Environmental Social Governance (ESG): Journey To The Green Path Target

While the government has promised a net zero by 2050 few believe they will live up to the commitment. A recent report from the British Property Federation (BPF) reveals that most of the senior leaders in the property industry believe that current Government policy will not deliver on its promise. They are pretty sure that the Government and industry must collaborate to overcome the property industry challenges with decarbonisation.

The property industry faces a string of challenges, dealing with policies such as the Building Safety Act and the Future Homes Standard. To add to its woes, there is a labour shortage issue while inflation continues to surge northward. This has made it challenging for companies to create quality homes. The industry has been urging the Government to incorporate financial incentives into its policies to support renting-homes-wales-act-how-will-it-impact-landlords'>landlords and corporations who want to decarbonise. That said, the government has started giving grants to Registered Providers.

There is a need for drastic changes across the industry to bring about real change. Policies enabling data sharing must be implemented to allow real-world building performance to be more easily monitored and to meet energy demands. There must be a firm policy for encouraging the retrofit of existing buildings and enhancing the national electrical infrastructure. These measures can improve the chance of the government being reelected and having any hope of reaching the 2050 goal.

Data Sharing

The mandated sharing of energy consumption data is critical to driving all toward achieving a decarbonised property industry. Designers must make design decisions based on full lifecycle carbon (including end-of-life disposal) as well of course as predicted energy usage. Design decisions and product choice need energy use data to improve design choices.

The lack of transparency about occupancy energy usage post-occupation is a problem area, as, so often data is closely guarded by building operators. Designers need to understand occupancy energy use data to close the gap between predicted and actual energy performance and to feed this back into design choices. As the property sector relies on several industries working together, mandated transparency and communication are vital for making real progress on decarbonisation.

Infrastructure

It seems that currently, the property sector is heavily dependent on the net zero electrical grid to achieve net zero. While there is a significant improvement in the country's renewable energy output, the pace of change must accelerate to meet the 2050 target. There is a clear move toward electrifying buildings and transport, which will only put more pressure on the grid. That's why new approaches to the management of infrastructure upgrades are needed. These may include investments in distribution, energy storage, and large-scale renewable energy production to be ready for the future demands of the industry.

Retrofitting

In retrofitting, the government aims to improve the standard of new homes and offices. They want to make changes to Part L to ensure improvements to the process of building fabric energy efficiency standards. This will result in a decrease in energy consumption and carbon emissions in new buildings. From 2025, buildings must achieve an EPC rating of C or higher for new lettings. renting-homes-wales-act-how-will-it-impact-landlords'>Landlords will have to improve existing buildings or face a loss of income. Part L states the minimum standards for existing dwellings. However, it doesn't address poor energy performance in existing housing units outside the rental industry.

The Future Homes Standard has plans to reduce carbon emissions by up to 80 percent by increasing thermal efficiency and reducing carbon in construction materials by 2025. However, if they have to achieve the net zero target by 2050, the current approach is severely underprepared for implementation. A bespoke and flexible policy is needed instead of a one-size-fits-all approach. A key challenge is improving the existing efficiency in older buildings as there are restrictions around improving older and heritage structures.

Beyond Net Zero

As the country approaches the net zero targets, the industry must not just focus on decarbonizing. They must also be mindful of other important aspects for the people, such as access to fresh air and green space. There should be a more serious effort at engaging with tenants and purchasers to send home the message of net zero carbon buildings, green premium initiatives, how low carbon buildings are valued, etc. These moves can help attract buyers as they are more particular about the amenities offered than with EPC ratings. The Ringley Group works tirelessly supporting institutional investors to both decarbonisation existing buildings and use ESG decision scoring matrices and work through design options to get closer and closer to Net Zero homes.

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The Role of Collaboration and Financial Incentives in Achieving Net Zero

The property industry, facing challenges such as labor shortages, inflation, and regulatory pressures, urges the government to provide financial incentives and collaborate more closely with the sector. This approach can better equip the industry to meet the decarbonization targets for 2050, ensuring that policies and practices align to overcome the hurdles posed by the push towards sustainability.