For the real estate industry this question has become impossible to ignore.
Boris Johnson has placed climate change targets at the top of the government’s agenda. The government’s target: to reach net-zero carbon emissions by 2050. Data suggests that in the UK the operations of buildings account for 30% of the country’s emissions. The Bank of England’s Mark Carney has warned that companies need to raise their game in tackling climate change or risk seeing their corporate assets become obsolete. Alas, there is no doubt that reducing our carbon footprint is proving to be the one of the biggest challenges facing the industry.
Where do we start?
The UK Green Buildings Council published its net-zero carbon framework in April 2019. This attempts to provide clarity in this area and identifies:
- the construction process
- the use and operation of buildings as the key target areas.
The framework provides guidance on achieving net zero carbon outcomes and this new wave is forcing developers and investors in real estate to make a positive long term sustainability commitment. We will start to see the efficient use of energy and water in our buildings, the use of renewable energy such as solar, pollution and waste reduction measures, good indoor environmental air quality, the use of non-toxic, ethical and sustainable materials and the consideration of the environment in design, construction and operation including the use of automatic light sensors, green roofs and electric car chargers in parking bays.
Tenants are creating demand and driving change with commitments to corporate social responsibility, a desire for a better indoor environment, wanting to achieve lower operating costs and calling for an enhanced market value for their letting space. With this in mind it is estimated that over half of the existing building stock in the UK will need to be refurbished. This creates a big infrastructure challenge: to revamp existing buildings with net zero carbon targets. A huge investment going forward.
Key policy advisers are appealing to government to do more to support the sector by providing legislation, regulation and incentives to meet green targets. A clear enforcement process is needed for transparency and to tighten minimum standards in order to facilitate change. Some suggest that there needs to be a real focus on holding developers to account on their net zero claims.
Not only are our University, investor and occupier clients having to respond to change and make a plan but so are our real estate agents, architects and building consultants. Will this worldwide shift in attitudes force the marriage of profit and eco-consciousness?
Sustainability has been on the agenda for a while but it is very much the trend for 2020. If our clients are going to retain a competitive edge and not be left with sub-standard real estate assets that are difficult to sell and let then investment and planning in this area is very much required. Not just by the big players (who must surely lead) but by all interested parties.