Sustainability
Government actions cause stall
Following government announcements to delay deadlines for several low-carbon targets, 34% of respondents will push back their own ESG goals and actions. And this is problematic. The roadmap to net zero is already challenging and hesitation will create further barriers, particularly given the necessity of ESG credentials to access finance. Overall, almost a quarter of respondents do not think the sector is making quick enough progress to net zero.
Have the recent government announcements to roll back deadlines for several low-carbon measures influenced your approach towards achieving your ESG goals?
Yes - we will push back action towards achieving our ESG goals
No impact - we are carrying on as planned
We have not decided yet/don't know
Nevertheless, 36% of respondents place reducing operational emissions as their top sustainability priority, and 26% say negating the longer-term impact of climate change is the most important. Meanwhile 43% of organisations have not set a target year to be ‘net zero’ by. It’s also possible that, a potential change of government could see new reporting measures announced, which are highly unlikely to be more lenient.
Which of the following are the most important to your business in relation to sustainability?
Reducing operational emissions
Achieving as high an EPC rating as possible
Reduced embodied carbon
Sustainable procurement practices
Longer term impacts of climate change
Biodiversity
Richard Hall
Head of Sustainability, RSM
'No future real estate planning will take place without environmental considerations being front of mind. Within this, we expect a massive shift in biodiversity to rise up the agenda, with new regulation coming into force requiring all new developments to deliver a 10% biodiversity net gain to achieve planning.'
Energy Performance Certificate (EPC)
Of the real estate businesses we surveyed, 31% own commercial assets with F or G ratings. Most startlingly, of those respondents, 40% say the reason their organisation has not made efforts to raise these ratings, is that the cost of making improvements would exceed the benefits. This is despite 35% of businesses saying that achieving the highest possible EPC rating was a top sustainability priority. Of course, many will be trying to time it just right to avoid stranded assets and write downs on the balance sheets. Uncertainty exists between owners and occupiers, penalties and listed building rules among other areas. Clarity is needed across all sustainability requirements in the built environment.
Why have improvements not been made yet to your commercial properties rated EPC F or G?
Cost exceeds benefit
Lack of finance
Labour constraints
More cost-effective tech needed
There are various major barriers to decarbonisation. The second top is lack of willpower to invest in environmentally friendly solutions – which will surely come back to bite as regulations tighten.
The top cited is a lack of cost-effective technology solutions. This particularly comes into play when discussing the retrofitting of energy inefficient stock – the solutions are not a one case fits all. In cases where a unit is not a listed building but may be considered a heritage building.
The Pathway to Net Zero for the UK Built Environment Report estimated that an additional 500,000 trade positions and 50,000 retrofit co-ordinator roles would be needed to meet the retrofitting challenge. On this scale, co-ordination between industry groups, technology, government, education and finance is required.
On a brighter note, with challenge comes opportunity and the future of high streets and housing will be at the forefront of political minds in this election year. New reporting requirements, which go beyond energy consumption and encompass the full building energy outputs from construction, will drive new technology and college curriculums fit for the future.
What do you consider to be the biggest barriers to de-carbonising the real estate sector?
Lack of cost-effective tech solutions
The impact of the energy crisis
Carbon intensive construction
Lack of landlord willpower to invest
Lack of understanding of how to decarbonise
Lack of people/workforce