Bilfinger GVA’s sixth Green to Gold survey reveals an urgent need for more action and greater leadership in tackling sustainability requirements in commercial real estate.
The unique biannual survey, the sixth since 2008, questioned UK real estate fund and portfolio managers on how they view the risks of rising sustainability pressures and market demands.
The findings reveal that the progress being made is not as strong as expected. As such, the industry now finds itself with more to achieve in significantly less time.
Peter Constantine, Regional Senior Director at Bilfinger GVA in Cardiff comments, “Our findings don’t show the signals of progress that we would expect considering the broader global trends. We now find ourselves with more to achieve in less time. The Paris climate agreement and the 2015 Sustainable Development Goals have focussed the attention of political and business leaders. Business now needs to do more. A handful of large companies leading in the field of sustainability is not nearly enough. We need a collective industry response requiring true leadership to deliver transformational change.
“Our Green to Gold survey illustrates how short investment horizons appear to translate into less focus on sustainability. Existing corporate and fund level sustainability strategies are not translating into the level of change at acquisition and management level. F and G rated EPCs are known to be a risk, but the actual level is still largely unknown, while action on mitigating climate change is set to be far below the required level to meet national and global targets.”
Although 84% of respondents acknowledged that they have a sustainability strategy in place, there are still huge gaps that need to be filled in order to meet appropriate standards.
Only 50% admitted to assessing operational energy efficiency, whilst 63% are not assigning specific figures for the costs or benefits of sustainability issues in investment appraisal calculations. Added to this, 43% are yet to assess their portfolio’s risk profile with regards to Minimum Energy Efficiency Standards.
More positively, 71% of respondents see benefit in engaging with occupiers, 55% plan to create asset level carbon or energy reduction plans, and 52% are looking to train staff on the risks and opportunities. In addition, 48% are seeking to outperform current building and planning regulatory requirements, 23% are striving to set service delivery standards for supply chain and 16% are seeking to set science-based emission reduction targets.
Jon Gibson, Associate Director, Sustainability, adds: “There are three areas in which we expect to see rapid progress within the next two years. These are MEES portfolio risk assessment, operational energy performance, and occupier health and wellbeing in design and performance of buildings.”