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Practice area

Construction Law

13 September 2022 · Article

Environmental certification of contracts

Sustainability work in the construction industry

The increased focus on sustainable development in recent years has also left its mark on the construction industry. Nowadays, requirements for environmental certification of construction projects are the rule rather than the exception and many developers impose such requirements in all construction projects. Environmental certification systems or environmental classification, as it is also called, are used to measure and communicate the environmental performance of buildings.

We are often asked what different environmental classifications mean for the contractor’s commitment in the individual project and how the contractor should act to meet the requirements.

Benefits of environmental certification

Environmental certification aims to reduce the environmental impact of buildings and is not only a cost for the developer and contractor. It also brings business benefits. Contractors who have knowledge of the process have a greater opportunity to compete in and win more tenders. For property managers, this can mean lower operating costs, and certificates can provide good publicity for all parties involved. Experience of environmental certifications also facilitates companies’ CSR work.

What environmental certifications are available?

Internationally, there are more than 100 different environmental certification systems. In Sweden, the following three are most common: Swedish Miljöbyggnad, British BREEAM and American LEED. Sometimes European GreenBuilding is also used to assess the energy performance of a building.

Swedish Miljöbyggnad is adapted to Swedish regulatory requirements, which means that it is well suited for Swedish construction projects. The certification system focuses on three different areas: energy, indoor environment and choice of materials. The certification shall be followed up with a verification of the building’s performance after it has been in operation for three years.

The international counterparts, BREEAM and LEED, cover significantly more areas and also provide scope for setting higher environmental requirements. One advantage of these certifications is that they are internationally comparable. At the same time, these systems impose higher demands on both the developer and the contractor, who must familiarize themselves with a regulatory framework that is partly adapted but not created according to Swedish standards. The actual application for certificates is made to the organization that manages the respective environmental certification system. More information about the certification process can be found at the Sweden Green Building Council (SGBC). The process results in a final rating that differs between the different systems. 

How should the developer act?

For a developer who plans to environmentally certify his contract, it is important that clear requirements are set out in the contract documents.

The tender specifications must contain regulations that specify the responsibility of the contractor for certification and any verification, as well as instructions on how the contractor should fulfill its obligations. AMA AF 21 contains codes specifically dedicated to environmental certification, see AMA AFC.2232 and AFD.2232 respectively. In the regulations, the developer should, among other things, specify which environmental certification is to be carried out and how far-reaching the contractor’s responsibility is.

In order to lead the work with environmental certification, the developer should already at the program stage appoint a manager within the project organization with experience and knowledge of the current certification system.

What should the entrepreneur consider?

Environmental certification imposes a number of requirements on how the contractor should act in the construction project. The scope of the requirements depends, among other things, on which environmental certification system is applied, but also on the level to which the requirements refer. In addition, the responsibility is affected by whether the contractor should only be responsible for certification or for both certification and verification.

The certification requirements govern both the design work and the execution of the contract, and may include requirements for how installations should be designed and what materials may be used.

If the certification work is neglected at an early stage, it may mean that costly changes have to be made later.

Both the designer and the construction contractor must be involved in the certification process. The form of contract – turnkey or construction – therefore affects how far-reaching the contractor should have for certification and any verification. In a turnkey contract, where the contractor is responsible for both design and construction, the contractor must take responsibility for meeting environmental requirements early in the process, while in a construction contract it should be done in dialogue with the developer, who is responsible for the design.

The requirements placed on the contractor in the individual project depend on how the contract documents are designed. In negotiated construction contracts, the contractor should take advantage of the opportunity to participate in the formulation of the requirements in order to clarify the responsibility and distribution of the same. However, in both negotiated and publicly procured contracts, it is important to communicate with the developer – in writing – and find out what expectations of certification and ratings exist.

The contractor should also ensure that the contractor is given the opportunity to meet the requirements. For example, if the contractor is responsible for subsequent verification, the contractor must be given access to information on the performance of the building after the contractor has delivered and no longer has access to the work.

For the contractor, the certification process requires a lot of administrative work. The contractor must describe and document how the set requirements are met. Documentation of material selection is particularly important. If the contractor is also responsible for verification, the commitment involves additional work.

Conclusion

The process of environmental certification is complicated and when problems or questions arise, for example regarding how contracts should be designed or which party is responsible for a certain part of the certification process, legal expertise may be required. Moll Wendén’s specialists in construction law have a strategic approach that prevents protracted disputes and facilitates our clients’ projects. If you have questions about, for example, design or compliance with environmental certifications, you are most welcome to contact us.

This text has been prepared for information purposes only and should not be construed as legal guidance.