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A new asset class: net zero property 3 The scale of the net zero carbon property challenge
Preventing stranded assets: the link between carbon performance and value 4 is starting to be understood. Commitments to
Step 1: Defining net zero 5 decarbonise are coming thick and fast.
Step 2: Incentivising net zero 6
Step 3: Taking a whole carbon lifecycle approach 7 Recognition that to avoid the worst impacts of climate change we need to
limit global temperature rise to 1.5°C, and the scale of the challenge that
Balancing impacts: embodied and operational carbon 8
implies, has finally prompted the collective penny to drop. We’ve seen the
Understanding the whole life carbon building ‘signature’ 10 global Climate Strike movement and Extinction Rebellion in the UK.
Tackling embodied impacts 12 In 2019, the UK Government signed a legally binding target to achieve net
zero carbon emissions by 2050.
Enabling operational net zero 14
Since then, the concept of net zero carbon has caught on astonishingly
Achieving net zero for existing assets 16 quickly within the UK property sector. Twenty-three leading property
Designing for net zero performance 18 organisations — members of the Better Buildings Partnership — signed a
climate change commitment, agreeing to set a pathway to net zero carbon
Transformation and reuse: prolonging building life 20
for their organisations, something that would have been unthinkable until
Intelligent offsetting 22 very recently.
Get in touch & references 24 Across the construction sector, thousands of organisations, including
architects, engineers, contractors and others have signed one of the
Further reading 25
“Construction Declares” commitments: https://constructiondeclares.com.
This document summarises key issues that need to be addressed now
to ensure the property sector can deliver buildings that contribute to a zero
carbon economy.
2 3
Preventing stranded assets: the link Step 1: Defining net zero
between carbon performance and value
The market has begun to price in operational carbon Net zero carbon is defined as a reduction in the demand
performance. But embodied carbon is still largely ignored for energy and materials to a level that can be met solely
by regulators and the market. by sources that do not emit greenhouse gases.
Market expectations of the carbon performance For evidence of the link between operational The UK Green Building Council (UKGBC)
of property assets is changing rapidly. energy/carbon performance and value, we can has led the way in the UK property sector in
This increases the risk that carbon intensive look to the Australian market. Since its launch defining what we mean by net zero carbon.
assets may become “stranded” if action is not in 1998, the NABERS energy rating scheme Its document “Net Zero Carbon Buildings: Redu
ce en
taken to decarbonise them. Whilst the market is credited with halving the average energy A Framework Definition” was published in 2019. ergy
dem
and
is not yet consistently accounting for carbon intensity of commercial property and reducing This defines the principle that achieving net by 6
0% Supply/demand
intensity in property valuation, asset owners the gap between the carbon emission profile of zero is about reducing demand (both for energy balance
need to be aware of this risk. This has been a building at design stage and its actual carbon and materials), with offsetting the last resort for
explored in the EU-funded CRREM (Carbon emissions during performance. Most commercial residual emissions.
Risk Real Estate Monitor) research. CRREM properties that have a high NABERS rating
The UKGBC defined a target trajectory for ly
provides a free online tool that allows property in Australia benefit from a value premium le supp
operational energy efficiency for commercial e renewab
owners to assess stranding risk for individual of approximately 20%. The Better Buildings Increas
offices, which can be applied across the property
assets (www.crrem.eu). Partnership has recently launched a NABERS
sector: that to be net zero carbon by 2050, we
style rating scheme for the UK market, called
GRESB (Global Real Estate Sustainability need to reduce our buildings’ operational energy 2020 2050
Design for Performance.
Benchmark) was an active partner in the use intensity by more than 60%. Whilst the
CRREM research, and is in the process of It’s important to recognise that all the above details of the calculation may change over time,
Research by the UKGBC estimates that a reduction in buildings’
integrating stranding risk assessment within the is focused on operational carbon. There is no the scale of the challenge is clear. energy demand of 60% will be necessary by 2050 for demand to
GRESB Real Estate reporting process. It seems effective link as yet between embodied carbon be matched by available renewable supply2.
But this is only part of the story. There is as
likely that this will encourage the market to and asset value. If we are to empower the market
yet no clear understanding as to the level of
make a connection between carbon performance to move toward true net zero, we need a robust
reduction in embodied emissions that will be
and asset value, something that has been largely framework to evaluate and report whole life,
required to achieve net zero. A clear view of
absent from the UK property market to date. not just operational, carbon.
the extent of embodied carbon reduction that is
necessary will be critical to complete the picture
and allow us to take a comprehensive approach
to decarbonisation.
Property secto
60%
r deca
rbon
CARBON INTENSITY
isati
on
Asset performance
To be net zero carbon by 2050
Asset at risk of ‘stranding’
we need to reduce the energy use
intensity of our buildings by more
than 60%.
Retrofit to
improve pe
and protec rformance An illustration from the
t asset valu CRREM EU-funded research
e
project (www.crrem.eu) on the
2020 2050 risk of ‘stranding’ for assets
or portfolios that fail to keep
pace with property sector
decarbonisation.1
4 5
Step 2: Incentivising net zero Step 3: Taking a whole carbon
lifecycle approach
Buildings that demonstrate the potential to achieve net zero when Embodied carbon emissions arising from new-build construction or
combined with sufficiently low occupant energy demand should be refurbishment can represent a significant proportion of a building’s whole life
accredited as ‘net zero enabled’. carbon impact. Our goal has to be to reduce all carbon emissions to net zero.
Net zero has become common parlance within It is important that we define clear markers for Until recently, little attention has been paid
the UK property sector seemingly in the blink speculative buildings on a net zero trajectory, to the carbon impacts of constructing and
of an eye. We need to recognise that achieving so that developers and portfolio owners have refurbishing buildings. Yet our buildings are
net zero in practice will take time, and that real something to aim for in the short term. constructed using materials, components, and
transformations in how we design, build and use We need to define the concept of ‘net zero products. All of this material has to be extracted
our properties needs to begin immediately but enabled’ – buildings that demonstrate the from the ground or (in the case of timber)
cannot be fully achieved overnight. potential to achieve net zero when combined grown, transported to a facility to be processed,
with occupants who maintain sufficiently low transported again (perhaps numerous times) to
In the property market, transformation is driven
energy demand. ‘Net zero enabled’ accreditation be fabricated into a product, transported to site,
by incentives and history has shown that rapid
will allow us to properly recognise buildings that and craned into place. All of these processes
transformation is possible if clear incentives
are capable of achieving net zero once occupant result in the emission of greenhouse gases – fuel
are in place. It is essential that we have a clear
energy demand reduces to an appropriate level. for deliveries, and to heat, shape and treat, as
and rigorous framework in place for assessing
well as releases from manufacturing processes.
net zero across the whole life cycle. The level At the same time we need to be careful.
of interest in the market suggests that with such ‘Net zero enabled’ needs to be defined as a This impact is repeated on a smaller scale all
a framework we should quickly start to see temporary staging post, not an end in itself. the way through the life of a building, during
buildings’ net zero credentials have an impact Any new accreditations need to encourage its repair, maintenance and any refurbishment
on asset value. There are already signs this is organisations to continue on the journey to programmes. At end of life, we expend energy,
happening, but without a rigorous definition we achieving net zero in operation. and therefore emit carbon, once again in the
risk sliding into “zero-wash”. demolition and disposal of assets.
It is becoming clear that embodied carbon
makes a significant contribution – between 30%
and 70% of a typical building’s total lifecycle
emissions. Our goal has to be for the whole
lifecycle emissions of our buildings to be net
zero, not just operational emissions. In pursuing
this we need to view key decisions through the
© Paul Carstairs/Arup
lens of whole life carbon impact. This approach
will ensure that the trade-offs between embodied
and operational carbon that are inherent in many
of our key decisions become explicit within the
decision-making process.
A whole life cycle approach needs to guide our 5 2 L I M E S T R E E T, L O N D O N
big decisions, and in many cases the biggest of Read more: www.arup.com/projects/52-lime-street
all is whether to demolish or refurbish.
6 7
Balancing impacts: Delivering Every project and site are different. Taking buildings on a journey
towards net zero carbon requires a sequential approach to ensure that
decarbonisation across the lifecycle critical decisions are made at the appropriate point in the design process.
Below are examples of the types of solutions that together may
contribute to an effective strategy for a net zero carbon building.
8 9
Understanding the whole life carbon
building ‘signature’
The fundamental tools are in place to BUILD YOUR NET ZERO TEAM
consistently evaluate whole life carbon, Achieving a positive whole life carbon outcome
although as we look further into the future requires collaboration across a broad range of
uncertainties increase. There is a need to ensure stakeholders throughout the lifecycle.
our assumptions about the future are balanced There is an enormous amount that can be
and consistent across the property market. enabled in the design stages of a project ‒
the impact of effective collaboration between
BALANCED DECISION-MAKING
developer and designer can be felt right through
A whole lifecycle approach implies a balancing operation, refurbishment and into end of life and
of short and long term emissions. We need to de-construction.
factor in the decarbonisation of construction
activities in future to gain a balanced view. The contractor’s role is critical in converting
When we do that, an entirely new image the designer’s intent into reality. There is
emerges of balances and trade-offs between an opportunity to transform the contractor’s
short and long-term impacts. Does triple contribution to achieving net zero through
glazing save enough operational carbon to positive incentivisation and involvement in post-
justify its embodied impact? What’s the carbon completion operational support.
payback from the thermal mass associated with Operational net zero can be enabled
a heavyweight structure? through effective design, construction and
In embracing a whole lifecycle approach, we commissioning, but is only really delivered in
need to understand that like sands in the desert, operation. As such, the role of both building
the picture is continually changing. As we operator/facility manager and occupant are
shift to all-electric operation, our operational critical. There has been much written about the
emissions are reducing much faster than those operational ‘performance gap’, which refers to
associated with manufacture and construction. the difference between the energy performance
What made sense yesterday may not make and carbon emissions a building was designed
sense tomorrow. and constructed to use and emit and the usually
much higher energy demand and emissions of
A L L O W I N G F O R D E C A R B O N I S AT I O N the building when it is in use. This gap can only
In calculating whole life carbon we need to be closed through close collaboration between
allow for differing rates of decarbonisation: designers and operators. Early involvement of
Decarbonisation of electricity in the UK is operators in the design process is a key factor in
predicted to be relatively rapid, reflecting the a positive outcome.
ongoing addition of renewable capacity to the
grid. Decarbonisation of manufacturing and
construction is generally assumed to lag behind
overall energy-related decarbonisation, which
is slower, reflecting the ongoing reliance on
natural gas in some sectors of the economy.
10 11
Tackling embodied impacts
© Simon Kennedy
SKY BELIEVE IN BETTER BUILDING, LONDON
Sky’s Believe in Better building is the tallest commercial
timber framed building in the UK.
Read more: www.arup.com/projects/sky-believe-in-better-
building
12 13
Enabling operational net zero
14 15
Achieving net zero for existing assets
16 17
Designing for net zero performance
For too long, design success has been measured OPENING THE ENVELOPE R I G H T- S I Z I N G P L A N T ENERGY SYSTEMS
by compliance outcomes, including BREEAM Fully sealed façades with close control air- Using advanced energy modelling to inform A ban on gas-fired heating in new homes is on
ratings and Part L. Designing for operational conditioning are unlikely to be compatible with plant sizing can result in lower peak capacities the horizon in the UK, although exact timing is
performance requires a different approach and net zero in the long term. There is a growing than more traditional approaches. This can not yet clear.
a much deeper understanding of how buildings realisation that internal comfort conditions both reduce installation cost and improve
High temperature district heating systems are
will operate and perform in practice. will need to relax, but in the context of sealed efficiency. A combination of reduced peak
becoming a thing of the past, but there remain
buildings with little local control this quickly capacity and differential sizing of main plant
opportunities for decarbonisation through
MODELLING SUCCESS leads to a rise in dissatisfaction amongst can have a particularly transformative effect on
district energy infrastructure. Fifth-generation
Designing for net zero performance makes occupants and poorer health and wellbeing performance at low part loads.
district energy networks employ low
advanced energy modelling an absolute necessity outcomes.
temperature “ambient loops” to enable energy
as well as its seamless integration within the D E S I G N F O R O P E R AT I O N
To achieve net zero, we will need to re-engage sharing between different building use types.
design process. The design develops in response Design of building systems and interfaces to
with mixed mode and natural ventilation. In the right circumstances they can effectively
to modelling outcomes. enable effective operation is essential if net zero
This will be enabled in part by changes in the exploit variations in daily and seasonal energy
This approach inevitably demands sustained targets are to be achieved.
external environment – the gradual move to demands to minimise plant size and maximise
focus on how systems perform when demands electric vehicles should reduce both noise and A smart building controls system and accessible, energy efficiency.
are low, an area of building performance that improve air quality, putting alternative approaches maintainable plant and equipment will allow a
is often neglected in the conventional design within reach. facilities management team to minimise the day-
process. As an example, it is not uncommon for to-day energy demands of new buildings. This
Whilst digital approaches can help optimise mixed
commercial buildings to operate at 5% of peak is critical to maintaining intended performance
ventilation approaches, there remain fundamental
load or less for a significant proportion of the levels ‒ and therefore carbon impacts ‒
challenges to overcome when combined with the
year. This means that poor turn-down efficiency throughout a building’s lifecycle.
commercial reality of large, deep-plan floorplates.
can have a crippling effect on performance
outcomes.
Measuring, verification Occupant energy Low energy occupant, Small power load Upgrade plant. Connection to Low energy lighting, Insulation retrofit Local external
& commissioning targeting, green leases HVAC optimisation district network if available intelligent controls (roof, cavity wall) shading
Control and monitoring system Explore renewable Low energy lighting, Occupant electricity purchasing. All electric Renewable generation Natural and/or mixed mode Facade replacement for improved
installation/upgrade power purchases intelligent controls Energy targeting green leases building ventilation u-values and air tightness
18 19
Transformation and reuse:
prolonging building life
Our design goal for new buildings needs to be ‘long life, loose fit’.
We need to maximise the life of buildings and ensure we get the
best return on the embodied carbon we invest in construction.
20 21
Intelligent offsetting
poverty. However, trust in the carbon offset The UK government publishes traded carbon
industry is low and offsetting decisions may need values. In mid-2020, this was a modest £13/
to be reviewed regularly, as investing in offsets tonne, but is forecast to rise to £43/tonne by
of questionable value increases reputational risk. 2035. The global carbon trading market is valued
at over £500M annually.
R E N E W A B L E E N E R G Y P R O C U R E M E N T
In London, the Greater London Authority’s
Once onsite decarbonisation opportunities have draft London Plan sets a carbon offset price for
been exhausted, procuring a 100% renewable referable property developments of £95/tonne,
energy tariff is the final step towards achieving intended to represent the higher cost of offsetting
net zero. There are different ways of procuring carbon within London and provide an incentive
renewable energy with varying impacts on price, for developments to invest in onsite carbon
complexity and additionality.Power purchase reduction.
agreements (PPAs) can present a good middle
ground for offsetters. This provides additionality
through the development of new renewable
generation without the complexity and capital
for an investment in a renewable energy asset.
A diversified approach is recommended, with a
PPA to cover base consumption and short term
green tariffs to capture peaks and fluctuations in
energy consumption.
22 23
Get in touch Further reading
AUTHORS
Stephen Hill
FM 2.0
Building Performance Specialist Re-imagining Facilities Management
FM 2.0
for the Digital Age
t: +44 20 7755 4365 FM 2.0 provides a vision for the digital future of Facility
e: stephen-d.hill@arup.com Management and how we can improve the performance
of our buildings.
Ann Dalzell www.arup.com/perspectives/publications/promotional-materials/section/
reimagining-facility- management-for-the-digital-age
Building Services Engineer - Mechanical
t: +44 20 7755 3873
e: ann.dalzell@arup.com
Mel Allwood
UKGBC NET ZERO CARBON BUILDINGS:
Sustainable Buildings Lead A FRAMEWORK DEFINITION
t: +44 20 7755 4353 The UK Green Building Council has developed a framework
e: mel.allwood@arup.com definition for net zero carbon buildings to provide the industry
with clarity on how to achieve net zero carbon in construction
CONTRIBUTORS
Net Zero Carbon Buildings: and operation.
Chris Carroll A Framework Definition
www.ukgbc.org/ukgbc-work/net-zero-carbon-buildings-a-framework-
Daniel Rafferty APRIL 2019
EDITOR
Erin Gill
The Circular Economy CIRCULAR ECONOMY IN
in the Built Environment
D E S I G N & I L L U S T R AT I O N T H E B U I LT E N V I R O N M E N T
Sophie Egler Our research outlines key principles of the circular economy,
Hannah Stockley using the Ellen MacArthur Foundation’s ReSOLVE framework
to explore and contextualise practical applications in the built
environment.
www.arup.com/perspectives/publications/research/section/circular-
economy-in-the-built-environment
References
1
Hirsch, Jens; Lafuente, Juan José; Recourt, Rik; Spanner, Maximilian; Geiger, Peter;
Haran, Martin; McGreal, Stanley; Davis, Peadar; Taltavull, Paloma; Perez, Raul; Juárez, You’ve declared a Climate
Emergency... what next? Y O U ’ V E D E C L A R E D A C L I M AT E
Francisco; Martinez, Ana Maria; Brounen, Dirk. (2019): Stranding Risk & Carbon. Guidance for local authorities
E M E R G E N C Y, W H A T N E X T ?
Science-based decarbonising of the EU commercial real estate sector. CRREM report
No.1, 2019, Wörgl, Austria. Our guidance sets out nine key stages for climate action planning,
while emphasising above all that we need to begin now, and act
2
Net Zero Carbon: Energy Performance Targets for Offices. UKGBC, January 2020
www.ukgbc.org/wp-content/uploads/2020/01/UKGBC-Net-Zero-Carbon-Energy-
fast, to reach a net zero emissions and climate-safe world.
Performance-Targets-for-Offices.pdf www.arup.com/perspectives/publications/promotional-materials/section/
youve-declared-a-climate-emergency-what-next-guidance-for-local-authorities
3
Note this is similar to the target for commercial offices defined in the LETI Climate
Emergency Design Guide of 55kWhe/sqm (GIA)/anum arup.com
24 25
arup.com