Buildings account for around 40 per cent of global emissions, yet they have escaped much of the attention and criticism levelled at other industries over recent years. Now, attitudes are shifting among property developers, construction firms and their customers. Firms in the forefront of change stand to benefit.
P rogress is a wonderful thing, but there can be little doubt that it moves faster in some sectors than in others. Take the built environment: if a construction worker from the 1930s could be resurrected today, they would probably regard digital technology and smartphones as little short of witchcraft. But take them to a contemporary building site and they would find many of the techniques and materials reassuringly familiar.
“Many industries are shifting towards new types of investment, driven by Silicon Valley, artificial intelligence and tech,” says Basil Demeroutis, managing partner of green property investment fund the FORE Partnership. “But, until recently, we have had almost zero innovation in the built environment. We still build buildings in almost the same way that we have done for 100 years.”
Number one challenge
This matters, not least because the built environment is the elephant in the room when it comes to tackling climate change, arguably the number one challenge of the 21st century. The homes we live in, the offices we use, and the shops, factories and warehouses that supply what we buy account for a major chunk of global emissions – up to 40 per cent by some industry estimates. Transport is a minnow by comparison at 20 per cent. Despite buildings’ outsized contribution to climate change, some 75 per cent of the EU’s total building stock is energy inefficient, according to the European Commission, and only one per cent of that stock is renovated annually to improve its performance.
Regulators forcing change
But the tectonic plates are starting to move. First, rocketing energy prices are pushing developers and landlords to focus on energy efficiency as never before. Second, regulations are forcing change. In the UK for example, 87 per cent of commercial property for rent does not comply with new energy efficiency standards, set to become law from 2030.
Andy Creamer is head of service performance for real-estate business Grosvenor, which dates from 1677 and owns £8.9 billion of property in 10 countries across Europe, the US and Asia. The company is spending £90 million over the next seven years refitting its historic London portfolio as part of a group-wide plan to cut carbon emissions by 52 per cent between 2019 and 2030.
“Our target is to refit all our commercial retail and market-let residential properties. Everyone knows there is legislation coming down the line, that energy performance certificate B ratings will be required by 2030, so there is a commercial element to it – our properties have to be fit for purpose. But we also have a responsibility as a landlord to do the right thing and reduce our climate impact. That’s one of the biggest drivers for us,” he says.
Grosvenor is owned by Hugh Grosvenor, the 7th Duke of Westminster. Its London estate covers a large part of Mayfair and Belgravia, two of the city’s most exclusive neighbourhoods, and includes more than 500 Grade I or II listed buildings. Measures range from ‘easy wins’, such as draughtproofing and smart LED lighting that turns off when no-one is about, through to replacing gas boilers with air source heat pumps and installing heat recovery technology that uses excess heat from air cooling systems to generate hot water.
In the UK, 87 per cent of commercial property for rent does not comply with new energy efficiency standards, set to become law from 2030
Making listed properties more energy efficient is not without its challenges. Grosvenor has pioneered the use of ultra-thin, high-efficiency insulation panels and vacuum double-glazing, which allows double-glazed windows to be installed into original frames, a particular benefit for old or listed properties. But some of the most valuable insights have been data-driven, through the use of networked sensors to monitor how buildings are used and run. “We discovered a boiler in one property that had been running 24/7, 365 days a year. We just wouldn’t have been able to see that without this technology,” says Creamer.
London test bed
The firm has already saved an estimated 1,000 tonnes of CO2 on the 22,000 square metres that have been upgraded so far, and it has a further 185,000 square metres to go. The intention is to use London as a test bed, from which lessons can be applied more widely by both Grosvenor and other landlords and developers. “We don’t want other people to have to learn the same lessons we have. This isn’t a Grosvenor problem or even an industry problem – it’s a global problem,” says Creamer. Retrofitting old buildings to make them less carbon intensive is an important but often neglected part of the jigsaw, because most of the carbon emitted by a building is during construction rather than use. According to consultancy Aecom, refitting rather than rebuilding can save around 30 per cent of total carbon emissions across a 25-year period. Importantly too, most of the buildings that will exist in 2050 have already been built and their environmental credentials will need to be significantly enhanced to allow nations around the world to meet their net zero targets by that time.
Environmentally conscious tenants are already beginning to vote with their wallets, and are prepared to pay almost as much for sensitively refitted older properties as they are for brand new buildings.
This shift reflects concerns about the emissions generated through the construction process itself. The use of alternative, low- carbon materials such as structural timber may be on the rise, exemplified by the world’s tallest timber framed building, the 18-storey Mjøstårnet tower in Norway, nicknamed the plyscraper. But most commercial construction still relies on concrete and steel, two of the most carbon- intensive materials around.
Concrete is the second most widely used substance on the planet after water. Around 30 billion tonnes are deployed each year and every tonne produces around 650kg of CO2. Steel output is a far more modest 1.95 billion tonnes annually but for each tonne produced, almost 1.85 tonnes of carbon is released.
Measures range from ‘easy wins’, such as draughtproofing and smart LED lighting, through to replacing gas boilers with air source heat pumps and installing heat recovery technology that uses excess heat from air cooling systems to generate hot water
Greening these materials is simultaneously crucial and hard to do, says Paul Fennel, professor of clean energy at Imperial College, London. “Concrete isn’t just energy intensive. More than half of the CO2 produced during cement production isn’t from energy use, it’s from the chemistry. It’s very difficult to decarbonise making ordinary Portland cement.”
Concrete is made by adding sand and gravel to cement, in varying proportions. Lower-carbon cement is available, which is made from waste materials such as furnace ash. Concrete can also be made stronger using materials such as graphene to reinforce it, meaning that less is needed for a given structure. But such developments are yet to be certified under construction regulations, which are designed to ensure that buildings are safe and durable.
Concrete is the second most widely used substance on the planet after water. Around 30 billion tonnes are deployed each year and every tonne produces around 650kg of CO2. Steel output is a far more modest 1.95bn tonnes annually but for each tonne produced, almost 1.85 tonnes of carbon is released
Steel has a similarly fundamental emissions issue, adds Fennell, due to the enormous amounts of energy consumed by blast furnaces and the large quantities of coking coal required.
Nevertheless, some of the world’s largest steel producers, including Japan’s Nippon Steel and South Korea’s Posco, have pledged to be net-zero carbon emitters by 2050. Achieving these aims will almost certainly depend on a combination of new production methods – such as using green hydrogen instead of coke in blast furnaces – and mitigation through carbon capture and storage (CCS).
The carbon-positive house
Given the difficulties in making a building carbon neutral, surely a carbon-negative one – which saves more carbon than it produces – is a pipe dream? Maybe not. Innovative developer GS8 is building a clutch of 10 pioneering eco-homes in Walthamstow, North London, which are timber framed and feature recycled plastic bathrooms, walls made of compressed earth blocks, and even lampshades made from soil excavated during the build.
The homes, says GS8 founder and managing director Ben Spencer, were conceived with two key goals in mind – to be carbon negative (and have small or non-existent utility bills as a result) and to generate zero waste in construction. It took five years of careful negotiations around planning, regulations and insurance requirements, but the first houses are now available, starting at around £850,000.
Fully electric and powered solely by their own rooftop solar panels, the homes store more carbon than they emit over their lifetime and surplus power can be stored in batteries or sold to the energy grid. In a further nod to the environment, industrial buildings that were on the site previously were not simply demolished; they were carefully deconstructed, and the materials they yielded – from steel purlins to concrete blocks – were reused in the new homes.
“We haven’t had a single skip on site during the build, and the only piece of plant we used was a small forklift truck,” says Spencer.
The approach is not just greener, but cheaper too. “From the time we started on site, the price of timber, for example, went up by 86 per cent. But we were able to offset a huge amount of that by reusing the materials that were already on site. We ended up with a very small cost overrun.”
Spencer says his firm has developed unique skills and processes over the course of the project and intends to roll out more innovative carbon-negative homes in future. “We want to create super-efficient buildings that have a purpose and an aesthetic, and don’t just use material after material and trade after trade because that’s the way we’ve done it for the past 100 years,” he explains.
From the age of 16, I was interested in everything that makes you sick and everything that makes you well again
CCS has already been successfully trialled in the cement industry. Large producers have invested heavily in the technology and some even expect to use it this decade, but there is little doubt that CCS is complex and expensive, so widespread implementation is many years away.
Fennell prefers to ‘engineer out’ as much carbon from steel and concrete production in the first place, because he believes it will be cheaper that way. “My work is about trying to offer ways to do what we do already, but with fewer carbon emissions,” he says. “Things are expensive enough already. I want to decarbonise the world as cheaply as possible.”
Ultimately, there is no magic bullet when it comes to removing carbon completely from the buildings we construct, whether they are new or old, retrofitted or purpose-made. Huge steps can be made, however. ‘It’s literally going down the bill of goods, looking at everything from the tiles on the floor to the paint on the walls and the nuts and bolts and asking how can we make that better? How can we do that in a more carbon friendly way?” says Demeroutis.
If all goes according to plan, our 1930s worker might not feel quite so at home on a building site in 2050 as he would today n