The green building rating system within the sustainability framework of the United Arab Emirates (UAE), the Pearl Rating System (PRS), similar to most international rating systems such as LEED, considers several strategies, regulations, and policies to improve the energy and water performance in buildings. However, the applicability of considering water as part of energy or the fact that the utilization of energy mandates the usage of water seems unexplored and is not yet included in any of the existing building rating systems. A unified approach of water and energy resources is thus vital for future considerations in energy policy, planning, and the inclusion of the same in the sustainability rating systems. This paper investigated, as a case study, the prospects of water–energy nexus in the prevailing UAE green building rating system—PRS—to uncover whether any water conservation strategy has an adverse effect on energy and vice versa. The review revealed that the major shortcomings of the PRS in terms of water–energy nexus strategy are the usage of reference codes that are not suitable for the UAE’s climate and geographical conditions, inexistent synergy between some credit categories, the oversight of rebound effects, and a need for credit reassessment. The paper also recommends that any proposed strategy to realign credit categories in terms of the water–energy nexus with the potential risk to also have a hidden negative rebound effect that researchers and practitioners should identify lest the water–energy tradeoff brings unprecedented repercussions. The theoretical analysis establishes that the bifurcating management of water and energy in the sustainability rating system and energy policy needs to be revisited in order to reap more sustainable and optimum results that are environmentally, ecologically, and financially consistent.