In the aftermath of COP26 in Glasgow and following the publication of the UK Government’s Heat and Building Strategy, there is a rapidly growing momentum behind the retrofit agenda. To explore how the buildings and cities of the future can contribute towards a net-zero economy, Foster + Partners and the Green Finance Institute convened industry leaders - from architects and developers to representatives of the banking and finance sector - to look ahead at the opportunities a green built environment can offer. This blog explores the key themes from the discussion.

One of the most important issues recognised by all sectors is the need to assess both the embodied carbon and the operational carbon of the built environment, also known as whole-life carbon. If both types of emissions are not considered, then carbon disclosures are at risk of underestimating the true climate impact of our buildings. This topic is receiving increasing scrutiny across the property sector, however early steps are being taken to assess and reduce these emissions. Several countries have already introduced legislation on embodied carbon and organisations including the Greater London Authority, the Royal Institute of British Architects and London Energy Transformation Initiative have published guidance about both types of emissions. A consensus-driven approach towards whole life carbon - led by the likes of UKGBC and World GBC - will be vital to ensure accurate and consistent GHG accounting and reporting in the future. A presentation given during the roundtable showcased an exemplar refurbishment project where a Hybrid Input-Output (HIO) LCA methodology helped to widen the scope of analysis of the building’s whole-life carbon. This HIO methodology also provides a means of associating whole-building carbon reductions with costs, and when these two elements are brought together, conversations become more accessible.

In addition to growing awareness about whole life carbon, there is a rising desire amongst clients, developers, and financial services to understand the opportunities to minimise the climate impact of properties they own, construct and fund. Connecting conversations about design, retrofit and finance, whilst also supporting clients in their decision-making process, can encourage design decisions that lower the carbon emissions of a building. A discussion on how to improve the design of cities suggested that the carbon associated with the mode of transport used to travel to and from a building must be considered in the design and assessment processes, because permission to build includes not just the real estate asset but also the activities within. It was understood from the discussion that transport-related emissions reduction strategies do not come up in planning phase conversations. Increasing the frequency of such climate impact conversations can drive a fundamental change in the design briefs received by architects and developers.

At a broader corporate level, several global initiatives have catalysed transformative steps across the finance and construction sectors to embed sustainability into the core business model.  These include the Task Force on Climate-Related Financial Disclosures (TCFD) and United Nation’s Race to Zero Campaign, which require the development of climate scenarios and stress-testing of existing models, as well as elevating conversations on climate to the c-suite level. The latter can bring about a ‘penny drop’ phenomenon, as the analysis of an organisation’s carbon footprint sheds light on significant risks – such as stranded asset and transition risks.  A masterplan case study presented in the roundtable showed how evaluating the sustainability and ESG metrics of urban scale projects can be achieved using bespoke tools developed in-house by one of the designers. This broader corporate context should drive changes in the briefs architects and design teams receive, consequently driving change across the built environment sector.

Understanding of the impact of buildings on the climate, and the impact of climate change on the property sector, is developing rapidly – however, it should be recognised that knowledge levels differ between individuals and organisations. Some are well ahead of the curve, while others are just starting to consider the risks that carbon emissions and climate change represent to their business, many of which with only the operational emissions in mind. A growing volume of guidance for the property and finance sectors, a rising number of robust and credible benchmarks, mainly in the UK, and an evolving regulatory system will help to upskill professionals and empower the industry grasp the net-zero transition’s opportunities.

In summary, achieving a net-zero built environment will require collective and co-ordinated action across all sectors of the economy. Addressing the dual-challenge of embodied and operational carbon, upskilling the sector to recognise and act on the opportunities of the transition, and harnessing the net-zero ambitions of clients and professionals alike provides the foundations for success.

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