Is the net zero pathway moving fast enough? 

2020 was a year of net zero commitments and public disclosure driven by the BBP Climate Change Commitment. Are we moving in the right way and fast enough?

If the UK is to guide other nations towards net zero carbon, it needs to arrive to the talks in December with credible plans and demonstrable progress.

Phoebe Lewis, Senior Consultant, JLL

Far from sweeping climate change concerns under the carpet, the global pandemic is refocusing attention on what’s needed to pivot towards a safer and healthier future.

In 2020, there was very much a sense that everyone was working together to carve out meaningful pathways to net zero carbon (NZC) and to identify the knowledge gaps that needed to be filled. As part of this, a groundswell of consultations and publications helped to provide clarity and direction. UKGBC assumed a leadership role, issuing guidance on embodied carbon, a feasibility study on delivering a new NZC building and ensuring a socially just transition to NZC amongst others.

This industry clarity heralded the arrival of many commitments and declarations. At the time of writing the World Green Building Council's Net Zero Carbon Buildings Commitment has just under 100 company and business signatures. Many other initiatives have gained momentum, including the UN PRI Net-Zero Asset Owner Alliance, the Net Zero Asset Managers Initiative and the Science-Based Targets Initiative.

In the UK, many of the industry’s early adopters fell under the banner of Better Buildings Partnership (BBP). Those who committed to the BBP Climate Change Commitment had to publish their pathways at the end of 2020. While there was a range of ambition on the targets set, this is one of the first times that the industry has seen such a wave of plans on how it will reach NZC.

Laying the groundwork

There’s a sense in the industry that we’re all finding our way together, adjusting and refining as we learn and as guidance becomes standardized. Here are some of the common issues facing companies today:

Setting a target year
While the UK government has set a legally binding target year of 2050, a large number of companies have set target years of 2030. Even so, there are those who have chosen to align their targets with the government deadline of 2050. Currently, ambition is at either end of this range with a few companies dotted somewhere in between.

Transitioning buildings that are owned and managed separately
Building owners with a high proportion of properties managed by their tenants have had to make tough decisions that balance their levels of ambition, what their peers are doing and what is achievable. Equally, building occupiers have had to think creatively about how they engage the owners and investors to implement NZC solutions. The focus now is how to engage and share the financial burden between owners and occupiers. 

Accounting for embodied carbon: to include it or not?
The industry consensus is that any credible net zero carbon pathway must include embodied carbon, given that embodied carbon currently accounts for 11% of emissions from the built environment.

However, measuring embodied carbon and taking steps to meaningfully reduce it in portfolios remains a challenge. For companies with large portfolios, doing an embodied carbon assessment of all their standing assets is just not feasible due to many factors, including the lack of information of the original build. For this reason, the industry benchmarks, such as those used by RICS’ Whole life carbon assessment for the built environment and RIBA 2030 Climate Challenge, are useful, if imperfect.

As a result, the focus should be on intervening in new developments in the design stage to make sure that emissions can be measured and that all options for reducing them – especially using circular economy principles – are explored.

Making the business case for transitioning to net zero carbon
Since most of the savings accrue to the tenants, a simple cost-benefit analysis is not enough. A series of factors are being considered by investors, a key one being the need to comply with regulations relating to the UK government’s legally binding net zero carbon target. Beyond this, there’s a strong recognition of growing occupier demand, enhanced rental premiums and lower voids that come with NZC buildings.

What’s next?

On the back of this momentum, the postponed COP26 – the world’s annual climate change conference – is planned to take place in Glasgow in November 2021.

This puts the UK in the spotlight – and if it is to guide other nations towards net zero carbon, it needs to arrive at the talks in November with credible plans and to demonstrable progress. The fact that the UK was the first major economy to set a legally binding net zero carbon target already puts it in good stead.

The efforts of wider industry – including the built environment – to set out guidance on achieving that overarching goal is pointing companies in the right direction, even if some of this guidance needs further research and clarification. Key areas include which renewable energies can be used, accounting for and reducing embodied carbon and using and costing carbon offsets – and more clarity is expected in the coming months. In addition, now that many companies have set their strategies and targets, the question is how these can be translated into action plans and, critically, how these can be funded.

This article is part of our Net Zero: The Big Questions series which looks at some the complex questions around how buildings can achieve net zero carbon. Check out the rest of the series below:

Are you ready to achieve your net zero carbon ambitions?

We can support you transition your real estate at every stage of property lifecycle with our end-to-end service