Subject: Technical Services – new Swiss International Standard

Ras Al Khaimah (UAE)/Baar (CH), May 9, 2023

New construction standard: LEED Certification

This is with reference to our new initiative towards sustainability and energy savings. Swiss
International is committed to make the development of green buildings based on LEED1 certification
from USGBC2 as a mandatory requirement for all properties under the Swiss International portfolio.

LEED certification is an increasingly popular distinction demonstrating and recognizing building

sustainability. It also demonstrates a commitment to “green” principles through the design, construction
& operations of a hotel. The certification is an appealing form of recognition for building owners
dedicated to key environmental principles.

LEED started its certification with just 19 buildings in a pilot program in 1998. As of November 2019,
there were more than 100,000 registered and certified LEED commercial projects around the world,
with more than 76,000 in North America and more than 6,000 in both Europe and East Asia. The first
hotel to be certified was the Kandalama Hotel in Sri Lanka in 2000. There are 2,000 LEED-certified
hotels. Some of the worldwide LEED certified hotels and its information can be seen in given below links:

1. https://www.usgbc.org/articles/hotels-worldwide-are-going
2. greenleedthepointsguy.com/guide/leed-certified-hotels-on-points-and-miles

This document will broadly cover the followings:

1. LEED System Goals & Benefits

2. LEED Rating
3. Return on Investment - Energy & Water savings
4. Incremental cost & payback period
5. Criteria for selection of LEED certification
6. LEED certification expenditures

v LEED System Goals & Benefits

LEED is a holistic system that doesn’t simply focus on one element of a building such as energy, water
or health, rather it looks at the big picture factoring in all of the critical elements that work together to
create the best building possible. The goal of LEED is to create better buildings & gives following
benefits:
• Reduce energy consumption
• Enhance individual human health
• Protect and restore water resources
• Reduce operating and maintenance costs
• Reduce carbon footprint
• Protect and enhance biodiversity and ecosystem services
• Promote sustainable and regenerative material cycles
• Enhance community quality of life

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v LEED Rating – level of Certification & corresponding points

There are four levels of certifications as shown in the table below and each level has to earn minimum
points as per the LEED checklist. LEED certification is valid for life time of the building.

S.No Levels of Certification Points earned

1 Platinum 80+ points earned
2 Gold 60-79 points earned

3 Silver 50-59 points earned

4 Certified 40-49 points earned

v Return on Investment - Energy & Water Savings:

It has been proven across the globe that LEED certified buildings save money, improve efficiency, lower
carbon emissions and create healthier places for people. Studies have shown that green buildings
increase the productivity by 25% and reduces the carbon emission by 40% due to operations and energy
efficiency strategies, waste management, water conservation & energy reductions. The below table
shows the percentage of energy & water savings corresponding to the LEED rating in comparison of a
normal building.

S.No Levels of Certification Energy & Water Savings

1 Platinum 40-50%
2 Gold 35-40%
3 Silver 25-30%

4 Certified Upto 25%

v Incremental Expenditure & Payback Period

There is an incremental expenditure associated with developing a LEED certified building. The
incremental expenditure is on account of usage of high-performance materials and equipment’s, LED
light fixtures, solar panels for hot water and electricity which must be considered in the project cost.

At the same time, this incremental cost is compensated by reduction in energy and water bills leading
to a payback period of 2-4 years. In addition, intangible benefits of green building include enhanced air
quality, excellent daylighting, health & well-being of the occupants. The table below shows the
associated incremental cost corresponding to each level of certification.

v Criteria for Selection of LEED Certification

It is important to target the level of LEED certification at the concept stage itself. This gives directions
and clarity to all stake holders. As below tables show higher the rating more the benefits and there is
an incremental cost associated to this. After various discussions with professionals and market leaders,
Swiss International has decided following LEED certifications for each brand.
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 S.No Brands Target of LEED Certification
1 Royal Swiss Platinum
2 Swiss International Hotels & Resorts Platinum

3 Swiss Spirit Hotels & Suites Platinum

4 YES INN by Swiss International Platinum

v LEED Certification Expenditure

The cost to obtain LEED certification for new or existing building can vary depending on the size of the
project and the level of certification desired. This expenditure can be split broadly into three components
which clearly identifies the expenditure as part of the capital cost of the project.

S.No Expenditure components Categories (under project cost)

1 LEED Professional Fees Design Fees
2 Incremental cost of using Construction Cost –
high-performance materials & equipment Direct labor & material cost
3 USGBC fees for getting the certification Building Approvals

In addition to above, the expenditure incurred on obtaining a LEED certification must be capitalized as
part of project costs due to following reasons under tax treatment:

o LEED certified buildings have higher asset value in comparison of a normal

building
o LEED certification is associated with an asset that has a useful life that lasts
substantially beyond the current year
o produces benefits that extend beyond a tax year over a number of years.

To make the whole process successful, we recommend the involvement of LEED professional with an
immediate effect to gain the maximum benefits & points under design, construction & operational
stages.

This new Swiss International standard goes into effect for new hotels as per the 1st of May 2023.
Existing hotels must be compliant as per the 1st of January 2025.

Executive member signing off:

Henri W.R. Kennedie, President & CEO

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