The sixth and final public comment period on the U.S. Green Building Council’s LEED v4®, the next version of its green building rating system, will close on March 31, 2013.

There are 23 credits in which substantive changes are proposed from the draft text last released and it is on those specific credits that comment is being solicited. Some of the revisions are refinements to credit language and calculations, including a modest reduction of the preferred parking requirement for the Green Vehicles credit from 7% to 5%. Arguably the most significant change from the fifth public comment draft is to the new Building Product Disclosure and Optimization – Material Ingredients credit, adding an option for achieving this credit with data supplied by manufacturers at the supply chain level (as opposed to an individual building product) when third party verified (.. which may sound like “inside baseball” but, as explained below, is key to LEED v4).

What is LEED v4?

Having transformed the culture of the real estate marketplace since the LEED 1.0 was launched in 1998, those engaged in the business of real estate need to be aware that this next version of LEED is a major step in the continuous improvement process and ongoing development cycle of the LEED program.

Widely heralded and overwhelmingly supported, those who may have had some experience with an earlier version of the rating system should note LEED v4 is not an update, it is a new and improved version of what is by far the most widely utilized standard for green building in this country and arguably the now nationally accepted benchmark, if not the dominant green building program in the world.

Scot Horst, senior vice president for LEED at USGBC analogizes LEED 2009 to a Swiss Army Knife with lots of tools for sustainable building. LEED v4 may be more of a Tactical Tomahawk, an extreme use tool with a host of new apps to force market transformation.

After 4 public comment periods, in response to growing concerns from the market, on June 4, 2012 USGBC postponed plans to ballot LEED 2012 last summer until summer 2013 and renamed it LEED v4. USGBC acknowledged “the proposed changes in the rating system were too much, too fast, especially in a weak real estate market.” Significantly on that same day, Rick Fedrizzi, the USGBC President offered certainty to the green building industry when he announced, “USGBC will ensure that LEED 2009 will remain available for registration for three years.”

It is not possible in a brief article to even attempt to summarize the myriad of changes proposed in LEED v4; as such this is a discussion of concepts. Changes from LEED 2009 can be considered in three categories: new market sectors, increased technical rigor and streamlined services. And given that as of December 31, 2012, over 39% of all square footage pursuing LEED certification exists outside the U.S., LEED v4 will be more globally aligned with international standards.

The Changes from LEED 2009 to LEED v4

First among the key changes in LEED v4, there are new market sectors, including data centers, warehouses and distribution centers, hospitality, existing schools, existing retail, and LEED for Homes Mid‐Rise. Pursuing those market sectors, which can be viewed as “alternative compliance paths” within existing rating system, there will be 21 different rating system alternatives.

Second, as mentioned above there are changes to content that increase the technical rigor of the rating system.

Credit weightings have changed such that the now more than decade old LEED will continue as “the most important instrument in the world for transformation of the building industry towards a more sustainable paradigm.” The point allocation that has 4 prerequisites and 33 credits within the Energy and Atmosphere category, more than double the weight of any other category, sends the message loud and clear where USGBC’s priorities have shifted in v4 to “reverse contribution to global climate change” through rising energy efficiency.

The stringency and rigor is also increased significantly where LEED 2009 required the proposed energy performance of new construction demonstrate a 10% improvement and major renovation a 5% improvement over the AHRAE 90.1-2007 baseline building model, and LEED v4 proposes new construction demonstrate a 5% improvement and major renovation a 3% improvement over the AHRAE 90.1-2010 baseline; a baseline model building many acknowledge is at least 30% more rigorous than the current standard. But changes like this must be viewed in context. The current LEED 2009 prerequisite for energy performance does not even rise to the level of the current minimum code requirement in any jurisdiction that has adopted the International Energy Conservation Code 2012.

Additionally, new concepts within the Energy and Atmosphere category include: building envelope commissioning is now included within the Enhanced Commissioning credit, a reworked Demand Response credit for participation in an automated program allowing a utility to curtain 10% of peak demand, and certified carbon offsets are for the first time going to be part of LEED.

There are, of course, throughout LEED v4 other new prerequisites and new credits. Some existing credits have been altered, including that as part of the new weighting of priorities the LEED point value of several credits have changed. And some of those prerequisites and credits are grouped differently within the existing categories of Sustainable Sites, Water Efficiency, Energy and Atmosphere, Materials and Resources, Indoor Environmental Quality, Innovation, and Regional Priority and the new category Location and Transportation. The previously proposed new category Integrative Process (think integrated design on steroids) has been further changed and is now a single credit.

Of note, the Minimum Program Requirements are not altered in the version available for comment, but it is anticipated they will change and are currently in development for release in the near future.

The two most significant changes may be:

LEED Existing Buildings: Operation & Maintenance

With LEED EBOM certifying more than half of all the domestic floor area in the LEED system in 2011 and with the square footage of certified EBOM existing buildings surpassing certified new construction on a cumulative basis, LEED is no longer only a new construction standard, such that the changes to EBOM are of paramount import.

The key change to EBOM is that many prerequisites and credits will include both an Establishment element and a Performance element. By way of example in the Location and Transportation credit for Alternative Transportation, in the Establishment element a survey of building occupant’s travel patterns is required as a component part a plan to reduce single occupant vehicle trips and then in the Performance element a follow up transportation survey must be undertaken not less than once every 5 years.

Also, there are market segment options in EBOM for data centers, warehouses and distribution centers, hospitality, existing schools, and existing retail.

The Minimum Energy Performance prerequisite remains the threshold for determining if an existing building could be a LEED EBOM candidate when v4 proposes to require a minimum Energy Star rating of 75 (for ratable buildings). This is more stringent than in LEED 2009 which required an Energy Star score of 69. This is particularly significant because the maximum potential market share for LEED EBOM is 25% of existing buildings (as limited by an Energy Star score of 75 indicates that the building performs better than 75% of all similar buildings nationwide).

Materials and Resources

“We. Are. Right. .. they are wrong” about the Materials and Resources credits and more, were Rick Fedrizzi’s words at the Opening Plenary at Greenbuild last November in San Francisco, where he took on politicians, climate change deniers and what he called pseudo journalists at USA Today. He argued that only with a campaign for increased transparency can we understand the impact of unhealthy materials in the built environment and declaring from the stage transparency “helps us make better decisions,” Fedrizzi announced a new campaign to get building product manufacturers to “prove that their products are the best and healthiest.”

LEED v4 proposes all but entirely new approaches to the Materials and Resources credits, much of which has been controversial. This category is still a work in progress and more changes will result from this public comment period. It has been suggested these credits will create a whole new industry for building materials ingredient certification that could dwarf LEED itself.

There are new credits in this category that include: the ambitious Building Life-Cycle Impact Reduction credit, the very controversial Building Product Disclosure and Optimization – Environmental Product Declarations credit, and the related and even more controversial Environmental Product Declarations option for “multi-attribute optimization” credit, a third party verified Corporate Sustainability Reporting (something USGBC does not do itself), and a Building Product Disclosure and Optimization – Sourcing of Raw Materials credit that prescribes use of the Sustainable Agriculture Network standard (that apparently no farm in North America is currently using), as well the single most controversial proposed change in v4 (despite that the old Certified Wood credit is gone) that same Raw Materials credits goes on to provide that for .. “new wood products. Wood Products must be certified by the Forest Stewardship Council, or USGBC-approved equivalent,” and there are other chemicals of concern credits relying on third parties programs that will all but certainly be further revised.

When will LEED v4 be Available?

A revised LEED v4, having incorporated ideas from this final public comment period, will be put to a member ballot vote in June 2013. LEED v4 will all but certainly launch in November 2013 at the USGBC Greenbuild Conference and Expo in Philadelphia.

The Future of LEED

Over 500 Million square feet spread across over 3,500 projects were LEED certified in 2012 alone.

Having already changed the culture of the real estate industry, it is the belief of some inside USGBC that LEED is near the top of or at its anticipated full market saturation point of 25% of new construction starts, and that a more technically stringent and rigorous LEED v4 will cause that top of the market to be greener edging toward a requirement in 2018 that a LEED Platinum project be a net zero green building.

Government building will continue to lead LEED, including the federal government, the largest owner of LEED certified projects, as both the GSA and Department of Defense are likely to find LEED is an efficacious “crosswalk” for articulating compliance with the Guiding Principles For Federal Leadership in High Performance And Sustainable Buildings”. The Department of Defense, the largest single owner of buildings among federal agencies, owns and operates more than one-half million facilities and has recently confirmed its policy that all new projects and major renovations must meet a LEED Silver rating at a minimum.

The announcement in November of last year by the Financial Times and London Stock Exchange, the National Association of Real Estate Investment Trusts and USGBC that they are creating the first tradable green property indexes, which will be based on the FTSE NARIET index series, and will include properties based on their LEED certification and Energy Star ratings, will allow investors to include a sustainability component in their portfolio while advantaging the green building sector.

Those who suggest a reduction or stalling in market share for LEED v4 are wrong, missing that green building is so fast growing today that such would be akin to King Canute seated on his throne on the seashore commanding the tides of the sea to go back.

Today with more than 2 Billion square feet of LEED certified building and USGBC now certifying more than 1.6 Million square feet a day, LEED v4 will only expand the voluntary third party rating system LEED brand and market share across the country and across the globe.

We Can Assist You

LEED v4 is available for review at USGBC and you can help shape the future of LEED by commenting on the draft credits today.

With a November 2013 launch, it is necessary and proper that developers and builders of projects planned to break ground in 2013 evaluate if that building is better registered under LEED 2009 or LEED v4? And beginning immediately, green building industry contract documents must be modified to anticipate LEED v4, including 21 rating system alternatives.

If we can assist you in that evaluation or otherwise in identifying opportunities to lead and profit in green building and sustainable business, do not hesitate to email Stuart Kaplow at skaplow@stuartkaplow.com or give him a call at 410-339-3910.