Around 80% of the commercial buildings that need to be net zero by 2050 are already built.
That means that the owners of these premises need to be putting plans in place to improve the energy efficiency and lower the carbon footprint, otherwise they will end up with a property that they cannot let and which won’t attract the selling price they think it should.
Otherwise known as a stranded asset, these buildings risk falling behind the increasingly stringent environmental requirements and therefore prove less desirable.
All commercial building stock which requires an EPC rating is at risk, especially if the building still uses fossil fuel and does not have a plan in place to remove it from site in the coming decade.
Buildings must meet high standards of EPC (Energy Performance Certificate) rating and failing to do so will result in a less commercially appealing asset for landlords, investors, and tenants.
However, the EPC rating is just the start as a building could also get stranded because it has not been put on the right pathway to net zero or still plans to use fossil fuels for its heating, which won’t align with the aspirations of current or future tenants.
Yet the longer building owners leave it to upgrade their buildings, the more it is likely to cost in the long run.
We want to help building owners tackle the issues head on
So, what is net zero?
Current government policy falls short of providing clear regulations or definitions for ‘net zero carbon’ buildings.
Whilst there is ongoing work within the industry to devise a Net zero Carbon Building Standard and the road map still presents a clear destination of Net zero by 2050, there are no real signposts as to how we get there.
This could mean that some buildings that are currently in the design or early construction phase could also be in danger of becoming a stranded asset before they even open their doors to potential buyers or tenants, especially if they do not have a clear plan of how they will reduce emissions on the road to Net zero.
For existing buildings, there is ongoing work in bodies such as the UKGBC and the Supply Chain Sustainability School, who are now creating focus groups on the retrofit challenges, but again, whilst we know the destination, we are currently on an open road with few signposts in place.
How is the market reacting?
The growing body of legislation is not the only driver on reducing energy consumption or pushing decarbonisation in commercial buildings. Many businesses are already looking at their own emissions and setting net zero targets.
These companies want low-carbon buildings to align with these strategies. Financial investors are also showing an increased preference for sustainable/environmental property developments.
Whilst the Minimum Energy Efficient Standard (MEES) is not mandated until 2023 for all existing commercial leases, tightening regulations will raise the requirement to C by 2030.
At the same time, we have seen a real appetite from the market to drive this further and quicker, with decarbonisation clusters or retro fit focused teams appearing across the larger Main Contractors to capitalise on this opportunity.
We are also seeing a new generation of employees and customers making it clear that they want to work in or deal with organisations that not only demonstrate but also deliver a commitment to environmental issues.
That means that the energy performance of the building your organisation occupies becomes a very public statement.
Doing nothing is no longer an option
With rising building standards brought in to help the industry reach net zero, we’re seeing large numbers of spaces potentially becoming redundant due to energy inefficiency.
This means that doing nothing is no longer an option for owners or investors and there is a real and tangible danger to the value of your asset if your building isn’t on the path to net zero?
To help building owners and operators, we have produced a white paper on Stranded Assets, which can be downloaded for free here.
The white paper aims to help owners avoid their buildings becoming stranded assets by providing a clear roadmap to net zero.
It contains a number of sections assisting in bridging the net zero knowledge gap for business owners, outlining the government’s net zero plan and showing what defines a net zero building.
The guide offers advice on installing heat pumps and utilising heat recovery in the decarbonisation of heating and ventilation.
We want to help building owners avoid their building becoming a stranded asset and help them tackle the issues head on.
Dan Smith, Sustainability & Construction Manager