New research guides commercial real estate toward net zero pathways
17 November 2021
A new report by UCL academics and released by HSBC UK today, provides a clear guide for the property industry in developing fit for purpose net zero strategies.
The report, Towards Net Zero in UK Commercial Real Estate, was led by UCL Energy Institute Principal Research Fellow Dr Kathryn B Janda, along with David Kenington, Prof Paul Ruyssevelt, and Dr Catherine Willan.
Commercial real estate plays a key role in the UK economy, providing workplaces for businesses of all types and a range of investable assets for private and institutional investors.
The report looks at where the opportunities lie and how organisations can navigate the demands of regulators and other stakeholders, whilst taking a candid look at the very real barriers that businesses face as they strive to pursue a path to Net Zero.
Through a combination of desk research and insights from organisations operating in the sector, the report reviews how businesses are approaching the need to achieve net zero and explores what next steps are required to ensure a just transition.
The report concludes with 10 guidelines for the property industry in developing fit for purpose net zero strategies:
- One size will not fit all: your net zero plan needs to fit your assets, your tenants, and your organisation.
- Measure often: as and when possible, upgrade legacy energy meters to smart meters and try submetering.
- Interpret data: measured data needs authentication and analysis to turn numbers into knowledge.
- Be flexible: although there is a need to plan, there is a lot of uncertainty in the future.
- Hire wisely: seek expert advice on Net Zero strategies, data analysis, and technology implementation, and/or foster it in-house.
- Be cooperative: develop owner/occupier relationships to address principal/agent problems.
- Get involved: join industry intermediary groups and/or learn across organisations.
- Look forward: expect government to implement operational energy ratings for large buildings, and to start looking at smaller buildings as well.
- Plan for financing: on both the debt and equity side of the CRE industry, investors and debt providers are thinking about Net Zero.
- Be strategic: recognise that there is a role for CRE businesses as leaders and innovators in creating thriving, yet resource thrifty, societies.
This is the fourth in a series of reports published by UCL with support from HSBC, with research on themes of agriculture, industry, and transportation.
Dr Kathryn B. Janda, lead author of the report, said:
“The research shows that one size strategy will not fit all. Moving the sector as a whole towards net zero will take skill, ingenuity, and most of all cooperation between owners and occupiers."
- Full HSBC commercial real estate report: Janda, K. B., D. Kenington, P. Ruyssevelt, et al. 2021. Towards Net Zero in UK Commercial Real Estate: Key Information, Perspectives and Practical Guidance. HSBC Centre of Sustainable Finance: London.
- Dr Kathryn B. Janda
- Related commentary in the academic journal One Earth