an investor’s uncertainty about an asset’s practices and characteristics. To assess the reduction in transition risk, it is then necessary to check whether the requirements met and actions carried out address the exposures specific to that building.
Three questions therefore need to be distinguished.
| Question | What is needed to answer it |
|---|---|
| Is the building emitting less carbon? | Comparable consumption and emissions, an explicit boundary and verification of results |
| Is its exposure to transition falling? | An analysis of future requirements, building use, technical systems and necessary investment |
| Is its value better protected? | An analysis of cash flows, leases, costs, risks and market conditions |
Transition risk includes the consequences of changes in regulatory requirements, energy and carbon costs, technologies and market expectations. It is distinct from physical risks, such as floods or heatwaves. A label does not remove the need to assess these exposures at asset level. [9]
A building that is commercially well positioned today may still need substantial investment to remain suitable. Identifying these needs in advance allows them to be incorporated into a strategy; documenting them is not enough to resolve them.
CRREM illustrates this distinction. The organisation has replaced the term “Stranding Year” with “CRREM Misalignment Year”: crossing an energy or carbon pathway signals climate misalignment, rather than a certain loss of value on a particular date. Its interpretation must take account of local regulation, tenants, leases and market conditions. [10]
Reducing risk requires linking the identified exposure to a feasible response. That response may be operational, technical, contractual or financial. Better information helps with decisions; protection then depends on the quality of the decision and its implementation.
Linking decisions to NOI and NAV
Discussing value creation becomes useful when the economic mechanisms are made clear.
Net operating income (NOI) is an asset’s income after its operating expenses, before financing and capital expenditure. A sustained reduction in an expense borne by the owner can therefore improve that income. [11]
But the energy saving does not always go to the owner. When a tenant pays for its consumption, the saving first reduces its occupancy cost. Where expenses are recoverable, a reduction can also reduce the reimbursements paid to the owner. Leases and the allocation of costs therefore need to be examined before energy savings are converted into an increase in NOI. This mismatch between the party that funds the work and the party that benefits is a recognised barrier to investment. [12]
Consider a purely illustrative example: an intervention avoids RMB 100,000 of annual energy expenditure. If tenants pay that bill in full, the RMB 100,000 does not automatically become RMB 100,000 of additional NOI for the owner. The project can therefore deliver a physical benefit and reduce occupancy costs without directly increasing NOI. Any effects on comfort, attractiveness or tenant retention must be assessed separately.
Net asset value (NAV), in the real estate context, generally applies at company or investment vehicle level: it takes account of the estimated market value of assets, less debt and other liabilities. For an individual building, “asset value” is the more precise term. [13]
Protecting that value requires an examination of future income, expenses, vacancy periods, maintenance and transformation expenditure, and the risks affecting these cash flows. Capital expenditure (CAPEX) must remain visible: a project can improve NOI without creating enough value to justify its cost. Conversely, works may be necessary to preserve the ability to let an asset, even with a limited direct return from energy savings.
The work published by INREV in 2025 highlights the difficulty of separating environmental effects from other drivers of value. It encourages the analysis of investments, scenarios and assumptions, while highlighting the limits of the available data. [14]
For each project, the case should therefore make clear the expected physical benefit, its economic beneficiary, the amount to invest and the remaining exposure. Emissions reduction and value protection can reinforce each other. Their relationship must be demonstrated for the asset concerned.
Moving ahead with works requires reducing uncertainty
The blockage can arise well after the diagnosis. A team knows that a building consumes too much, but does not yet have enough information to commit a budget and accept the operational risk.
The questions are practical. Does excessive consumption come from the equipment, its sizing or its controls? Will the savings last when occupancy changes? Should the equipment be replaced now, or should the intervention take place during an already planned renovation? Who authorises the works, who pays, and who will operate the system after handover?
These uncertainties have a financial consequence. In its analysis of energy efficiency financing in Thailand, the OECD identifies uncertainty about project performance and the difficulty of assessing cash flows from savings as barriers to investment. This finding documents a mechanism; it does not establish that all Asian markets face the same situation. [15]
For a portfolio operating in several countries, a common framework remains useful. However, solutions must take account of climate, tariffs, the carbon intensity of energy, leases and local operating capabilities. A technology or priority that is appropriate on one site does not automatically become the right decision elsewhere.
The risk of chasing points arises when effort is organised around the next submission, while technical decisions remain without a responsible person, a budget or a timetable. This risk relates to how the frameworks are used. It proves neither a general absence of action nor bad faith among the teams applying them.
The priority becomes resolving the unknowns that prevent a specific decision. This requires knowing what information is missing, whether it could change the choice and what work is needed to obtain it.
Design the solutions before promising their value
The engineering tools exist: audits, targeted measurements, simulation, economic analysis, commissioning and performance monitoring. Their usefulness depends on how they connect with decision-making and operation. A report that stops at a list of recommendations still leaves much of the work to be done.
Consider an office building whose air conditioning consumes too much energy. Recommending a more efficient chiller is not enough. It is necessary to understand actual loads, schedules, flows, part-load operation and the interactions between production, distribution and terminal units. Depending on the findings, control adjustments may be the priority; in another case, equipment replacement will be justified.
A useful comparison should examine at least continued operation with optimisation, replacement at the planned date, and a deeper transformation where appropriate. Each scenario should specify the expected benefits, their underlying assumptions, the full cost, construction constraints and the ability to maintain the results.
The reference scenario must include replacements that would be necessary anyway. The cost of transition is not always the same as the total cost of the works: the additional cost of a more efficient solution must also be examined against the planned renewal.
The interactions must also be addressed. Savings calculated separately for several measures cannot necessarily be added together. Reducing demand changes the sizing or benefits of a subsequent intervention. Early replacement must also account for remaining service life and the carbon associated with new equipment.
The project then becomes concrete: a defined solution, budget, timetable, responsibilities, acceptance tests and operating rules. The measurement plan must be prepared before the works so that a usable baseline is available.
This is the work that connects engineering with economic decision-making. It turns a general intention into an intervention that can be funded, delivered and checked.
Measure what changes and maintain the result
Energy use intensity (EUI) expresses annual energy consumption divided by floor area, generally in kWh/m²/year. It is a useful indicator for benchmarking a building and tracking its change over time. It must be accompanied by absolute consumption and a clear boundary. [16]
To give it operational meaning, it is necessary to specify:
- the convention used, site (final) or source (primary) energy, and the energy carriers included, particularly electricity, fuels and purchased heating or cooling;
- the coverage of common areas and occupiers’ spaces;
- the floor area used and its consistency over time;
- conditions of use, operating hours, occupancy and weather;
- the measured share, the estimated share and the comparison period.
A low EUI in a building with low occupancy does not establish the same performance as a low EUI at comparable service levels. At portfolio level, an average that improves after a disposal does not demonstrate that the retained buildings operate more efficiently either. Changes across a consistent portfolio boundary must remain visible.
Operational emissions must be tracked in tonnes of CO₂e per year and as an intensity per square metre, with the emission factors and calculation boundaries stated. A reduction in consumption, a less carbon-intensive energy supply and the effect of procurement contracts must be distinguished. The GHG Protocol’s location-based and market-based methods provide different views of emissions from purchased electricity; neither replaces the building’s energy analysis. [17]
Carbon monitoring must also make refrigerant emissions explicit. During building works, the carbon associated with materials and equipment complements the operational assessment. These issues do not disappear because EUI improves. [4, 9]
Finally, a saving cannot be read directly from a meter: it is determined by comparing actual consumption with what would have been consumed without the intervention, after the necessary adjustments. The International Performance Measurement and Verification Protocol (IPMVP) provides a framework for this measurement and verification, to be adapted to the project. [18]
Verification must continue after handover. Settings can drift, building use can change and savings can erode. The intended result must remain compatible with comfort, air quality and continuity of operation.
Turn a change in standards into a change in practice
The evolution of GRESB and LEED opens a useful opportunity: to connect market recognition more closely with what actually happens in buildings. Its success will depend on the role given to technical teams, investment and verification.
At BAARCH, we stand for a clear requirement: technical decisions must be clear enough to act on. An owner must be able to understand which interventions to carry out, how to fund them, who will benefit from their effects and what evidence will allow the results to be assessed. This approach brings decarbonisation closer to day-to-day management and the protection of value.
A credible strategy must therefore make approved budgets, completed works, verified savings and the risks still to be addressed visible. Reporting then becomes a record of the transformation and a support for the next decisions.
Real change will be judged in the buildings themselves: by their energy use, their emissions and their ability to remain useful, operational and economically viable over time.
Sources
- GRESB. “2028 GRESB Standards: Key Changes and Transition Support.” 4 November 2026. Source
- USGBC. “Guide to LEED Certification: Commercial.” Sections on certification systems and performance periods. Source
- GRESB Guides. “Benchmark Report” and “Performance Component 2026.” Source 1 ; Source 2
- USGBC. “LEED v5” and the Operations and Maintenance rating system, February 2026. Sections on performance, decarbonisation plans and commissioning. Source 1 ; Source 2
- Clay, K., Severnini, E. and Sun, X. (2023). “Does LEED certification save energy? Evidence from retrofitted federal buildings.” Journal of Environmental Economics and Management, 121, 102866. In particular, pages 2, 5, 10 and 12. Source
- Scofield, J. H. et al. (2021). “Energy and Greenhouse Gas Savings for LEED-Certified U.S. Office Buildings.” Energies, 14(3), 749. Source
- GRESB. “Marketing Resources,” GRESB Rating section. Source
- GRESB Foundation. “2028 Real Estate Standard.” November 2026. Standing Investments, Building Certifications and Appendix 2 sections. Source
- RICS. “ESG and sustainability in commercial property valuation,” fourth edition. 2026. Sections on market value and ESG indicators. Source
- CRREM. “From Stranding Year to CRREM Misalignment Year.” 22 July 2025, updated 17 March 2026. Source
- Nareit. “Net Operating Income.” Definition and exclusions. Source
- U.S. Department of Energy. “Leasing & Tenant Build-out.” Allocation of energy efficiency costs and benefits. Source
- Nareit. “Glossary of REIT Terms,” Net Asset Value entry. Source
- INREV. “Phase 2 of integrating environmental considerations in real estate underwriting.” 16 December 2025. Source
- OECD. “Clean Energy Finance and Investment Roadmap of Thailand.” 2024. Buildings and cooling chapter, sections on financing barriers and performance uncertainty. Source
- U.S. EPA ENERGY STAR. “What is Energy Use Intensity (EUI)?” Source
- GHG Protocol. “Scope 2 Guidance” and executive summary. Source 1 ; Source 2
- Efficiency Valuation Organization. “International Performance Measurement and Verification Protocol.” Principles, boundaries and adjustments. Source