You wouldn’t think that in London they’re concerned about urban heat and keeping places cool. But they are. Last year was the hottest on record in London as well as in large swathes of Europe and other parts of the world.
According to Sarah Ratcliffe who is chief executive of the UK’s Better Buildings Partnership, nature has become way more important than it ever was in the past for property owners and developers are paying attention, partly as a result of that heatwave.
The Fifth Estate had called in on for an interview with Ratcliffe during a brief visit to London in early January, because she’s a reliable indicator to the way the sustainable property world is heading in the UK, given previous interviews (including a podcast) and her role leading an organisation that has more than 50 large UK property owners as its members.
Nature issues such as habitat and biodiversity are coming up as really significant issues, she told us. Among the reasons is the growing acknowledgement of nature’s links to health and wellbeing during COVID – and people’s need to access green space.
“Also, in a lot of places and streets that were used for transport, restaurants have now moved their tables outside, so the outdoor environment has become much more important to people – I think that’s part of it,” she says.
“There’s also the emerging links between climate change, climate resilience, and how nature can help provide solutions to some of that as well.”
She also notes: “really interesting studies in urban environments, where you see two streets that are effectively carbon copies of one another; one is devoid of trees, the other one has a lot of trees or green space in it.
“And you can genuinely see that the trees provide cooling for the buildings, reducing things like urban heat island effect and so on.
“We had one of our hottest summers on record last year. There’s are lots of different kind of drivers for why nature’s sort of kind of bubbling up.”
The issue is important for commercial property to address because of the impact it can have with large areas of regeneration.
The nature positive movement for property has to be a collaborative effort for the simple reason it’s based on places with a lot of different stakeholders
Building performance
On the more material front of the built environment, Ratcliffe says among the most interesting is the transition to outcomes for commercial, in many ways kicked off by the launch of Australia’s NABERS energy rating tool in the UK in November 2020.
The backdrop includes some significant regulatory drivers that underpin the trend.
There are those related to the financial sector, such as the sustainable finance disclosure regulations or SFDR emanating from Europe, the Financial Conduct Authority (FDA) affecting the companies sector and how they operate and those that are “relevant specifically to the built environment”.
In the UK the “Design for Performance” rating works in the same was as “commitment agreement protocols” in NABERS and is based on a NABERS energy rating.
Already about 100 buildings are registered with the rating. But these are new buildings, Ratcliffe points out and the rating of existing buildings is still nascent. This is in significant contrast to Australia where NABERS is credited with transforming the landscape for sustainability in offices.
Ratcliffe has great hopes for transformation across a much bigger part of the market and is in regular contact with the NABERS team in Australia.
Members of the Better Buildings Partnership and the take up of NABERS
Green leases and upskilling
As to other major challenges for her members she singles out education or upskilling, particularly in property management, collaboration, and green leases.
In many ways the green leases issue is most intriguing.
This is where the tenants and landlords have the opportunity to align for greener outcomes – but it’s notoriously difficult to kick off.
There are too many factors are play.
Even the definition of what’s green can be a problem.
Ratcliffe and her members haverecently tackled a big tranche of work on that score, with an update to the organisation’s original Green Leases Toolkit that first saw the light of day in 2008.
New elements include “green lease essentials”, that outline a vision for minimum expectations on what green leases should include and an attempt to identify what can actually be termed “green”.
It’s taken a whopping 18 months of work to complete, and you can see why when she shares some of the outcomes.
The BBP might not be a standard setting organisation, Ratcliffe says, but what it’s tried to do is address one of the big challenges with green leases – that there “isn’t really a consistent and coherent understanding” of what needs to go into a lease for it to be called green.
Among the answers the working group alighted on was the treatment of data and transparency – and cooperation.
“Data transparency and sharing was a really important part of that, but also commitment and cooperation.”
Without these you really don’t have much to go on, she points out.
You might have a “legal and transactional…piece of paper” but what’s really important is the owner occupier relationship. “If you get to the point of litigation, then something’s gone wrong in that relationship.”
“One of the things that we’ve found in our Green Lease Toolkit is that it’s not just the writing of the clause that’s important, it’s actually people engaging all the way through that process.”
This means that right from the start of the owner seeking to lease an asset or a tenant looking to find a rental property, “before they even get to the terms and following that through all the way so that their ambitions and their intentions are aligned.”
Net zero agreements are possible
If this can happen it makes the lease so much easier to negotiate and much harder for others to argue that certain aspects of the lease should be left out.
“You would hope that if you’ve then established the groundwork, the foundations are a really good relationship, you don’t get to the point where you get into litigation.”
Ratcliffe says she has examples where this has worked brilliantly to get “really kind of leading commitments”.
“For example, we have begun to see a couple of what are defined as net zero leases emerging, where both the owner and the occupier are committing to net zero and effectively articulating that in the leasing arrangement.”
Collaboration and upskilling are key
Other critical issues to a better more sustainable industry are collaboration and this is a key motif for the organisation, deeply embedded in its 2030 vision.
Another is education or upskilling.
This focuses on the nuggety problem of how to deliver, in practice, on “buildings that perform”. In this, property managers are coming in for special attention.
“[It’s] particularly thinking about the things that property managers can be responsible for, things that they can improve, and the things that require more investment from the building owner.”
The new normal in offices, and shorter leases
Property management is changing, she says
“So now, it’s sort of evolving from being something that is seen as kind of an additional service that they provide to owners to actually something that’s much more integrated within their core service offer. That’s really important.”
As to the longer term, Ratcliffe can see a raft of new sectors starting to become more important in commercial property – and it’s not offices. And there’s a big opportunity here.
These are areas such as health, life sciences, and innovation – residential too.
“From an impact point of view, I think it’s a really important time to pay attention to those growth sectors, and to make sure that the right standards and mechanisms are in place for them.”
Given Ratcliffe and the BPP’s track record so far, get set for more change to a greener industry.
Links to some of these programs include: