As I write hastily on Wednesday (20.09.23), I assume speech writers in the back rooms of No 10 Downing Street will be hammering their keyboards with even greater urgency, tasked with framing the government’s shift on climate policy in the best possible light. I don’t envy their task in polishing this particular turkey.
Business reaction has run ahead of Rishi Sunak’s speech, following the media leak that the policy pronouncement was coming.
Car manufacturers, for example, don’t much like the notion that electric vehicle milestones they’ve been aiming for, at great capital expense, might be dug up and moved. Trade body the Society of Motor Manufacturers and Traders issued a plea for “a clear, consistent message, attractive incentives and charging infrastructure that gives confidence rather than anxiety”.
I suspect the reaction from property owners may well be more mixed, with some high-fives likely to be triggered by the prospect of delays to Minimum Energy Efficiency Standard (MEES) rules and the resulting requirement to upgrade older premises across England and Wales.
Any such celebrations might be short-sighted. Speaking to many different people over the past year, in preparation for our Get Set for Net Zero campaign that launched this summer, I found widespread agreement that the property sector is running well ahead of regulation in terms of its thinking and indeed its action on sustainability.
Asset valuations already tend to price in the discount or upside that applies to a building according to its energy efficiency, with a K-shaped future trajectory in store for those properties that do or don’t perform well. It is, after all, not the government that determines rental values or transaction prices.
Anyone tempted to welcome a reprieve on the need to reach an Energy Performance Certificate ‘B’ rating in the near future might also consider that a rule loosened can also be tightened again before we actually get to any particular deadline, potentially shortening the opportunity for action.
In an early reaction from our industry, Matt Sal, UK sustainability manager at Colliers, said moving the goals was “hugely concerning”, adding: “Within the built environment, the deadlines for implementing energy efficiency improvements are already loose and vague.”
At Property Week, we will continue to showcase the steps that businesses can take to reach net zero, not simply because it is the most responsible course of action but also because it is the wisest. Businesses thrive when they face up to risks, understand them as best they can and take whatever steps they can to mitigate downsides.
I find it hard to think of a more pressing risk to the future value of properties than the potential that buildings might become unsaleable, unlettable, uninsurable or otherwise rendered worthless for want of improvements to efficiency.
Of course, not everyone will share my view. This is why Property Week is running a survey about the industry’s plans regarding net zero. Whether you believe climate change is an existential threat or an overblown waste of money, we would welcome your considered opinion. Please do complete the short survey.