Our Thoughts
Thu, 30/05/2024 - 12:00
· 4 min read

As Sustainable Building Targets Multiply, Can Real Estate Meet Them All At Once?

Even meeting the government’s proposed, gradual tightening of the Minimum Energy Efficiency Standard (MEES) will prove too much for many property owners. More than half of inner London’s commercial stock will be severely impacted by 2027 without a massive surge in retrofitting, according to our research.

The pitfalls of benchmarking performance against Energy Performance Certificates have been well documented and their influence is likely to eventually wane. The difference between a building’s potential performance as it has been designed – as measured by EPCs – against its real-world performance can be significant, which is why retrofitting and sustainably developing with other goals in mind is so important.

Net zero carbon is already the focus of many occupiers and landlords, and it’s feeding into their real estate choices. More than 2,600 companies have set science- based emissions reduction targets and 1,800 have made net zero commitments. Those numbers include major financial institutions and enterprises who carry significant value, and the total number of companies taking action is growing rapidly.

With increasing utility costs more companies are focusing on energy usage and we anticipate that more companies will accelerate their drive towards net zero.

Preparing for both incoming regulations and the shifting desires of occupiers requires developers and landlords to make commitments with incomplete information – particularly when it comes to net zero. Questions remain as to what even constitutes a net zero building, for example. Making significant investment decisions under these circumstances while materials costs are rising understandably fuels caution, but the gains for the early movers could be substantial.

A New Framework

We have developed a new decarbonisation framework to remove much of the uncertainty. The framework maps a set

of optimised upgrades over a building’s lifecycle that hit several goals simultaneously, whether it is MEES, net zero or other initiatives such as NABERS. By considering the impact each upgrade has against those goals, creating a schedule of possible solutions and forecasting the asset’s performance, we’re able to establish the most cost-effective and optimised upgrade and retrofit programme.


This approach is important because we’re increasingly finding that a one off retrofit exercise alone isn’t the silver bullet many hoped it would be. A golden thread of deep and continuous collaboration with a wider pool of operational stakeholders, especially occupiers, is key to closing the performance gap, decarbonising, and crucially hitting both the asset’s and the occupier’s net-zero targets whilst reducing energy consumption and costs.

Other key features of the framework include maintaining a core team and monitoring governance. Having a core team consistent throughout an asset’s lifecycle is vital to ensure the process stays on track.

"At its core, this framework is an organisational solution for solving multiple complex problems that can be applied at asset or portfolio level. It leverages both retro-fitting and collaboration with occupiers to achieve various goals through an asset’s lifecycle"

New Guidelines

We hope that the framework will become best practice, underpinning design decisions as prevailing uncertainties over net zero are resolved. Indeed, many questions will be answered by the Net Zero Carbon Buildings Standard, which set out metrics by which net zero carbon performance is evaluated, as well

as performance targets or limits based on the industry’s required decarbonisation trajectory.

Crucially, those performance targets will align with science-based trajectories needed to achieve net zero by 2050, while also keeping to the energy demand reductions that will be required to enable a net zero carbon energy supply sector.

The guidance publication will constitute a watershed moment for the industry. We’ll finally have much greater certainty over how to balance energy use, upfront embodied carbon, and lifecycle embodied carbon while considering metrics such as space heating/cooling demand and peak load. The guidelines will also cover the approach to carbon accounting, procuring renewable energy, and the treatment of residual emissions, including carbon ‘offsetting’.

Capitalising on information this granular will require even greater collaboration between professionals at earlier phases – we see it as a trend that will grow more important over time. Occupiers will play a bigger role in those conversations, too. After all, investment decisions must be accompanied by the right behaviours if a building’s potential is to be met.

Our framework provides a foundation for all of that – and will prove that it’s possible to work towards multiple sustainable building goals at once, no matter how ambitious they are.

Read the next article, Tower 42: A Story of Continuous Improvement or discover more from our ESG in Perspective magazine. 

As Sustainable Building Targets Multiply, Can Real Estate Meet Them All At Once?