TFT has joined with The British Property Federation (BPF) to identify the challenges faced by the property sector as it decarbonises. Economic incentives for retrofit works, mandatory data sharing, and sustainable construction skills training are just some of the proposals included in the new report, published in February 2023.

The TFT team works with many leading property investors, occupiers, developers and estates who seek high standards for the performance of their buildings, including ambitious targets for decarbonisation. But this is not the outlook for the whole industry, and there is more to do to elevate standards across the UK's whole building stock.

Action to date is led by organisations which understand that decarbonisation works can enhance property values and future resilience, not by regulation which could deliver far more widespread benefits. The BPF's research finds that 9 in 10 property industry leaders do not believe current Government policy will deliver a net zero property sector by 2050.

How can we change the outlook? Our industry has the capability and the advantages are clear to see. Targeted policy can align all stakeholders to bring those benefits to life:

1. Energy efficiency

The first priority is to implement measures for improving energy efficiency of our buildings. Retrofit programmes and an accurate operational efficiency metric are critical to doing so.

Adopting an operational building performance metric, to understand the gulf between a building's intended energy usage (as designed) and the facts of its day-to-day energy use.  

2. Onsite renewables

The report recommends that Government mandate the installation of photovoltaic (PV) panels on all new large commercial, residential and public buildings. This includes reviewing upcoming policies to ensure that they are not disincentivising the uptake of PV. If PV panels are not viable for specific buildings, the report suggests that green roofs are mandated for those.

3. Embodied carbon

Embodied carbon needs to be regulated, and 80% of survey respondents called for legislation around embodied carbon to further incentivise decarbonisation.

We support the calls for use and disclosure of Lifecycle Carbon Assessments (LCAs) in new developments and refurbishments. The policy should be first enforced for large buildings and building projects, and then rolled out more widely. Embodied carbon reduction targets, based on appropriate benchmarks, should be set by the Government, and reviewed on a regular basis.

4. Offsite renewables

As businesses seek to procure more green energy, Government must strengthen the criteria for a green tariff label. Tariffs labelled as “green” should consist of the energy attribute (REGO) and the renewable energy itself bundled together. The current system requires energy suppliers to own a Renewable Energy Guarantee of Origin (REGO) certificate, but not to bundle the certificate with the renewable energy itself. This means that the actual supply to the building is highly likely to contain fossil fuel generated electricity.

In addition, the government should allow Real Estate Investment Trusts (REITs) to invest in offsite renewables. Broadening the asset classes that REITs can invest in to include renewable energy generation infrastructure will unlock finance for additionality and support the decarbonisation of the grid.

5. Planning authorities

Local planning authorities need more support to enable the net zero transition. There is an upcoming review of the National Planning Policy Framework which provides an opportunity to do so. In particular, the report focusses on how the planning system supports retrofitting our listed and heritage buildings.

Additional investment in the capacity and capability of local planning authorities will also be
essential to improve and speed-up the decision making process.

6. Data collection and sharing

Mandatory data-sharing could underpin all of these initiatives. Access to data of all kinds is a major challenge for both property owners and occupiers, so mandatory sharing and disclosure of energy consumption data for all large commercial buildings could drive change.

In addition, a mandate for green leases for all commercial property could be included as part of the review of the 1954 Landlord and Tenant Act, as well as provisions on water, waste and biodiversity. Considering data gaps at a national level, Government could set up centralised anonymous data pools of building data from suppliers. This widespread transparency is necessary for high quality data collection, and to establish a better understanding of where the property sector is most carbon intensive.

The full BPF report explains the context and policy recommendations in detail, drawing on research and expertise of its contributing partners. Read it in full here.