The coalition government is decidedly green, in both its mix of Conservative blue and Liberal Democrat yellow and its pledge to become the UK’s most eco-friendly administration.
Ministers are lobbying the EU to raise the target for cuts in emissions across member countries from 20% to 30% by 2020. Cameron is also sticking to the Labour government’s target for all new homes to be zero-carbon by 2016 and for all commercial buildings to be zero-carbon by 2019.
And a new report, Hitting the green wall…and beyond – to be published next week by the British Property Federation, law firm Taylor Wessing and consultancy Spada – shows that the property industry, one of the largest emitters of CO2, is increasingly taking note of sustainability issues, even if, for the most part, it still thinks that government targets are unrealistic.
The report, based on the opinions of 800 property owners, developers, occupiers, advisers and contractors, found that, despite the recession, a clear majority of them (69%) still considered sustainability to be important.
Durable commitment
“This indicates remarkable resilience in an industry that has borne the brunt of a major recession,” notes the report, “suggesting that commitment to the sustainability agenda is real and durable – rather than lip-service paid when economic times are good.”
It found that almost 40% of developers rated sustainability as highly important. They were followed by advisers (33%), occupiers (22%) and investors (18%). This finding was also reflected in the fact that 71% of firms had sustainability agendas in place.
Stringent regulation, combined with social and customer pressure, is likely to drive the further development of sustainability strategies among investors and occupiers, says the report.
However, it warns that there is a need for more evidence that investment in such strategies, and the setting and meeting of targets, can be of real commercial value. “Investment in these strategies now may be a leap of faith,” states the report, “but failure to future-proof a business so as to meet the sustainability challenge will in time become a significant commercial risk.”
Hitting the green wall also points out that, while many firms may have sustainability strategies in place, only half measure their success. It found that fewer than 28% of occupiers report on sustainability annually, while 41% of occupiers and 38.4% of investors do not report on sustainability at all.
And while more than half of developers ask for or provide information relating to sustainability when buying or selling buildings, 47% of investors and 45.5% of occupiers fail to do so.
Helen Garthwaite, UK head of construction and engineering at Taylor Wessing, reckons that the Carbon Reduction Commitment, which from next year will rank companies according to their carbon emissions, will become a key tool in influencing investors and occupiers.
Green incentives
“We will see the tax regime changing and more incentives to promote green behaviour coming into play,” says Garthwaite. “But government hasn’t got a lot of money to play with. It will look at mechanisms that are cash-neutral, or use tax to push companies down the change route.”
And perhaps just a little push is all that is needed for momentum to gather. While the last sustainability report by Taylor Wessing and Spada, published in 2008, revealed that 36% of the UK development industry had no awareness of green contract provisions, this time almost 60% of respondents had used a green agreement.
The report goes on to say that, of the 40% of respondents that had not used a green lease or building contract, half said they would consider doing so.
Despite this, an overwhelming majority of the property industry (73.4%) still believes that the government’s carbon reduction targets for commercial property are unrealistic (see left). This rises to 76% for residential targets.
The report concludes: “An inconsistent approach to regulation, or the setting of targets that are perceived as unachievable, is likely to impact negatively on the delivery of the sustainability agenda.”
BPF chief executive Liz Peace says: “With an industry that is sceptical about carbon-reduction targets, closer collaboration between government and the industry is essential if these are to be met.”
Burning issue or burnt fingers?
Is it realistic for the government to plan for all new commercial property to be zero-carbon by 2019?
Investor
No – 90% Yes – 10%
Developer
No – 71% Yes – 29%
Occupier
No – 72% Yes – 28%
All
No – 74% Yes – 26%
The report warns that there is a need for more evidence that investment in green strategies, and the setting and meeting of targets, can be of real commercial value
