What’s changed? A year since COP26

15 Nov 22

One of the encouraging aspects of COP26 was the significant attention paid by, and involvement of the real estate industry.

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This month, and the start of COP27, marks a year since the world gathered in Glasgow to debate and agree future action on climate change. The world has changed markedly in that short time, with an energy crisis, rampant inflation, and economic uncertainty. Not to mention political chaos. One would be forgiven for assuming the built environment’s transition to net zero is subsequently on shaky ground. But is it?

One of the encouraging aspects of COP26 was the significant attention paid by, and involvement of the real estate industry. There was a tacet acknowledgement from the UK built environment – not expressed so loudly at any previous COPs – that this is the time for action. Our industry’s commitment to decarbonisation has never been so evident. We recently joined over 100 business in signing a letter to the new PM (and short lived predecessor) calling on the government to join industry in committing to a net zero transition and the considered restoration of our natural environment.

We have seen first-hand through the advisory services we provide, that now more than ever, the intersecting spheres of corporate, private, and public sector are putting sustainability first on the agenda. For industry at least, it hasn’t been a year of inaction.

We are increasingly seeing:

Corporate ESG strategies proliferate

We work with a diverse range of clients across a wide spectrum of sectors. There objectives and business plans can therefore vary significantly. One unifying factor however, is an understanding that to operate a sustainable business in the long term, you must measure your impact, understand the consequences of that impact for your business and society, and have a credible plan for reducing the (in particular environmental) costs of that impact. We are seeing more and more businesses measure their carbon and environmental impact baselines – the critical first step in reducing any negative impact on place and planet. Businesses should be doing this as a bare minimum I hear you say. We would agree, but interestingly this understanding of impact is increasingly spilling over into:

Clients setting stretching project briefs

There has understandably been keen debate on issues of greenwashing both within and outside our industry. After all the climate crisis is a problem that needs solving through action, not words. Some corporate strategies may pay mere lip service to real climate action, but never has the market been more vocal in acknowledging that these businesses are unsustainable and un-fundable. This reality is now filtering down to project level, even as businesses grapple with supply chain issues and inflationary pressures there are ample players targeting net zero development, and it’s not lip service, the ambitions are being written into project briefs and contracts. This is often being driven by strong business leadership and a desire to put purpose alongside profit, but we are also seeing:

Authorities dictating the tone

Achieving a timely and equitable transition to net zero doesn’t lie uniquely at the feet of industry. Any successful outcome will require levers to be pulled by civic and private interests. We happen to work at one of the most prominent intersections between these two spheres, where policy meets planning. Not only has the previous year seen businesses attempt to drive change, but local authorities have also recognised the importance of shifting away from business as usual. This is evident in many councils moving beyond the ‘climate energy declarations’ to actively introduce more stringent and progressive requirements. The City of London has recently consulted on a planning advice note for assessing whole life carbon emissions associated with development options, a particularly notable direction of travel given the often carbon intensive nature of the buildings that spring out of the ground in that area. And St Alban’s Council has included in its latest validation checklist consultation, an option to require Climate Change Statements for planning submissions. We are familiar with both of these requirements and have supported clients in delivering on both, but often as ‘nice to haves’. With such requirements no longer set to be optional, it really does appear this has been a year of action.

Alex Green Director,Iceni Futures