If we are to tackle the climate crisis and limit irreversible changes to our planet, we have to focus on the impact of buildings, whether they’re offices, shopping centres, homes or schools.
According to the World Green Building Council, less than one per cent of the current building stock meets net zero standards. For our industry to achieve net zero we must first recognise the size of the challenge and adopt a whole lifecycle mentality.
To accommodate a growing urban population, we will keep building so it is imperative the new stock that is added aspires to be net zero right at the outset to avoid increasing our carbon debt. That said, due to the significant emissions that come from construction, maximising the use of existing assets whilst addressing the negative market perception of retrofitted space needs to be an absolute priority. We already know that the majority of the buildings that are on the planet right now will still be here in 2050, so doing more with less should become the industry’s mantra for the decades to come.
Doing more with less
To make the existing built environment net zero we must significantly improve energy efficiency. In their landmark publication Energy Performance Targets for Offices, the UK Green Building Council suggested offices need to achieve a carbon reduction of around 60 per cent to be in line with a net zero trajectory. To give this context, the proportion of buildings that currently achieve that level post-renovation is only 0.3% across Europe. This needs to increase substantially.
Our own research has shown that an estimated €7 trillion could be needed to retrofit buildings across Europe, and in the UK alone this amounts to £600 billion.
While there are clear drivers to accelerate the transition, including the increasing flows of climate finance, many are waiting for it to become a legal requirement before they will make the investments needed, but landlords who fail to act now, could find themselves facing a tsunami of legislation later, ultimately leading to stranded assets.
Addressing occupiers’ sustainability goals
In addition, the occupier market these days is putting increasing pressure on landlords to upgrade their stock because they’re looking to house themselves in buildings that align with their sustainability goals and credentials. However, every building is unique and retrofit strategies need to take into account a number of parameters beyond the technical specification including whether the type of occupier the building is going to serve would be prepared to pay for the green premium. There is no one size fits all approach to making buildings net zero – especially when dealing with dated stock.
As technology makes our buildings become more operationally efficient, the highest percentage of carbon emissions in their whole lifecycle will come from the embodied carbon in the materials used. Therefore, retrofits must assess the balance between operational and embodied carbon. Much of focus of regulation has been on addressing operational efficiency but reducing embodied carbon will be an important part of the solution and the focus of future legislation.
Real estate is one of the sectors that can make one of the biggest impacts in the shortest amount of time and after COP26 the focus on sustainability will be even bigger. More and more investors are assessing the carbon performance of buildings as they consider their acquisitions, and their due diligence process will continue to be stepped up. The same attention needs to be directed to retrofits.
The greenest buildings have already been built. We just need to make them perform to a net zero standard.
About the author
Andres Guzman has over a decade of industry experience across different sectors as he leads the Colliers property management team's sustainability strategy in the UK & Ireland which focuses on improving ESG performance and managing associated risk at asset and portfolio level for a range of occupier and investor clients.
To contact Andres, email Andres.Guzman@colliers.com.