Combined Sustainability Updates from Member Bodies Q1 2014

Association of Real Estate Funds

The ESG Committee will be updating the membership on MEPS development, consultation and potential risks/issues for investors/landlords. Also on the new(ish) RICS Guidance Note on Sustainability and Commercial Property Valuation including the role of the valuer in assessing a building’s sustainability characteristics and reflecting sustainability characteristics in market value, fair value, market rent and investment value.

Plan to set up a meeting with GRESB to feedback on the survey, process, scoring methodology and outputs. Likely to happen in autumn 2014 after the next survey.

The updated Code of Practice is nearly finalised and will include ESG wording.

It has been agreed that the ESG Committee should focus on the following areas, so as to avoid overlap and duplication with other industry groups and committees:

>> Encouraging and promoting the awareness and consideration of ESG matters, relating to commercial property activities, to AREF members, via, amongst other things, supporting external events, e.g. UKGBC, holding seminars in conjunction with others, e.g. IPF, and offering brief updates to members via the AREF newsletter

>> Best practice – distilling, disseminating and ‘signposting’ best practice and offering guidance to members endeavouring to source information on ESG

>> Having a bigger presence on the AREF website, including links to key bodies e.g. Green Property Alliance

>> Regulation – keeping members abreast of important regulatory proposals or change

>> Lobbying – and working alongside other groups, where appropriate, e.g. GPA and PIA, with the option of going further on certain issues if it is felt to be appropriate

Better Buildings Partnership

Sustainability Benchmarking Working Group
The Real Estate Environmental Benchmark (REEB), a joint initiative by the BBP and JLL combines the two organisation’s datasets and is the largest dataset on energy, water and waste in the UK. This publically available benchmark provides property owners, occupiers and managers with a means to compare the performance of their own buildings in terms of energy, water and waste. The Benchmark has been used to inform the updated BCSC Sustainability Charter.

Transaction/Letting Agents Working Group
The Working Group is developing an update of the Transactional Agents Sustainability Toolkit, which will include populating the work with relevant case studies/examples of sustainability features in BBP member’s buildings as well as a simple ‘sustainability building checklist’ for agents.

Managing Agents Working Group
The Working Group is developing an update of the Managing Agents Sustainability Toolkit.

Green Lease Working Group
An update of the Green Lease Toolkit was published in July 2013. It includes a revision to both the model form lease clauses and MoU. An updated iPad app is also now available.

Owner Occupier Working Group
The BBP continues to engage with the retail sector in order to develop better collaboration between owners and occupiers. The BBP is working closely with the BRC in order to take forward a number of engagement initiatives.

Landlord Energy Rating Working Group
The BBP, supported by the BCO, the BPF and the UKGBC, is developing a Landlord’s Energy Rating (LER). The project focuses on the multi-let office sector, but the intention is to address other sectors over time. Final specification/methodology has been agreed and a prototype tool has been produced which is being tested by BBP members. A number of opportunities to commercialise the tool for the wider industry are being explored.

Commercial Real Estate Lending Working Group
The BBP has established a Working Group to consider how best to educate and raise awareness of sustainability issues within member organisation’s debt teams, share sustainability challenges and develop best practices on core real estate lending activities. The Group has attracted a great deal of interest from the wider market.

Commercial Innovation Forum
The BBP and BPF are working with the Institute for Sustainability on a number of initiatives which are looking at the issue of climate change adaptation for commercial property. The Group has completed a challenge lead completion looking at solutions to improve the facades of existing buildings and is now taking forward further projects including forward commitment procurement, a mapping exercise of London’s carbon emissions and behaviour change for reducing environmental impacts.

GRESB Consultation 2013
The BBP submitted a detailed response to the 2013 GRESB consultation, raising a number of issues of importance to members. A meeting was held with GRESB representatives in January 2014 to discuss and dialogue is ongoing.

British Council for Offices

BCO Guide 2014
The next edition of the BCO Guide will be launched at the conference in Birmingham on 15 May 2014. This is the BCO’s most important publication, it contains a chapter dedicated to sustainability and sustainability is also picked up throughout the document in a series of talking points.

Improving Performance
This is a research paper which has been written by the members of the BCO’s Environmental Sustainability Group. The paper gives an overview to a newcomer to building performance, explains why it’s important, describes the methods available to define and to record performance data, and offers sources of more detailed information.

British Council of Shopping Centres

Sustainability Charter Update
Updating the last 2009 version with new case studies and including a new section on transport. Expected to be published April.

Value of Sustainable Shopping Centres research
CBRE is undertaking research to understand if there will, in the future, be a link between the environmental performance of a shopping centre and its value.

Crowdfunding platform launch
BCSC’s bespoke crowdfunding platform is launching at the shopping centre management conference in March. This platform focusses on town centre regeneration and enhancing community participation. Six demonstration projects are currently open for fundraising.
www.spacehive.com/initiatives/regen

Retail Path
BCSC’s Educational Trust is piloting an innovative apprenticeship scheme with six retail property owners. Taking a broader remit than traditional retail apprenticeship schemes, Retail Path exposes apprentices to both the retail and property aspects of the industry. The first influx of apprentices are expected to be placed by June.

British Property Federation

EcoBuild
The BPF is participating in sessions at EcoBuild on MEPS and on drivers of retrofit.

Biodiversity
The BPF has responded to Defra’s proposals to replace current arrangements for biodiversity preservation with a system of biodiversity offsetting, where biodiversity loss can be sustained provided it is compensated through habitat creation in another location.

In its response, the BPF said that biodiversity offsetting should be only an option open to developers and that it should not be the sole route toward biodiversity preservation, but one option to permit developers flexibility to choose ad hoc solutions where it is economic, practical and provides the best means to preserve biodiversity. The consultation closed on 3rd November and no summary of next steps has been published at time of writing.

Energy Savings Opportunity Scheme
On 11th July 2013, the Department of Energy and Climate Change (DECC) issued a consultation on its proposals to implement Article 8 (Energy Audits) of the Energy Efficiency Directive. The consultation closed on 3rd October 2013 and the BPF responded in full.

The BPF has been working with the Government to identify how responsibilities for energy audits should be distributed where properties are held in trust (building on joint work by BPF, DATA and AREF in respect of the CRCEES).

Mandatory Greenhouse Gas Reporting
The BPF intends to contribute to the review of Mandatory Greenhouse Gas Reporting in 2015, which is widely expected to extend reporting requirements to large (non-listed) organisations, which would likely capture a large number of property owners purely by virtue of turnover and balance sheet thresholds within the Companies Act.

Operational Energy Use Data Capture
The BPF continues to be a leading active supporter of a UK GBC-coordinated campaign to encourage the collection and benchmarking of energy data within the non-domestic built environment. The Operational Energy Use Pilot/Platform is the subject of a request for tenders which has been issued by the UK Green Building Council, in association with the Construction Industry Council.

Sustainable Buildings Consultation
In the summer, the Commission’s DG Environment did an online consultation about its ideas for top-down EU designed national sustainability reporting requirements, EU frameworks for potentially mandatory core indicators and benchmarks and extension of building renovation and certification requirements beyond energy efficiency to broader sustainability requirements such as water and waste.

Revision of the Energy Efficiency Directive
The EU’s Climate and Energy Package was announced in early January 2014. The Package has signalled that in respect of its June review of the Energy Efficiency Directive the Commission is considering an absolute energy efficiency target for buildings coupled with more regulation.

Of course, the UK Government already intends to introduce MEPS by 2018 for both domestic and non-domestic buildings. It will be important to ensure as far as possible that the UK Government’s policies are congruent with the likely outcome of the revision of the Energy Efficiency Directive.

EU 2030 Energy Targets
The European Commission, in January presented its views on 2030 energy targets, calling for one fully binding goal to cut emissions by 40 percent by 2030 as well as a weaker EU-wide target on green energy, which would not oblige individual nations to act.
The European Parliament on 4th February voted 341 to 263 MEPs for three binding targets for 2030: a 40% cut in greenhouse gases, compared with 1990 levels; at least 30% of energy to come from renewable sources; and a 40% improvement in energy efficiency.

Investment Property Forum

The Investment Property Forum is acting as treasurer for the Green Property Alliance Carbon Incentives and Penalties Project.

In early 2014, the IPF will ran its annual event updating members on emerging sustainability legislation and regulation, and the extent to which asset sustainability is being reflected in related valuations.

Royal Institution of Chartered Surveyors

The RICS Service Charges in Commercial Property Code of Practice (3rd edition) is now available free of charge on the RICS website and has an enhanced environment and sustainability section, including Carbon Reduction Commitment

2nd edition ‘Methodology to calculate embodied carbon in a building’s construction lifecycle’ has been confirmed publication date on 23rd April. The RICS has a feature article about embodied carbon planned in the April edition of the RICS Construction Journal as well, and the paper will be launched at a sustainability event in June.

A European Commercial Real Estate Climate Change Model that will be published sometime June 2014 onwards. UK report available at: http://www.rics.org/uk/knowledge/research/research-reports/non-domestic-real-estate-climate-change-model/ The Model will build upon the “UK Non domestic Climate Change model”, the report will look at the energy performance of buildings in a range of different European countries where data is available.

It will also explore the climatic impacts through a series of scenarios and solutions to illustrate what these climatic impacts will mean to individual buildings in different locations and what preventative actions owners, occupiers and designers should begin to consider.

UK Green Building Council

Embodied Carbon Week
On 7-11 April we will be hosting Embodied Carbon Week – initiated with the developer partners (British Land, Derwent London, Tishman Speyer, Land Securities and WRAP). The aim is to raise awareness of the topic within the industry and encourage groups and organisations to put on events on the theme. For more information see http://www.ukgbc.org/content/embodied-carbon-week-2014

Green Deal Finance Report
In January, our Green Deal Finance Task Group published a report which examines the Green Deal interest rate as a barrier to take-up and sets out potential options to reduce the rate. The report finds that while the interest rate on Green Deal loans is not the overriding issue deterring consumers from signing a Green Deal plan, lower rates could be beneficial by increasing the number of measures eligible under the scheme. You can download the report at http://www.ukgbc.org/resources/publication/uk-gbc-task-group-report-green-deal-finance

The Economic Case for Domestic Retrofit
Over the next few months, UK-GBC will be coordinating a piece of work looking at the economic benefits of domestic energy efficiency. The work will bring together existing research and analysis to create a comprehensive set of economic benefits associated with retrofit. This will be used to engage the three main political parties and ensure that domestic energy efficiency is brought up the agenda for the general election in 2015. If you would like to contribute to this work, please contact richard.twinn@ukgbc.org

Zero Carbon Non Domestic Task Group – Consultation
UK-GBC’s Task Group on zero carbon non domestic buildings is examining both the technical aspects of the zero carbon definition, and also the business case for policy clarity. The final Task Group report is close to being finalised, and is due to be published on 27 February

Operational Energy Use Project
UK-GBC is working with industry partners to address the need to make operational energy use data available and comparable. A scoping project for this Operational Energy Use Project (http://www.ukgbc.org/content/understanding-operational-energy-use) was put out to tender by the GCB, under the banner of the CIC, with a deadline for tender submissions on 21 February. The project is expected to start in early March.

Healthy Buildings Project
World GBC are currently undertaking a project which will help to overcome some of the key obstacles to making a more robust business case for health, wellbeing and productivity improvements in green buildings. For more details visit http://www.ukgbc.org/resources/publication/health-productivity-buildings-project-overview

Urban Land Institute

UK Sustainability Council – Social Cohesion Event
On January 23rd, Kate Brown, Group Director for Sustainability at Grosvenor, hosted a first meeting of the new ULI UK Sustainability Council which she is chairing. The topic for the evening was ‘Achieving Event-Led Social Cohesion and Change’ and the speakers included Sir Stuart Lipton, Malcolm Smith from Arup and Paul Brickell from the London Legacy Development Corporation. A summary of the event is available here: http://europe.uli.org/event/uli-uk-open-event-convened-by-the-new-uli-uk-sustainability-council/

UK Sustainability Council accepting nominations for membership

Kate and her committee will be setting dates for their 2014 programme of events and meetings by the beginning of March. All GPA members are welcome to join as members or nominate others to participate.

Research paper on Extreme Weather Events and Impact on Property Values & Insurance
At the ULI Europe conference in Paris (5-6 Feb) Professor Sven Bienart, ULI Europe Fellow for sustainability announced a forthcoming ULI report on Extreme weather events and their impact on property values and insurance. Kate will be organising a UK event around this on publication.

ULI UK Residential Council Build-to-Rent Best Practice Guide
The UK Residential Council are due to publish a ULI UK Best Practice Guide on Build-to-Rent for the UK in a half-day conference at the Royal Geographical Society on 2nd April. This includes a chapter on sustainability, engineering and construction, which touches on BIM, modern methods of construction, energy, waste and water management. The Guide is jointly sponsored by the ULI UK and the government PRS Taskforce and has been developed in response to the increasing demand for accurate, unbiased information in the UK residential sector around the potential for an expanded, scalable and high-quality PRS market. It aims to identify the key points of difference between property that is built to rent and property that is built for private sale. It is hoped that the Guide will become a useful reference tool and benchmark for everyone involved in the design, delivery and ownership of PRS property, as valuable as the BCO Specification Guide is to the office sector. Anyone wishing to find out more should contact Alex Notay directly. Registrations for the launch conference open: http://europe.uli.org/event/uli-uk-residential-council-build-rent-uli-uk-best-practice-guide/