Sustainability Flashcards
What industry standards and metrics do you know around sustainability?
Standards:
Passivhaus
new-build, high level of air quality and comfort, requires very little energy for heating and cooling
BREEAM
enviro performance of bdgs design, operation
WELL
performance of bdg related to health and wellness
SKA
RICS non-domestic fit-outs
How does sustainability affect valuations?
- key question: which factors affect value
- inspection/investigation
- inspection identify physical factors, duty to report to client e.g. contamination and sustainability risk, potential/actual constraints on the enjoyment and use of property caused by environmental factors may result from natural causes (such as flooding), from non-natural causes (such as contamination) or sometimes from a combination of the two (such as subsidence resulting from historic minerals extraction).
- investigate sustainability/ESG factors such as: configuration and design including the use of materials and concepts increasingly associated with ‘wellness’;
accessibility and adaptability, including access and use by those with disabilities;
carbon emissions, energy efficiency, building ‘intelligence’ - valuation analysis: while valuers should reflect markets instead of leading them, they should also be aware of sustainability features and the implications these could have on property values in the short, medium and longer term.
- valuer may recommend making further enquiries and/or obtaining further specialist or expert advice in respect of these matters
What are regulations related to sustainability?
- Paris Agreement 2015
UN Framework for Convention of Climate Change
aim to keep a global temp rise this century well below 2 degrees C above pre-industrial levels and to pursue efforts to limit to 1.5 degrees C - UK Climate Change Act 2008
in 2015, gov amended the Act and set a legally-binding target to achieve net zero greenhouse gas emissions from across the UK economy by 2050 - Energy Performance of Bdg Regs 2012
- Energy Efficiency Regs 2015
Minimum Energy Efficiency Standards (MEES)
UK plans:
Industrial Strategy 2017
(skills, industries, infrastructure of future)
Clean Growth Strategy 2017
(blueprint for a low carbon future)
25 Year Environment Plan 2018
(gov action for healthy natural enviro)
CHECK UPDATE
GM:
Local Industrial Strategy 2019
5 Year Environment Plan 2019
Climate Change Strategy 2011-2020
Climate Change Implementation Plan 2015-20
CHECK UPDATE
SCC:
Climate change strategy 2020
Carbon management plan
Social value and sustainability policy
Green city programme 2018
Local flood risk management strategy 2015
Planning policy:
- Design: Sustainable design and construction SPD
Environmental:
- Playing pitch strategy
- Greenspace strategy SPD
- Nature conservation and biodiversity SPD
- Flood risk and dev planning guidance
- Trees and dev SPD
- Contaminated land planning guidance
CHECK UPDATE
Name some organisations related to sustainability.
UN:
12 UN Sustainable Development Goals
IPCC:
The Intergovernmental Panel on Climate Change is an ind body of scientists tasked by the UK to assess the most recent scientific, technical and socio-economic evidence relating to climate change
Better Buildings Partnership:
improve sustainability of existing commercial building stock
UK Green Building Council
CHECK UPDATES
What are regulations around EPCs?
Energy Performance of Bdg Regs 2012
- to improve energy efficiency of bdgs
- reduce carbon emissions
- reduce impact of climate change
- require EPCs for dwellings and commercial
- DECs for large public bdgs
- air-con inspections for systems above certain size (every 5 years)
- EPCs required when build/sell/rent
if bdg has roof and walls and uses fixed services to condition indoor climate
each unit of bdg with floor area greater than 50sqm
- exceptions:
- Properties to be demolished
- Listed buildings where compliance would unacceptably alter their character or appearance
- Buildings used as a place of worship
- Temporary buildings with planned time use of 2 years or less
- Certain buildings i.e. agricultural buildings/workshops with low energy demand
- Standalone buildings with a Total Useful Floor Area of less than 50sqm
Energy Efficiency Regs 2015
Minimum Energy Efficiency Standards (MEES)
- to improve energy efficiency of UK’s older bdg stock to meet carbon reduction targets 2050
- Bdg Regs ensure new properties conform to current standards, MEES existing stock
COMMERCIAL
- from April 2018, new tenancies can’t be granted if bdg has less than E rating
- after April 2023, LLs will not be allowed to continue to let any bdgs with rating less than E
- MEES doesn’t apply to tenancies of less than 6 months or more than 99 years
- enforced by Local Weights & Measures Authorities (SCC!)
- exemptions:
7 year payback rule
devaluation more than 5%
third party consent refused i.e. T, superior LL
bdg surveyor advises wall insulation not appropriate due to the negative impact on fabric/structure
if LL makes all improvements and rating still F or G
Exemptions must be registered on the PRS exemptions register (which is self-certified) and based on improvements from an EPC recommendation report or a report prepared by a registered valuer. Exemptions last for five years and cannot be passed to a new owner on sale.
- The government has proposals that, from April 2025, landlords will be required to submit a valid EPC with a C rating to a new centralised PRS Exemptions and Compliance database or register a valid exemption.
- From April 2028, properties would be required to achieve a B rating or register a valid exemption.
CHECK UPDATE
What are residential rules on EPCs?
since 1 April 2018, private landlords may not let domestic properties on new tenancies to new or existing tenants if the Energy Efficiency Certificate (EPC) rating is F or G (unless an exemption applies).
since 1 April 2020, landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place.
If you are currently planning to let a property with an EPC rating of F or G, you need to improve the property’s rating to E, or register an exemption, before you enter into a new tenancy.
If you are currently letting a property with an EPC rating of F or G, and you haven’t already taken action, you must improve the property’s rating to E immediately, or register an exemption.
If your property is currently empty, and you are not planning to let it, you don’t need to take any action to improve its rating until you decide to let it again.
The cost cap: you will never be required to spend more than £3,500 (including VAT) on energy efficiency improvements.
If you cannot improve your property to EPC E for £3,500 or less, you should make all the improvements which can be made up to that amount, then register an ‘all improvements made’ exemption.
There are 3 ways to fund the improvements to your property:
Option 1: Third party funding
If you are able to secure third-party funding to cover the full cost of improving your property to EPC E, you can use this and you don’t need to invest your own funding:
- the cost cap does not apply
- you should make use of all the funding you secure to get your property to band E, or if possible higher. Funding can include:
- Energy Company Obligation (ECO)
- local authority grants
- Green Deal finance
Option 2: Combination of third-party funding and self-funding
Option 3: Self funding
Exemptions:
- ‘All relevant improvements made’ exemption
- ‘High cost’ exemption (£3,500)
- Wall insulation exemption
- Third-party consent exemption (T/sup LL)
- Property devaluation exemption (5%)
Temporary exemption recent ll (6 months)
The maximum penalties amounts apply per property and per breach of the Regulations. They are:
- up to £2,000 and/or publication penalty for renting out a non-compliant property for less than 3 months
- up to £4,000 and/or publication penalty for renting out a non-compliant property for 3 months or more
- up to £1,000 and/or publication for providing false or misleading information on the PRS Exemptions Register
- up to £2,000 and/or publication for failure to comply with a compliance notice
The maximum amount you can be fined per property is £5,000 in total.
main proposed changes are as follows:
- Minimum EPC rating to be raised from E to C.
The plan is to enforce this from 1 April 2025 for new tenancies, and from 1 April 2028 for existing tenancies.
- Cost cap to be raised from £3,500 to £10,000 per property
The government says this would be sufficient to bring more than 90% of D-rated properties up to a C rating, as well as nearly 60% of E-rated properties
- “Fabric first” policy to be introduced
This would control in which order work is carried out, so improvements to the fabric of the building (ie insulation, windows and doors) must be done before additional measures such as new heating systems are installed.
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When do you need a DEC?
Public authorities must have a DEC for a building if all the following are true:
it’s at least partially occupied by a public authority (eg council, leisure centre, college, NHS trust)
it has a total floor area of over 250 square metres
it’s frequently visited by the public
DECs last for 1 year for buildings with a total useful floor area more than 1,000 square metres.
They last for 10 years when the total useful floor area is over 250 square metres and up to 1,000 square metres.
Private organisations don’t need a DEC but can choose to get one if they want to. They may still need an Energy Performance Certificate if the building is sold or rented.
What is a green lease?
provides for the landlord and the tenant to undertake specific responsibilities and obligations to minimise carbon emissions arising from the sustainable development, operation and occupation of a property
for example: energy efficiency measures, waste reduction/ management and water efficiency
Memorandum of Understanding is intended for use where there is an existing lease or agreement in place
Sustainability and ESG in Commercial Property Valuation and Strategic Advice:
Within the investment sector, some stakeholders make arrangements that encourage, or even
contractually impose, standards of sustainable asset management and ongoing sustainable
performance on either or both the landlord and the tenant. These contracts (leases, licenses,
management agreements) aim to address the inequities of investment and return inherent
in traditional leases, in which the landlord has responsibility for capital investment, but the
beneficiary is the tenant. A common version of these agreements are so-called ‘green leases’.
The concept is to share the tenant’s savings with the landlord so that both benefit, and there is
an incentive for the landlord to undertake investment to improve the sustainable performance
of the asset. Some leases may place the tenant under potentially onerous liabilities in relation to
repair, including specification of materials and hand-back clauses. In all cases where contractual arrangements exist relating to sustainability performance, valuers should assess whether they
may have an impact (positive or negative) on value.
The use of leases containing specific sustainability criteria is a feature of some markets and
jurisdictions. Such leases contain clauses within the lease, or the addition of a memorandum
of understanding attached to the lease, that place additional responsibilities and potentially
additional costs on the tenant. While these clauses are not necessarily punitive, some are. If
they involve the tenant in actual or potential additional costs, they could result in a lesser rental
bid. Alternatively, some tenants could regard the acceptance of a ‘green lease’ as fulfilment of
their ESG requirements. As with all matters of lease interpretation, valuers should take care to
analyse the inter-relationship of clauses against each other, and between the subject property
and those of comparable properties.
What is SUDS?
SUDS are drainage systems that are considered to be environmentally beneficial, causing minimal or no long-term detrimental damage.
Approaches to manage surface water that take account of water quantity (flooding), water quality (pollution) biodiversity (wildlife and plants) and amenity
SuDS mimic nature and typically manage rainfall close to where it falls. SuDS can be designed to transport (convey) surface water, slow runoff down (attenuate) before it enters watercourses, they provide areas to store water in natural contours and can be used to allow water to soak (infiltrate) into the ground or evaporated from surface water and lost or transpired from vegetation (known as evapotranspiration).
What is net biodiversity gain?
Biodiversity net gain (BNG) is a way to contribute to the recovery of nature while developing land. It is making sure the habitat for wildlife is in a better state than it was before development.
This will apply from November 2023 for developments in the Town and Country Planning Act 1990, unless exempt. It will apply to small sites from April 2024.
Under Environment Act 2021.
If you’re a land manager
You can get paid by selling biodiversity units.
If you’re a developer
You must try to avoid loss of habitat to a piece of land you plan to do development work on. If you cannot do this, you must create habitat either on-site or off-site.
If you cannot use on-site or off-site land, you must buy statutory credits from the government. You must provide evidence for using this option. This must be a last resort. The government will invest in habitat creation elsewhere in England.
You may be able to combine all 3 options to make up your BNG. You must discuss this with an ecologist, as you will need to prove why you cannot use one option. You must get approval from your local planning authority before you start building.
If you’re a local planning authority
LPAs will have to approve a biodiversity net gain plan for development work before it can start.
What is an Environmental Impact Assessment and when would one be carried out?
The aim of Environmental Impact Assessment is to protect the environment by ensuring that a local planning authority when deciding whether to grant planning permission for a project, which is likely to have significant effects on the environment, does so in the full knowledge of the likely significant effects, and takes this into account in the decision making process. The regulations set out a procedure for identifying those projects which should be subject to an Environmental Impact Assessment, and for assessing, consulting and coming to a decision on those projects which are likely to have significant environmental effects.
Environmental Impact Assessment should not be a barrier to growth and will only apply to a small proportion of projects considered within the town and country planning regime. Local planning authorities have a well established general responsibility to consider the environmental implications of developments which are subject to planning control. The 2017 Regulations integrate Environmental Impact Assessment procedures into this framework and should only apply to those projects which are likely to have significant effects on the environment.
What are Modern Methods of Construction?
Modern methods of construction is a process which focuses on off-site construction techniques, such as mass production and factory assembly, as alternatives to traditional building.
The process has been described as a way ‘…to produce more, better quality homes in less time.’
Historically, it was created to meet an urgent demand for residential buildings after the Second World War and the method became popular again during the housing crisis in 2005.
Modern methods of construction employ innovative practices such as:
Creating paneled units in factories, which can be quickly assembled onsite to create 3D structures.
Volumetric construction, which sees 3D, or pre-fabricated, units created under factory conditions.
Pre-cast concrete foundations
Pre-fabricated floor and roof cassettes (panels)
Many pre-fabricated homes use timber. Whilst this sustainable material is often more eco-friendly, the increased fire safety risks of a timber-framed building may also put people off homes created using modern methods of construction.
What are the Future Homes Standard / Future Buildings Standard?
In 2025, compliance with the Future Homes Standard (FHS) will become mandatory. Its aim is to ensure that new homes built from 2025 will produce 75-80% less carbon emissions than homes built under the current Building Regulations.
The FHS aims to decarbonise new homes by focusing on improving heating, hot water systems, and reducing heat waste. This will be achieved in part by replacing current technologies with low-carbon alternatives. For example, very high quality building fabric (structural materials, insulation etc.), triple glazing standards and low-carbon heating through heat pumps will replace their older, less efficient counterparts.
To meet the specifications set out in the 2025 FHS, the Government updated Parts F and L of the current Building Regulations. These specifications must be adhered to when constructing, extending, or renovating UK homes. Part F introduces new standards for ventilation, while Part L sets out minimum energy efficiency performance targets for buildings, airtightness requirements and improved minimum insulation standards. These more rigorous requirements have applied to UK homes since June 2022.
From 2021 new non-domestic buildings will be required to produce 27% less CO2 emissions when compared to current buildings – a positive start on our road to decarbonisation.
It also progresses plans for new performance metrics by setting a new primary energy target, CO2 emissions target and minimum standards for fabric and fixed building services.
The Future Buildings Standard also introduces a new Approved Document – Part O – which aims to tackle overheating in new homes.
The standard also sets out the 2021 ‘uplift’ to the fabric energy efficiency standard for new homes.
How do you define ESG?
ESG comprises three pillars: environmental, social and governance, all of which collectively contribute to effective performance, with positive benefits for the wider markets,
society and world as a whole
(IVS)
How do you define net zero?
Net zero: A balance between the carbon and other greenhouse gas emissions produced and the impact of measures to remove emissions. It can be referred to with different degrees of scope, for example at a global, company or portfolio level, or in respect of an individual asset.
