Built environment must progress on decarbonisation as demand for green buildings continues to rise

According to the RICS 2022 Sustainability Report, progress can be seen in some aspects of the built environment towards greater sustainability, but the rate of progress needs to accelerate significantly and become more widespread.

The report, which collated the views of nearly 4,000 chartered experts, around 1,200 of whom are from the UK, from across the trade and construction sectors worldwide, shows that there have been some improvements in the pursuit of sustainability over the past year, particularly in the commercial real estate sector as demand for green buildings continues to rise.

However, the data also shows that in some key areas little or nothing has changed over the past 12 months. In fact, a significant proportion of construction professionals report that they do not measure carbon emissions from projects.

While the appetite for green buildings in the UK commercial property sector continues to grow, change has been modest.

commercial real estate

Looking at UK investors and occupiers separately, around 65 per cent of respondents state that occupant demand for green/sustainable buildings has increased over the last 12 months, but the UK is lagging behind Europe as a whole, with Europe at the top Leading the way Around 52 percent of providers in the region see a slight increase in demand and just under a quarter say there has been a significant increase in occupier interest in green/sustainable buildings.

On the investment side, around 45 per cent of UK survey respondents report a slight increase in investor interest in green/sustainable buildings over the last 12 months, five per cent above the global average. Another 21 percent expect a stronger increase in demand. Comparing the UK to the rest of Europe, where investor demand is picking up again, around 80 percent of respondents across Europe see an increase in investor demand for green/sustainable real estate over the past year.

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As demand for green buildings continues to grow, not just in the UK but globally, this is having an impact on both rents and prices, with a significant proportion of contributors seeing a market premium for green buildings and citing these non-green property assets as subject to one “Brown Discount”. For those buildings not classified as green or sustainable, 48 per cent of respondents noted a fall in rents and around half also cited a fall in sales prices in the UK, both figures lower than those seen across Europe, with 57 percent of respondents giving a “brown discount” for rental properties and 60 percent a “brown discount” for prices.

In another signal that people in the UK are taking a greater focus on sustainable real estate, the majority of respondents (55 per cent) note that investors’ climate risk assessments of their built assets are increasing, suggesting that climate issues are now on the rise are on the agenda and could influence the behavior of important market participants.

The figures suggest that Europe is seeing greater progress towards sustainability in the built environment, as the European Commission’s ambitious Green Deal has placed a focus on green buildings. Policymakers in other regions turning their attention to sustainable real estate will lead to market shifts elsewhere, the report finds.


Survey respondents report that UK construction professionals are beginning to use digital tools and technology to perform sustainability-related analysis on construction projects, primarily to assess energy needs and costs, but are less likely to use these tools to reduce embodied carbon or to reduce Measure the impact on biodiversity. Forty-seven percent of UK respondents say digital tools and processes are used to conduct sustainability assessments on less than half or none of their projects. In comparison, the figure is lower in Europe: 40 per cent of respondents say digital tools and processes are used to conduct sustainability assessments on fewer than half or none of their projects, suggesting the UK lags behind the rest of the world region remains.

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This year’s results also show that there is still a lot of room for improvement when it comes to measuring CO2 emissions. 76 per cent of professionals in the UK say they do not operationally measure carbon emissions on projects, which is consistent with the whole of Europe but slightly higher in a global comparison (72 per cent). With more than half of UK respondents also saying they do not measure embodied carbon, fewer than 14 per cent use it to select the materials they use in their project, even among those who do.

When examining the barriers to reducing carbon emissions, around 38 percent of participants cited both the lack of established/adopted standards, guidelines and tools, and high cost or low availability of low-carbon products as the most fundamental issues. In addition, the contributors also highlight cultural issues and established practices as a challenge.

Kisa Zehra, Sustainability Analyst at RICS, commented: “There is a benefit to everyone in adopting a climate strategy and we need to reduce our impact on the built environment. A change in behavior is taking place, with higher rents and prices for the more desirable sustainable real estate and rising climate risk assessments by investors for their built assets worldwide. But measuring all forms of carbon is also critical to the changes we need to see from the built environment.

“One of the obstacles to progress identified in the report is the lack of established standards, guidelines and tools. However, it is equally fair to say that industry must adopt these tools and standards where available and should make carbon assessment and management an integral part of business practice. Industry must work together to be successful. The work that RICS is leading with partners, such as the ICMS coalition, in developing a cost measurement standard that combines cost and carbon reporting is a key example.

“RICS will continue to advance research and urge policy change as we work with industry, governments and our professionals to increase the impact of the built environment on positive climate strategy.”

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