The built environment has made a significant commitment to reaching net zero by 2050, but what are the actions we must take to help us get there? Greg Borel explains in EG.
It’s the dawn of a new year and many of us are wondering how to stick to those resolutions we made. Similarly, it has been hugely encouraging to see the commercial real estate sector resolve to play its part in averting the climate crisis with commitments to reach net zero by 2030, 2040 or 2050. But how should we get started? Actions taken over the next couple of years will signal how serious we are about the longer journey ahead.
Simply having a net zero ambition isn’t a strategy
The first priority is to take a strategic view and build a clear business case with a shared understanding of why net zero is critical. Anchor the long-term view with your board and integrate net zero throughout your strategy; it’s about meaningful business transformation, not an add-on.
When faced with significant targets, it’s tempting to go straight to the big capex questions: portfolio-wide retrofits? Heat pumps in every building? Jumping head first into these considerations can lead to a hyperfocus on cost that severely misses the bigger picture.
After all, all commercial real estate players will need to remove carbon from their portfolios to remain relevant and stay in business. You can procrastinate on starting your inevitable journey by dwelling on the cost, or use this shift to find new opportunities and redefine ‘how to win’. This means building new value propositions for customers and investors who are rapidly demanding more sustainable portfolios.
Once you understand the value of net zero and have your long-term vision grounded in the overall strategy, there are key short-term steps that will set you up for success.
Score quick wins with your occupiers
No building owner, manager or occupier usually has complete control of a commercial building, and chances are that they all have similar carbon reduction goals. Begin by having open conversations about those goals with occupiers, set out to work collaboratively on a common framework and adopt a flexible, incremental approach.
Starting with tackling energy waste and operational carbon through better usage is a no brainer. Commercial premises are still inefficient, with £60 million per year wasted by just a few thousand commercial properties across five major UK cities. Even the top environmentally rated buildings can be wasteful because of how they are (mis)used. Ratings are valuable benchmarks, but they should not be seen as an end in themselves. Many are driven by tick-box exercises: a beehive on your property to improve your green rating – without considering the wider role of nature loss to your portfolio – misses the point.
Without a better alternative, there can also be an over-reliance on ratings that assess theoretical energy use, which isn't as important as actual energy use. Emerging ratings that measure in-use performance, such as NABERS, are promising, but the sector still requires an overhaul on how it works to see impact.
Buildings can cut up to 50% of their energy usage without major expenditure by working with occupiers on behaviours and through basic reprogramming. Tools such as the CUBE competition can foster that closer engagement to deliver savings and transform energy performance without major investment. CUBE does this by providing a framework for internal engagement programmes to encourage everyday behaviours to tackle energy consumption through friendly competition and gamification. Already, participants including Landsec and the Howard de Walden Estate are using it to help drive occupier behaviour change. Stronger relationships with occupiers leave you well placed to introduce green leases that truly align incentives.
Collaborate on things you cannot control
Beyond the quick wins, net zero is a question that can only be solved on a universal scale by government, businesses and people, and is far beyond anyone’s individual remit.
It’s crucial to seek ways to collaborate to drive wider impact – trying to go it alone is a recipe for failure. You may have a sustainable building, but you don’t have direct control of how people use it. The only way to get beyond this is for landlords, building managers, suppliers, and occupiers to join forces and work towards the same objectives.
Meaningful progress will stem from greater occupier engagement, as well as participation in innovation and knowledge sharing beyond market and geographical boundaries. Identifying market transformation priorities and joining the right coalitions will enable our industry to hit longer-term net zero goals.
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