Green is good: Why more developers eye green certifications for buildings

Philippine property developers are increasingly seeking green certifications for office buildings not only because of government energy mandates but also rising demand from multinational companies.

It’s no longer uncommon to find developers touting the sustainable features of their new office buildings, which have received certifications like Leadership in Energy and Environmental Design (LEED), Building for Ecologically Responsive Design Excellence (BERDE), Excellence in Design for Greater Efficiencies (EDGE) and WELL Building Standard.

To get a green building certification, a project must meet certain environmental and sustainability standards. These usually ensure that a building meets high standards of energy efficiency, resource conservation, air quality, among others.

“We see the increase (in green certifications) because of the mandates by the government, such as the Department of Energy, to comply with the laws to Republic Act No. 11285 or known as the Energy Efficiency and Conservation Act,” Jess Niño H. De Villa, Head of Engineering, Energy and Environment of Knight Frank said.

The law requires Philippine businesses to monitor energy consumption, which is the top contributor to net-zero emissions.

“Certification helps ensure compliance with these requirements, avoiding potential fines or legal issues, making it a top reason for properties to adopt green certifications in the Philippines,” Mr. De Villa said.

Green certifications can make a big difference in attracting potential tenants.

“A green-certified building can be more attractive to potential tenants who prioritize environmental responsibility. Green certification can set a building apart, making it a preferred choice for tenants and investors who value sustainability,” he added.

As of now, 31.2% of the 8.5 million square meters (sq.m.) of existing office supply within Metro Manila have varying levels of LEED certifications, Mr. De Villa said.

He noted the NEO Property Management’s real estate portfolio in the Philippines was the first in the world to secure the International Finance Corp.’s (IFC) EDGE Zero Carbon certification. NEO’s entire portfolio is powered by Cleanergy, which delivers 100% renewable energy.

While the cost of securing green certifications can be costly, it can still be worth it for developers.

“In general, (the cost of the) certification is still quite low in terms of the savings that you can be able to gain and for the revenue,” Mr. De Villa said.

STRONG DEMAND

Demand for green certified buildings in the Philippines is also driven by multinational companies.

“It’s largely because of the Western companies and Western tenants moving to the country, requiring their buildings to be LEED certified. Their head offices in, let’s say, London and the US, have certain requirements for the office space that they need to occupy here,” Leechiu Director of Research Roy Amado L. Golez, Jr. said.

Mr. Golez said most of the newer buildings are compliant with green building standards, mainly because they don’t want to lose out on the tenants whose parent companies are based or headquartered in Western countries.

“It has become a must-have. If you don’t have it, your market might be smaller,” Mr. Golez said.

CBRE Philippines Country Head Jie C. Espinosa said global companies make green building standards a “first hurdle” when choosing office spaces.

“There are certain cases, that these occupiers consciously negotiate provisions in their contract, that down the road developers need to be proactive in providing sustainable features into their buildings,” Mr. Espinosa said.

Green leases, rental agreements where tenants and landlords set sustainability-related targets, benefit both parties by raising the value of the property and creating incentives for tenants.

Mr. De Villa said domestic companies also see green-certified office buildings as an ideal location for their operations, as they also seek to comply with evolving environmental standards.

He also noted that tenants that want to integrate sustainability in their operations are willing to pay premium rates to secure office spaces in buildings with green certifications.

ADOPTION HIGH IN METRO MANILA

Central business districts in Metro Manila have seen significant gains in green building adoption in recent years, CBRE Philippines Director of Advisory and Transactions Services Garri Amiel P. Guarnes said.

Based on CBRE data, the office segment in Fort Bonifacio has seen its green building adoption rate jump to 73% in 2024 from 63% in 2022.

For Alabang, the green building adoption rate inched up to 67% this year from 49% two years ago.

The green building adoption rate in Ortigas rose to 66% in 2024 from 42% in 2022, while in Quezon City, it went up to 45% in 2024 from 42% in 2022.

However, green building adoption in provincial locations is lower than in Metro Manila, Mr. Guarnes said.

“This was due to developers being more focused towards third-party outsourcers but moving forward, these companies or the clients they serve would implement their sustainability targets,” he said.

In Davao, 24% of the office stock is green certified, followed by Cebu with 23%, Iloilo with 16% and Pampanga with 8%.

However, Cebu is leading in terms of the rate of increase in adoption, Mr. Guarnes said.

In Cebu, 44% of the recent completions between 2020 and 2024 have green certifications, while 16% are still under application.

FIVE-STAR BERDE

For Aboitiz InfraCapital, Inc., its 800-hectare LIMA Estate in Lipa-Malvar, Batangas, is one of the strongest examples of a green-certified property.

“It’s been recognized as a five-star BERDE, which means it is implementing sustainable practices that are aligned with the global standards,” Aboitiz InfraCapital, Inc. Economic Estates Vice-President for Inventory Generation Group Jolan P. Formalejo said.

BERDE is a local green building system rating that was developed by the Philippine Green Building Council.

Mr. Formalejo said the developments inside the estate, such as the Outlets at Lipa and the LIMA Tower 1 were five-star BERDE certified in 2022.

LIMA Tower 1 holds a BERDE certification for environmental sustainability, and has pre-certification from the WELL Building Standard, which assesses features promoting health and well-being.

“Hopefully, once we start to operate LIMA Tower 1, all the tenants will appreciate the operational savings that they can achieve,” Mr. Formalejo said.

He said the Smart Water Network, wherein its water facilities turn into interconnected and intelligent systems, operated by LIMA Water Corp., resulted in 30% savings in operations and uptime of 99.3%. It is also less than 5% in terms of wastage of non-renewable water.

“Soon we will be developing our Tower 2. We’ll also gear up for these certifications,” he said, adding that The West Cebu Estate and Mactan Economic Zone 2 Estate are aiming for five stars this year.

Mr. Formalejo noted these green certifications make the locators feel secure knowing their business operates inside a sustainable development along with the assurance that all these facilities and systems are future proof.

Source: Business World

Clarity sought on ‘green’ energy project economics

While financing is readily available for green energy projects in the Philippines, the industry requires a clearer pathway to profitability to strengthen the investment argument, according to ACEN Corp.

“I’m a little surprised by the assumption that climate financing in general is not available, right? Because there is a lot, certainly,” Miguel de Jesus, ACEN managing director and chief operations officer, said at the BusinessWorld Economic Forum: Unlocking Philippines’ Potential.

“I think a lot… has to do with getting the economics right on how to enable these energy transition opportunities,” he added.

Mr. De Jesus said developers and their financial backers have yet to see clarity on the revenue streams to be generated by energy-transition projects.

“At the end of the day, the banks want certainty of payment, right? And what’s important therefore is to ensure that (these projects have robust) revenue stream,” he said.

ACEN, the listed energy platform of the Ayala group, has initiated the early retirement of the 246-megawatt (MW) South Luzon Thermal Energy Corp., a coal-fired power complex.

The company has a target of scaling up its renewable energy capacity to 20 gigawatts 

(GW) by 2030.

Vincent Martin C. Villegas, senior vice-president and chief revenue officer of First Gen Corp., said the liberalization of foreign ownership rules will help accelerate the development of renewables.

“We can now have 100% foreign investors, which is a big thing,” he said.

Mr. Villegas noted the high levels of risk in geothermal exploration, where First Gen, through its subsidiary Energy Development Corp., is the industry leader.

Mr. Villegas said customers and generation companies are gravitating towards clean energy, adding: “It will take some time. It’s going to be a journey. But it’s a collaboration… That’s going to be an effort from across the entire country. But we’re quite hopeful. If you look at the targets, we think they are achievable,” he said.

First Gen, the power generation arm of the Lopez group, controls 3,668 MW in capacity from its portfolio of geothermal, wind, hydro, solar energy, and natural gas plants.

The company has set a capacity target of 13 GW by 2030.

Monalisa C. Dimalanta, chairperson and chief executive officer of the Energy Regulatory Commission (ERC), said the industry is moving on from the old model where projects were deemed bankable if they signed up one major offtaker.

“This is where government agencies like ourselves and the DoE (Department of Energy) are helping out, in recalibrating the narrative for the financing sector,” Ms. Dimalanta said.

She said various cash flows can now be tapped by the developer, and not necessarily the traditional streams provided by a distribution utility.

Ms. Dimalanta said other potential revenue streams have been liberalized, such as selling to contestable customers under the Retail Competition and Open Access scheme, and participating in the Green Energy Auction Program.

Energy Undersecretary Rowena Cristina L. Guevara said the DoE is pursuing discussions with the Department of Finance (DoF) on initiatives like geothermal de-risking, total electrification, energy efficiency and conservation, and the hybridization program of the National Power Corp.

She said the DoE is in “advanced discussions” with the Asian Development Bank (ADB) to obtain support for these programs next year.

Ms. Guevara said the energy transition should be “calculated and calibrated,” adding: “We don’t want to miss out on economic growth by suddenly turning off our coal-fired power plants.”

Ms. Guevara said that the DoE is coming up with a coal transition policy, having received a presidential directive to ensure the Philippines can deliver on its Nationally Determined Contribution under the Paris agreement.

The Philippines hopes to increase the share of renewable energy in its power generation mix to 35% by 2030 and 50% by 2040.

Source: Business World

The architects' role in sustainable urban conservation

Urban conservation and sustainable urban design are integral to disaster risk reduction management, especially in the Philippines, where many heritage towns are highly vulnerable to natural calamities. Typhoons, earthquakes and floods pose significant threats to these areas, aggravated by aging infrastructure and climate change.

Architects can collaborate with local government units (LGUs) to combine urban conservation efforts with sustainable urban design to safeguard cultural heritage and improve disaster resilience.

Many Philippine historic towns were not designed to withstand modern environmental challenges. As a result, retrofitting and adaptive reuse have emerged as vital strategies, strengthening these structures while preserving their historical integrity. Some traditional building materials, like wood, bricks, and adobe stones, necessitate reinforcement to adhere to contemporary safety standards.

Urbanization's unregulated developments encroach upon heritage sites, increasing their vulnerability to disaster risks. Historic towns in coastal and riverine areas are vulnerable to floods and rising because aging drainage and sewage systems intensify flooding problems. The same is true of those in earthquake-prone areas because of their delicate foundations and the lack of seismic retrofitting.

Vigan, a Unesco World Heritage site known for its well-preserved Spanish-era architecture, remains at risk from seismic activity. The magnitude-7.0 earthquake in July 2022 caused damages to its historical structures, including the Vigan Cathedral and old-century houses along Calle Crisologo. In response, Unesco's collaborative project with Icomos Philippines protects Vigan's historic structures, helps them recover from earthquake damages, and restores them for future generations.

Conservation efforts have focused on adaptive reuse and sustainable materials in Taal, Batangas, and its well-preserved ancestral houses. Taal is exposed to earthquakes, volcanic activity and flooding. Taal's LGU coordinates with national agencies that conduct restoration projects and initiate conservation efforts. It has mapped out high-risk zones and developed flood management systems to protect heritage sites and residential areas.

Iloilo City's Calle Real has been the focus of revitalization efforts to preserve its architectural heritage while enhancing structural resilience. The restoration of its Art Deco and Neoclassical buildings incorporated retrofitting strategies to reinforce them against seismic movement. A flood mitigation strategy, the Iloilo River Esplanade project integrated natural floodplains and green infrastructure to bolster urban resilience. These initiatives demonstrate a holistic approach to heritage conservation and sustainable urban design which can create disaster-resilient communities.

The framework of several national policies integrates disaster resilience with urban conservation. Republic Act (RA) 10066 mandates LGUs to protect and conserve the Philippines' cultural heritage. RA 11961 reinforces efforts in cultural mapping and enhances cultural heritage education programs nationwide. The Green Building Code of the Philippines promotes climate-responsive design, which can be applied to heritage buildings through passive cooling techniques and adaptive reuse. The National Disaster Risk Reduction and Management Act of 2010 encourages LGUs to integrate disaster preparedness and risk reduction strategies into local urban planning. The Philippine Climate Change Act of 2009 supports climate adaptation and nature-based solutions benefiting heritage towns in flood-prone areas.

Architects can translate these national policies into tangible built environments. Their expertise is essential for the preservation and adaptive reuse of heritage structures. The Green Building Code of the Philippines demands that they be adept in climate-responsive design and selecting sustainable materials. The National Disaster Risk Reduction and Management Act of 2010 and the Philippine Climate Change Act of 2009 require them to integrate resilience into their designs by creating structures capable of withstanding natural disasters while minimizing environmental impact. In implementing these policies, architects bridge the gap between legislative objectives and the development of a sustainable and culturally enriched built environment.

Architects advocate for nature-based solutions that mitigate disaster risks. They ensure that policies and urban planning frameworks respect historical authenticity and climate resilience. Green infrastructure, such as tree-lined buffer zones, bioswales, and wetland restoration, enhances heritage sites' aesthetic and ecological value and protects them from climate-related threats.

Collaboration with LGUs and community engagement are essential in crafting local conservation strategies integrating disaster risk reduction and management. Many residents perceive conservation as solely the preservation of old structures, overlooking its role in enhancing resilience against natural hazards. Architects can address this misconception by demonstrating how conservation and adaptive reuse of historic buildings contribute to safety, sustainability and climate resilience. Public awareness campaigns, workshops and participatory planning sessions can involve communities in decision-making processes.

Given the Philippines' rapid urbanization and climate-related threats, integrating disaster risk reduction into urban conservation as interconnected disciplines is imperative. Sustainable interventions should focus on retrofitting and strengthening historic structures, improving drainage and flood control systems, promoting mixed-use development in heritage districts, and incorporating green. Architects play a vital role in this transformation, working with urban planners, landscape architects, and local stakeholders to ensure that heritage towns remain livable and well-prepared for future challenges.

Source: Manila Times