Land Securities, the UK's leading commercial property company, will lead the call for action on reducing carbon emissions this week as it begins the introduction of Display Energy Certificates across its London office portfolio and Chief Executive, Francis Salway, delivers his speech 'Leading on Sustainability' to the construction industry.
Responding to the problem that the property sector accounts for an estimated 44% of UK emissions Mr Salway also sounds a warning on the size of the problem to be addressed.
"We can easily forget that in any one year no more than 2% of the national stock of buildings is likely to be renewed leaving 98% of existing, mainly energy-inefficient buildings Real progress against targets for carbon emission reduction will not be met unless progress is made on the existing building stock."
Mr Salway calls on all property owners to help drive behavioral change through their actions and those of their tenants. He also argues that industry action has to be complemented with the government showing stronger leadership on sustainability issues.
He highlights three key steps necessary to deliver meaningful reductions.
1. Behavioral change by companies and individuals
"Significant progress can be made through behavioral change, for example, if we can persuade occupiers of our office buildings to accept an extra 1 degree of centigrade variance in internal temperatures, we can reduce energy consumption by some 10%."
2. Technological innovation
"I have great confidence that engineers will devise solutions which enable us to construct new buildings with carbon emissions at low levels. Land Securities has been one of the pioneers of the use of energy piles for heating and cooling to create renewable energy sources for our new projects."
3. Strong government policy and leadership.
"Current market pricing will not stimulate the renewal of older energy inefficient buildings. If the carbon footprint of the existing building stock is to be tackled, we will need government to take a lead. The UK always seems to have a reluctance to use carrot and sticks in the tax system to drive behaviors and redirect capital investment I think the simplest route may be to use the property rates system to reward those who occupy energy-efficient buildings and to penalise those who occupy energy inefficient buildings."
The JCT (Joint Contracts Tribunal) Povey Lecture was delivered on Thursday November 12 and coincided with Land Securities' bold decision to audit all its London offices and to display the results of how much energy the property is using (energy ratings) prominently in the building's public area.
"We believe that as an industry leader we have to demonstrate that we are willing to take the lead on big issues. Display Energy Certificates in our London office buildings means that instead of certifying the energy a building is designed to consume, we will be showing the much more meaningful measure of energy it actually consumes. We recognize that some of our buildings will score poorly, but it is only through measurement and benchmarking that we will drive improvement." commented Mr Salway.
Mr Salway will also argue that the government itself will have to take far more responsibility at a national policy level for driving changed behaviors. In particular it will need to take action to internalize the cost of consumer and corporate choices which currently create environmental impacts. It should also set national environmental policies rather than create inefficiencies by having varying environmental policies in local authority areas.
He also highlights one of the main problems to be overcome is the conflict in energy management between the landlord and tenant. The landlord pays for improvements in more energy efficient plant but it's the tenant who enjoys the reduced bills. This breaks the natural "invest to save" link. This is an inherent conflict of interest that has not been fully taken into account by the Carbon Trading Scheme under the Government's Car