The government’s 2050 net zero strategy, corporate environmental, social and governance (ESG) targets and the 2025 Energy Performance Certificate (EPC) regulations on leased buildings are all working in sync to nudge those who own and occupy commercial buildings to think carefully about their decarbonisation roadmap.

Elisa Sartori

Elisa Sartori

Too often, though, there is still a lack of action by many building owners; in fact, it has recently been reported that almost 10% of London’s office stock has an EPC rating of ‘F’ or ‘G’.

As well as the lack of awareness, one of the main reasons for inaction is financial. Although the most efficient and lower-carbon solutions available on the market can be paid back over time through energy savings and lower energy bills, a significant capital expenditure is needed to start making any action. In some cases, there might be problems of affordability; in others, despite the availability of funds, there is no interest in making actions towards decarbonising buildings, as the return on investment is seen as marginal.

This happens mainly due to the current owner-occupier division of costs, with the owner in charge of the main capital cost and the occupier dealing with the operational costs, with little ability to change them.

Holding back from action results in higher carbon emissions and energy bills, but additionally there is significant evidence that there are peripheral costs and consequences, for example tenant dissatisfaction, low occupier interest and falling interest from investors.

However, there are measures to mitigate these risks and encourage more actions, both from a technical and a financial perspective. Through sophisticated modelling, engineers can simulate existing constraints, opportunities and potential phasing, to outline the impacts of each option on a key group of variables, such as capital expenditure, embodied and operational carbon and tenant operational costs.

Innovative business models should be considered and adopted, where the capital expenditure is paid back from tenants based on operational cost savings. Phasing projects could be an effective way to address the issue of costs associated with decarbonisation between building owners and tenants. By breaking down decarbonisation efforts into smaller phases, building owners can spread out the costs of capital expenditure over time, making it more manageable and cost effective.

In addition to these approaches, there is a need for more education and awareness-raising among building owners and occupiers about the benefits of decarbonising buildings. Building owners need to understand that decarbonising their buildings is not only necessary from an environmental perspective, but also makes good business sense. As more investors and tenants demand sustainable buildings, those who delay action may find themselves at a competitive disadvantage.

Policies and regulations should further support this change of approach by encouraging actions and giving support to innovative solutions and business models. However, even before policies are updated to where they need to be, action is required right now and we all must work together to reduce greenhouse gas emissions and transition to a more sustainable and resilient future.

Elisa Sartori is associate director at Webb Yates Engineers