The impact and opportunity arising from Net Zero Carbon

Avison Young's Tom Malcolm Green hopes to give a feel for where local authorities are at in tackling NZC and presents a useful legislation timeline.

Avison Young's Tom Malcolm Green hopes to give a feel for where local authorities are at in tackling NZC and presents a useful legislation timeline. I’m hoping that this is an introductory broad piece, which ensures there are plenty of avenues to explore for future articles. Tom also wants to highlight that NZC isn’t simply about improving our building stock and has the potential to be far more wide-reaching in its impacts on the industry as a whole.

The last few years have highlighted that Zero Carbon (net or not), means more to people (and business) than the term alone conveys. It is central to what we identify as ESG because it seamlessly sits within what each of those letters stands for (Environmental, Social and Governance). It has become so prevalent that it is now uncommon for it not to be a consideration under most topics within the real estate industry. So how are local authorities making it their mission and what does progress look like?

Let me begin with a quick recap of how 2021 played out in terms of net zero carbon and the built environment. Following the industry’s general awakening in 2019 with the UK’s commitment to eradicate its net contribution to climate change by 2050, 2021 saw a significant step-up in action and leadership on this front at both a national and global level.

In June 2021, the UK enshrined in law the world’s most ambitious climate change target, aiming to cut emissions by 78% by 2035 compared to 1990 levels. This will bring the UK more than three-quarters of the way towards its 2050 net zero goals and is in-line with the independent Climate Change Committee’s recommendations. To put this into perspective, the previous target was an 80% reduction by 2050.

With C-19 still posing an untameable global threat, the world’s attention turned to Glasgow for the UN’s climate conference, COP26, in November. An important action here was the launch of the UK Green Building Council’s (UKGBC) Net Zero Whole Life Carbon Roadmap for the UK Built Environment, outlining actions required by the government and industry to achieve net zero carbon (NZC) across the sector by 2050. Ahead of this, in mid-October, the UKGBC also published guidance for local authorities on improving the sustainability of new commercial buildings in the form of its Commercial Playbook. A further useful guide, the Government Property Function’s Net Zero Estate Playbook, a guide to decarbonising government property, was released in November.

UK legislation timeline

The timeline sets out some of the key known regulations, policies and actions which have either been enacted or are in consultation over the course of the “decade of delivery”. Each of these have direct influence on energy efficiency and development in the built environment and we can expect more as the decade progresses. Tightening policy and regulations combined with national grid decarbonisation by 2035 are key to driving the shift to net zero across both the public and private sector.

What are local authorities doing?

In the last 3 years, against the background of global and national action, there has been a growing impetus from local authorities to act, with many electing to push harder and faster to NZC than national policy. Since 2018, local authorities have declared climate emergencies and set targets on 2 fronts. Firstly, a net zero carbon target for themselves encompassing their own operations and estates, and secondly, targets relevant to their jurisdiction. Typically, these targets differ (with a local authority’s own target being more ambitious), but both are generally more progressive than national policy, treating 2050 as an absolute backstop.

Of 408 local authorities (district, county, unitary and metropolitan councils alongside combined authorities and city regions), 60 have yet to set a carbon neutral target. 350 local authorities have taken decisive action, with 313 of these having published a plan of some form. 25 local authorities which have not yet set a target have also published a plan towards NZC, indicating that not setting a more stringent target than national policy does not necessarily indicate complacency. The most common target date is 2030, giving the 56% of local authorities which have committed to then around 8 years left to establish how they are going to meet their targets and see it through. Only 21 local authorities (5%) have yet to set a national policy beating target and have not yet published a plan towards net zero carbon.

The practicality of achieving versus the principle of setting a net zero carbon target is where the real challenge begins, where strategising becomes a necessary tool and theories are tested. Certain questions spring to mind. How do you implement a commitment and is it achievable? What changes need to occur to ensure a local authority can meet its set target, how is this mandated and how is progress tracked? On top of this, against the backdrop and need of a local authority continuing its primary service provision while coping with typically increasing budgetary cuts and growing deficits, how can the transition to net zero even be considered, yet alone funded with limited assistance from central government?

In short, is there a set methodology or blueprint which all local authorities can use to enable them to get to where they need to? And where will the investment come from?

Certainly, there are approaches that can be taken, common actions that can lead towards a common goal. However, finding a one size fits all approach across more than 400 organisations which all have different priorities governed by localised needs and responsibilities is never going to be straight forward and is unlikely to gain the best results. At Avison Young, we favour a tailored approach based upon specific needs and requirements which can be adjusted as necessary when conditions change.

An interesting, perhaps unexpected twist to the NZC agenda, is its application and commonality to everyone, in the sense of how it has been embraced. As a local, national, and global objective we (the community) see merit in not only sharing best practice, but in doing all we can to ensure mistakes and pitfalls are not repeated. To many of those working within what is rapidly becoming a mainstream part of the property industry, the opportunity for collaboration involving teams across the property lifecycle has never been greater. To my mind this is a significant factor in opening the industry up to both new and existing talent from all backgrounds, as real estate embraces non-traditional pathways through its adoption of technology, shifting societal demands, response to environmental challenges and future proofing of the assets we already have. This is an opportunity aligned with net zero which should not be missed and one which local authorities can really lead on.

Clearly local authorities are engaged with net zero carbon. In many ways they are far more advanced and applied than their private sector counterparts. The real test is yet to come in the sense that those with the most ambitious targets are soon to be tested, and it’s in the industry’s best interests that they can be confident about their methodology and the actions they are taking.

In my next article on NZC [Ed – to be featured in a subsequent issue of ACES’ Terrier] I will outline the typical process a local authority might go through to maximise its chances of a successful carbon reduction strategy (in the context of its buildings), and how success on this front can be measured, the problems which can be faced, what opportunities might typically arise, and some of the positive impacts (and co-benefits) which may result.

Reference

All figures taken from Climate Emergency UK’s Climate Action Explorer, with thanks to Kevin Frea.

This sightlines article first appeared on page 48 of the Winter 2021/22 edition of ACES' Terrier magazine. The full edition is available here.