Ringley Launches ESG Whitepaper

ESG the acronym for sustainably focused decision-making and operation encompassing the disciplines of Environmental Social Governance (ESG) has gained momentum over the last year and largely replaced CSR Corporate Social Responsibility that it is more wide-reaching. In a property context ESG deals with investment matters related to sustainability which is a complex area, encompassing embodied carbon (that was created during the build), operational carbon (that was created during the use of the building – hence operational), and responsible sourcing – the decision on materials, travel distance and end of life disposal.

The key objective is to improve environmental performance in both existing buildings and in planning for what to build and how to build it in the future. Environmental management is a huge challenge globally, hence the United Nations Net Zero 2050 commitments and the 17 sustainable development goals that member nations signed up to. Put simply, in the UK these challenges scale up monumentally.

People, those who want to live a greener, those who want to invest their pension in environmentally responsible companies, and organizations lending to business and construction are all pushing the ‘sustainability agenda’ and rightly too. This puts ESG center stage as a value-add tool that offers immense benefits to all stakeholders – indeed in the UK real estate investment market you can expect 4+ pages of your lending proposal to seek out your ESG strategy, credentials, and track record. Achieving ESG goals is no longer negotiable. Failure to do so can result in regulatory action. Ringley has launched the ESG white paper to inform, educate and guide investors about the key issues affecting the UK living sectors. The whitepaper broadly covers six key areas:

1. Environmental performance: The challenges involved in improving them.

2. Tools: Why converging competing assessment schemes can benefit the industry.

3. A state of flux: How to keep updated with developments in this ever-changing field.

4. Community: The tools and ingredients are needed to create a community in buildings.

5. Integrated localities: The methods and tools needed to allow interaction and integration between residential communities and their broader neighborhood.

6. Governance: Steps for delivering quality buildings from construction to mobilization and occupation.

Why is ESG Important?

The UK has the oldest housing stock in Europe. They are a legacy of the house-building projects taken up during the industrial revolution. Whilst much of the UK housing stock is high value, most are energy inefficient (in ESG terms the ‘operational carbon’ they produce in use is poor as much of UK housing was designed decades back. Therefore, simply put, much of UK housing stock does not meet the ESG regulations and concerns. The UK government for rented housing to reach EPC Grade C or above is putting increased focus on this fact.

The Future Homes Standard and Future Buildings Standard are regulations designed to help address the concerns of climate resilience of residential and commercial buildings. However, the biggest challenge comes from existing housing stock. New housing is naturally evolving to reach ever higher and higher BREEAM standards of energy efficiency therefore compared to older housing stock can achieve say 30% less (or more) ‘operational carbon’ in use.

With building systems becoming more complex, the focus for new Build to Rent schemes is how they can be managed operationally and strategically to both measure the buildings ‘operational carbon footprint’ but to also drive behaviour change of individuals living therein in order to encourage them to also live more responsibly and consume less carbon. The holy grail being to create a community of ‘like-minded carbon conscious individuals. The role of the asset manager and building manager in initiating corrective actions is crucial. This is why asset management clients of Ringley have access to our ESG retrofit strategies and when sitting in the asset management role of project monitoring we similarly work towards scoring building elements and kit to plan ESG strategies into the build.

Operational carbon reduction success is only assured asset managers and building managers are given the responsibility of educating the owners and occupiers about how to observe more sustainable behaviours.

Buildings are long-lived assets. In the UK, new buildings constitute a tiny fraction of the stock in any year. There is a huge need to upgrade existing properties. The government has previously subsidised solar panels, current subsidies exist for ground source heat pumps and some forms of insulation.

The Changing Value Chain program launched by the government in 2017 aimed to upgrade all properties to conform to EPC grade C by 2030. The renovation rate needed to achieve this ambitious target will have to be accelerated by a factor of seven. It will also pull back the government financially by around £330bn.

Focus is rapidly shifting to the concept of ‘stranded assets’ or ‘stranding assets’ terms essentially developed to identify assets that fall below standards buildings will be expected to meet as we move towards 2050, or will be too costly to upgrade.

Increasing Building Energy Efficiency

Building Energy Efficiency refers to the building’s shearing layers. Elements that are closer to the building’s exterior e.g., the façade, insulation or windows, are changed less frequently than those closer to the centre of the building, e.g., furnishings and fittings. When items closer to the building exterior are replaced, it provides greater opportunities for significantly reduced emissions.

Asset managers must double-check whether they need to replace the kit and machinery or consider future lease events which might, in any case, lead to such spending – and learn to ‘future think’ their spending. This goes beyond the normal agenda of a property manager who might only be concerned about the property occupier receiving the deserving service. Upgrades might need to be included in their scope of duty.

Decreasing Emissions

Decreasing emissions in buildings at present tends to rely on two main routes. One is using green tariffs to reduce carbon in buildings below grid-average levels. The second route is using on-site or near-site energy schemes with low-carbon generation.

Using on-site or near-site energy schemes makes it easy to justify the investment in low-carbon energy sources. Green tariffs and offsets typically have poorer traceability – however, for now, they provide property owners and managers with a way to comply with the regulations without making any significant investment in an infrastructural outlay. Will that be allowed to continue?

Other Factors Of ESG

Climate change is one of the factors on which ESG is sharply focused. Other factors like social value are also essential, but its quantitative metrics (whilst evolving) are not as sharp as climate-specific metrics.

The Role of Ringley Group in ESG

The Ringley Group has been playing an active role in the residential built environment, and in particular, in the Build to Rent sector. They are committed to delivering great homes for people to live in.

Ringley’s UK-wide portfolio has over 13,000 homes of mixed tenures, ancillary amenities, and commercial space. The ‘one-stop shop’ resource offers complete asset lifecycle expertise and the same hassle-free approach built-to-rent operators provide to consumers.

Ringley supports consumer’s right through the journey, from project monitoring to stabilisation and exit. With their knowledge of the processes, they can add value at each stage, drive total returns and improve the long-term performance of investments.

Ringley employs its in-house proprietary technology that not only automates and simplifies but also reduces the risks of processes. They take into account the ESG factor from the very outset and integrate them into the whole lifecycle approach.

To read our ESG Whitepaper – CLICK HERE

References:

file://Driversoftheesgagenda05.08.2022.pdf

https://gtmhub.com/resources/articles/esg-goals?utm_term=esg%20criteria&utm_adgroupid=140036967573&utm_campaign=engage-t3-use-cases-esg-dei-pillar-pages-8-22-v1-emea-apac-google-search&utm_source=google&utm_medium=cpc&hsa_acc=1660248024&hsa_cam=18082486041&hsa_grp=140036967573&hsa_ad=617209258477&hsa_src=g&hsa_tgt=kwd-312010278362&hsa_kw=esg%20criteria&hsa_mt=b&hsa_net=adwords&hsa_ver=3&gclid=Cj0KCQjw08aYBhDlARIsAA_gb0c_rhIiriIf3rdijcArnmHx52Wb81IFG03H58MsDiCCgzbQQyBj1s8aAicLEALw_wcB