Built assets need to become a physical manifestation of a brand’s commitments

Before the pandemic hit, the UK government had committed to reducing net emissions of greenhouse gases to zero by 2050. In April of this year, the government went yet further and will now set into law the world’s most ambitious climate change target - to cut emissions by 78 percent by 2035 compared to 1990 levels. We now have under 14-years to reduce carbon emissions by over three quarters of current levels.

COP26 may have presented the most recent rallying point for global leaders, but the ubiquity of natural disasters has led to the climate change narrative becoming embedded in vocabularies and echoed across all corners of the planet.

Whatever your stance on the emerging headlines and pledges, we cannot ignore the fact that over a quarter of global CO2 emissions comes from buildings, so taking immediate action to reduce the emissions from the property sector is crucial on our race to net zero.

Do we appreciate that this target is as much about the operation of buildings, as well as the construction of new build assets? - and are we thinking about the existing building stock? If we further understand that 80% of the buildings that will exist in 2050 are already standing, we must recognise that this is a challenge primarily focused on the refurbishment and retrofit of our current estates.

The scale of the challenge requires each of us to challenge our behaviours

Last year, we launched our ISG Power of Place white paper exploring the transformation of attitudes towards workspace. While the concept of working from home, for a broad cross section of society, has been normalised, the message is clear that the office still plays an invaluable role in our productivity and the attraction and retention of talent.

Against the backdrop of a national skills crisis, the war for talent is at an all-time high in many industries. So, when occupiers look to the environments they create to nurture their people and attract the brightest minds, they need to think carefully about their offering and what this communicates.

Many businesses have made bold pledges that recognise their role in the ESG (environmental, social and governance) agenda, embracing these ideals within their core purpose. When considering the carbon performance of their estate, progressive brands will not only be stating their claims, but also committing to evidencing strategies to tackle these challenges for an increasingly discerning talent and customer base.

Undeniably we also need significant global capital flows in support of ethical investments to drive the change. Blackrock’s 2018 announcement that it would prioritise ESG investments was a bold and very public declaration of intent. ESG stocks outperforming the wider stock market in recent years demonstrates the increasing investor appetite. However, to allow these international markets to grow, we also need to step up as an industry to establish universal data collection and common standards to help investors make informed decisions that drive progress.

The good news is, we have the collective knowledge, skills and desire to chart a bold new course

Collaboration is crucial to this endeavour. Working together as an industry, that has typically evolved to operate under the mantra of competition over collaboration, is the only way to succeed. We need to evolve from what could be considered a defensive and secretive posture to an open source, transparent and collaborative culture to develop new ways of contracting that ensure building performance is a target and risk is shared by all involved. We must also be prepared to move forward with power and purpose, not being afraid to relinquish our hold on intellectual property and share our learnings for wider betterment. RIBA, UKGBC and LETI have already helped to point to targets we can start to apply to different building typologies, and we welcomed the release of the UKGBC Whole Life Carbon Roadmap at COP26, to help deliver a common vision and agreed actions for achieving net zero.

Minimising embodied carbon is essential for developers looking to avoid ending up with ‘stranded assets’ on their hands, but the operational carbon is influenced by many different market players.

Owners, occupiers, lawyers managing agents, facilities managers, maintenance engineers and most importantly control engineers, to name but a few. It’s important to stress that a building designed and delivered to achieve net zero performance, can only ever achieve this target if it is maintained and operated with an absolute focus on this goal. Human behaviour is always the variable in the equation.

Only through quantifying where we are on the journey to net zero, can we effectively target solutions and benchmark our progress

To help demystify where we are on the race to carbon neutrality, ISG’s Sustainable Buildings Monitor provides data on the regional variations in the carbon emissions and energy consumption due to the operation of commercial buildings. The Sustainable Buildings Monitor is aligned with the UKGBC operational efficiency target, which represents the total reduction in energy demand required for UK building stock to meet the goal of net zero emissions by 2050.

To provide some context, the UKGBC is targeting a reduction in operational energy use to 70 kWhe/m2 of the net lettable area in the 2035-2050 period. This compares to an estimated level of energy efficiency for the median office of 233 kWhe/m2 in 2019, reflecting a required reduction of building energy consumption of over 70%.

The ubiquitous nature of the office across the UK suggests that transforming our property assets to perform better is a matter of priority. However, we should increasingly look at recycling buildings. How do we fit out buildings so nothing needs be added but nothing can be taken away?

Urgent action is required to reduce energy demand through smart retrofit solutions as well as exemplar new build schemes, alongside enhanced maintenance regimes to optimise operational efficiencies and bringing renewable energy supplies on stream.

In this vein we welcome the current BEIS consultation on compulsory performance ratings for existing commercial buildings over 1’000 m2, with annual ratings and mandatory disclosure as the first step.

We all have a role to play - everyone with a stake in the UK built environment - it must be a team effort, with landlords and tenants approaching these conversations together.

Despite the scale of the challenge, the awareness and desire is there. As an industry we should continue to drive ahead of legislation and keep challenging ourselves to accelerate change, together.