Read this article to understand:
- Why buildings are on the front line in the battle against climate change
- Why the UK’s headline net-zero target must be complemented by more ambitious policies
- The actions developers and investors can take to avoid being saddled with stranded assets
Now in her eighth year as chief executive of the UK Green Building Council (UKGBC), Julie Hirigoyen has helped ensure environmental issues are at the heart of the way property people think about the built environment.
UKGBC, a membership organisation for the property and construction industry, was formed in 2007 with the goal of transforming the way the built environment in the UK is planned, designed, constructed, maintained and operated.
During her tenure, Hirigoyen has been credited with transforming UKGBC into a powerful mouthpiece on sustainability, with a seat at the table when it comes to government initiatives. But she has also spearheaded efforts to drive collaboration between the wide variety of forces at work in the sector, from policymakers and town planners to designers and architects, engineers and construction firms.
Buildings are on the front line in the battle against climate change. As UKGBC points out, the built environment – homes, offices, public spaces, high streets, towns and cities – is responsible for 25 per cent of the UK’s carbon emissions. If transport is added in, the figure jumps to 42 per cent. The government has committed to slashing the sector’s emissions by 68 per cent by 2030, but has come under fire in numerous quarters, including from the Environmental Audit Committee, for failing to put the necessary policies in place to achieve it.
Perhaps unsurprisingly, Hirigoyen says she wants to see much more national ambition from the government, which she says should also be putting far greater emphasis on the detail and implementation of policy plans.
She argues one way that the government could raise its ambition is to bring forward its target date for net zero, to 2045 for example, as Scotland has already done. So, just how do we stem the numerous tonnes of carbon our built environment still pumps into the atmosphere?
The first, and possibly biggest challenge, is the UK’s 29 million existing homes. To stand any chance of hitting net zero by 2050, each of these must be adapted, or "retrofitted"; in practice, this means insulating draughty properties, replacing gas boilers with heat pumps, installing energy-efficient meters and switching to all-electric, renewable energy sources.
Green grants and energy-efficiency incentive schemes are not sufficiently adventurous or targeted at those more likely to respond
There are various green grants and energy-efficiency incentive schemes to encourage homeowners to make the leap, but none of them are sufficiently adventurous or targeted at those more likely to respond, Hirigoyen says.
“Existing-home retrofitting requires national fiscal incentives and carrots and sticks, as well as capital investment, support for local authorities and much more localised efforts to start scaling up. Each different type of tenure requires a different approach. It’s complex and we need to be thinking about the one or two key levers.”
Disclosure and desirability
Then, of course, there are commercial properties, just as likely to be inefficient users of energy and intensive emitters, with gas boilers in the basement and a heating system that works overtime. Here, too, there are some powerful levers that can be pulled, including ones that property owners, and their investors, could end up feeling in their pockets.
Performance disclosure for commercial properties could be based on real, rather than estimated, energy usage and carbon emissions
The most obvious is to have performance disclosure for commercial properties based on real, rather than estimated, energy usage and carbon emissions. This would give property owners, developers and investors real insight into the actual carbon intensity of an asset – not modelled energy performance certificates (EPCs) but what Hirigoyen calls “real-life energy and carbon performance disclosure”, available to see at the point of sale or lease.
“One would think, from an energy point of view, this should become even more palatable. You need to know what your liability is,” she says. It’s not hard to see how having an accurate measure of a building’s carbon intensity could have both financially beneficial, and painful, implications for its market value and desirability as an investment.
This brings us to the idea of the whole-life carbon assessment, in other words trying to establish the total amount of CO2 emissions created during the entire life cycle of a building. That includes the building materials used in its construction, its lifetime as an occupied property, followed by the carbon effects of the demolition process.
And it is a whole-life carbon assessment that Hirigoyen says is the best way to decide what to do with an existing building. “Invariably, you’re going to favour retrofit and refurbishment over tearing something down and starting again – because that really is profligate. We haven’t got enough ‘stuff’ anyway, we’re running out things like sand. We need to do more with less.”
Desperately seeking definitions
Hirigoyen says the UKGBC is collaborating with more than a dozen organisations and industry bodies – the Better Buildings Partnership, Royal Institute of British Architects, Royal Institution of Chartered Surveyors and The Carbon Trust to name a few – to define what exactly net zero means for different types of building.
The UKGBC and others are trying to get the property industry to coalesce around a definition of net zero
With input from various working and technical groups, the UKGBC and others are trying to get the property industry to coalesce around a definition of net zero, which can then be used to set credible targets. That endeavour, in which whole-life carbon assessments look likely to play a role, seems like a pretty good start.
Hirigoyen cites a definition of net zero set by the Science Based Targets initiative, the global partnership widely followed by the private sector, that, irrespective of sector, net zero means an absolute reduction in emissions of 90 to 95 per cent, supplemented by minimal carbon offsetting. Companies cannot claim to be net zero unless they have achieved that initial reduction.
“The same is true for buildings,” she says. “It’s both a top-down approach, as in what global budgets of CO2 should be allocated to different countries and different sectors, and then a bottom-up approach country by country. In the UK, given what we know about grids and decarbonisation factors, or the growth in floor area of different asset types and so on, it’s about what is feasible and realistic for this particular asset class to bear in getting the whole thing down to residual amounts.”
In the UK, there are some specific things that can be done to help move the whole process along, not least much better government coordination across the various parts of the built environment ecosystem.
“That’s where in a sense we’re the least strong, because policy is still developed is in silos. Ultimately, no policy is ever devised without consideration for its financial implications, and so everything comes ultimately from a Treasury department, or equivalent. We really ought to have the same for carbon, so every policy has a carbon or environmental impact assessment. We can’t make decisions that lead to non-net-zero outcomes,” Hirigoyen says.
The decarbonisation of buildings has to be linked with the government’s overall energy policy
As another example, the decarbonisation of buildings has to be linked with the government’s overall energy policy and with the decarbonisation of the power grid using renewable sources in particular.
A matter of days after our interview, it’s as if Sunak and his chancellor Jeremy Hunt were listening in on the conversation. In a move applauded by the UKGBC, as part of his Autumn Statement, not only did Hunt pledge to invest in a slew of new renewable energy projects, including offshore wind farms and solar parks, but he also said he aimed to reduce energy consumption by buildings and industry by 15 per cent by 2030. Investment zones will be clustered around universities and centres of excellence in research. Finally, a bit of joined-up thinking perhaps.
Hirigoyen says there are three big contributions commercial buildings can make. The first is that we need to turn them into “mini power stations”. “They can all have photovoltaics on the roof – you can now coat a building’s facade in photovoltaic film – and panels and glass. As the cost of some of those technologies starts to come down dramatically, we ought to be decentralising our energy usage and making it as onsite as possible,” she says.
The second is that we must make our buildings much more efficient, so they need less energy to heat and cool them. Much of this is easily achievable through new technologies and can be incorporated into any retrofit or new-build design.
“The third is they should be flexible,” Hirigoyen says. “Especially in the digital age, we should be much better at matching energy demand with supply. That’s very much what the energy companies are incentivising consumers to do; they’ll sometimes pay you to put your washing machine on at times other people don’t. Commercial buildings, with their automated management systems and so on, should be really clever at doing that.”
What we can’t have is properties left languishing because the perceived financial cost of improving them is seen as too high
What we can’t have is the status quo, where properties are left languishing because the perceived financial cost of improving them is seen as too high, or a less-effective alternative gets pursued in the belief that the planet can take the hit.
“We don’t really have an environmental trade-off,” Hirigoyen says, referring to an October report by the UN that made plain the world’s temperature could have risen by 2.8 per cent by the end of the century against pre-industrial levels, thus making a nonsense out of the Paris Agreement’s commitment to try to limit the increase to 1.5C by 2050.
“The 2.8C scenario is totally catastrophic for economies; it’s not an economically viable place to end up for any organisation or any economy,” she says. “The cost of action needs to be pitted against the cost of inaction, which is increasingly becoming untenable.”
Miles Costello is a multi-award-winning writer and journalist.