Target net zero – are you ready to report?
By Ian Jeffries, Managing Director, EEVS.
Government commitments about carbon are like buses. You wait for a long time and then two come along, in the shape of the Prime Minister’s ten point plan for a green industrial revolution and last week’s commitment to cut emissions by 68% by 2030. It’s a hugely ambitious target particularly as the European Union is considering increasing theirs from 40% to 55%.
These are undoubtedly positive steps in a climate emergency, but as the National Audit office noted last week, the 2030 target is also a ‘colossal challenge’. Whatever way you look at it, the spotlight is now on government, business and consumers.
Many businesses have declared a commitment to net zero. That means that the glare of the corporate and societal spotlight is also shining on property teams too.
Why? Because buildings and their construction together account for 36% of global energy use and 39% of energy-related carbon dioxide emissions annually, according to the United Nations Environment Programme. Put simply, net zero societies will not exist without action from property and built environment professionals.
Delivering net zero requires decarbonised real estate and a new way of operating buildings. Here are three thoughts on some (not all!) actions for 2021 that are going to be important:
- Get ready to tell the business that energy usage in buildings will go up
Property and energy teams need to prepare to tell the rest of their businesses that energy usage in buildings could go up. It’s going to require expectation management plus a plan to genuinely decarbonise. The age of Covid-19 and multiple lockdowns has meant that the energy usage in many office buildings in 2020 has been at a rate similar to that of the annual Christmas break. It’s been a green silver lining for efforts to cut carbon.
Additional ventilation in a Covid world is also going to lead to higher energy usage. The German government has already said ventilation was “one of the cheapest and most effective ways” to contain the spread of the virus. We can therefore expect to see ventilation technology play a greater role in the buildings of the near future. This will come with more energy requirements. Plus electrification with charging points for cars will also have an impact for many businesses.
2. Get your reporting match fit
To deliver meaningful action on carbon and energy consumption requires better reporting. Corporate reporting for many businesses is going to be notched up to higher levels because of the Government’s recent pledge to mandate carbon disclosure for listed and large private business. This will inevitably place companies under greater corporate scrutiny to cut carbon.
Independent assessment of energy performance across a property portfolio is going to be crucial. The reality is that many businesses do not have a detailed understanding of energy performance or the cost saving. Many companies pay their FM providers an incentivised fee to save energy but do not have a detailed qualitative and quantitative assessment of all the methodologies and calculations used to generate a savings figure. Independent verification is important for providing greater certainty and transparency to reporting.
3. Get contracts to improve energy performance
Decarbonising real estate will require behavioural, attitudinal and technological change. In energy terms there many things that you can effect now. It means putting in place contractual measures with FM providers to cut energy usage. Some corporate estate and property teams opt for a simple system where any energy costs savings are split 50:50 between client and contractor. Other options might use an incentivised energy reduction programme with clear targets and an agreed percentage shared with the providers. The key is to have an agreement and measure performance against it.
As we prepare for 2021, the Government has upped the ante on climate change. There’s undoubtedly a bit of climate diplomacy going on ahead of hosting COP26 next year. But I’d like to think that there is also a genuine comprehension of the climate emergency and getting the UK on a roadmap to net zero. Meeting the carbon commitments for 2030 will require significant societal change. For those working in property and real estate, the transition to this target and net zero is only just beginning.
LinkedIn Article (December 2020)