COP26: four key takeaways for the real estate sector

For the first time COP26 had a day dedicated to cities, regions and the built environment. Three members of our team were in Glasgow to attend - what were their key takeaways from the day?

We have the will - but need a clear way

We have the capability to build higher performance buildings in the UK - but our regulatory framework has yet to catch up. Building regulations don't currently go far enough to address built environment emissions and the government's net zero commitments, and there isn't a clear and consistent standard that buildings must comply with.

The United Nations Economic Commission for Europe (UNECE) relaunched its High Performance Buildings initiative at COP26 to help break the link between building development and carbon emissions. The UK government has also promised to make climate-related disclosures mandatory by 2025, however there aren't currently any plans to require carbon emissions reporting against targets. Clear regulations are needed from government to ensure buildings meet performance targets and translate promises into action.

How we can help you:

• Provide insight on the differing approaches to dealing with the impacts of embodied and operational carbon in development, leasing and financing transactions.
• Guidance on navigating existing and potential new EPCs and MEES regulations, and the possibility of a new performance ratings regime.
• Advice on the installation of Proptech and data management tools to track carbon use in property.

We need to address the past while looking forward

"The greenest building is the one that already exists" said Carl Elefante, former president of the American Institute of Architects. While new smart buildings are a step in the right direction, 80% of the buildings in existence today will still be standing in 2050. Making existing buildings more sustainable should be our priority. 

If we want the real estate sector to do its part in reaching net zero, retrofitting these buildings well will be a huge factor of success. We need to focus on extending the life of existing buildings rather than knocking them down to make way for new ones. This comes with its own challenges though; our recent article looks at some of the issues involved in making historic homes greener.

How we can help you:

• Advice on retrofitting existing buildings.
• Specific guidance on planning and regulation around listed buildings.

We have a roadmap - but need government action

A net zero real estate sector by 2050 is achievable – but only with urgent government action. This was the message by the UK Green Building Council (UKGBC) as it published its Net Zero Whole Life Carbon Roadmap.

The tool will help businesses measure and cut carbon from materials, processes, operation and demolition and let the UK benchmark progress over the years ahead. We can measure the emissions reductions needed year-on-year to meet the government's 2050 deadline and assess where more attention is needed.

The roadmap sets out a pathway to net zero for the UK's built environment sector and calls on policymakers to act to make it a reality. One thing's for certain – now progress can be tracked, the pressure will be on to demonstrate progress.

How we can help you:

• Advice on creating and fulfilling net zero obligations in the built environment and achieving industry benchmarking, including drafting tailored green lease documentation.
• Reviews of operational real estate documentation to assess sustainability opportunities.
• Advice on navigating carbon reduction policies and offsetting requirements in planning processes.

Collaboration will be key to success

In some ways the formal agreements of COP26 were a disappointment. But we mustn't let this stop momentum. Looking past the compromise text agreed by world leaders to what the real estate sector is saying and doing, there's a lot of cause for optimism.

It was clear from COP26 that the sector is serious about climate action and there are a multitude of industry commitments and initiatives that sit outside the formal Glasgow Pact. Panellists from across the real estate world were candid that the problem is a big one, but they're keen to work more collaboratively than in the past to find solutions, whether that's trialling new green systems and sharing outcomes or better partnership between local authorities and government.

Overall, we left COP26 with a sense this progressive collaboration can set us on a path to net zero that doesn't rely on fragile political agreements.

How we can help you:

• We routinely hear the industry demanding greater sustainability regulation and leadership from the government to level the playing field in terms of end-user expectation. Until this is created, property documents can introduce co-operative goals for sustainability into transactions and operational relationships.

Find out more

We recently looked at some of the areas the real estate sector would have to address to build a sustainable future.

Read more about the future of UK cities in our City 2040 report