The U.S.-based International Well Building Institute’s third-party interior sustainability accreditation system entered the Hungarian market around 10 years ago, and the first buildings in the Budapest office market were certified three years ago.
This reflects the extension of ESG issues to all types of real estate interiors and their occupants, involving the well-being of occupants and the wider business environment. According to the report, the occupants of a “healthy” building are happier, more content and more productive.
The latest iteration of the standard, Well v2, is based on 10 basic themes relating to air, water, nourishment, light, movement, thermal comfort, sound, materials, mind and community.
The first Well standard accredited buildings in Hungary were the Corvin Technology & Science Park by Futureal and the Nordic Light Trio by Skanska. Both projects now need to be re-accredited as the certification is valid for three years.
According to the research, there are currently three “Platinum” accredited office buildings (the highest in the Well standard) and seven at “Gold” (the second highest). Another nine projects are pre-certified in Hungary, and 36 are pre-registered.
Futureal’s Budapest One has achieved Well Core “Platinum” for the three phases of the development project. The Agora Tower and the Agora Hub, by HB Reavis, have achieved Well “Gold” in addition to Breeam “Outstanding” and “Communities” accreditation.
With regard to earlier generation buildings, CA Immo has achieved Well Core “Gold” accreditation for the renovated IP West office complex.
“The entirety of office centers need to be Well accredited, including tenant areas, rather than just common or core areas. This incorporates the whole office,” comments Regina Kurucz, manager of the HuGBC Well Working Group.
She says the advantage of investing in offices to achieve Well certifications can be traced through reduced levels of sick leave and higher productivity. It also aids positive company branding, with younger workers increasingly expecting healthy and impressive workplaces.
MSD Pharma has achieved Well certification in 11 international locations, including its 1,400 sqm Budapest office in Millennium Gardens. The company has 40 offices worldwide, and MSD is seen as a regional leader in sustainable office interiors.
The renovated National Bank of Hungary (MNB) has achieved Well pre-certification for its historic, listed building headquarters in Szabadság tér, originally completed in 1905 but now restored to make it suitable for 21st-century use.
“Net-zero carbon emissions is not tunnel vision; it also includes a consideration for people. For example, with regard to damaging materials, 600,000 people in Budapest are at risk of drinking water containing lead. Further, with an aging population, persons with limited movement should be catered for,” concludes Kurucz.
The Green Future Conference 2024 by the Hungarian Green Building Council (HuGBC) at the Budapest Music Center looked at the challenges facing the route to zero-carbon emissions throughout the lifecycle of the built environment. Gábor Szarvas, president of the HuGBC, stressed that sustainability and net-zero emissions should engage all aspects of society, including the political environment and the business community.
Concerning the zero-carbon route plan for 2050, Mathew Black, climate action manager at the World Green Building Council (WGBC), stressed the need for Whole Life Carbon Roadmaps in the EU that provide “clear actions across the value chain as a guide for finance and investment.” The WGBC is present in 75 countries with 47,000 members, including Hungary.
One of the main sponsors of the event was the Swedish Embassy of Budapest. Stefan Andersson, project development manager at Skanska Nordic, introduced the 14,000 sqm Hyllie Terrass office project in Malmo that is based on complete circularity and re-use of materials in construction. The project, designed by Denmark’s Cobe Architects Studio, is Well and Leed “Platinum” accredited and climate neutral.
“The challenges facing developers with regard to achieving net-zero emissions in the value of all projects by 2045 is the wide range of suppliers and contractors, that the industry is driven by competition rather than collaboration,” Andersson said.
“[With] limited knowledge regarding the embodied carbon in buildings, developers need to see sustainable goals as cost-effective and a need to focus on embodied carbon from source to deconstruction. There is a need to identify materials with the greatest impact and the minimum use of materials.”
The construction site is fossil-free, and energy is provided in collaboration with the city of Malmo from a recycled furnace.
“Sustainability targets are clearly set as the market is moving towards a new assessment of carbon neutrality. Companies are currently hiring with regard to sustainability requirements, and there is an understanding of requirements and monitoring of technology,” comments Pál Baross, the Royal Institution of Chartered Surveyors CEE ambassador for ESG and sustainability.
With the EU Taxonomy in place, there is no way back. Logistics is the easiest to develop in line with ESG principles as the buildings are simple, and most asset managers and developers build on the basis of sustainability.
Concerning the office sector, there is a mutual benefit between the landlord/investor developing in line with ESG and the benefits and savings for tenants.
When it comes to shopping malls the Westend City Center is aiming for green energy provision for tenants. The financial sector is sensing strong market signals for a sustainable asset class and must find a way to meet the green transaction, Baross argues.
Sustainability issues are at the forefront in the real estate and related industries, as evidenced by the 150 people, mainly sustainability-related professionals, who attended the sold-out Green Future Conference.
This article was first published in the Budapest Business Journal print issue of November 15, 2024.
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