Our values and mission
A Sustainablility Manifesto for the Property Sector
Expert sustainability advisor to the real estate market, Longevity Partners, sets out the key issues that every property firm should be looking at for the long term:
1. Improve data quality, coverage and transparency - From both an asset and a corporate level, the quality and coverage of data needs to be vastly improved in the area of environmental performance. Too few companies have their environmental data audited and scope 1, 2 and 3 (Greenhous Gas) emissions are inconsistently reported. All of which prevents real transparency around performance.
We ought to be more sophisticated in the way we measure our buildings' performance across a wide range of indicators. This would allow us to better understand and identify the design and performance gap in buildings where energy consumed fails to measure up to the predictions from the design phase.
2. Transition from buildings to energy management assets – There is so much potential with existing technology to evolve beyond the inclusion of renewable generation and battery storage in buildings and energy efficiency in design, to include the remote management of smart facilities to take advantage of time-of-use/smart energy tariffs and remuneration for reducing power demand at peak times. The platform technology for such remote and automated facilities management already exists and so incorporating it in building design will allow building owners and occupiers to take advantage of business models and data to monetise this potential.
Backed by smartly automated facilities, sustainable transport and distributed generation is to be incorporated into a sustainable building environment for a synthetic cost-benefit analysis. Electric mobility is playing a new energy storage role and has increasing influence to be involved in building energy management to help energy shifting in different time and places. On-site generation is financially feasible by means of Moore’s Law, and this will get better with time.
Also, demand response technology facilitates more flexible and efficient usage of energy. By shifting flexible loads to network off-peak time or simply reducing the energy consumption, owners save more money and so does the network operator because of less energy loss during transmission. Furthermore, the scope and speed of demand response are boosted through the Internet of Things and cloud computing. These technologies bring computing and demand resources together and could be taken into consideration in future planning. All appliances in a building or even in a community shall play as a team and coordinate with each other for one common goal—lower energy costs and CO2 emissions. The smart mobile is a good illustration—quite a few apps are now based on cloud computing—how often do you use a standalone radio, MP3 player or a paper map now?
We must address the elephant in the room that is energy efficiency (or lack thereof) across the existing building stock throughout Europe. Getting serious about installing measures to improve this, such as in-wall insulation and double (or triple) glazing should not even be up for discussion! Replacing inefficient HVAC equipment and exploring progressive technologies and applications - like smart metering, community energy systems and district heating/cooling with combined heat and power - could also help significantly.
3. Increase diversity – With increased diversity across society comes greater diversity of thought.
The history of the property industry has been noted to be non-diverse and male dominated. This viewpoint evolved over the years, however, reaching the stage where the industry reflects wider society will not happen overnight. If the property sector wants to successfully adapt to the enormous challenges that lie ahead, it needs to become more representative of society as a whole. The UK’s second largest listed property developer has published figures revealing that median hourly pay for female staff is 42 per cent lower and bonuses 73 per cent lower in median terms. The present gender pay gap issue reveals the lack of female representation at the top of many property companies. Four fifths of our most senior roles are occupied by men.
The lack of ethnic minorities in senior positions has been a concern in Chair, CEO and CFO positions. The number of black, Asian and minority ethnic (BAME) leaders have reduced by 18%. The future of the sector is dependent upon evolving the existing approach to staff attraction and retention. With these highlighted issues, companies need to redress the imbalance in the property sector, take steps to improve the diversity of the property workforce by widening its recruitment but also support women’s committees, pride networks and ethnic diversity committees.
The influence of the property industry can be utilised to promote and encourage best practices within our sector and encourage working with partners and members to create a more diverse and inclusive professional world.
However, this balance is not being sustained all the way to board level, and it was suggested that parenthood is often the point at which women's ascent through the ranks tends to stall.
4. The importance of indoor environmental quality on wellbeing – Health and wellbeing within buildings have become one of the most important elements of sustainable design and construction. Buildings should not only be energy efficient. They should have positive health impacts on the people that use the building and contribute to a holistically sustainable environment.
Indeed, property owners and managers have begun to appreciate the links between increased staff productivity, overall improvements in staff performance and higher returns.
By implementing measures (such as the WELL or Fitwell standards) to improve the health, comfort and knowledge of building occupants, real estate funds and property companies can not only improve the happiness of employees and personal health, but also improve their productivity, and offer tenants a work environment that nurtures business development.
5. Get to grips with embodied carbon – When considering their impact on climate change and their contribution to global GHG emissions, most property companies focus on their operational carbon – the total amount of carbon emissions (Scope 1, 2 and 3) associated with the operational activities of their asset or portfolio. As a requirement for most sustainability reporting frameworks, operational carbon monitoring has become a standard practice amongst property companies.
However, when looking at the total footprint of a building, it is also important to consider its embodied carbon – the carbon emissions resulting from the manufacture, transport and construction of building materials. Indeed, most sustainable construction certification schemes (BREEAM NC, LEED v4 BD+C, HQE) recommend that project developers perform Life Cycle Analyses (LCA) to not only reduce the carbon footprint but also identify cost saving opportunities associated to material selection, quantity and transport.
Moving forward, embodied carbon will begin to play a more significant role within the property sector as fund managers, property developers and construction companies widen the scope of their carbon foot printing as they aim to further reduce their carbon emissions and improve returns.
6. Circular economy – The built environment sector is one of the largest consumers of raw materials, accounting for 50% of global steel production and contributing 25-40% of global carbon emissions. The World Economic Forum reported that currently less than a third of construction and demolition waste is recovered and reused, even though opportunities for repurposing or recycling the discarded materials exist.
In the quest for healthy, affordable and sustainable communities, real estate has an increasingly important role to play by championing sustainability, embracing the circular economy and promoting smart solutions for the built environment. In addition to recognising the opportunities to reduce and reuse these resources, the sector needs to facilitate the movement to a new lease-based business model where the longevity and reuse of building materials and components is incorporated at design-stage. So far, society has geared towards a focus on recycling, which is relatively energy intensive. The adoption of a circular approach could allow the sector to reduce its environmental impact, as well as avoiding the financially disruptive consequences of volatile commodity markets. Circular economy has the potential to create a net benefit of £1.6 trillion by 2030, or £0.8 trillion more than in the current linear development path. The priorities of the built environment should lie with efficient design stage planning, maintaining materials and components at their highest value in order to maximise efficiency, eliminate waste, and promote reuse and repurposing.
The circular economy model is perhaps the greatest opportunity we have to shift toward sustainable economic growth, urban life and value creation.
7. Increase resilience across the sector to the outcomes of climate change – When the next storm hits, how prepared will you be? This issue is being addressed by cities around the world who are seeking ways to be more resilient following a major natural disaster. Cities – and therefore buildings - are especially vulnerable to the negative aspects of climate change, which are expected to increase in frequency and intensity with extreme events such as heatwaves, flooding, water scarcity and droughts. Given that assets are developed and owned with the expectation of providing steady income and value increase over the course of decades, the implications of climate change need to be understood and buildings need to be made climate-proof for the future. This involves the ability to retrofit solutions and new technology in existing buildings, making them capable of withstanding new environmental conditions and support health, safety, amenity and sustainability in a changed future.
8. Building optimisation – Working and living practices are changing. With nearly 3 million sq ft of new office space being completed last year, it is imperative that new buildings are flexible and able to change their uses so that they can adapt to current and future lifestyle shifts.
Inefficiency in buildings is a real issue for a sustainable future and continued efforts are needed to reduce the wastefulness of the sector, accounting for 40% of global carbon emissions. New spaces cannot afford to choose energy systems that will lock them in for the next 20, 30 or 40 years. Flexibility is key and building design decisions must be carefully thought out to allow future needs to be accessible. With an ever increasing Internet of Things technology being present in buildings, more data on performance can be collated on a real-time basis. This will go some way to improving the understanding of performance and therefore how and when energy systems can be improved rapidly. This will be driven, no doubt, by the largest technology firms. They will provide data-led, optimisation tools to all real estate through seamless BMS technology. Once other occupiers realise the significance and benefits of this data wealth, they will demand a similar approach in all spaces. Smart buildings will help build-to-rent accommodation become more attractive across residential but also more adaptable to facilitate a flexible approach to commercial occupation. More importantly, new technology advancements paired with intelligent design will unlock the current real estate market potential to decarbonise our environment.
9. Greater collaboration between tenants and landlords – Good relationships between tenants and landlords are the backbone of successful and future proof sustainable property investments. The buildings on their own do not generate any carbon emissions, it is the people that operate them that do. Landlords have got a shared responsibility in engaging with their tenants to incentivise them to reduce their energy and water consumption as well as waste generation. Climate change needs urgent attention, which can not be managed by landlord alone, not without the combined commitment of responsible tenants.
Buildings are places of life, where humans spend 90% of their time. People meet, work, exercise, eat, and sleep in buildings. The property industry has therefore a huge social impact and improved tenant landlord relationships increase the social benefits of property investments through educational, athletic, artistic, mindfulness or even healthy lifestyle programmes.
The future property industry is an inclusive industry where interactions between users and operators are crucial to ensure tenant retention and their related environmental and financial benefits. Conscious asset managers who create places and life experiences for their users will outperform their peers who operate their properties in a classic manner. Creativity is at the heart of great tenant landlord relationships. Measuring the social, environmental and economic benefits of your engagement programmes will also have a positive impact on your extra-financial performance ratings.