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14 April 2021

Offices and energy labels

C label for offices mandatory in 2023 – no delay possible

By Hans van Brakel, co-owner of C2N

The Financieele Dagblad already paid ample attention in April 2017(!) to the obligation that offices from 2023 must have at least an Energy Label C ‘because otherwise they may not be used’. This was the beginning of a series of reports on the imminent C label requirement that can no longer be ignored.

The fact that the government is serious is demonstrated by a letter they recently sent to parties who have offices in buildings with a label lower than C. Tenants may ignore the letter, landlords may not.

How difficult is it technically to achieve an energy label C? For offices with a D, E or F label, the rule of thumb is that energy-saving measures on installations, such as the use of LED lighting, are sufficient for a C label. For offices with a G-label or worse, additional energy saving measures are required.

You can bet that this will not be such a big deal because the government lacks the manpower to enforce the C-label obligation. According to estimates, more than 50% do not yet comply with this obligation. So it will not go that far?

The disciplining effect to obtain a C-label will also come from another source – the market. Especially the sector that, since 2021, is legally obliged to list and publish its environmental, social and governance (ESG) risks.

For the real estate sector, it primarily concerns financiers who are subject to ESG requirements and investors with a direct or indirect interest in real estate. There are two reasons why they will want to dispose of property that does not have a C label by 2023. Firstly, the poor ESG reputation of unsustainable property, and secondly, the financial risk that such office property may no longer be let.

As mentioned earlier, achieving a C-label need not be an impossible financial and technical task. But time is pressing – 2023 is near.

There are a number of possible scenarios to respond to this.

You can decide to dispose of the office real estate or to allocate it to a use that is not subject to sustainability requirements. Or, you can decide to make the investments necessary to achieve a C-label. But you can also take into account in your investment that it is very likely that as of 203o offices will have to have an A label, and what else is in store.

For each scenario, our sustainability advisers indicate which measures are required, what the possibilities are, what they cost and what they yield.