Achieving net zero carbon emissions by 2050 is a crucial goal in combating climate change, and the real estate sector has a significant role to play. The property industry accounts for approximately 38% of energy consumption and 29% of greenhouse gas (GHG) emissions in the EU.
With strengthened regulations and shifting market expectations, the push for energy efficiency and decarbonisation has never been more critical.
But what does it all mean in practice? Here’s a breakdown of what you need to know, and how PRE Chartered Surveyors can help you navigate the requirements step by step.
What is Net Zero Carbon?
According to the UK Green Building Council, a net zero carbon building is highly energy-efficient and powered by renewable energy, with any remaining carbon emissions offset through recognised schemes.
The framework for achieving Net Zero Carbon – Operational Energy outlines four key stages:
- Reducing Energy Demand: This involves minimising energy use through efficient design, insulation, and “fabric-first” approaches.
- Incorporating Low-Carbon Systems: Installing efficient HVAC, lighting, and other low-carbon technologies.
- Maximising On-Site Renewables: Adding renewable energy sources like solar PV where space and feasibility allow.
- Carbon Offsetting: Using recognised, including Gold standard schemes to offset unavoidable emissions, ensuring net zero is achieved.
The Role of CRREM (Carbon Risk Real Estate Monitor)
The CRREM framework supports decarbonisation by identifying risks associated with buildings that fail to meet future energy standards. These properties – often referred to as ‘stranded assets’ – face potential obsolescence and reduced value due to non-compliance with regulations.
“Reducing the EU carbon footprint will require refurbishment in the existing buildings, but for some assets, retrofitting will not be financially viable.”
The European Union has set an ambitious goal to decarbonise the building sector by 2050, recognising the crucial role of retrofitting existing properties. Investments in retrofitting could benefit the EU economy by up to EUR 175 billion annually, while also reducing the carbon footprint of the property sector. However, many existing buildings require significant upgrades to meet these decarbonisation pathways.
‘Stranding diagram’: The figure above provides a summary of the fundamental principle of CRREM’s stranding risk analysis approach for single properties.
Key highlights of CRREM include:
- Baseline and Targets: CRREM establishes decarbonisation pathways for different building types and locations, ensuring alignment with climate targets like 1.5°C/2°C.
- Retrofit Needs: Many existing buildings require retrofitting to meet these pathways. Without upgrades, assets may become non-compliant and lose value.
- Investor Guidance: CRREM provides tools for real estate companies to assess carbon risks and plan energy-efficient upgrades.
Why It Matters to You As A Real Estate Owner Or Investor
To futureproof your assets and maximise their value, you need to consider these core areas:
- Net Zero Carbon: Ensure your commercial properties are designed or refurbished to meet energy efficiency standards.
- Sustainability Certifications: Certifications like BREEAM, WELL, and Fitwel can enhance property value and help attract ESG-conscious buyers.
- EPC Compliance: Ensure your properties meet the UK’s Minimum Energy Efficiency Standards (MEES) to avoid penalties or loss of value during sales.
- ESG Reporting: Incorporate ESG audits at the acquisition and sale stages to meet investor expectations and secure funding.
Making a Positive Impact
Tackling climate change is not just a regulatory requirement—it’s an opportunity for real estate owners to add value, improve resilience, and secure long-term profitability. By incorporating net zero carbon strategies and prioritising ESG practices, the real estate industry can lead the way in building a more sustainable future.
Since March 2021, asset managers and those in the financial market must classify funds based on their sustainability objectives under the Sustainable Finance Disclosure Regulation (SFDR). Properties with strong ESG credentials can access cheaper funding options through ESG-linked debt or equity, making them more attractive to investors. These savings allow investors to pay a higher purchase price, knowing their acquisition aligns with ESG mandates.
The changes you make to future-proof your commercial property assets and bring them in line with net-zero and ESG regulations today, will not only benefit the planet as a whole, but will also reap financial rewards for your business in the longer-term.
Need Help Navigating Net Zero?
If this all sounds like a lot to navigate – don’t fret. That’s where PRE Chartered Surveyors can help.
Our range of professional reports, surveys, and services are tailored to help you investors navigate these challenges confidently.
Services we offer include:
- Measurement Services
Fast, accurate measured surveys and reports, including Area Measurement Reports (NIA/GIA/GEA), Land Registry Compliant Lease Plans, and Calculated Boundary Surveys. - Building Consultancy
Comprehensive building condition surveys, dilapidations assessments, reinstatement cost evaluations, and landlord-tenant obligation advice to protect your property assets and maximise value. - Project Management
Efficient project oversight, from contract administration and feasibility studies to preventative maintenance planning and refurbishment management, ensuring your projects run on time and within budget. - Sustainability Services
Expert sustainability advice, including EPCs, Net Zero Pathway Reports, and Environmental & ESG Reports, to help you future-proof your assets, meet regulations, and enhance energy efficiency.
With our expertise and bespoke approach, we ensure that your properties are future-proofed, aligned with regulatory standards, and optimised for maximum value.
If you want to learn more about achieving Net Zero Carbon or would like tailored advice on EPC+1 Budget Costings and Net Zero Carbon Pathway Reports, we’re here to help.
📧 Contact Jason Antill for a CPD session or a competitive proposal:
[email protected] | +44 (0) 7855 520223
