COMMENT The release of the UK Net Zero Carbon Buildings Standard pilot version has been met with widespread positivity across the real estate sector. This isn’t just another set of guidelines; it is on course to be a transformative standard that will reshape the landscape for net zero buildings in the UK.
With more than 6,200 companies globally now having net zero targets validated to the Science Based Targets Initiative – many with significant UK operations and around 1000 based in the UK – the pressure is on to deliver buildings that align with these ambitious goals. The standard is essential to drive investment, collaboration and innovation towards a net zero UK built environment.
Bridging the gap
The mismatch between supply and demand for net zero buildings in the UK is stark. JLL analysis of the office market shows that the demand for net zero space in London from occupiers with leases expiring by 2030 will outstrip the supply – low carbon projects currently in development or planning – by 90%. Outside of London this is even more pronounced with 2030 demand outstripping supply in the “big six” cities by 227%, presenting a huge opportunity for regional developers and investors.
These statistics are a clarion call for change, and the standard will provide a blueprint for answering it.
Companies with SBTi targets will finally have an industry-agreed standard to demonstrate net zero performance in their buildings. Spaces meeting the standard will command premium rents and valuation, in turn stimulating greater investment into net zero buildings – a virtuous circle accelerating the UK built environment’s transition to net zero.
Driving collaboration
The standard will bring the entire real estate value chain closer together to deliver net zero, aligning practices across the property life cycle to a consistent definition, methodology and metrics. The top-down and bottom-up approach to setting the standard’s targets and limits will be reflected in how stakeholders play their part; from lenders setting top-down KPIs at an investment level, through to supply chain meeting the demand for bottom-up innovation in low carbon materials and technology.
While green lease adoption continues to gain momentum, more advanced or “deep green” clauses stipulating carbon performance requirements can still be met with resistance. For buildings aiming to meet the standard’s stretching targets this will not be an option, with a clear common goal for verified net zero performance demanding full collaboration between owners and occupiers.
Boosting green finance
The robustness of the standard and anticipated premium for net zero buildings, in some markets, will increase investor confidence in net zero assets, unlocking green finance and sustainable investment, with clear carbon performance metrics applied to lending criteria and cascaded through the real estate value chain.
The standard will also future-proof assets against increasingly stringent environmental regulations and and proposed changes to minimum energy efficiency standards, providing further confidence to lending and investment markets in the long-term financial resilience of buildings meeting the standard’s requirements.
Innovation and best practice
A clear ambition for the standard is to drive improvement and innovation in embodied carbon. The standard’s requirements for embodied carbon reporting and performance will demand greater transparency of measurement and subsequently drive much-needed improvement, from design and construction through to operation and maintenance.
For in-use operational energy performance, adoption of innovative technologies to optimise performance will drive continued investment in this exciting and rapidly evolving space – along with improved energy management practices to avoid performance lag.
Driving a new standard
Much work lays ahead to finalise the standard and associated carbon limits and targets, but the investment and sheer will from the sector to create a standardised approach and drive real change has brought the industry together like never before. The standard will elevate the whole sector to be better – enabling the radical collaboration that is needed to transform UK real estate towards a net zero future.
JLL is encouraging all stakeholders to contribute to the next stage of this crucial standard by submitting project data to the pilot phase.
Find out more and register projects for the pilot version here: Pilot Version of the UK Net Zero Carbon Buildings Standard
Richard James is head of sustainable client solutions at JLL
