Many real estate companies talk about a journey to net zero, but what does that actually mean in practice? 

Property Week asked Climate Crisis Challenge supporting partners Carbon Intelligence, Hawkins\Brown and chapmanbdsp what practical steps companies should be taking now to get to net zero, what they think the main challenges are and what they see as the main opportunities.

Oliver Light

Oliver Light

Oliver Light

Associate director at Carbon Intelligence

What steps need to be taken to reach net zero carbon?

The first step is understanding internally where the key stakeholders stand when it comes to net zero, and the benefits and challenges of setting a net zero pathway.

The next step is determining your level of ambition. Not all organisations will want to be ambitious. Some will want to keep up with the market, so it’s about being able to lay that out at the start so you can rely on your strategy with that.

The third step is referring to the key guidance and credible experts to determine what a net zero pathway looks like. Previously, there has been a lot of greenwash and a lack of clarity around what net zero means.

What are the main challenges?

Getting buy-in is absolutely essential. That means buy-in from your internal stakeholders as mentioned – and that might require a culture change – but also buy-in from your investors.

We often speak with organisations that are concerned to let their investors know that they want to embark on a net zero carbon pathway because the investors think it is going to cost a lot of money from their side and can’t see the upside in it.

So, to overcome that, we speak about how it will affect valuations, how it will create rental premiums, how it will reduce the risk of stranded assets and how it will help them hit compliance requirements.

What are the main opportunities?

The main opportunity is the chance to future-proof your portfolio. There has been a recommendation in a recent white paper that Energy Performance Certificates should be ‘B’ or above by 2030. Just that on its own is a massive risk to different portfolios.

What should businesses be looking to achieve by COP26?

By then, you should have a credible net zero pathway in line with UKGBC’s advancing net zero framework. You don’t necessarily need to publicly disclose this.

It could just be something you align to in your business but don’t let anyone know about until you are really clear on what it means for your strategy, your upcoming investments and your asset acquisition and disposals strategy.

Louisa Bowles

Louisa Bowles

Louisa Bowles

Head of sustainability at Hawkins\Brown

What steps need to be taken to reach net zero carbon?

Net zero carbon should be defined to encompass the whole lifecycle of a project. Often the term net zero is used to refer to carbon emissions from operational energy use, but embodied carbon can account for 75% of the building’s overall emissions.

Clients should request an embodied carbon analysis as part of a design team’s scope, which would in turn provide them with data to make informed decisions throughout the design process.

What are the main challenges?

The UK government has the right overall ambition, and its 2035 target is definitely more ambitious, but it needs action to back it up. The sooner we reduce carbon, the sooner we can stop ourselves reaching the point of no return. We need a clearer roadmap to achieve this: one that uses the national carbon budget to balance sector contributions, and that is bolstered with a gradually tightening regulatory environment.

Although some typologies achieve net zero carbon operation by reducing energy use, for many it is still not possible, especially in inner-city sites. Meeting net zero embodied carbon targets is even harder without an offset, especially with the use of timber limited through fire regulation.

What are the main opportunities?

Conversations at the early stages of projects should include hard commitments that don’t disappear during the design process.

Meanwhile, organisations such as the Better Building Partnership and initiatives like Design for Performance are educating organisations to reduce perceived risks.

By publicly declaring a climate emergency and integrating net zero carbon targets into local policy, clients and design teams are being rightly challenged to deliver to higher standards by local authorities.

The GLA Whole Life Carbon reporting scheme is welcome, and with more emphasis on the circular economy the drive for retrofit has risen to the top of the agenda.

What should businesses be looking to achieve by COP26?

First, join one of the race-to-zero schemes, which guide companies through carbon analysis and the options for reduction across business operations.

Second, analyse your portfolio – it should include an energy review, occupant surveys and embodied carbon analysis.

Lastly, ensure any new initiative has net zero whole-life carbon as a key driver of the brief.

Susan Hone-Brookes

Susan Hone-Brookes

Susan Hone-Brookes

Director of sustainability at chapmanbsdp

What steps need to taken to reach net zero carbon?

The first step is that we have got to commit to clarity around the measurement.

It’s that classic thing: if you don’t accurately measure something, you can’t manage it, so you can’t effectively change it.

Chapmanbdsp is committed to science-based targets. We know where we spend our carbon and where our greatest emissions are, so we can effectively start to change our business to manage it.

With that comes commitment. That has got to go from the top down and the bottom up so that everybody manages their carbon more effectively.

What are the main challenges?

The main challenge is clients accepting that they have to invest and they have to potentially increase their budget.

The other challenge is that you are creating a building that has got a grid connection and you are making a prediction about the carbon levels of the grid. In other words, some of the steps to reach net zero carbon are relatively out of our control because they are government-led decisions.

What are the main opportunities?

Reducing emissions can also increase wellbeing. The opportunity is that we create a better environment for our people to work and for our clients to do well. Younger graduates and younger people look at a company and look at how effectively it is protecting nature, the planet and people. And they want to work at a company that shows that it is doing that.

What should businesses be looking to achieve by COP26?

Businesses should demonstrate that they are measuring to manage net zero carbon and that they have a plan. What businesses should be looking to achieve, and to be able to present, at COP26 is that they have got this. They need to be able to say: ‘We’ve got a plan. We know our trajectory. We know what we’re doing and you know that we know how we’re going to achieve this.’

That would give the rest of the world a level of assurance. And I think then that level of assurance becomes something that the UK can sell around the world.

From Covid tunnel to net zero funnel