Property developers and decarbonisation

28 March 2023

The UK government is committed to the country reaching net zero by 2050 and, as a result, developers are facing increased scrutiny when it comes to looking for alternatives to demolishing buildings and putting new ones in their place.

New-build developers are already embracing sustainability and energy efficiency, but others must think far more carefully about potential risk, delay and challenge if environmental concerns are not placed front and centre of their work.

The issues surrounding Marks & Spencer’s flagship 100-year-old Art Deco building in Oxford Street, London, are a case in point.

The retailer had proposed to demolish Orchard House and replace it with a new building. The plans were called in by Michael Gove at the Department for Levelling Up, Housing and Communities (DLUHC) in June last year.

A public inquiry was launched in October and November after a public outcry about the plans, with the charity Save Britain’s Heritage arguing that 40,000 tons of embodied carbon would be released by the demolition.

It was the first public inquiry to consider sustainability alongside heritage as a major issue and those campaigning for the retention of the original building said there was no fundamental structural, façade deterioration or safety explanation that justified its demolition. 

They argued there were good opportunities for an innovative and comprehensive retrofit and said greater operational energy efficiencies in the building could all be achieved.  

The retailer had decided to demolish and rebuild the flagship site as a modern office and retail complex in 2018 and had not revisited the plans in light of the greater understanding around embodied carbon.

This was despite the fact M&S has published an ambitious green agenda, with ambitions to cut a third of its carbon emissions by 2025 and be fully net zero by 2045.

The outcome of the public inquiry has yet to be published, but it is expected it could influence future of major projects that will involve demolition and rebuilding.

After the public inquiry was held, the RICS published its own report Decarbonising UK real estate, which concluded that urgent action is needed to  decarbonise UK buildings and that existing policies are insufficient to meet the net zero commitments by 2050.

It identified five areas of concern and recommendations to address them:

  • No decarbonisation targets for industry subsectors (eg residential) nor individual buildings - Define science-based targets for UK real estate at the subsector and individual building levels, engaging through the Net Zero Carbon Building Standard initiative.

  • Complex metrics for assessing building performance make it difficult to understand whether updates to building regulations go far enough - Mandate net-zero carbon emissions for all new buildings as soon as possible, and any delay must be justified with solid evidence.

  • Limited support in England for retrofitting - Establish a national programme to fund retrofit projects, following the direction contained in the National Retrofit Strategy developed by the Construction Leadership Council.

  • Lack of energy management incentives risk undermining efforts to construct and retrofit energy efficient buildings - Improve the EPC scheme to make it fit for the different purposes that it serves. Accelerate a national performance-based rating scheme to ensure that final energy use and carbon emissions are publicly available metrics. Develop fiscal policies to stimulate improvements in building operations by 2030.

  • No embodied carbon regulations (emissions are uncontrolled and unmeasured, with little incentive to reduce them) - Introduce embodied carbon requirements in a new section of the Building Regulations as proposed by the Part Z initiative, mandating embodied carbon assessments to be conducted at design and completion stages, and introducing maximum limits for embodied carbon.

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