Sustainability Flashcards
Can you tell me about why there has mentioning of the legislation surrounding EPCs in the news recently?
The Government has put a delay on the proposed changes to the MEES regulations.
What RICS guidance is there on sustainability?
Red Book 2025
Sustainability and ESG Guidance in Commercial Property Valuation and Strategic Advice 2021
RICS Rules of Conduct 2021 - 3.1
differences between:
Mitigation
Adaptation
carbon neutrality
Net Zero
Mitigation
Adaptation
carbon neutrality - producing emissions but offsetting e.g. carbon credits
Net Zero
What is ESG? What is Sustainability?
Environmental, social, governance
Sustainability: use of resources to meet today’s needs without compromising meeting tomorrow’s needs
- 1/3 co2 emissions from energy consumption in buildings
20% water usage in buildings
80% buildings today will be in use in 50 years
What further MEES regulations were there going to be?
2027 - EPC C
1st April 2030 all commercial properties will need to have a minimum EPC B
However, these are not yet enforced, and the Government announced the scrapping of these regulations.
What are the exceptions to MEES/EPC
Listed building – if the changes would affect the building characteristics, place of worship, tenancy of less than 6 months and space less than 50 sq m.
what is your company sustainability strategy
UN Sustainabilie development goals provide framework 17 - my company uses 9 to align sustainability strategy
- climate
net zero by 2024 inc scope 3 advise clients on same
100% green energy for office by 2026
advise clients on same
track waste, printing, water usage - to lower all
-community
support health wellbeing of employees
support diversity
maintain living wage employer status
- culture
educatiion - apprenticeships
pro-bono, volunteering
biodiversity
What are the MEES standards?
As of April 2023, all commercial properties must have a minimum of an EPC E.
Have you seen any evidence in your work of any practical signs of MEES affecting the market?
Yes – achieving a premium for sustainable buildings or tenants only searching/including properties with an EPC B+ in their search.
What are the different ways of assessing a buildings sustainability?
NABERS UK
BREEAM
WELL
What does BREEAM stand for?
Building Research Establishment Environmental Assessment Methodology
What are the different BREEAM ratings?
Unclassified
Pass
Good
Very Good
Excellent
Outstanding
Are all listed buildings exempt from EPCs?
No – only those where the changes implemented would affect the listed building characteristics.
EPC contents and limitations?
Contents:
Address, rating (letter and number) property type, total floor area, expiry date (10 years), breakdown of performance (main heating fuel, emission rate, )
Limitations:
Limited scope: no accounting how occupants use building
- Standard assumptions
- Inconsistent accuracy – depends on assessor
- Valid for 10 years – a lot can change
- Tickbox exercise – recommendations are often ignored
- Focus on building fabric – not operational use
What are MEES?
Minimum Energy Efficiency Standards
- What future changes are coming to MEES regulations and how will these impact your client?
C in 2027 and B in 2030 - potential of adverse effect on valuations
- What RICS guidance note relates to sustainability and ESG?
Heavy emphasis on ESG across the board:
ROC 2021: 3.10 Members and firms, when advising clients about projects, encourage solutions that are
sustainable in that they minimise harm and deliver balanced economic, social and environmental
benefits.
Redbook
RICS Sustainability and ESG Guidance in Commercial Property Valuation and Strategic Advice 2021 –
RICS SKA rating system for fit-out of commercial premesis
- How did you benchmark data collection assist your clients ESG strategy?
what is sustainability?
satisfying current needs whilst not compromising future needs
What is ESG
Environment, Social , Governance
- What is your company’s ‘Green Charter’?
he Property Management Division has launched a Green Charter. The Green Charter highlights the Division’s vision to operate in an environmentally and socially responsible manner and sets out a commitment for buildings managed by the division to meet environmental, social and governance standards. Areas covered by the Charter include energy, data, procurement and occupier engagement.
Ranging from finance to procurement to HR , safety
What sustainability credential was it awarded? How did this help the client?
internal credential
company sustainability strategy
Goals in line with nine UN Sustainable Development Goals (SDGs) (UJN has 17)
- Switch to sustainabile energy in workplaces
- Fair, safe, diverse workplaces
- Healthy workplaces
- Education
- Gender equality
- Res[pmsible consumption + production
- Protect biodiversity + systems
- Sustainable cities
- Climate action
Net zero by 2030
- What legislation is relevant to the protection of bird species?
Wildlife and Countryside Act 1981
All breeding birds, their active nests and eggs are protected
In addition, peregrine falcons and black redstarts are protected under Schedule 1 of the (WCA) 1981 (as amended), making it illegal to disturb pairs while they are nest building, or at a nest containing eggs or young, or disturb their dependent young.
⦁ An unlimited fine;
⦁ Up to six months imprisonment;
⦁ Or both.
what legislation on waste recycling?
UK Waste Regs 2008- england from 31 march 2025 businesses must present waste in - dry recyclable, food waste, black bin waste - exemption for micro business under 10 employees
everyone has duty of care
- Why is biodiversity important for sustainability?
measure of all living things alongside natural systems that support them : DEFRA biodiversity metric
⦁ Mandatory BNG for developers as part of Environment Act from 12 Feb 2024 (new applications)
⦁ At least 10% gain – to be registered via public register
Image
⦁ Using biodiversity to deliver value: onsite à Offsite à statutory credits (sold by govt.)
⦁ Importance: restore biodiversity, gree jobs, diversified income for land managers, innovative placemaking
⦁ Offsite (wildlife trusts, s106, conservation covenant, 30 yr legal commitment); onsite (keep most valuable parts, include non-developable landm species rich, dual purpose areas – public open space;
What are the penalties in place if EPC requirements are not met?
Trading standars - 12.5% of rateable value of building - min £500 max £5k
non compliance penalties:
breach under 3m: £5000 or 10% RV, max £50k
> 3m up to £10k or 20% RV up to max £150k
How would you improve the EPC rating of a property?
change to LED lighting
what are EPC exemptions?
Minimum Energy Efficiency Standards 2015 (MEES)
As of the 1stof April 2023, commercial properties are required to have an Energy Performance Certificate (EPC) rating of at least E.
This may sound familiar to many of you who are aware of the requirement for an EPC rating of at least E on new leases and the extension or renewal of an existing lease, as this has been the position since 2018. However, the key difference in the current MEES regulations is that a minimum EPC of E is now also required for thecontinuationof any existing lease or tenancy of a property. This means that if you have a lease currently in place where the EPC rating is below E, you may face penalties, including (if you are a landlord) a fine of up to £5000.
The government has proposed raising the MEES for commercial properties in 2027 and 2030. By 2027 the Government wants to enforce a minimum rating of C. They have proposed an even higher minimum rating of B by 2030.
Exemptions
⦁ listed or officially protected and the minimum energy performance requirements would unacceptably alter it
⦁ a temporary building only going to be used for 2 years or less
⦁ used as a place of worship or for other religious activities
⦁ an industrial site, workshop or non-residential agricultural building that doesn’t use much energy
⦁ a detached building with a total floor space under 50 square metres
⦁ due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents
Vacant buildings and demolition
A building is also exempt if all of the following are true:
⦁ it’s due to be sold or rented out with vacant possession
⦁ it’s suitable for demolition and the site could be redeveloped
⦁ the buyer or tenant has applied for planning permission to demolish it
Beyond EPCs what other sustainability features/considerations are there in property? (Ended up chatting about this one for a while with some of the suggestions)
Social, Governance
What is the different between ESG and corporate social responsibility?
CSR on ethical - ESG on overall sustainability
How can energy efficiency and carbon reduction can be improved via design, construction, use and refurb ?
o Solar power to replace gas
o Changing of lights to LED lights
o BMS system to control when lights go on and off
o Change to green electricity sources
o Metering
o Changing to HVAC system
- What are green leases?
etter Building Partnership
The Lease contains provisions restricting Tenant alterations which adversely affect the Environmental Performance, EPC rating or other environmental rating of the Building or the Premises. The Lease includes provisions giving the Tenant the right to do alterations which improve the Environmental Performance, EPC or other environmental rating, with L’s consent not to be unreasonably withheld
The Lease contains provisions restricting Tenant alterations which adversely affect the Environmental Performance, EPC rating or other environmental rating of the Building or the Premises. The Lease includes provisions giving the Tenant the right to do alterations which improve the Environmental Performance, EPC or other environmental rating, with L’s consent not to be unreasonably withheld
The Lease contains a provision which promotes the procurement of renewable electricity for the Premises and the Building with options for higher quality green tariffs and allowing the parties to prioritise on-site renewables and encourage off-site additionality, which either the landlord and/or the tenant can adopt, depending on practicality and cost.
The Lease contains a provision aimed at behavioural change. The Landlord and the Tenant will not operate the Premises or the Building so as to increase energy and water consumption above reasonable levels and will use reasonable endeavours to minimize energy and water consumption (with all permitted uses/intensification of use and ambient conditions protected and works not required) and will operate equipment properly so as to maintain the Environmental Performance of the Premises and the Building.
Data sharing and metering
The Lease contains provision for the parties to communicate on adequacy of data sharing re the Environmental Performance, travel plans [and Social Impact] and for discussion on environmental sustainability [and Social Impact] issues.
why is sustainability important?
Aside from being in line with legislation, it provides clients, wider public with a mark of approval
Funds and investors have ESG targets - hitting targets
Efficiency - saves cost and increases profit
Environment - land scarcity
What legislation relates to ESG
o Climate Change Act 2008 – amended 2019 to require UK Net Zero by 2050 , 78%, 2030 subsequently introduced interim target
o Sustainable energy generation by 2030
What is a stranded asset?
o be a building, a piece of land, or a piece of related infrastructure that once had value, but no longer does because external societal factors change.
o Affects commercial buildings a lot, e.g. too costly to improve EPC therefore no capex and tenants move out, cannot be marketed
- How long is an EPC valid?
10 years
- What does BREEAM assess?
The standard can be used to assess all existing non-domestic building types against nine environmental categories: Energy, Water, Transport, Management, Waste, Pollution, Health & Well-Being, Land Use & Ecology and Materials.
New construction, in-use, refurbishment
- how have you collated information on ESG?
certification, on a spreadsheet with matrix on gold, silver, bronze
