With so much focus aimed at reducing emissions in transport and energy, the life sciences sector has rarely been subject to the same level of scrutiny. As Emily Slupek, Buro Four’s science sector lead, recently commented: “There’s a huge dilemma looming … Although science and its part in advancing clean technologies is rightly seen as a major driving force of sustainability, it’s a lot harder to reach net zero in science buildings.”
Scale of the challenge
JLL’s recent report “Embracing sustainability in life sciences”, highlights some stark statistics that demonstrate the bespoke challenges posed by life science spaces compared to offices. For example, labs:
- Use around 10x the amount of energy
- Use 4x the amount of water
- Generate enough plastic waste to cover almost 140,0000 hectares every year
Architecture firm, HOK, further emphasised this point in its recent paper titled “Pathway to Net Zero Carbon Labs”, which found:
- It’s not uncommon for lab buildings to contain twice the amount of embodied carbon owing to the high levels of steel and concrete
- Benchmark annual operational energy usage for labs is over 4x greater than a commercial office (589 kWh per sq m vs 130 kWh per sq m)
- Labs demand “far greater ventilation than most building types and are home to high energy-intensive equipment that is often in operation 24 hours a day”
Labs also tend to require more intensive use of the drainage system, bespoke air-handling arrangements and increased cooling loads as a result of lab equipment.
Lack of supply
Demand for labs has increased 300% since the beginning of the pandemic and there is not a single lab in Cambridge to move into today. Lack of lab supply is nothing new but how can it be solved with the net zero agenda in mind?
Mills & Reeve partner, Stuart Pemble is clear in where he feels the solution should lie: “If we are serious about net zero, we must stop knocking down buildings because you lose all the embedded CO2 which has gone into their constructions and so we should retrofit existing space, not demolish it.”
Is retrofitting, rather than rebuilding, really the answer? In the US’s six largest life science markets, office-to-lab conversions now account for more than 20% of lab space yet David Williams, Commercial Director of Harwell Science and Innovation Campus warns that such conversions require serious consideration as they “require huge capital investment” and adaptation has to cater for “a change in function which can be technically complex”. Certain spaces also present better opportunities than others; Chris Walters of JLL comments that “Shopping centres work well for repurposing into lab space, given their existing loading spaces, storage and high ceilings.”
Although not lab specific, an ongoing case which demonstrates the tension between the two options is Marks and Spencer’s (M&S) plan to demolish and rebuild its Oxford Street store. Although planning permission was granted for the scheme, a public inquiry was ordered amid concerns that a refurbishment would be less environmentally damaging. Campaigners claim the project would release 40,000 tonnes of CO2 into the atmosphere whilst M&S claim that in the long term the more energy-efficient new building “will more than offset any emissions from the redevelopment”.
What will drive change
According to Debbie Hobbs, group director of sustainable business at ISG, current buildings would require an average 80% reduction in existing energy consumption to get to net zero by 2050. So, what will drive the drastic change needed in the life sciences sector?
All commercial buildings will be required to have an EPC rating of B or above by 2030 so the looming deadline is creating a sense of urgency. The target not only puts pressure on existing stock which is underperforming, but will be factored into decisions regarding new builds and whether poorer quality buildings need to be removed from the market.
Companies are being increasingly pressured by shareholders and investors to reveal the steps they are taking to reach net zero. This will increase enquiries about energy efficiency and incentivise decisions that create a more environmentally friendly portfolio. In turn, this will apply pressure to those seeking investment to prove their environmental credentials. Carol Potter of Avison Young, says: “lenders will now look not just at the value of the property but how the environmental rating and performance is likely to effect future value.”
Amid accusations of “greenwashing” from leading environmental campaigners, there has been a gradual shift from asking about policy and aims to requesting hard evidence and data. For example, CRREM allows investors to put in details about buildings and their energy consumption to identify if it will become a “stranded” asset, ie difficult to sell/let.
(c) Rental values
It is likely that occupiers will look elsewhere or demand lower rents if a building cannot provide the efficiency it expects. With the competition for attraction and retention of talent fiercer than ever, a strong sustainability offering can be a key differentiator. Kate Lawlor, CEO of Bruntwood SciTech comments “If you’ve got buildings that aren’t sustainable, Landlord’s will begin losing customers; this then affects value and the level of rent which can be generated.”
Evidence of change
While easy to get caught up in the gloomy statistics, there are great strides being made in the sector. For example:
- GSK has slashed operational greenhouse gas emissions and is implementing plans to reduce its water use by 30% at high-risk sites by 2030
- Pioneer Group recently announced a new virtual Corporate Power Purchase Agreement with Ray Valley Solar (RVS), an Oxfordshire-based solar farm. The agreement sees four locations from the Pioneer Group portfolio become the first science parks in the UK to source green electricity from a single, dedicated supplier, gaining the opportunity to report zero carbon emissions on their scope two electricity. RVS will power over 700,000 square feet of office and lab space to more than 100 companies located within Pioneer Group‘s campuses.
- In its 2021 ESG report, global real estate firm Hines highlighted its work on 555 Greenwich. This is believed to be one of the first office developments in New York to provide a circular energy infrastructure. It integrates geothermal piles, thermally active radiant slabs, a dedicated outdoor air system, and a fully electrified heating system to reduce carbon emissions. Energy simulations suggest that it will reduce operational carbon by 45%, electricity consumption by 25%, and save 800,000 gallons of water per year.
In its new damning progress report, the Climate Change Committee stated that the government’s net zero pledges are all talk with “scant evidence of delivery”. Therefore, there is clearly more to be done. How can the life sciences sector go further?
(a) Environmental assessments
BREEAM has been the traditional method for assessing the environmental impact of buildings and infrastructure for over 30 years. However, it is voluntary and targeted at design stage only and so can only be considered accurate at the time of assessment. Stuart Pemble sees “significant merit in post-construction carbon assessments, which would identify issues where pre-build assumptions turned out to be incorrect, or where a company installed something which wasn’t operating as predicted.”
(b) Business rates
The British Property Federation (BPF) has urged government to look again at how changes to the business rates system “can unlock investment in buildings to make them more environmentally efficient and support the UK’s net zero carbon targets”. They have suggested linking available reliefs to a building’s EPC rating, to accelerate investment into technologies such as heat pumps and hydrogen and reviewing the system every five years to ensure “that all green technologies are exempt from rates”.
While encouraging efforts are being made, the pace of change is still far below where it needs to be. The sector needs to move faster and treat the issue as a “non-negotiable” rather than a “nice to have”. A shift from voluntary to compulsory schemes is arguably needed to see the scale of change required, together with additional financial and moral incentives which Emily Slupek believes could “counter the impact on margins which can dissuade developers from really pushing the boundaries on the sector.” Increased collaboration and innovation will clearly be key if we are to move away from code red territory.