Sustainability Flashcards
How is the RICS involved?
- RICS Sustsinability Report is published every year which provides a global benchmark for issues of climate, carbon and sustaibaility practise. 50% of respondent’s reported a rise in occupier and investor demand for climate adapted real estate.
- RICS has updated the Whole Life Carbon Assessment which took effect from 1st July 2024. The key updates include:
– Aligned with International Cost Management Standards and the Built Environment carbon Database to provide a consistent output of cost and carbon reporting and benchmarking
– Sets a standard approach for assessing whole life carbon across the entire asset life cycle, so it can be undertaken across all sectors and asset types
– Industry agreed definitions for carbon terminology
– Mandatory requirement to calculate and report a contingency allowance
Key legislation?
- Climate Change Act (2008) amended in (2019) for net zero by 2050
- RICS Rules of Conduct (Rule 3)
- RICS Red Book Global (VPGA 8)
- RICS Professional Standard: Sustainability and ESG Guidance in Commercial Property Valuation and Strategic Advice (2021)
- RICS Professional Standard: Environmental Risks and Global Real Estate (2018)
- RICS SKA (for fit out of commercial premises)
Commercial Accreditation
- RICS SKA (commercial fit out)
Net Zero Carbon
Climate Change Act (2008) amended in 2019 for UK to achieve net zero carbon by 2050
Interim target of reducing emissions by 78% by 2030 was introduced
Better Buildings Partnership (BBP)
UK property funds and REITs committed to net zero carbon by 2050 through this
The UKGBC has a framework for this:
1. Establish net zero carbon scope (across construction, use, refurb, demolition)
2. Reduce construction impacts
3. Reduce operational energy use
4. Increase renewable energy supply
5. Offset any remaining carbon
What are Lendlease’s commitments to sustainability?
- Net Zero Carbon by 2025 in Scopes 1 & 2
- Absolute Zero Carbon by 20240 in Scopes 1, 2 & 3
- A$250 million of measured social value by 2025
EPCs:
What is the EPC regime?
1. Higher standards of energy conservation for new and refurbished buildings
2. Calculation methodology for the energy performance of buildings
3. Minimum requirements for the energy performance of all buildings
4. Energy certification for all buildings when built, modified, leased, sold
5. Mandatory inspection of boilers and air conditioning systems
What are the requirements?
- All commercial buildings over 500sqm must achieve a minimum E which could rise to C in 2027
- When newly built, sold or let for more than 6 months
- When newly refurbished and heating, AC, ventilation services are altered, or subject to Building Regs for construction
- Residential buildings when leased, sold, refurbished, sub-let must achieve a minimum E which could rise to C in 2025
What are the exemptions?
- Listed buildings
- Buildings with no heating
- Religious buildings
- Temporary buildings
- Buildings to demolish / redevelop
- Resi unit not occupied more than 4 months a year
What are the rules for marketing?
- Commissioned within 7 days of marketing (28 day limit)
- Agents responsible
- Energy rating must be displayed (and graph if space)
- Online material must have link to show front page
What must the front page show?
- Address and floor area
- EPC reference number
- Technical info on energy provision
- Estimation of energy running costs
- Energy performance rating from A+ to G
- Benchmarking information
How long valid for?
- 10 years
Penalties?
- Local Authorities Trading Standards enforce
- Residential: £200 fine for non display on marketing
- Commercial: 15.5% of RV or £500-£5000 fine
MEES:
Minimum Energy Efficiency Standards (2015):
As of April 2023 you cannot let a building of EPC F or G
Updated for 2030 has to be B, 2027 C - for Commercial buildings
Require an EPC Level E:
- New leases from 1st April 2018 (commercial & resi)
- All existing leases from 1st April 2020 (resi) and 2023 (commercial)
- Spend £3,500 on improving energy efficient where an AST was granted since 1st April 2019 if property has F or G rating and the tenant demand improvements
Exemptions:
- Place of worship
- Industrial / workshop with low energy demand
- Tenancy less than 6 months
- Tenancy more than 99 years
- Not feasible (no payback over 7 years despite energy savings, 3 quotes must be obtained)
- If improvements would devalue a property by more than 5%
- Third party consent from tenant, landlord or planning authority is refused
- Some residential leases (company lets, second homes, high/low rents, public second and social landlords)
- Must register exemptions
Non-compliance:
Commercial
- Less than 3 months: up to £5,000 or 10% RV (max £50,000)
- More than 3 months: up to £10,000 or 20% RV (max £150,000)
Residential
- Less than 3 months: up to £2,000
- More than 3 months: up to £4,000
Changes?
- Proposed changes to EPC and MEES whereby EPC Band C for new tenancies by 2024 and other tenancies by 2028 was shelved
- Proposed changes to MEES regulations may change in future to require EPC Band B for all new tenancies from 2030
What are ESOS?
Energy Savings Opportunity Schemes
Mandatory for large UK firms with 250 employees / turnover + £44m / balance sheet + £38m
- Measure total energy consumption across buildings, transport and industrial activities every 4 years
- Conduct energy audits to identify cost-effective energy efficiency recommendations
- Report compliance to the Environment Agency
Heat Network (Billing & Metering) Regulations (2014, 2015, 2020)
- Related to communal heating systems in multi-occupied commercial and residential schemes and to district heating systems
- Customers must be provided with accurate meter readings / bills and competitively priced individual meters
What is the Climate Change Levy?
- Tax on energy delivered to non-domestic users in the UK
- Introduced to increase energy efficiency within businesses and reduce carbon emissions
- Consumers charged by their energy providers who forward £1.9m to UK Treasury
- Energy generated from renewable sources is exempt from CCL
What are Display Energy Certificates?
- Required by assets occupied by public sector and visited by the public, which are over 250 sqm
- Display actual energy used and CO2 emissions - operational energy
- BBP leading an industry initiative to promote voluntary certification and disclosure of office buildings’ operational energy ratings (NABERS UK)
Biodiversity Net Gain?
- Creating and improving natural habitats and deliver measurable positive impact through the development process
- From Feb 2024 it is compulsory for all new developments to provide at least 10% BNG for 30 years, either through on or off site measures
- Statutory Biodiversity Metric will be used to calculate BNG delivered
What is BREEAM?
Building Research Establishment Environmental Assessment Method
- Voluntary
- New, refurbished or operational buildings
- 9 categories (energy consumption, water use, transport links, waste management, health & wellbeing)
NABERS
Australia and UK
WELL
- International
- Health and mental wellbeing
Guidance?
RICS Practise Information: The design, delivery and management of healthy buildings: a practical guide (2023)
- Existing and new buildings
- How healthy buildings impact our health in relation to design, construction, sound, light, water and air quality, building technology and management
- Role of health and wellbeing in ESG and how it should be considered
Other current issues?
- Green leases seek to ensure landlords and tenants share information about the use of energy, water and waste arising in a building (BBP has a toolkit)
- RICS SKA Rating scheme aims to be the standard measure of building fit out in relation to sustainability (gold, silver, bronze)
- BBP published various toolkits to provide guidance
- RICS Residential Retrofit Standard (2024)
- Developers using renewable energy, technology (solar, wind, biomass, heat pumps to achieve low carbon emission solution), use of natural daylight for solar gain, energy management and monitoring systems for waste, water, and procurement of goods and services
How long is an EPC valid for?
10 years
When was net zero decided?
Paris Agreement (2015)
What is key legislation relating to Sustainability?
Climate Change Act (2008)
What does the Climate Change Act set out?
Requires UK to achieve net zero carbon by 2050
What is net zero carbon?
Greenhouse gases going into the atmosphere are balanced by the removal out of the atmosphere
What is a WLCA?
- Carbon is a greenhouse gas that traps heat / goes into ocean and changes ph
- WLCA assesses carbon emitted from a building during construction, operation and demolition
- Assess in emissions (embodied, operational, user, circular economy)