Government must facilitate net zero workplace developments

ISG’s COO, Zoe Price, highlights the step change needed by developers of UK commercial office spaces to meet 2030 climate targets, but that this will only happen with improved incentives, guidance and co-operation from government to support this drive, as featured in Property Week.

We are in a state of climate emergency. Sea levels are rising, weather patterns are becoming more extreme, with 2021 one of the warmest years on record according to a government report in June titled ‘Climate Change: Global Temperature’. The need for net zero has never been greater.

The building sector is one of the largest polluters globally, responsible for carbon emissions that are roughly equivalent to that of China, research from the World Green Building Council shows. If we are to meet the 2030 climate targets, we need to prioritise innovation in the industry.

According to the World Green Building Council, there are only 500 net zero commercial buildings and 2,000 net zero homes globally, well under 0.01% of all buildings worldwide. To stop rising temperatures and global warming, net zero buildings must become the norm.

Developers of UK commercial office spaces are still largely disinclined to make a significant change to their operations as long as current conditions prevail. ISG’s recent Power of Place report found that demand-side incentives provided by local planning authorities do not support the drive for net zero office spaces, which is preventing the rapid development of sustainable commercial buildings.

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power of place graphic | ISG

44% of investors said UK government guidance on how to promote sustainability was key.

Featuring insights from employees, employers, investors, landlords and developers across the UK, ‘The power of place: The true cost of inaction’ sees us go beyond the workplace to understand the greatest risks to our assets so we can take steps to overcome them, achieve long-term return on investment and mobilise for the challenges of tomorrow.

In fact, the research found that just 11% of respondents experienced faster planning permissions when following net zero commitments. If the government could ensure faster planning permission decisions, greater incentives would be offered to developers, aligning with net zero targets.

Our research also uncovered a lack of cooperation between developers and local authorities.

A mere 36% of investors said they regularly and closely co-operated with local authorities. There is an issue of bureaucracy, as authorities need stringent verification to ensure a building is in line with net zero commitments, making co-operation a challenge and stunting environmental progress within construction.

What’s more, of those investors that did co-operate with local authorities, 44% said UK government guidance on how to promote sustainability was key, without which, projects would not be feasible. The UK government can help support and facilitate the development of sustainable offices across the country by promoting and raising awareness of the opportunities.

Developers are increasingly recognising that they must improve buildings’ energy performance, and the threat of rising energy prices has made this even more important. However, the majority of investors (52%) agreed that the primary reason for investing in mitigation measures was to attract tenants, with environmental sustainability cited by a lower 48%.

Developers need to ensure they are improving the energy performance of buildings to align with environmental standards, notably Energy Performance Certificates - a key in-operation energy performance certification.

Levelling up the British economy is top of the UK government’s agenda, and real estate is a primary component of this. Commercial property development has significant social and economic benefits to communities, creating local employment and driving growth. But while the government’s focus should be in this area, it is integral for sustainability and net zero targets to be at the forefront of their ambitions.

The deadline for the UK to fulfil its environmental obligations is approaching quickly, and our industry’s ability to mobilise and create enhanced workspaces in a sustainable way will undoubtedly play a major role in meeting our 2030 carbon reduction targets.

With new prime minister Liz Truss in post, and a reshuffle at Number 10, it is critical that we maximise cooperation with the government, most notably within the levelling up agenda, to ensure investors have access to sustainable infrastructure and can develop commercial offices that meet net zero goals.

A version of this piece appeared in Property Week, here.

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