Driving Sustainability Through Energy Performance Certificates in Real Estate: Insights from South Africa, the USA, the UK, Europe, and Asia
The real estate market is responsible for nearly 40% of global energy-related carbon emissions—with about 28% stemming from building operations (heating, cooling, lighting) and 11% from embodied carbon in materials and construction processes. This makes buildings one of the largest contributors to climate change and a critical focus area for decarbonisation.
In response, Energy Performance Certificates (EPCs) and equivalent rating tools have emerged as powerful instruments to measure, regulate, and improve energy use in buildings. By providing standardised benchmarks, EPCs help align asset performance with global climate targets, ESG mandates, and financial risk models.
While researching this article, I had the opportunity to travel to both London and Singapore, and saw firsthand how these global cities are leveraging policy, technology, and stakeholder engagement to make energy performance visible, actionable, and integral to real estate value.
This article explores how South Africa, the United States, the United Kingdom, Europe (with a spotlight on Germany), and Asia (focused on Singapore) are advancing the use of EPCs and energy ratings to drive a more sustainable built environment.
1. United Kingdom: From Compliance to Market Differentiator
During my visit to London, I was struck by how integrated energy efficiency has become in the city’s property narrative. From modern office buildings in Canary Wharf to retrofitted heritage structures in the West End, EPC ratings are prominently featured in listings, leases, and investor materials.
How it works:
Mandatory EPCs are required for residential and commercial buildings upon sale or lease.
EPCs are graded from A (most efficient) to G (least efficient).
As of April 2023, commercial buildings must have a minimum EPC rating of ‘E’ to be leased, with proposals to increase this to ‘C’ by 2027 and ‘B’ by 2030.
Impact on real estate:
EPC ratings have become a critical asset valuation metric.
Green leases and retrofitting strategies are being driven by EPC requirements.
Institutional investors and REITs use EPC data to align portfolios with net zero pathways and ESG reporting frameworks (e.g., GRESB, TCFD).
2. United States: A Patchwork of Performance Tools, Led by ENERGY STAR
Unlike the UK, the United States does not operate a single, federally mandated EPC framework. Instead, a mix of voluntary and city/state-level energy disclosure policies drives market accountability. At the heart of this system is the ENERGY STAR® rating, one of the longest-standing and most widely adopted energy performance tools in the U.S. real estate market.
ENERGY STAR: The De Facto National Benchmark
ENERGY STAR is a federally administered program, originally launched by the Environmental Protection Agency (EPA) in the 1990s and up until recently subsidised by the U.S. federal government to promote energy efficiency across buildings, appliances, and products.
Commercial buildings are scored on a 1 to 100 scale, benchmarking their energy performance against national peers. A score of 75 or higher qualifies a building for ENERGY STAR certification.
ENERGY STAR Portfolio Manager (ESPM) is used by over 40% of U.S. commercial floor space and underpins mandatory benchmarking laws in major cities like New York, Seattle, Boston, and Los Angeles. ESPM has supported more than 330,000 buildings across 35 billion square feet (±3.25 billion m²) in North America.
Implications for the U.S. Real Estate Market:
ENERGY STAR certification has become a valuable signal of operational efficiency, leading to higher rental premiums, increased tenant retention, and reduced vacancy.
Investors and REITs incorporate ENERGY STAR data into their ESG scoring, GRESB submissions, and green bond reporting.
Many sustainability-linked loans and C-PACE programs give preferential terms to buildings with strong ENERGY STAR performance.
Despite the recent tapering of federal subsidies, ENERGY STAR’s broad adoption has created a self-sustaining ecosystem where building owners are voluntarily pursuing certification for market advantage.
In essence, while the U.S. lacks a formal EPC mandate, ENERGY STAR has become the performance benchmark of choice, influencing everything from capital markets to leasing strategies—and solidifying energy efficiency as a driver of real estate value. The U.S. continues to lead in performance-based benchmarking. This is despite the proposed removal of the federal subsidy in the FY2026 budget.
3. Germany (and the EU): Mandatory and Deeply Embedded in Market Regulation
Germany, like other EU member states, enforces EPCs under the EU Energy Performance of Buildings Directive (EPBD), but with strong national implementation that links energy certification to real estate transaction rules.
How it works:
EPCs are mandatory for all buildings sold, rented, or newly constructed.
The certificate includes key energy consumption data, system efficiency, and recommended upgrades.
Real estate advertisements are legally required to disclose EPC ratings.
Market impact in Germany:
EPCs influence mortgage rates, as banks increasingly favour efficient buildings in line with the EU Taxonomy.
They are critical in building renovation strategies, with the German government offering subsidies and tax incentives for EPC-driven improvements.
Institutional landlords use EPC data to prioritise retrofits, especially as Germany targets full building stock decarbonisation by 2045.
All new residential and non‑residential buildings must be zero emission by 2030 (public buildings by 2028).
All new builds must be solar‑ready, and existing non‑residential and public buildings must install solar systems via phased timelines (2026–29)
Germany is an example of how EPCs are not just compliance tools, but are tightly integrated into national climate goals, fiscal policy, and real estate financing. EPCs are now harmonised across the EU, with validity capped at 5 years for energy ratings D‑G, and 10 years for higher energy ratings (A‑C).
4. South Africa: A New and Evolving Mandate
South Africa (the home country of the current World Test Cricket Champions) introduced mandatory EPC regulations in 2020, making it one of the first African countries to implement mandatory energy performance reporting at a national level. South Africa has been moving towards energy efficiency for the past 15 years, the requirement of having an EPC will play a key role in Greenhouse Gas emissions reduction, which is a key requirement to improve energy efficiency and saving costs.
Key features:
EPCs are currently required for government-owned buildings over 1,000 m² and privately-owned buildings over 2,000 m² used for specific occupancy types (e.g., offices, schools, training facilities, theatres, restaurants, gyms).
By 8 December 2025, these buildings must publicly display their benchmark Energy Performance rating. Ratings range from A (best) to G (worst) based on energy usage per square meter.
A D-rating is the benchmark, meaning buildings should be benchmarking themselves on this scale (While the South African EPC regulations don’t explicitly mandate a minimum rating like a 'D', the EPC guidelines suggest that a 'D' rating is generally considered the threshold for acceptable energy performance in non-residential buildings).
An EPC must be issued by a registered EPC Professional.
The initiative is led by the Department of Mineral Resources and Energy (DMRE) and the South African National Energy Development Institute (SANEDI).
Market developments:
EPCs are creating a new green consulting market and boosting demand for energy audits and energy efficiency-related building upgrades (smart metering, renewable energy, HVAC optimisation projects as examples).
Real estate funds and property developers are beginning to integrate EPCs into valuation and risk assessments.
Local municipalities, including Cape Town and eThekwini, are exploring how EPCs could tie into building approvals and incentives.
A recent and innovative development is the partnership between Standard Bank’s LookSee platform and SANEDI, which launched a energy and carbon certification tool for existing homes in May 2025.
5. Asia – Singapore: A Leader in Regulatory-Driven Building Performance
Singapore’s commitment to building efficiency was especially evident during my recent trip. Whether walking through green-certified malls in Marina Bay or visiting high-performance commercial towers in the Central Business District, it was clear that energy performance is woven into the DNA of real estate operations.
Though Singapore doesn’t issue EPCs in the European sense, its Green Mark certification and Building Energy Submission System (BESS) perform a similar function—ensuring that building owners not only report but act on energy performance data.
Key features:
All commercial buildings above 15,000 sqm of Gross Floor Area are required to submit annual energy consumption data through BESS.
Buildings are rated and published in a national benchmarking report administered by the Building and Construction Authority (BCA).
The BCA Green Mark scheme functions similarly to EPCs, with a tiered certification system (Certified, Gold, GoldPLUS, Platinum) based on performance in energy, water, indoor environment, and carbon.
Market impact:
Green Mark ratings are now a must-have for Class-A commercial developments and institutional assets.
Incentives, tax rebates, and procurement advantages reward high-performance buildings.
The ecosystem encourages collaboration between landlords, tenants, and regulators, all aligned on sustainability goals.
Singapore's digitally enabled, policy-backed approach shows how performance data—when transparently used—can shift culture and drive long-term value in urban property markets. This model has influenced other regional markets, such as Hong Kong and Malaysia, and represents a successful integration of EPC-style regulation into a pro-business and tech-enabled real estate ecosystem.
While EPC frameworks differ in maturity and enforcement across regions, the direction of travel is clear: energy performance transparency is becoming central to real estate economics.
Whether through EPC mandates in Germany and the UK, ENERGY STAR benchmarking in the U.S., or new compliance structures in South Africa, the industry is evolving toward performance-based accountability.
Forward-looking real estate players are using EPCs and energy ratings not just for compliance, but as tools to unlock higher valuations, ESG alignment, and long-term asset resilience.
Conclusion: Global Convergence on Building Transparency
From Cape Town to California, from Frankfurt to Singapore, the story is the same: energy performance is becoming central to how buildings are valued, managed, and regulated. With buildings contributing nearly two-fifths of global carbon emissions, the adoption of EPCs and energy benchmarking systems is no longer just good practice—it is a climate imperative.
The cities I’ve explored and the markets assessed, a common insight has emerged: energy performance transparency is no longer optional—it’s becoming foundational. Whether through EPC mandates in Europe, ENERGY STAR benchmarks in the U.S., new compliance frameworks in South Africa, or digitally integrated systems in Singapore, the message is clear: measure, improve, and disclose—or risk being left behind.
Real estate market players who embrace EPCs and energy performance frameworks not just for compliance—but as tools for competitive advantage, ESG credibility, and operational efficiency—will lead the future of sustainable property. EPC frameworks differ in maturity and enforcement across regions, the direction of travel is clear: energy performance transparency is becoming central to real estate economics.
Whether through EPC mandates in Germany and the UK, ENERGY STAR benchmarking in the U.S., mandatory energy reporting regulations in South Africa, or digital submission platforms in Singapore, the global real estate market is evolving toward sustainability performance-based accountability.
Forward-looking real estate players are using EPCs and energy ratings not just for compliance, but as tools to unlock higher valuations, ESG alignment, and long-term asset resilience.
Below are are a few recommendations for Real Estate Stakeholders to enhance the benefits from EPC’s:
Integrate EPCs into asset management and capex planning to futureproof portfolios.
Link EPCs to green finance instruments, such as sustainability-linked loans and bonds.
Educate occupants and brokers on how energy ratings create long-term value and lower risk.
Prepare for regulation tightening, particularly in Europe and in Africa where minimum EPC thresholds will soon become more stringent.
In every real estate market I visited, the writing is on the wall: energy-efficient buildings are more valuable, more attractive, and more resilient. The tools now exist—the next step is to use them wisely, consistently, and collaboratively. Investors, regulators, and occupiers demand better performance, EPCs and sustainability rating tools will become the passport to sustainable building credibility—across all continents.
Green Building Design Group is accredited to issues EPCs in South Africa and has a global team of accredited sustainability experts to offer end-to-end technical support towards the real estate market’s infrastructure teams. Speak to our team here
References
UK Government – Non-domestic private rented property: minimum energy efficiency standard - landlord guidance
Minimum energy efficiency standards (MEES) for commercial buildings
https://www.gov.uk/guidance/non-domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidanceGreen Building Council South Africa (GBCSA)
Energy Performance Certificates in South Africa
https://www.gbcsa.org.za/news/tag/energy-performance-certificate/South African Department of Mineral Resources and Energy (DMRE)
Mandatory Energy Performance Certificates Guidelines for Buildings in South Africa
https://www.dmre.gov.za/Portals/0/Energy_Website/EEE/Energy-Performance-Certificate-Guidelines.pdfENERGY STAR Portfolio Manager – U.S. Environmental Protection Agency (EPA)
Benchmarking and Certification Resources
https://www.energystar.gov/buildings/benchmarkNew York City Local Law 97 – NYC Sustainability Office
https://www.urbangreencouncil.org/what-we-do/driving-innovative-policy/ll97/U.S. Green Building Council (USGBC)
Green Building and Energy Benchmarking in the U.S.
https://www.usgbc.org/articles/green-building-101-why-energy-efficiency-importantEuropean Commission – Energy Performance of Buildings Directive (EPBD)
https://energy.ec.europa.eu/topics/energy-efficiency/energy-efficient-buildings/energy-performance-buildings-directive_enGerman Federal Ministry for Economic Affairs and Climate Action (BMWK)
Energy Efficiency in Buildings – EPC Implementation and Renovation Strategy
https://www.bmwk.de/Redaktion/EN/Dossier/enhancing-energy-efficiency-in-buildings.htmlGRESB Real Estate Assessment
ESG performance benchmarking in global real estate
https://www.gresb.com/nl-en/real-estate-assessment/United Nations Environment Programme (UNEP)
2022 Global Trends and Case Studies on Building Performance Regulation
https://globalabc.org/sites/default/files/inline-files/2022%20Global%20Status%20Report%20for%20Buildings%20and%20Construction_0.pdfStandard Bank Group website. https://www.standardbank.co.za/southafrica/news-and-media/newsroom/south-africas-first-home-energy-and-carbon-rating-via-looksee-sanedi
