What net-zero carbon standard means for surveyors

Property Journal: What is the Net Zero Carbon Buildings Standard, and what are its aims?

David Partridge: Essentially, we're looking to agree some rules that will outline the net-zero carbon content of all new and existing real estate, embodied and operational. The standard will set targets against which all buildings will be able to measure their whole-life carbon impact. It's not a verification standard in its own right, but we hope that in due course people will be looking to certify their assets against this standard. At the moment we're focusing on the metrics behind the standard itself, and subsequently we'll ensure that there's a verification process so people can measure their assets' progress towards net zero. The standard will align with current thinking across all disciplines.

The aim is for the standard to be universally adopted across the UK's built environment, including residential, commercial, retail, logistics, warehousing and hospital sectors among others, although excluding infrastructure.

It's important to do this as people are measuring in various ways, and claiming carbon-neutrality in different ways using different methods. For instance, I'm told that I could buy an offset for anything from £5 to £1,000 a tonne of CO2. It's a very confusing market. 

What we're looking to do is to get an absolute, common standard adopted, against which everyone can measure their carbon. People will then be encouraged to achieve that standard one way or another – or maybe punished if they do not achieve that standard in due course. These incentives should come from a combination of market response and, ultimately, government intervention.

Clara Bagenal George: I would add that the standard is science-based. We're looking at the UK's carbon budget in line with emerging scientific thinking, currently based on limiting global temperature rise to 1.5°C. 

We also intend that, when published, the standard will be transparent and available to everyone working in the built environment. It's not designed to be a British Standard or an ISO standard in the first place as this may limit access; but this may be something we need to look at in the future. We're committed to the standard being available to download free of charge, so that everyone's always clear on what net zero means. 

What's key to the standard is that there are quite a few significant players working in net zero who have been developing guidance that has been more or less aligned, but because it hasn't been published by the same organisations the language is used slightly differently, causing confusion in the sector about whether they are aligned or not. 

The good thing about our standard is that it's being developed with those key players, working collaboratively, with everyone having an equal vote. This means everyone in UK real estate will be behind it, so the standard is more likely to achieve our aims by being the go-to document across the country. 

PJ: What work has already been done on the standard, and what is left to do?

CBG: In May 2022, we launched this project to real-estate professionals and asked them to get involved in various ways. That could be by contributing to a technical task group or a sector group, which means looking at the 14 different building sectors for which we're developing targets. 

We had more than 900 applications from people who wanted to become involved. As a technical steering group we sifted through these to appoint the task and sector groups. Between these, there are now around 300 people involved. 

We have five task groups: the first is concerned with operational energy, the second with embodied carbon, and the third with carbon budgets and top-down modelling, taking a science-based approach. 

The first two groups will develop an understanding of the performance levels of buildings' embodied carbon and operational energy use of the existing building stock, standard practice and best practice new builds today and in future. We'll then combine the information from the top-down, science-based work with the performance data to establish the net-zero-carbon targets.

Then we have a fourth task group looking at carbon accounting, renewable procurement and offsetting. The final task group is looking at verification. Effectively, these task groups will develop the technical material for the standard, as well as a series of technical annexes that back it up. We want the standard to be as transparent as possible, so people can see not only what it says but how it was developed and the decisions that were made in doing so.

Underpinning that technical development are the 14 groups covering specific sectors, namely homes, schools, offices, retail, higher education, healthcare, logistics and warehouses, sports and leisure, science and technology, hotels, commercial and residential, culture and entertainment, heritage and data centres. Each group includes experts who look at the specifications for that sector, as we want to make sure that the targets are relevant to each sector.

We established these sector groups and set the scope and brief for each in September and October. We issued a call for evidence in November through January, where we asked for as much data as possible from across UK real estate, and received information on operational energy use and embodied carbon from a variety of sectors. From February, we are looking at analysing this data to develop the performance levels that will inform the net-zero-carbon targets.

The next step is bringing the science-based, top-down approach together with the performance levels, to work through what those net-zero targets are, and to understand how they can be met and their wider impacts, as well as dealing with the finer details of carbon accounting and verification.

DP: That's where engagement with the rest of the real-estate professions comes in, so we are able to explain where the technical standard is going and understand from them what they need in terms of accounting, verification and so on. We'll be embarking on this engagement initiative from March. The key is getting the standard to be user-friendly, so it is fit for the people who will be making the big decisions on net-zero-carbon buildings and other assets.

CBG: We're trying to think as much as possible about where it could go wrong, to try to pre-empt that. We will also ask questions of the right people (e.g. designers, contractors, developers, owners, lenders, property managers or other professionals); we're very well aware it would have been great if we'd had this standard five years ago, so we want to get it finished as quickly as practically possible and make sure that it's relevant and useful. That's why we're collaborating rigorously. 

PJ: What are the main challenges that the initiative faces?

DP: There are lots of other people working in this area. Not that we're competing with them: we want to make sure that we dovetail with them. 

We appreciate that something such as the Carbon Risk Real Estate Monitor, which is the standard that a lot of asset owners and investors use and are reporting against, has a far wider basis because it's not just looking at real estate. But it also has a far narrower basis in some cases because it includes operational but not embodied carbon. So we want to be sure that we're overlapping with these in a positive way as well as filling in the blanks for all the other initiatives out there. 

Some people have asked us why we are focusing only on the UK. It's a good question, and the answer is because that's the bit we can do now. That doesn't mean that the standard shouldn't be equally applicable in Europe or Canada or Australia or elsewhere. The template should be the same.

CBG: I think the template of the methodologies could be the same, but sometimes you need to be humble. We're experts about buildings in the UK, so let's start here. 

We also appreciate that investors and developers have portfolios that extend beyond the UK, which is why we are looking to understand other international standards with which we could work. All of the initiatives with which we could have a relationship have been enthusiastic about what we're doing, and I don't think we're treading on other people's toes. I think they want to work with us, and that's been great.

DP: Everyone is looking for an answer to this issue in a way that doesn't involve reinventing the wheel each time. This can be complementary, because if one party understands that it's doing one part of the work others realise that they don't need to do it. It's important that we are aware of this. 

The geographical element is also important. Someone asked me whether Canada had a similar standard; although it does, this is going to be different because the construction industry there primarily uses wood rather than bricks, the ecology is different and there is a different energy system. The UK has a national grid that's gradually decarbonising, so we're working more towards electrical approaches to reducing operational energy use. 

Other geographies have different variables. If you go to Iceland, for instance, it benefits from abundant geothermal resources through its volcanic geology, but not every country has such advantages in terms of how its energy is generated. That's why the UK standard focuses on the UK.

But as Clara said, the methodology should still be applicable to other places, and we're trying to do that by sharing our working process. We are going to publish absolutely everything: where decisions required difficult trade-offs, we're going to say we decided to do X as opposed to Y and here's why, so people can understand the decision-making process. 

We don't see the standard as being static, either. We understand that the standard in 2023 may look very different from one in 2025 or 2030 when the market may have moved on or the technology has improved. 

CBG: Another challenge is time and the number of people who are involved. If we had a team of 20 people working full time it would be different, but we don't. We have a team of 300 working a bit of time every month. Most of them work maybe a day a week or every two weeks on the standard. 

The positive thing about this is that we get the skill, the breadth and depth of knowledge and the consensus built by that group of people. The challenge is bringing everyone along together and making sure that people are not duplicating their effort, that they understand what decisions have already been made and what decisions are yet to be made. 

We've been doing a lot of work to make sure that these points are clear for the various people working on the project, that we have a clear matrix about the types of decision and who's responsible for making them, and that all decisions have a justification. That helps mitigate this issue.

DP: That's a good point. The other challenge is that we don't have much money, and 85% of work is being done pro bono. We have recently hired some individual project managers and directors to help with the coordination that Clara mentioned. 

PJ: The standard will require broad collaboration across the built environment to achieve its aims. How are you fostering such collaboration?

DP: There are two sides to this. Clara's side is the people getting involved in the technical aspect of the standard using science-based data. These people have come from across the sector, including members of RICS, RIBA, CIBSE and the Low Energy Transformation Initiative (LETI). 

The other side is engagement, which the governance board will be embarking on this year, the members of this board essentially being the founders of the standard initiative. We'll be looking to consult widely with built environment professions to ensure that RICS members who are advising investors and occupiers, valuing for lenders and working in facilities and asset management will have a say in the standard's technical elements. The aim is that, when certification and validation is offered, it will work for members' own reporting needs and meet their requirements. 

This collaboration from the bottom up and the top down is critical and distinctive, because in the past we tended to have initiatives from one or the other, but not necessarily both meeting in the middle. So we will be launching a series of iterative consultations with the technical groups in March, and by the middle of 2023 we hope to have a standard that can be used across the built environment.

In the second half of the year we're going to send this out for beta testing. It's not just going back to the technical groups to ask whether it works for them; we're also going to ask the members of the various different institutions with which we've worked. We want to know whether they can use the standard for their assets, their loan portfolios, to get it beta tested by the commissioners or users as well as the professionals who might use it to design interventions for new or existing buildings.

PJ: How will the standard be relevant for RICS members and how can they get involved? 

DP: RICS members have been involved in providing us with data, but we also want to hear how they might use the standard in their daily work. If you're a valuer, an asset manager, a facilities manager, a tenant advisor, how would it help you help your clients achieve net zero for their assets, and what do you need from us? When we know that, we can tailor the standard appropriately. 

We want to work through the professional organisations whose members will be interested in the standard. If we can get these organisations to adopt the standard on behalf of their members, that will mean it carries much more weight.

At the same time, they will need to talk to their members, so we're looking to host consultations to explain where we are, hear what individuals or groups want from the standard, and see how we can make individuals and groups come together. That is our main focus as of January, unless we find there are areas in which we need more data.

CBG: As well as what David's mentioned, we hope that RICS members can support beta testing of the standard when that gets under way this summer. We will be seeking feedback from the team designing the standard but also from its potential users.

DP: We also hope that big and bespoke surveying firms will be using it for all their clients and customers, and they can get involved by telling us what they think their clients and customers want. By going and testing the standards with those clients and customers, surveyors can provide us with feedback to make the standard better.