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Procedia Engineering 180 (2017) 303 – 310

International High- Performance Built Environment Conference – A Sustainable Built

The New NABERS Indoor Environment tool – the next frontier for
Australian buildings
Caroline Residovica *
a
NSW Office of Environment & Heritage, 59 Goulburn St, Sydney 2000, Australia

Abstract

In our ambition to improve the environmental performance of office buildings, it is easy to lose sight of their real purpose – to
accommodate people. To understand the future of sustainable buildings, it is important to recognise that services such as HVAC
and lighting are provided to create suitably comfortable conditions for staff to be productive.
Providing a good quality indoor environment has been shown to increase staff productivity from improved comfort, health and
wellbeing. Productive staff are essential for creating competitive businesses. The Property Council of Australia has estimated for
offices that a 1% improvement in productivity would be equivalent to the whole energy cost of a building or, nationally $2 billion
annually. The indoor environment quality (IEQ) of an office is complex and determined by many factors, including the layout of
the space, lighting, air quality, thermal conditions and noise levels. These are influenced by the building characteristics,
maintenance practices, tenant equipment and behaviour. The new NABERS Indoor Environment (IE) tool measures these IEQ
factors and compares their performance against a set of benchmarks that reflect industry standards, scientific research and current
market performance of office buildings. NABERS IE converts this complex information into a score on a six star scale –
providing a direct measure of the overall IEQ for the office. This star rating provides a common language which can assist in
coordinating multiple parties in setting goals, evaluating performance and recognising market achievements in occupant comfort
and wellbeing.
A high NABERS IE rating will help attract and retain tenants with excellence in indoor air quality and thermal comfort identified
by tenants as significantly more important than other building attributes [14]. While for businesses, a high NABERS IE tenancy
rating will identify you as an employer of choice – helping you to attract and retain staff.
© 2017
© 2017Published
The Authors. Published
by Elsevier by Elsevier
Ltd. This Ltd.
is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the organizing committee iHBE 2016.
Peer-review under responsibility of the organizing committee iHBE 2016
Keywords: NABERS Indoor Environment (IE); IEQ; Sustainable Buildings; Occupant Satisfaction; Commercial Buildings; Energy Efficiency.

* Corresponding author.
E-mail address: [email protected]

1877-7058 © 2017 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the organizing committee iHBE 2016
doi:10.1016/j.proeng.2017.04.189
304 Caroline Residovic / Procedia Engineering 180 (2017) 303 – 310

1. Introduction

Office buildings are designed to provide suitable conditions for occupants through the provision of services such
as lighting, heating, ventilation and air conditioning (HVAC). The Australian office sector is globally one of the
most active and engaged in sustainability today [1]. Since 2010, NABERS rated office buildings have decreased
their energy use by 10 per cent, which is around $60 million per year in energy savings [2]. However, with the focus
on energy efficiency, it is easy to lose sight of the real purpose of office buildings – to provide suitable conditions
for occupants. As Joseph Allen, Assistant Professor of exposure assessment science, Harvard Chan School of Public
Health said “We have been ignoring the 90%. We spend 90% of our time indoors and 90% of the cost of a building
are the occupants, yet indoor environmental quality and its impact on health and productivity are often an
afterthought” [3].
There are currently two streams of thought around energy efficiency and the indoor environment quality. The
first is that decreasing energy consumption negatively impacts indoor air quality. The basis for this idea is that as
three quarters of an office building’s energy consumption is used to provide a suitable indoor environment for
occupants [4], reducing the energy inputs to these systems will have a detrimental impact to occupants.
The second stream of thought is that energy efficiency will lead to a good indoor environment, because highly
efficient buildings are well managed and are more likely to be in tune with occupant comfort and satisfaction. This
paper presents the findings from analysis of the NABERS Indoor Environment ratings for the 35 base building
ratings listed on the NABERS website in June 2016. They include buildings across five states in Australia. The
analysis compared the NABERS Indoor Environment rating with the NABERS Energy rating for the same building
to assess, in practice, these two streams of thought.

Nomenclature

NABERS National Australian Built Environment Rating System

2. Importance of energy efficiency and indoor environment quality in the office sector

Staff costs, including salaries and benefits, typically account for about 92 per cent of business operating costs [4].
With office workers spending an average of 7 hours a day inside, the quality of the indoor environment can have a
significant impact on employee health and productivity. A recent study found that people who work in well-
ventilated offices with below average levels of indoor pollutants and carbon dioxide have significantly higher
cognitive-functioning scores than those in offices with typical levels [3].
The study tested participants under four stimulated conditions [3]:
x elevated levels of VOCs, to represent emissions emitted from common office materials (classed as ‘conventional’
building);
x elevated levels of carbon dioxide to represent higher, but not uncommon levels found in an office environment
that typically has the minimum required ventilation;
x low levels of VOCs (class as ‘green’); and
x enhanced ventilation (classed as ‘green+’).
The results show that the cognitive performance for participants who worked in green+ were, on average, double
those of participants who worked in the conventional environment, while the scores for those working in green
buildings were 61 per cent higher [3]. The study found that the most significant difference between the ‘green’ and
‘conventional’ building conditions was experienced for crisis response, information usage, and strategy, which are
indicators of higher levels of cognitive function and decision-making abilities (Table 1).
 Caroline Residovic / Procedia Engineering 180 (2017) 303 – 310 305

Table 1. Results for three cognitive function areas linked to cognitive function and decision making for green buildings and
green+ buildings in comparison to ‘conventional’ buildings [3]
Cognitive function area Green building Green+ building
Crisis response 97% 131%
Information usage 172% 299%
Strategy 183% 288%

The results from the study demonstrate that even modest improvements to indoor environmental quality can have
a profound impact on the cognitive-functioning of employees.
This issue is also important, because commercial buildings (including office buildings) account for
approximately 10 per cent of overall energy consumption in Australia [5]. Around three quarters of an office
building’s total energy consumption is used to provide a suitable indoor environment for occupants from the
provision of heating, ventilation and air conditioning (HVAC) and lighting. HVAC is generally responsible for a
significant proportion of total building energy consumption - a typical system accounts for approximately 40 per
cent of the total building consumption [6]. The pie graph in Figure 1 shows the typical energy consumption
breakdown of an office building:
x HVAC ~ 39 per cent,
x Lighting ~ 25 per cent,
x Equipment, such as computers ~ 22 per cent,
x Lifts ~ 4 per cent,
x Domestic hot water ~ 1 per cent, and
x Other uses not covered ~ 9 per cent [6].

9%
1%
4% HVAC
Lighting
39%
Equipment
22%
Lifts
Domestic hot water
Other
25%

Fig. 1. Typical energy consumption breakdown in an office building [6]

3. Background to the NABERS Indoor Environment (IE) rating

The new NABERS Indoor Environment (IE) tool for offices tool was released in October 2015 with the goal to
improve occupant comfort and wellbeing in the office sector [7]. It is a national tool for Australian office buildings,
designed to be used in conjunction with the other NABERS rating tools (energy, water and waste) to deliver a
comprehensive measure of the operational performance of an office building that takes into account the occupant
comfort and well-being, as well as the resource efficiently and environmental impact of the building. The NABERS
IE tool is managed by the NSW government on behalf of the other state and territory governments and the
Australian government and is a voluntary rating.
The NABERS IE tool benchmarks the performance of a building or tenancy on 1 to 6 star rating scale. The
highest rating of 6 stars represents market leading performance, while 3 stars represents average performance within
the market.
The NABERS IE tool measures the five indoor factors; thermal comfort, air quality, noise, lighting and the office
layout to assess the level of comfort or wellbeing and ultimately satisfaction in a building. NABERS uses two
306 Caroline Residovic / Procedia Engineering 180 (2017) 303 – 310

measurement approaches - an occupant satisfaction survey and the collection of on-site quantitative data [7]. These
two approaches allow the tool to measure to what extent the building characteristics, maintenance practices and
tenant equipment impact the quality of the indoor environment. The occupant satisfaction survey assesses how a
building is performing from the perspective of its occupants, while the on-site quantitative measurements capture
data on specific parameters that are indicators of overall building performance.
NABERS IE benchmarks the quality and performance of the indoor environment for a building or tenancy
against the Australian office market – the only tool worldwide that uses the combination of qualitative and
quantitative data to benchmark performance.

3.1. Ratings reflect split responsibilities within the building

The NABERS IE rating reflects the split of responsibilities within a building, so that building owners and tenants
can separately measure and report on the environmental impact from the part of the building for which they are
responsible (Figure 2). There are three different rating types; base building, whole building and tenancy [7].
Separate rating types enable the different stakeholders within a building including, building owners, managers and
tenants to benchmark how well their indoor environment is performing and identify opportunities for improvement.

Fig. 2. An illustration of the NABERS IE building coverage [7]

3.2. The indoor environmental factors measured by NABERS IE

NABERS measures five key indoor environment factors (thermal services, acoustic comfort, indoor air quality
lighting and office layout) to measure the level of comfort, wellness and ultimately satisfaction in a building. Each
factor is scored separately, to help identify areas where the building and/or tenancy is performing well and area
where performance can be improved. The factors are also weighted differently depending on their impact on
occupants (Table 2).
The number of floors to sample and the sampling locations required is based on the size of the building or
tenancy. The maximum number of floors required for a NABERS rating is 6 and the maximum number of samples
per floor is 5. The majority of the site measurements can be taken within one to two working days, with
measurements taken during the morning and afternoon. To ensure the site visit does not influence the occupant
survey results, the occupant satisfaction survey must be completed before conducting the measurements.
The occupant satisfaction survey measures the level of satisfaction with various aspects of the indoor
environment and is used with the quantitative measurements taken on-site to calculate the final rating. NABERS
currently allows three occupant satisfaction surveys for use in a certified rating – Center for Built Environment
(CBE), Building Use Studies (BUS) and BOSSA administered by Sydney University. The occupant satisfaction
survey is used for whole building and tenancy ratings and account for 50 per cent of the final rating score for
thermal services, acoustic comfort, indoor air quality and lighting and 100 per cent for the office layout parameter.
 Caroline Residovic / Procedia Engineering 180 (2017) 303 – 310 307

3.2.1. Thermal Services

Thermal services is very important for occupant comfort and wellbeing. Under NABERS it is measured by the air
temperature, radiant temperature, relative humidity and air speed provided to the space and compared against the
international standard ASHRAE 55:2013 Thermal Environmental Conditions for Human Occupancy [8]. It is
measured for base building and whole building ratings only, as tenants typically have no control over these services
[7]. The percentage of samples that meet ASHRAE 55:2013 (‘optimal conditions’) is then compared to the
NABERS benchmark to determine the final quantitative score, which is used for base building ratings. For whole
building ratings the thermal services score is calculated from the final quantitative score and the occupant
satisfaction survey result.

3.2.2. Acoustic Comfort

Noise levels in an office are a key factor to occupant satisfaction, with one study finding that over 50 per cent of
occupants in office cubicles think that noise levels interfere with their ability to get their job done [9]. Acoustic
comfort is measured for all NABERS IE rating types as noise levels can be attributed to the mechanical systems and
façade insulation in the base building, as well occupant behaviour in the tenancy [7]. The average result from the on-
site samples are compared to the NABERS benchmark to determine the final quantitative score, which is used for
base building ratings. For whole building and tenancy ratings the acoustic comfort score is calculated from the final
quantitative score and the occupant satisfaction survey result.

3.2.3. Indoor Air Quality

Research shows a strong relationship between good indoor air quality and people’s performance at work [3] [10].
It is not a simple, easily defined concept but a constantly changing interaction of factors, including the maintenance
and operation of building ventilation systems, pollutant sources from office materials, and occupant perceptions and
susceptibilities. NABERS measures the ventilation effectiveness provided (using carbon dioxide as a proxy) and the
levels of pollutants (carbon monoxide, particulate matter (PM10), formaldehyde and Total Volatile Organic
Compounds (TVOCs)) [8]. To reflect their individual importance, the quantitative indoor air quality result is
calculated from the individual weighted scores for these five variables based on their potential impact to occupant
satisfaction, health and wellbeing. The average result from the on-site samples are compared to the NABERS
benchmark to determine the final quantitative score.
For whole building and tenancy ratings the indoor air quality score is calculated from the final weighted average
of the on-site quantitative measurements and the occupant satisfaction survey results. Formaldehyde and TVOCs are
the result of tenant activities and equipment or materials used and are measured for tenancy and whole building
ratings only. Carbon monoxide is measured for base building and whole building ratings only because it generally
comes from external sources and is heavily influenced by the building design and the location of the air intake ducts.

3.2.4. Lighting

Lighting accounts for around 25 per cent of the energy used in an office building [6]. The quality of the office
lighting is critical, with employees spending, on average 7 hours every weekday in the office. Studies have shown
that light and glare can impact staff productivity and general wellbeing [11].
NABERS measures the level of horizontal illuminance at the occupant’s desk level to provide an indication of the
potential for eye strain, and therefore the occupant’s ability to work effectively. Lighting is only measured for
tenancy and whole building ratings because the tenant has the greatest control over the light levels within the
tenancy [5]. The lighting score is calculated from the final quantitative score and occupant satisfaction survey result.

3.2.5. Office layout

As the office layout is difficult to quantitatively measure, the data used in the NABERS IE rating is based on the
results from the occupant satisfaction survey to provide information on the level of satisfaction with the general
office layout [7].
308 Caroline Residovic / Procedia Engineering 180 (2017) 303 – 310

Scores are calculated based on how the responses compare to the Australian IEQ NABERS benchmark [7]. For
example, if results for office layout are better than 70 per cent of buildings, the score obtained will be 70 per cent.

Table 2. Data required according to the NABERS IE rating type and weighting [8]

Indoor environment factor Base building rating Tenancy rating Whole building rating
Data Weighting Data Weighting Data Weighting
Thermal services M 40% - - M, S 30%
Indoor air quality M 40% M, S 40% M, S 30%
Acoustic comfort M 20% M, S 25% M, S 15%
Lighting - - M, S 25% M, S 15%
Office layout - - S 10% S 10%
Where: M represents on-site measurements; S represents occupant satisfaction survey; - represents no measurements.

4. Analysis: Can we have a highly efficient building and an excellent indoor environment?

To assess, in practice, whether it is possible to operate a highly efficient building while at the same time
delivering an excellent indoor environment, the NABERS IE and Energy base building ratings for 35 office
buildings around Australia were analyzed. This represents the total number of buildings with a NABERS IE and
Energy base building rating listed on the NABERS website in June 2016.
The analysis demonstrated a correlation (R2=0.3346) between energy efficiency and good indoor environment
quality, with 94 per cent of buildings achieving good performance (4 stars and above) for both (Figure 3). Only two
out of the 35 ratings had a NABERS IE rating below 4 stars (both achieved 3 stars, representing market average
performance). One of the two buildings had a NABERS Energy rating of 3.5 stars, while the other had a NABERS
Energy rating of 5 stars. The numbers inside each bubble in Figure 3 represents the total number of buildings
analyzed. The linear trend line has also been included.
This correlation between energy efficiency and good indoor environment quality is further demonstrated when
comparing the NABERS IE rating and the average NABERS Energy rating, particularly as the NABERS IE rating
improves (Table 3).

5. Discussion

The results from the study support the theory that high energy efficiency will lead to a good indoor environment
with highly efficient NABERS rated buildings demonstrating excellent indoor environment quality by achieving a 4
star NABERS IE rating and above. It is likely that these highly efficient buildings are well managed and are
therefore more in tune with occupant comfort and satisfaction.
Independent research by the Investment Property Databank has shown buildings with high NABERS ratings have
higher returns and less vacancies, leading to a higher market valuation [12]. These efforts have been recognised in
many international sustainability indices, and as a result, the Australian property market took out the top spot as the
world’s leading region in the Global Real Estate Sustainability Benchmark (GRESB) in 2014, far outperforming
buildings in Europe, Asia and North America [1].
This research is supported by a separate study into the value of buildings with excellent indoor environment,
equivalent to a NABERS IE rating 5 stars and above. This study found that the value of buildings with excellent
indoor environment compared to standard buildings is 10 per cent higher, while the occupancy rate is approximately
10 per cent higher and rent is 5 per cent higher [13] (Table 4). The results for 5 star and above NABERS Energy
ratings correlate well with the results for excellent IEQ rating and support the findings from the study of the 35
NABERS rated buildings that show high NABERS Energy correlates with excellent IEQ.
 Caroline Residovic / Procedia Engineering 180 (2017) 303 – 310 309

5.5 4 1

5 1 1 4 7 1
NABERS Energy Rating

4.5 4 2
7

4 1 1

3.5 1

3
R² = 0.3346

2.5
2.5 3 3.5 4 4.5 5 5.5 6
NABERS Indoor Environment Rating

Figure 3. NABERS Indoor Environment and Energy ratings for the 35 office buildings in Australia.

Table 3. NABERS IE rating and the corresponding average NABERS Energy rating
NABERS IE rating Average NABERS Energy rating
3 4.3
4 4.5
4.5 4.7
5 4.9
5.5 5.3

Table 4. Investment returns for buildings with a 5 star NABERS Energy rating and excellent IEQ [12] [13]
5 star and above NABERS Energy Rating [12] Excellent IEQ [13]
Building asset value 10.6% higher +10%
Occupancy rate Not reported +10%
Vacancy rate -1.4% Not reported
Rental return +10.8% +5%

Of the 35 office buildings rated using NABERS IE, 21 building (60 per cent) achieved NABERS 5 stars or above
for NABERS IE (‘excellent’ and ‘market leading’) and 19 buildings (54 per cent) achieved NABERS 5 stars or
above for NABERS Energy. 14 out of the 35 buildings achieved NABERS 5 stars or above for both NABERS IE
and Energy (40 per cent).
310 Caroline Residovic / Procedia Engineering 180 (2017) 303 – 310

The potential financial return from buildings that are achieving environmental excellence is supported by a recent
survey by Colliers International that showed that 95 per cent of tenants want to be in a green building [14] and
results from Jones Lang LaSalle’s research that found that 92 per cent of the 143 top-level corporate real estate
leaders surveyed internationally consider sustainability when making their location decisions [15]. Importantly, of
those surveyed, just under half said they would pay up to a 10 per cent premium for sustainable office space [15].
This study analyzed buildings rated under the new NABERS IE tool and while these buildings represent a range
of geographical locations, with different climatic conditions (for example, Queensland in comparison to Victoria),
these buildings, are most likely, A Grade buildings – representing the premium building market. This assumption is
based on a knowledge of the buildings rated and previous experience with new NABERS ratings which saw initial
uptake in the premium building market. Based on the 35 buildings assessed, it is clear that buildings can be managed
to provide an excellent indoor environment and be highly energy efficient. As the market matures, and NABERS IE
ratings become an established performance assessment of a building’s IEQ it will be interesting to re-analyze the
results to assess these two theories in the less-premium building market.

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