Climate Active is closing. What’s next for green buildings?

The Australian Government has confirmed it will wind up Climate Active certification, discontinue the program’s trademarks, and step away from the term “carbon neutral” altogether. For building owners, developers and project teams who have used the Carbon Neutral Buildings Standard or the Upfront Carbon guideline, the obvious question is what happens now.

The reassuring answer is that the succession pathway for the built environment is further advanced than most people realise. The less comfortable answer is that it will ask more of project teams, because the frameworks replacing Climate Active are built around measured reductions rather than purchased neutrality.

What is actually changing

Climate Active has been shrinking for some time. Certified brands fell from close to 590 at the end of 2024 to around 423, and the number of organisations that stopped using the certification more than doubled over the same period. The Department has pointed to shifting community expectations and a growing preference for language that emphasises direct emissions reduction, alongside the progress of its own flagship policies such as the Safeguard Mechanism.

Program data helps explain the shift. Analysis of the certification register published in March 2025 found that international units made up around 89 per cent of all offset credits used, with more than half of those being Certified Emission Reductions generated under the Clean Development Mechanism. Australian Carbon Credit Units accounted for roughly 11 per cent. Whatever one’s view of offsetting in principle, a scheme whose demand flowed overwhelmingly to the cheapest available international units was always going to face questions about whether it was driving physical abatement in Australia.

That is the part worth being clear-eyed about, because it points to what should and should not be carried forward.

The measurement was always the valuable part

Strip Climate Active back and two things were happening. One was a claim: this organisation, building or product is carbon neutral. The other was a discipline: a defined boundary, a consistent method, documented evidence, and independent verification of the numbers.

The claim is what attracted the scrutiny. The discipline is what the industry cannot do without.

Measurement is what makes abatement investable. Without a defensible figure for the carbon saved by a structural redesign, a facade specification, an electrification project or a heat pump retrofit, there is no way to compare the cost effectiveness of competing transition actions. A client asking where to spend the next two million dollars on decarbonisation needs quantification, not a certificate. Offsetting, by contrast, tends to suppress that analysis, because it offers a cheaper substitute for doing the calculation at all. Offsetting became a distraction, with many accusations of offsetting becoming a honey pot for profiteering, while delivering questionable abatement.

To avoid offsetting becoming permission slips for continued pollution, the UN published the following guidelines on voluntary Net Zero pledges in their 2022 report “Integrity Matters: Net Zero commitments by Businesses, Financial Institutions, Cities and Regions”

UN Integrity Matters Net Zero Recommendations

1. Announcing a Net Zero Pledge. Non-State actors should publish a pledge including targets for 2030 and 2035 and plans to reach net zero by 2050 or sooner.
2. Setting Net Zero Targets. Non-State actors should set short-, medium- and long-term absolute reduction targets, and relative emission reduction targets in their value chain, where appropriate.
3. Using Voluntary Credits. High-integrity carbon credits in voluntary markets should be used for mitigation beyond the value chain, but cannot be counted towards non-State actors’ interim emissions reductions.
4. Creating a Transition Plan. Non-State actors must publicly disclose transition plans indicating the actions taken to achieve all objectives. They should update them every five years and report on progress annually.
5. Phasing Out of Fossil Fuels and Scaling Up Renewable Energy. Net-zero pledges should include specific targets for ending the use and/or support of fossil fuels, accompanied by a fully funded transition to renewable energies.
6. Aligning Lobbying and Advocacy. Non-State actors need to align their external policy and engagement efforts with emission reduction targets.
7. People and Nature in the Just Transition. Non-State actors with high land-use emissions should avoid converting remaining natural ecosystems. Financial institutions should avoid financing companies linked to deforestation.
8. Increasing Transparency and Accountability. Non-State actors must annually disclose their greenhouse gas data, net-zero targets, plans and progress, and have their reported emissions cuts verified by independent third parties.
9. Investing in Just Transitions. There needs to be a new deal for development including financial institutions and multinational corporations, governments, Multilateral Development Banks and Development Finance Institutions.
10. Accelerating the Road to Regulation. Regulators should develop regulations and standards, starting with high-impact corporate emitters. A new Task Force on net zero Regulation should be formed to avoid fragmentation.

So the useful question is not “what replaces the carbon neutral claim” but “what preserves and improves the measurement” and “how do we communicate and implement our Net Zero transition plans with integrity”.

For buildings, the replacement is already taking shape

This is where the built environment is in a stronger position than most sectors, because the Green Star tools already carry both halves of the problem.

Green Star Buildings addresses upfront embodied carbon through its Upfront Carbon credit, and Green Star Performance addresses operational carbon for existing assets. Neither depends on a carbon neutral claim to function. Both are structured around quantifying what a building actually does, then improving it.

What sits behind those credits is a set of international measurement standards that has matured considerably. Life Cycle Assessment (LCA) and EN 15978 defines the modular life cycle stages, from A1 to A5 for upfront carbon through to end of life, that allow one assessment to be compared with another rather than merely asserted. Environmental Product Declarations prepared under ISO 14025 with EN 15804 or ISO 21930 supply the verified product-level data that fills those modules, and Australian practice already draws on this through EPD Australasia. The RICS Whole Life Carbon Assessment methodology operationalises EN 15978 for practitioners, setting out how to scope, calculate and report consistently. Together these give a project team a defensible number for a material substitution or a structural redesign, which is precisely what a carbon neutral certificate never did.

Alongside this, the NABERS Embodied Carbon tool launched in late 2024 and is accepted as a pathway for the Upfront Carbon credit in Green Star Buildings, having also been integrated into the Climate Active Carbon Neutral Buildings Standard and adopted as a voluntary pathway under the National Construction Code 2025. For teams that were using the Climate Active upfront carbon guideline, it offers continuity of method. It is one route into Green Star rather than the whole picture, and the underlying discipline is the same either way: measure the life cycle stages properly, use verified product data, and report on a consistent basis.

The Government’s consultation raises the prospect of NABERS and the Green Building Council of Australia taking on the buildings certification pathway. On the evidence above that reads less like an administrative transfer and more like a structural improvement, because it moves certification to organisations whose tools reward measured physical performance rather than procurement.

The international frame is converging

Australian practice does not need to invent a replacement architecture. Several international frameworks have matured over the past three years, and they point in a consistent direction.

The ISO Net Zero Guidelines (IWA 42:2022) provide the common definition of net zero and the sequencing that sits above sector tools: reduce first, at pace, and use removals only after all technically feasible reductions have been made. They contemplate net zero at asset level, defined as the life-cycle emissions of a physically defined unit such as a building, which is the boundary Green Star already works within.

The Science Based Targets initiative Buildings Criteria, released in August 2024, converts a measured emissions figure into a defensible trajectory, with operational pathways developed alongside the Carbon Risk Real Estate Monitor and global pathways for upfront embodied emissions. CRREM itself answers the question owners actually ask, which is not whether a building performs well today but in which year it becomes stranded on its current trajectory.

Meanwhile, mandatory climate disclosure under AASB S2, built on the ISSB standards rather than the superseded TCFD, has become the dominant driver of corporate carbon accounting in Australia. Building portfolio emissions feed directly into it. And GRESB, which drew 2,382 assessments from 1,002 fund managers in 2025, already incorporates Green Star and other Australian building ratings, so domestic certification transmits into international investment decisions.

At the top of this structure, the UNFCCC began piloting a Net-zero Recognition Framework in February 2026, benchmarking participants against the ten recommendations of the UN High-Level Expert Group’s Integrity Matters report.

Expect much less room for offsets

One number from IWA 42 deserves attention. Its indicative sectoral pathways call for emissions reductions of 99.6 per cent for service buildings and 97.9 per cent for residential buildings by 2050.

Read that carefully. A building on a credible net zero pathway has almost no legitimate residual emissions left to counterbalance. Offsetting does not disappear, but it shrinks to a narrow, tightly conditioned exception for genuinely residual emissions, subject to real diligence on additionality and permanence under frameworks such as the Integrity Council’s Core Carbon Principles and the VCMI Claims Code. It is no longer a substitute for a reduction that is technically achievable.

What project teams can do now

Four practical steps will put most organisations in good shape:

1. Put your upfront carbon quantification on a defensible footing, using EN 15978 modular reporting, verified Environmental Product Declarations and the RICS Whole Life Carbon Assessment method, through whichever Green Star Buildings pathway suits the project. If you were relying on the Climate Active guideline, this is a change of reference rather than a new capability.
2. Keep operational carbon on measured data, with emission factors updated annually from the National Greenhouse Accounts Factors as the grid decarbonises, and feed the result through Green Star Performance.
3. Set a trajectory, not just a rating. Use the SBTi Buildings Criteria and CRREM pathways so capital works are sequenced against stranding risk rather than scheduled by convenience.
4. Align your outputs with AASB S2 and GRESB reporting so the same data serves certification, mandatory disclosure and investor benchmarking rather than being rebuilt three times.

The takeaway

Climate Active’s closure removes a claim. It does not remove the obligation to know your numbers, and it does not remove the tools for doing so. For green buildings the transition is unusually well prepared, because the national measurement infrastructure was built while the certification scheme was still running.

The teams that will find this easy are those who were already using certification as a discipline rather than a badge. Measure rigorously, abate quickly, and treat any residual credit purchase as a narrow exception rather than the point of the exercise.

If you are working through what this means for a specific project or portfolio, we are happy to talk it through.

Further reading

• Green Star Buildings and Green Star Performance: https://new.gbca.org.au/green-star/
• UN High-Level Expert Group, Integrity Matters: https://www.un.org/en/climatechange/high-level-expert-group
• UNFCCC Net-zero Recognition Framework: https://unfccc.int/NZRF
• SBTi Buildings Sector guidance: https://sciencebasedtargets.org/sectors/buildings
• ISO IWA 42:2022 Net zero guidelines: https://www.iso.org/standard/85089.html

Ian Adams is Director of Organica Engineering, a chartered civil and environmental engineer, and a Green Star Accredited Professional and Certified Assessor.