Sunil Shah - Chair, Global Responsible Business Forum - RICS
The UK is the first major economy to put into legislation a net zero emissions target for 2050, balancing the requests from the Extinction Rebellion to pull it forward and the Global Warming Policy Forum to remove it altogether. The target was set based upon the work from the Committee on Climate Change (CCC), who have mapped out the necessary milestones to achieve this target (www.theccc.org.uk/).
For the built environment, which contributes about 40% of the UK’s total carbon footprint (www.ukgbc.org/climate-change/), there is a significant challenge to optimise and upgrade the existing building stock by 2050 – one property every 30 seconds. For much of the past 15 years, I have been commenting on the lack of a coherent Government policy, focussed too much on new build rather than on energy efficiency, building optimisation and learning lessons from operations to feed into new design.
Globally, greenhouse gas emissions are reducing by about 6% per annum. That means from a 2014 base year, an organisation can claim emissions will have reduced by over 30% by 2020, without reducing any energy consumption. We therefore need to move towards reporting on both emissions and energy consumption and be open about tackling the gaps.
Progress over the past decade across the commercial buildings sector has been patchy and limited. The Building Performance Evaluation (BPE) study (www.gov.uk/government/publications/low-carbon-buildings-best-practices-and-what-to-avoid) highlighted significant gaps in optimising energy from simple things such as meters, commissioning equipment and effective use of technology. In general there is a poor take up of these practices across the board, which have been shown to reduce energy consumption by 20-25%. Our own studies (www.acclaro-advisory.com/sfmi/) has shown limited progress by FM to develop beyond regulatory requirements for a variety of reasons.
So what can FM teams be looking at to help meet these targets – there are five key areas, aligned with the CCC and BPE outputs, each of which are interconnected:
Set longer term targets – strategic buy-in from the business to significantly reduce emissions, with FM being part of the overall programme. Robust data to understand how and why energy is used is critical here to develop a strategy aligned with the business culture;
Heat – heat demand has reduced and there is a desire to move towards district or electric heating systems, rather than gas. Reduced consumption can occur from modulating for current systems and resizing for any replacement. There is a strategic role to look at how to reduce demand and resize equipment, influencing capital spend decisions;
Optimising buildings – ensuring the correct skills are in place and the contracts allow for optimising to be maintained are critical points and cross cutting across different departments. Too often, significant improvements are lost due to incorrect structures being in place resulting in negativity about the potential opportunities;
Climate risk – review the portfolio for their ability to cope with higher temperatures and changing weather, many of which have not been designed for these parameters. This will influence lease lengths, but also business continuity practices to cope with the risks and input into the capital investment plans;
Supply chain emissions – wider impacts from suppliers including food and equipment are not factored into the impacts that organisations make (https://ghgprotocol.org/). FM has a broader supply chain emissions potential to support the net zero targets, with the recent IPCC report highlighting reduced meat consumption being a key mechanism to reduce emissions. (https://www.nature.com/articles/d41586-019-02409-7)
The agreement by Government to move towards a zero carbon trajectory will mean the built environment will need to achieve net zero shortly after 2040 according to the CCC. This is within the timeframes for capital spend programmes and will have to influence how decisions are made. FM is at a cross roads and has a choice between cost cutting and tick box responses against being a responsible business.
Sunil will be speaking at our FMP Event at the Celtic Manor Hotel, Newport on October 17th 2019.
To learn about about this and other FMP events, visit here.
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