Julia Cahill puts five questions to Nigel Topping, the UK’s high-level climate action champion.
If you are not already familiar with Nigel Topping, you will be by the time the dust settles on COP26. Topping was appointed as the UK’s high-level climate action champion by the prime minister in January 2020. The role was created at the Paris talks in 2015.
Topping was most recently chief executive of We Mean Business, a coalition of businesses working to accelerate the transition to a zero carbon economy. Prior to that, he was executive director of the Carbon Disclosure Project. He had previously spent 18 years in the private sector, in emerging markets and manufacturing, before completing an MSc in holistic science.
Topping is now working alongside the Chilean high-level climate action champion Gonzalo Muñoz. Together, they are tasked with driving action from businesses, investors, organisations, cities and regions on climate change.
They have convened a team to help them deliver on this work through UN-backed flagship campaigns such as Race to Zero – and they want you to sign up.
All members of Race to Zero are committed to the same overarching goal: reducing emissions across all areas swiftly and fairly in line with the Paris Agreement to achieve net zero emissions by 2050 at the very latest, with transparent action plans and robust near-term targets for 2030.
1. Are UK cities and businesses engaging with Race to Zero?
Race to Zero has become the guiding star for action on climate change since it was launched on World Environment Day in 2020. It has seen a near-exponential growth in membership across the world. The UK has led the charge, contributing significantly to the growth of the campaign. As of July this year, 47% of FTSE100 companies have joined, with six regions, 40 cities, 1,186 companies, 63 investors, and 78 universities having signed up as of June.
2. What does net zero really mean for the real estate sector, and how will it affect businesses’ balance sheets if they don’t take action?
The built environment is responsible for approximately 40% of global carbon emissions and 50% of the world’s resource consumption. As a key contributor to global emissions, stakeholders across the built environment must take collective responsibility to reduce emissions and play their part in creating a healthier, cleaner, more resilient zero carbon world.
Ultimately, the cost of inaction on climate change is that our global building stock will not be able to withstand future climate shocks. Just this summer we have seen extreme climate events, the impacts of which will be increasingly costly and difficult to mitigate for stakeholders all over the world.
For real estate businesses’ balance sheets in the near term, a huge range of tenants are making a commitment – via the World Green Building Council’s Net Zero Carbon Buildings Commitment, for example – to inhabit only net-zero office spaces and premises. The market needs to rapidly adjust to meet occupier demand.
3. What level of sign-up do you need from the real estate sector to make a difference?
Our long-term 2050 goal is to ensure that all new and existing buildings and infrastructure assets are net zero across their whole lifecycle.
To achieve this breakthrough outcome and catalyse this exponential change, we are striving to get 20% of key actors globally from a range of built environment stakeholder groups to commit by 2023 to joining Race to Zero. Real estate investment and asset management are two of these stakeholder groups we are targeting. By the time 20% of the market is moving, we believe the momentum will accelerate. Laggards will move with the momentum and systems transformation can be achieved.
In the UK, major developers such as Berkeley Group, Landsec and British Land are already in Race to Zero. We are also thrilled that real estate asset management companies such as LGIM and M&G are in the campaign. We have captured the equivalent of more than $150bn (£108bn)assets under management by Race to Zero commitments in the UK alone.
Globally, we are starting to see movement in Asia-Pacific with firms like New World Development and Sino joining the campaign. However, we want to see more momentum in this region to really capture global market share, particularly in real estate investment.
4. What else could real estate investors and developers do to combat climate change?
Investors and developers are critical actors in the built environment sector’s net zero transition. They are the demand signal to other major stakeholders in the sector. We need them to commit and take immediate action or we risk locking emissions and vulnerability into our buildings and infrastructure that will become increasingly costly to mitigate in the future.
Some of the largest buildings that developers are pondering now may not be constructed until 2030, by which point interim measures to halve carbon emissions globally will need to have been met. The lag between design and construction in the sector means that decisions being made today run the real risk of “locking in” emissions as businesses wait for policy to come in.
For developers, the new buildings that they commission form a large chunk of their business emissions. These firms are therefore increasingly looking to set requirements for low-carbon solutions across the full lifecycle of built environment projects, including reductions in emissions from building materials and the construction process. Increasingly, the focus must be on the embodied carbon of those buildings, from foundations to light fittings. As energy supplies decarbonise across the country, the main source of emissions will be those associated with materials and fit-out.
5. How should developers and investors be shaping the way people (the end users) use the built environment to help achieve net zero?
The opportunity for real estate investors and developers to influence how civil society interacts with the built environment is huge. People spend around 90% of their lives indoors or in shelter, meaning that it is an accessible and obvious lens through which people can see the impact of climate change.
If we want all buildings to be net-zero across their lifecycle by 2050, the reality is that there may only be a couple of refurbishment cycles open to landlords until then, when lease cycles are considered. Can commercial leases be transformed to help a transparent relationship between user and developer and enable the transition to net-zero buildings – for example, by encouraging energy efficient refurbishment works without associated lease permissions?
The Better Buildings Partnership has set out a green lease toolkit containing best-practice recommendations, along with model lease clauses which provide a framework to support greater engagement and collaboration. In Europe in particular, the majority of the transition to net-zero buildings will need to come from refurbishment. Collaborative relationships between owners and users will be critical to unlocking this.
To send feedback, e-mail julia.cahill@eg.co.uk or tweet @EGJuliaC or @EGPropertyNews
