Sustainability

Question 1

What us the RICS guidance for sustainability ?

Answer 1

RICS Guidance Note ‘Sustainability and ESG in commercial property valuation and strategic advice effective January 2022

Question 2

What is an EPC, tell me about them?

Answer 2

• Energy Performance Certificate (EPC) measures energy efficiency of a property on a scale of A-G
• Required for all commercial properties over 50 sq m, newly built, newly refurbished, HVAC alternations or building is subject to building regs.
• Exemptions for listed buildings, buildings with no heating, religious buildings, temporary buildings, buildings with no heating and buildings due to be demolished
• EPC should:
  o Display indicated of current CO2 emissions
  o Provide an indication of potential emissions and potential energy use of the building
  o Record a list of cost-effective improvements
• Required to have for marketing a property

Question 3

EPC G – what would you do?

Answer 3

• Cannot let this space
• Exception if building is over 1,000 sq m and built prior to 202. In this case an action plan is required which must be completed within 3.5 years or formally reported in an annual display energy certificate

Question 4

What is an EPC action plan?

Answer 4

• Identifies physical improvements required to reduce energy consumption and greenhouse gas emissions
• Once registered in Scottish EPC Register owner needs to:
  o Complete improvements in 42 months OR;
  o Opt to defer carrying out of works by
   Monitoring and reporting annually on operational energy ratings
   Display Energy Certificate (DEC) only valid for 1 year and must be renewed to allow deferment to continue
   This does not remove the need to carry out works and may be withdrawn in future reviews
  o On completion of works, obtain new EPC and Action Plan

Question 5

Who does the obligation fall on?

Answer 5

• Owner/landlord
• £1000 penalty fines for non-compliance

Govt planning to introduce regulations for ensuring non-domestic buildings meet NCZ by 2045, by 2025

Question 6

What is sustainability?

Answer 6

• Sustainability focuses on meeting the needs of the present without compromising the needs of future generations

Question 7

Tell me about section 63

Answer 7

• All buildings over 1,000 sq m require an action plan which details the actions to be followed in order to improve the energy efficiency of the building
• Not needed for buildings constructed with buildings regs from 2002 or if lease period is under 16 weeks
• You have 3.5 years to act on the action plan or you can formally report annually on a display energy certificate

Question 8

What is BREEAM?

Answer 8

• The building research establishment environmental assessment method
• Covers:
  o Energy and water use
  o Health and wellbeing
  o Pollution
  o Transport
  o Materials
  o Waste
  o Ecology and management processes
• Rates buildings on a scale of ‘Pass, good, Very Good, Excellent and Outstanding’

Question 9

What is a green lease?

Answer 9

• A lease that incorporates clauses where the owner and occupier undertake specific responsibilities/obligation with regards to sustainable operation/occupation of a property such as:
  o Waste reduction/management
  o Water efficiency
  o Energy efficiency measures
• Not limited to new leases, Memorandum of Understanding can be affixed to lease to provide a roadmap of cooperation between parties to improve environmental efficiency of a building

Question 10

Why would you use a green lease?

Answer 10

• Achieve greater energy and resource efficiency to reduce costs
• Comply with a company’s ESG goals
• Comply with statutory requirements to report on environmental issues

Question 11

What are the economic and social implications or sustainability?

Answer 11

• Social
  o Harmful environment for people
  o Can be unsafe
• Economic
  o Depreciation in asset value of properties that aren’t energy efficient
  o As companies shift focus to ESG, assets that are non-conforming will not be attractive for leasing or investing

Question 12

What are some factors of sustainable building design?

Answer 12

• Energy consumption monitoring built in
• Sensor activated lighting
• Shell and Core finishes to minimise waste
• Recycle buildings materials
• Biophilia

Question 13

RICS Guidance on Sustainability?

Answer 13

• Updated Rules of Conduct – Rule 3: High quality & diligent service example – must advise on sustainability factors
• Red Book – Guidance Note Sustainability and ESG in Commercial Property Valuation and Strategic Advice
• Guidance Note – Environmental Risks and Global Real Estate

Question 14

Can you explain the Better Buildings Partnership and the UK Green Building Council framework?

Answer 14

Number of UK REITS have signed up to this.

1. Establish Net Zero Carbon Scope - carbon emissions associated with construction use, refurb and demolition.
2. Reduce Construction Impacts - change material and designs in buildings.
3. Reduce operational energy use - landlords need to retrofit and consider how to make buildings more efficient.
4. Increase renewable energy supply
5. offset any remaining carbon - last resort. Plant trees.