Informing responsible investors on the differences of sustainable building certifications in Malaysia

Over recent years within developed countries, and notably US, Australia and UK, there has been a significant uptake in the production and use of voluntary building certification schemes which provide perspective investors and tenants with information about the construction and expected performance of commercial buildings measuring against a range of (mainly environmental) sustainability criteria. Malaysia has also launched its own Green Building Index (GBI) customised to suit the tropical climate and current state of development. Numbers of studies (Gowri, 2004; JLL, 2008 and Reed et al, 2009) have been carried out comparing the characteristics of the various rating tools and their economic value (See for example Eichholtz, Kok, & Quigley, 2009), but there has been very little research which addresses the key practical considerations which may be of critical importance moving forward, namely in relation to the voluntary nature of the certificate, monitoring of actual against expected building performance and a lack of monitoring of adherence to the standard during the building life.The use of certification is also spreading in developing countries and some of these are demonstrating cognisance of the take up and monitoring issues. Singapore has introduced mandatory labelling whilst Malaysia has introduced reassessment in its rating tools (Green Building Index) making it not a ëone-offí award; it is life limited and subject to monitoring. Malaysia is also debating the possibility of making the certification mandatory. Recent research conducted by Mohd Aini (2010) reveals that Malaysian property investors who pursue responsible property investment (RPI) principles may place greater significance on the certification of a building than do investors from the wider international community. This paper explores, through literature and an ongoing research project, why this seemingly greater reliance may be occurring and explores whether the introduction of monitoring and the need for renewal of the certification may be important factors in providing investors with greater assurance that highly rated buildings do indeed satisfy their sustainability aspirations. It concludes that, moving forward, a certificate scheme that does not include monitoring and renewal provisions, may not meet the needs of ever increasingly discerning investors. Key ReferencesEichholtz, P., Kok, N., & Quigley, J. M. (2009). Doing Well By Doing Good: An Analysis of the financial performances of Green Office Buildings. Royal Institution of Surveyors, RICS.Gowri, K. (2004). Green building rating systems: An overview. ASHRAE Journal , 46 (11).Jones Lang LaSalle. (2008). Green Building Rating Systems : Going beyond the labels - October 2008. London: Jones Lang LaSalle.Mohd Aini, A. (2010) Sustainable and Responsible property investment in Malaysia :Summary Findings from Delphi Round 1. Available at http://sites.google.com/site/srpimalaysia.Reed, R., Bilos, A., Wilkinson, S., & Schulte, K. (2009). International comparison of sustainable rating tools. Journal of Sustainable Real Estate , 1 (1), pp.1-22.