A New Era for Green Buildings: LEED v5 Has Arrived

New projects can still be registered under LEED v4 and v4.1 until June 30, 2027

In today's global real estate market, it is no longer enough to describe a building as simply energy-efficient or sustainable. Investors, lenders, and tenants increasingly require verified, comparable data on a building's energy performance, carbon emissions, climate resilience, and occupant well-being. LEED certification provides one of the world's most widely recognized frameworks for evaluating these aspects, and its latest version—LEED v5—is now available for new projects.

Three New Core Priorities

LEED v5 organizes sustainability around three key pillars:

• Decarbonization

• Quality of Life

• Ecological Conservation and Restoration

Half of all available credits are now directly linked to decarbonization, while quality of life and ecological outcomes each account for 25% of the scoring system. As a result, LEED v5 evaluates not only how efficiently a building operates but also the broader environmental and social impacts associated with its construction and long-term performance.

Energy Efficiency Is No Longer the Only Focus

One of the most significant changes introduced by LEED v5 is its stronger emphasis on the building's entire life cycle. New construction projects are now expected to complete, among others:

• a whole-life carbon assessment,

• a climate resilience assessment, and

• a human impact assessment.

Projects must quantify embodied carbon associated with structural elements, façades, and exterior envelope components while identifying the project's most significant carbon emission sources. Within the Energy category, particular emphasis is placed on:

• long-term operational carbon emissions,

• building electrification,

• renewable energy integration,

• energy metering and monitoring,

• the climate impact of refrigerants, and

• enhanced commissioning of building systems.

Following certification, projects are also required to report energy consumption, on-site energy generation, and peak electricity demand data for five years.

Material Selection Must Start Earlier

LEED v5 introduces a much broader assessment of construction materials. In addition to embodied carbon, the system evaluates human health impacts, circularity, responsible sourcing, and social considerations throughout the supply chain. Consequently, collecting Environmental Product Declarations (EPDs), material ingredient documentation, and manufacturer certifications should begin during the specification phase. Attempting to address these requirements at the end of construction can be costly—or, in some cases, impossible.

Platinum Certification Has Become More Demanding

The certification thresholds remain unchanged:

• Certified: 40 points

• Silver: 50 points

• Gold: 60 points

• Platinum: 80 points

However, achieving Platinum now requires more than simply accumulating enough points. Projects must also demonstrate mandatory minimum performance in key areas, including energy efficiency, electrification, renewable energy use, and embodied carbon reduction.

How Long Will LEED v4 and v4.1 Remain Available?

LEED v5 is now open for registration for Building Design and Construction (BD+C) and Core and Shell projects, while previous versions remain available during a transition period. New commercial LEED v4 and v4.1 BD+C projects may be registered until June 30, 2027. Projects already registered under these versions must submit their initial certification application by June 30, 2033. As a result, projects currently in the planning phase still have the opportunity to choose between the well-established LEED v4.1 framework and the more comprehensive LEED v5. The decision should consider the project's schedule, design maturity, availability of carbon and material data, and the owner's long-term ESG objectives.

What Are the Benefits for Investors?

LEED provides an independent, internationally recognized framework for demonstrating a building's sustainability performance. It can support both technical and ESG due diligence processes, facilitate communication with tenants and investors, and reduce the risk that a property will require costly energy-efficiency or carbon-reduction upgrades only a few years after completion.

That said, market advantages are not automatic and will always depend on factors such as location, building quality, and local demand.

A CBRE study covering approximately 20,000 U.S. office buildings found that, after controlling for factors such as age, location, size, and renovation status, LEED-certified office buildings achieved an average rental premium of approximately 3.7%. Meanwhile, research conducted by JLL across multiple international markets identified rental premiums ranging from 7.1% to 11.6% for office buildings holding various green building certifications.

While these findings should not be interpreted as direct forecasts for the Hungarian market, they demonstrate that independently verified sustainability performance can generate measurable market value—alongside long-term operational savings resulting from improved energy efficiency.

More Than Another Green Building Standard

LEED v5 is far more than an updated certification scheme. It provides an integrated project management and risk management framework that connects operational energy performance, whole-life carbon emissions, material selection, climate resilience, and occupant well-being from the earliest stages of project development. For developers, the question is becoming less whether these considerations should be incorporated into their projects—and increasingly how early they can integrate them into investment and design decisions.