More clarity is needed if occupiers are to fight climate change, says Christopher Hedley
John McEnroe famously shouted, ‘you cannot be serious,’ at the umpire. In the case of the planet, we all know we have to be serious.
The mood has definitely changed.
The Confederation of British Industry’s (CBI) Climate Change Taskforce, comprising 19 of the UK’s most senior chief executives, has produced a report that bears the slogan ‘Concerted action needed now’.
Around 500 senior corporate property executives gathered in London in September to discuss the environment for the entire two-day CoreNet conference. The corporates present talked long and hard about the extent of their commitment to the environmental cause.
In December 2007, the Better Building Partnership and the Green 500 initiatives were launched in London by mayor Ken Livingstone, to get landlords and tenants working together on radical reduction in carbon emissions.
On a personal level, I am spending half my time on environmental issues. I know many others are doing the same.
When we talk about the environment, what exactly do we mean? Great clarity is needed here. Are we just focusing on carbon? How important are waste and water, pollution and travel to work? How do you balance these out? The challenge for each of us is to focus on making progress.
There is a lot of work to do. The CBI report shows how critical both residential and commercial property is in the potential reduction of carbon.
Chart 1 shows four specific areas with the biggest scope for carbon abatement in the period to 2030 the year the CBI believes efforts to reduce greenhouse gas emissions need to be geared towards to meet the government’s 2050 targets. The most significant area is buildings, which account for 31% of the total abatement options.
Charts 2 and 3 shows how variable energy consumption, water use and waste generation is in UK offices.
For example, the top quartile figure for waste is more than double the median and more than six times the lower quartile. These differences need to be reduced.
On the energy front, the Climate Change Bill is setting a challenge to deliver 60% carbon reduction over the years to 2050 with legally binding five-year ‘carbon budgets’, set at least 15 years ahead. This will have enormous implications for commercial property.
More immediately, energy performance and display energy certificates come out next year. The British Property Federation has published a recommended approach, using its landlord’s energy statement and tenant’s energy review model.
We need a constructive and consistent way of measuring progress in this area. We need data at building level but it must be the right data and we cannot afford to get drowned in it. This is why Investment Property Databank will next month publish a new set of data definitions and an approach for occupiers to strike the right balance between clarity and communication on the one hand and detail and accuracy on the other hand. This builds on the Total Occupancy Cost Code.
The Environment Code is designed to help building managers produce information that will work at board level. The maxim ‘Reduce, repair, reuse, recycle’ is helpful in thinking through how to assess environmental damage.
So, for energy, distinguish between:
- Overall use are we reducing total energy consumption?
- Environmentally damaging waste are we reducing CO2 and kilowatt hours?
- ‘Environmentally responsible’ energy is this increasing?
We want to see strategic and tactical indicators that help to focus total effort (see chart 4). These can produce annual budgets, analogous to the financial budget, which can be worked to and tracked over time. Indicators will also be needed to identify relative performance for benchmarking purposes so that we identify areas for improvement.
Numbers cannot tell the entire story; qualitative measures are also required.
The Environment Code also sets up a series of indicators so that building occupiers can rate their properties quickly and cheaply to aim for environmental excellence.
In short, the message is that, if you are serious about environmental impact, you have to measure it and prove it.
Christopher Hedley is director of occupiers and management at Investment Property Databank