Carbon costs: five steps for Birmingham real estate on the journey to net zero

Turner & Townsend

Here’s a fact you may have heard before. Buildings and their construction together account for 36 percent of global energy use and 39 percent of energy-related carbon dioxide emissions annually, according to the United Nations Environment Programme.

So, whether you live in Birmingham, Berlin or Barcelona, the reality is that net zero societies will not exist without action from built environment professionals. Against the backdrop of a climate emergency, there’s a need for real estate clients to move from talking about net zero, to embracing a true net zero mindset. This mindset will need to shape both the construction and the operation of buildings. Understanding the whole life cost and carbon of buildings is going to be key.

The good news is that property investors are already taking great steps. The ability to secure investment for the development of new assets will now increasingly be conditional on a commitment to net zero from some institutional investors. Some global asset managers have already pledged to become operationally net zero across UK property funds by 2030.

With all this in mind, here are five thoughts on whole life carbon for clients and investors and a few key considerations for Birmingham too. 

  1. There is no set of instructions for a net zero building

From renewable energy through to sustainable construction materials, the route to net zero buildings is not straightforward and doesn’t come with instructions. But the carbon debate is often focused on embodied carbon that incorporates only carbon emitted during the construction of buildings and assets. There’s a more holistic requirement that is critical to achieving net zero and moving towards a circular economy where buildings are operated for longer. Whole-life carbon analysis means anticipating the impacts over the lifetime of a building or infrastructure asset. It considers not only the construction process, but also takes account of emissions during the operation and maintenance of the asset along with its end-of-life disposal.

Understanding the whole life carbon and financial cost will be important in the move to net zero. Carbon should be treated as a currency as the idea that you would build a project and not know how much it costs financially would be inconceivable. Design teams should be challenged to arrive at the best carbon outcome, with alternative designs and solutions considered during the early project stages. The challenge now is that there are few examples of net zero buildings to benchmark against.

  1. Will Birmingham follow London’s approach to whole life carbon?

The recently launched London Plan 2021 now requires developers of schemes referable to the Mayor to submit a whole lifecycle carbon assessment and demonstrate actions to reduce emissions. While there’s no mandatory whole-life carbon targets in the London Plan, it includes carbon benchmarks for four building types – offices, retail, education and apartments/hotels. Developers will need to meet these benchmarks. London’s leadership on this issue is a major step forward because it now means those building an asset must have an interest in its long-term carbon and cost performance. We may well see other cities follow London’s lead and it will be interesting to see whether Birmingham adopts this approach.

  1. The greenest building is the one that already exists

We lose more than 50,000 buildings through demolition every year and, while more than 90 percent of the resulting waste material is recovered, a lot of carbon is generated in constructing a new building. The RetroFirst campaign is an architect-led campaign to prioritise retrofit over demolition and rebuild which is getting a lot of attention.

You don’t have to look far to see how retrofit can speed up the pace of cutting carbon emissions and achieving zero carbon. In London, we are currently working with Greater London Authority (GLA) on its Retrofit Accelerator Programmes to transform energy inefficient housing and public buildings across the capital in the move towards net zero carbon. However, in cities like Birmingham the drive for grade A office space has led to a lot of demolition and the creation of new assets. This has been vital for cities like ours but it’s going to be important that we embed sustainability into every project and that these buildings can now have longer lives, and potentially have different occupiers over time. Net zero retrofit is not only vitally important but creating an industry which has the scale and capability to deliver this is going to be crucial for UK construction.

  1. Buildings are going to have longer lives and multiple uses

Linked to that last point, the conversion of office to residential, retail to build to rent is already happening in Birmingham and many cities. It was happening pre Covid-19 but the pandemic has accelerated this as cities adapt and evolve. The key for clients and investors is going to be constructing buildings which offer the ability to be reconfigured and reused. The flexibility to change a building’s use needs to be considered in the earliest design stages so that it can adapted as easily and economically as possible. This will minimise carbon emissions later in life and maximise the opportunity to retain a fit for purpose asset. 

  1. How will net zero buildings be operated?

Over potentially longer lifecycles, a challenge is going to be making sure that a net zero designed building continues to operate as net zero. It’s going to require a collaborative relationship between landlords and occupiers with a joined-up focus on delivering net zero. We could well see new financial incentives for occupiers that outperform environmental targets for their buildings. Alternatively, it could see increased rents for occupiers that do not operate a low carbon building correctly.

Net zero requires attitudinal and behavioural change if it’s to become reality across everything we do in our daily lives. Reducing the 39 percent of energy-related carbon dioxide emissions from buildings annually is an essential part of that.