- If building is exempt from needing an EPC (e.g. place of worship) - if it has minimum energy usage e.g. a shed with no heating etc - Lease less than 6 months or longer than 99 years - When improvement to an E is not possible within the '7-year payback' time. 3 quotes have to be obtained from energy assessors. - When it can be proven that improvements could devalue the property by 5% - When 3rd party consent from a tenant/landlord/planning authority is refused.

- Places of worship - If listed/in conservation area and improvements would alter the character - Buildings of less than 50 sq m in size - Buildings with no heating - Buildings due to be demolished - Residential buildings occupied for less than 4 months of the year

Sustainability Flashcards by Lauren Harrison

RICS commitment to sustainability

(5)

RICS Global Compact published - ‘Advancing responsible business in land, construction, real estate use and investment’ 2018. How organisations can identify and address impact of their activities and decision making throughout the construction process.
Evidenced based research - ‘sustainability rises up the agenda in UK FM sector’ 2021
Rules of conduct: e.g. Rules 3.10 encourage sustainable solutions when advising clients
Red Book Global - VPGA2 - consider esg when valuing - consult experts
Guidance Note: ‘Sustainability and ESG guidance in commercial property, valuation and strategic advice’ 2021
Certification - e.g. RICS SKA system for the fit-out of commercial premises (gold, silver, bronze)

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Climate Change Act 2008

amended in 2019 to allow the UK to commit to ‘net zero’ carbon by 2050

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Biodiversity Net 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.

Already in place but 10% biodiversity net gain (BNG) will become mandatory when Part 6 of the Environment Act 2021 comes into force in November 2023.

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November 2020

The UK government announced a 10-point plan for a ‘green industrial revolution’
- green finance
- greener buildings
- greener public transport

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ESG - what does it stand for?

Environmental Social Governance

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ESG - what is it?

It is a set of criteria that investors and companies use to evaluate a company’s sustainability and societal impact.
- Environment = company’s impact on the environment (carbon footprint, waste management and energy efficiency)
- Social = company’s impact on society (employee relations, D&I and community impact)
- Governance = how the company is managed (ethics, board composition, decision making)

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MEES - 1 April 2018

All com and resi buildings with new leases - minimum of E

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MEES - 1 April 2020

All resi buildings with existing and new leases - minimum of E

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MEES - 1 April 2023

All com buildings with new and existing leases minimum of E (registered by 1/4/2025)

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MEES Exemptions
(6)

If building is exempt from needing an EPC (e.g. place of worship)
if it has minimum energy usage e.g. a shed with no heating etc
Lease less than 6 months or longer than 99 years
When improvement to an E is not possible within the ‘7-year payback’ time. 3 quotes have to be obtained from energy assessors.
When it can be proven that improvements could devalue the property by 5%
When 3rd party consent from a tenant/landlord/planning authority is refused.

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EPC what is it/what does it measure?

Energy Performance Certificate
Provides information on energy efficiency of a building. Help to make informed decisions about energy efficient buildings and encourages uptake of them.

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EPC Exemptions

Places of worship
If listed/in conservation area and improvements would alter the character
Buildings of less than 50 sq m in size
Buildings with no heating
Buildings due to be demolished
Residential buildings occupied for less than 4 months of the year

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EPC penalties for non compliance

Resi = £200
Commercial = 12.5% of RV (minimum of £500 and max of £5,000)

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MEES Penalties (comm)

Breach less than 3 months = 10% of RV or £5,000 (max fine £50,000)
Breach more than 3 months = 20% RV or £10,000 (max fine £150,000)

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MEES penalties police by…

Local Authority

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Resi MEES penalties

less than 3 months - £2,000
more than 3 months - £4,000

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2027

2030

Other potential changes…

All let properties will fall in the scope of MEES
Listed buildings need an EPC
2025 register MEES on new database
then register again in 2028 and 2030 to comply with new minimum standards

BBP

Better Buildings Partnership
- A number of UK property funds and REITS have publicly committed to achieving net zero carbon by 2050 under the BBP

UKGBC Framework
(5 - ranked)

ESTABLISH NET ZERO CARBON SCOPE - across the whole life of the building (from construction through to demolition)
REDUCE CONSTRUCTION IMPACTS - developers need to consider materials and design
REDUCE OPERATIONAL ENERGY USE - LL need to consider how best to retrofit efficiency measures (e.g. led lights, smart controls)
INCREASED RENEWABLE ENERGY SUPPLY - on and off site, work out how to implement these in designs
OFFSET ANY REMAINING CARBON - last resort (e.g. planting trees)

Why are EPCs updated

To meet the governments targets of ‘carbon budget’ which is updated every 5 years under the climate change act

Building Regulations and Codes

UK government updates this, it contains info on MEES and regulations which address the certification of buildings.

5 key provisions of Building Regulations and Codes

higher standards of energy conservation for new and refurbed buildings
establishing a calculation methodology for epcs for all buildings
MEES
EPCS for all buildings when leased and sold
Mandatory inspection of boilers and aircon in buildings

EPCs are required for (4)

-All buildings over 50 sq m - When newly built, sold or let (more than 6months, less than 99 years) - When newly refurbed and air con/heating etc is altered and/or building is subject to building regs for construction - EPC is also required for sub-letting or assignment of lease.

EPC requirements for marketing (3)

- Commissioned within 7 days of marketing commencement - obtained within 28 days of marketing commencement - only actual rating displayed on property and advertisements (graph included when space and link to front page for online marketing)

What is on the front page of an EPC certificate? (6)

1. Address of property and floor area (GIA) 2. Certificate reference number 3. technical info on the property's energy provision (main fuel, emission rate) 4. estimation of running costs 5. A+ - G rating 6. Benchmarking information

How long does an EPC certificate last for

10 YEARS

Scottish Regime (s.63) Regs

Action plan created prior to marketing. 3.5 years to improve from date action plan is issued

ESOS

Energy Saving Opportunity Scheme - Mandatory for large UK organisations: measure energy consumption, conduct energy audits, report compliance to environment agency.

Heat Network Regulations 2014

Related to communal heating systems in multi-occupied buildings (comm and resi) Must be provided with accurate bill info/competitive prices.

CRC Energy Efficiency Scheme

CARBON REDUCTION COMMITMENT SCHEME - scrapped in 2015 and replaced by CCL (climate change levy) in 2019

CCL

CLIMATE CHANGE LEVY - Tax on energy delivered to non-domestic users --> encourages efficiency - energy providers charge it and then forward money to HM treasury - Energy used from renewable sources is exempt

DECs

DISPLAY ENERGY CERTIFICATES - Required for public buildings over 250 sq m - discloses actual energy used and Co2 emitted. - BBP is trying to encourage voluntary display via a scheme known as NABERS UK

BREEAM

Building Research Establishment Environmental Assessment Method - voluntary for nee and refurbed buildings - judged off 9 environmental weightings (e.g. transport links, waste management, water use, health and wellbeing)

Other voluntary ratings (5)

LEED (design based USA) DGNB (Germany) HQE (france) NABERS (UK and Aus) WELL (international)

what is within a green lease?

typically seek to ensure LL and T share info on the use of water, energy and waste in a building. BBP has a toolkit , recommending green lease components

RICS SKA

Rating system aiming to be standard measure of fit-out sustainability in buildings

BPP Outline

- Change through collaboration and leadership - Improve professional understanding (have a training course on ESG) - Stimulate change

GBC

Green Buildings Council

GBC mission

To radically improve the sustainability of the built environment, by transforming the way it is planned, designed, constructed, maintained, repurposed and operated.

Sustainability and ESG in commercial property valuation and strategic advice 2021 (eff 2022) --> contents

'Valuers should have working knowledge of sustainability and its impacts including on the physical asset, policy and market participants' - Inspection (VPS2 = observe things that may impact sustainability) - Reporting (VPS3) = - statement about ESG related to value, property features, opinion of how property features impact value, how they may impact future value. - VPS5 Valuations methods = explicit vs implicit to value sustainably - Sustainability characteristics, considerations and risks (cap ex)