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Aberdeen Climate Positive

Aberdeen: Vision for a climate-positive city at the heart of the global energy transition

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Aberdeen is widely regarded as the energy capital of Europe. It boasts the highest concentration of energy supply chain companies in the world, including around 75% of the global sub-sea engineering capability, and is home to half of Scotland’s energy sector jobs.

Aberdeen City Council has today approved a bold vision and strategic plan for the city to leverage that expertise, as well as its unique geographical, institutional and technology strengths, to become an exemplar in tackling the climate crisis.

The vision is for Aberdeen to become a climate positive city, at the same time helping to lead the world in the urgent shift to a net zero future by leveraging its unique assets and capabilities to support the global energy transition.

Prepared with the support of Hillbreak and Creative Concern, the prospectus is an ambitious and compelling response to the climate and energy transition imperatives. It positions Aberdeen as the primary destination for focused UK and international investment in alternative energy solutions and markets, particularly hydrogen, offshore wind and carbon capture and storage.

The prospectus calls for the city’s climate positive ambitions to be recognised, promoted and invested in as a national infrastructure and inclusive economic development priority. It advocates a decisive local partnership approach, underpinned by commitment from the UK and Scottish Governments, to unlock the unique potential of Aberdeen in contributing towards national net zero carbon and just transition goals, whilst also sharing its unrivalled depth of expertise with international partners to drive the global energy transition.

As well as spearheading the transition of global the energy sector, the prospectus also confirms Aberdeen’s aim to be a climate positive city as soon as possible. This means that greenhouse gas emissions related to the operation and continued development of the city – across all sectors – are verified as reaching beyond net zero, taking account of the emissions saved beyond the boundaries of the city through the export of zero carbon energy supplies, such as green hydrogen. Calculating a robust pathway to below zero emissions, aligned with an appropriate science-based methodology, is highlighted as an immediate priority.

The vision ­– and the framework of leadership and governance actions which underpin it ­– is as timely as it is ambitious. The coronavirus crisis has had a huge impact on people’s lives and on the economy. For Aberdeen and wider city region, it has had a particularly dramatic effect. The recent and profound fall in oil prices underlines the importance of showcasing the strengths of the whole city region economy, and in particular Aberdeen’s place in the vanguard of a future renewables revolution. Meanwhile, the concentration of climate-altering greenhouse gases in our atmosphere continues to break records. Ushering in a just energy transition is more critical now than it was even just a few months ago.

Aberdeen’s vision to become a climate positive city at the heart of the global energy transition is therefore pivotal to its prospects for realising a resilient recovery following the pandemic, as well as those of Scotland and the wider UK.

Jon Lovell, co-founder of Hillbreak and lead author of the prospectus, said: “the idea that we have a collective future in which we all have a stake and a part to play is uniquely resonant at this moment in time. Just as profound action on climate change requires political leadership, economic resolve, and individual action and agency, the notion that we are all in this together has added poignancy as we also respond to the enormous threats of the coronavirus crisis.

“There’s no question that the success of national efforts to transform to a net zero carbon economy, as part of a resilient recovery from the impacts of COVID-19, will be contingent on what happens in Aberdeen. Whilst working with the City Council and its partners in the public, private and academic sectors, I was struck by the strength and unity of opinion, not only about Aberdeen’s potential role in a national and international context, but of the vital importance of everyone working together towards a common vision and goal.”

That sentiment was echoed by Aberdeen City Council Co-Leader Jenny Laing. Commenting on the launch of the plan, she said: “Green recovery will be a big part of how the Aberdeen economy responds to Covid-19 and the Net Zero Vision already builds on the plans we have in the Local Outcome Improvement Plan.

“Aberdeen is a world-leader in energy technologies providing a major economic stream locally and nationally while already embracing the global energy transition. We have an enviable track record of leading on deploying climate friendly actions including the EOWDC and H2 Aberdeen, and now in working collectively on leading the transition to net zero activities.

“This provides an opportunity for the city to become an exemplar in the energy transition towards net zero and lead the way in how to change in a dynamic and thoughtful way. It also aligns to the work of World Energy Cities Partnership and its work around climate change.

“We look forward to the future and working with public and private sector partner organisations and companies to achieve net zero together.”

You can read Aberdeen’s vision to be a climate-positive city at the heart of the global energy transition by clicking on the image below.

Aberdeen Energy Transition Vision

London Strategic Land

London Strategic Land appoints Lovell to Advisory Board

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London Strategic Land, the investment company working to bring more and better housing to London, has appointed Hillbreak co-founder, Jon Lovell, to its Advisory Board. He will bring an independent perspective on ESG trends and priorities, advising on the integration of pertinent factors into fund strategy and the investment process.

Commenting on the appointment, Jon said: “Addressing the acute housing crisis in and around London is one of the most pressing and systemic challenges for the city region and the wider UK economy. It is crucial that all new homes built for the Capital are fit for the future, whilst also meeting the needs of today. I’m therefore delighted to be taking on this role with London Strategic Land, a business with great potential to be part of the solution, and I look forward to helping the team to integrate rigorous attention to relevant environmental and social factors into its investment processes.”

He continued, “Increasingly, institutional and private investors are looking for investment solutions that deliver positive environmental and social outcomes alongside a competitive financial return. With quality, sustainability and accessibility as central guiding principles to the planning, design and delivery of new homes, there’s a significant opportunity for investors to realise these combined objectives.”

Mark Tagliaferri, Chairman of London Strategic Land, said: “We are delighted that Jon has agreed to join our advisory board.  We believe Jon and the team at Hillbreak can assist us in our objective of achieving high social impact on our sites.  The team at LSL strive to create places which are sustainable environmentally and socially.  Jon’s experience will be invaluable in helping us demonstrate, validate and measure these important objectives on our sites and as we develop and grow as a business.”

Lovell joins Robin Hoyles, former Group Land and Planning Director at Crest Nicholson plc, Claire Fielding, Partner at Town Legal LLP, Karen Alcock, Managing Director at Kanda Consulting, and Jennifer Ross, Founding Director of Tibbalds Planning & Urban Design, on the Advisory Board.

Lovell brings a wealth of independent advisory experience to the role. He currently sits on the ESG Committees of Round Hill Capital, BMO Real Estate Partners and the Responsible Property Investment Group of Royal London Asset Management, as well as the Advisory Board of the Urban Land Institute in the UK.

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Introducing the new Hillbreak Podcast

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Over recent weeks, Hillbreak has released a mini-series of podcasts focusing on the top ESG topics for the real estate sector in 2020.

The first episode talks about the key trends driving the ESG agenda and then introduces our picks for the three principal topics for real estate organisations to be prepared for this year, in both public and private markets. The following episodes dive into greater detail, discussing each of those themes in turn, invariably highlighting some of the key risks and opportunities to look out for.

You can jump straight to each episode from the list below:

Episode 1: Top 3 Strategic Topics for 2020

Episode 2: Ambition & Leadership on ESG

Episode 3: Better Reporting & Disclosure

Episode 4: Climate Risk & Net Zero

We’ve really enjoyed recording this first Hillbreak Podcast series and we plan to do more soon. We’d love to hear what you think and would be delighted to hear any suggestions for topics you’d like to hear us tackle. And if you’ve got a burning opinion you’d like to air, then why not join us behind the mic on a future episode?

Do get in touch…

Round Hill Capital

Integrity, Innovation, Impact – a new ESG Strategy for Round Hill Capital

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Integrity, Innovation, Impact – a new ESG Strategy for Round Hill Capital

  • Round Hill Capital launches new ESG Strategy, advised by Hillbreak
  • Underpinned by a refreshed statement of Core Values for the Company
  • Jon Lovell appointed to global ESG Committee to help support continued oversight

Since its foundation in 2002, Round Hill Capital has become a market leader in the real estate accommodation sector – offering a fully integrated investment, development and management approach alongside venture capital for early stage, high growth property technology companies.

Hillbreak was engaged by Round Hill Capital to develop an Environment, Social and Governance (ESG) Strategy to help to underpin its corporate and investment management activities. Working with Round Hill Capital’s Executive Committee and a Company-wide Steering Group, we undertook in depth analysis to identify opportunities for a compelling ESG strategy that aligns with the Company’s pioneering, macro-driven and nimble approach to business.

Extensive internal surveying and dialogue was a key part of our approach, to further engage collaboratively with employees and decision-makers in the process of determining the core areas of focus for the ESG Strategy. We found significant appetite for Round Hill Capital to formalise a comprehensive and proactive approach to responsible property investment that aligns with investor objectives and supports financial returns and which also, notably, embraces key ESG impact themes emerging within the market.

Examination of the Company’s current activity revealed several examples of strong ESG-related business practices, which presented a clear opportunity to build on the existing internal culture to more consistently integrate ESG considerations into the investment process and development and asset management practices.

The resulting ESG Strategy sets out clear ambitions targeting performance and positive change, supported by a refreshed statement of the Company’s Core Values, which clarify Round Hill Capital’s commitments as a Group and its expectations of the conduct of its employees and wider stakeholders. Features of note include:

  • A focus on Round Hill’s core strengths of innovation, flexibility and proactivity – the Strategy highlights positive ESG impact, first mover advantage and stakeholder engagement as key features within its overarching business objectives.
  • Highlighting integrity alongside innovation, ensuring an underpinning of consistent standards and a continual drive to take account of ESG impacts, risks and opportunities in all business activities.
  • A structure for embedding ESG more formally into the real estate investment process. A suite of decision-making tools and best practice resources are currently being developed.
  • Prioritisation of internal capacity building and reporting capability, including systematic internal training, the development of ESG requirements for operating partners, and extension of investor and external reporting to include ESG performance.

The ESG Strategy combines strong foundations with the flexibility for Round Hill to capitalise on its strengths and take a positive, opportunistic and responsible approach to ESG.

Implementation will be led by a newly established ESG Committee, to which Jon Lovell, co-founder of Hillbreak, has been appointed as an independent member.

Commenting on the new ESG Strategy, Lovell said, “Working with Round Hill Capital has been a unique and insightful experience for Hillbreak. The Company’s blend of fast-paced successful growth and investment agility in alternative sectors, together with its core values, has created a really interesting opportunity to present a distinctive approach centred on integrity, innovation and impact. We’re so pleased to have been retained to help support Round Hill Capital with the realisation of its ESG goals.”

Paul Bashir, President and COO, commented, “Our new ESG Strategy is the formal expression of our innovative approach to community, wellbeing, environment and risk.  Round Hill Capital is really enthused by the prospect of working with our investors and other stakeholders to drive positive social and environmental outcomes and change alongside the delivery of investment performance.”

He continued, “Hillbreak has been an excellent partner for us to work with in helping to bring forward our new ESG Strategy. They have been challenging, bold and ambitious, which sits perfectly with how we do things at Round Hill Capital. I’m delighted that Jon will continue to bring insight, ideas and objectivity by serving on our new ESG Committee.”

 

About Hillbreak

Hillbreak provides training and strategic advisory services for organisations seeking purpose and competitive advantage in a changing urban world. Its mission is to expedite the transition to a sustainable policy, business and investment environment by bringing intelligence, challenge and inspiration to its clients and stakeholders.

About Round Hill Capital

Round Hill Capital is a leading global real estate investment, development and asset management firm.  Since inception in 2002, Round Hill Capital has acquired and repositioned for long-term institutional ownership over 110,000 residential units and student housing beds. Round Hill is a responsible landlord of assets offering housing to a range of occupants, from students through to senior citizens.

Round Hill Capital has an established track record of generating high risk-adjusted returns and invests in and asset manages real estate on behalf of some of the world’s leading institutions and private investors.

Further information on Round Hill Capital is available at: www.roundhillcapital.com.

Oslo Opera

Perfect Storm for Managing Agents

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Consultants Howard Morgan & Jon Lovell offer a six-point solution to the problems of the property industry’s managing agents.

Managing agents caught in the ever-increasing whirlwind of client demands and occupier expectations must embrace risk and innovation if they are to survive.

This is the view of two independent experts, operating in complementary spheres of the real estate industry, who are offering them a blueprint for survival.

Jon Lovell, whose Hillbreak business provides strategic advice and training on sustainability and responsible investment, and Howard Morgan, whose RealService consultancy operates in the world of customer experience, believe the role of the traditional managing agent is now in peril.

Lovell and Morgan see a perfect storm of challenges coming from two principal directions:

  • Increasing performance, compliance, cost efficiency and transparency demands from landlords, including on environmental, social, wellbeing and health and safety matters. These are testing managing agents who are going to need stronger leadership, more effective systems and new capabilities to keep ahead of the game
  • Meanwhile, those who occupy the buildings they manage are becoming fickle and savvy customers, expecting a more enriching experience, greater flexibility and reliability.

With rising expectations from occupiers and their landlord clients, managing agents are feeling the pressure.

Bill Hughes, boss at Legal and General Investment Management recently turned up the heat. Writing in Property Week, Hughes said managing agents are being asked to provide services “they are not equipped to offer” as their role moves from rent-collection and basic maintenance to provider of “customer service, facilities maintenance and engineering, sustainability and CSR strategic thinking”.

In response, property managers MJ Mapp blamed property owners for instigating a tendering process which has outsourced management to the lowest bidder. They said owners should select managers who share their values and not take management in-house, risking losing focus on their core business.

Lovell and Morgan have sympathy with both perspectives, which points to a collective market failure rather than a single source of blame.

According to Morgan, salvation for the property industry’s operational intermediaries lies in persuading owners and investors to join them in forming strategic partnerships which harness the talent of the client, the managing agent and an increasingly disparate supply chain. This would require a fundamental change in thinking from the current “hands-off” outsourcing model.

Their Six-Point Survival Blueprint focuses on:

  1. Better business alignment and planning
  2. Clearer agreements and outcome-based performance contracts
  3. Stronger leadership from senior management
  4. More effective and consistent deployment of capability and technology
  5. Greater harmony of message & transparency to customers
  6. Closer alignment between performance and remuneration

Morgan’s blueprint inspiration came from a visit to John Lewis’s state-of-the-art warehouse complex in Milton Keynes. Here he saw collaboration in action, in the form of the company’s partnership with Knapp, an Austrian firm, which enables the retailer to deliver more than 220,000 different product lines to its stores and online customers.

He says: “John Lewis’s reputation is based around customer service and it is putting that reputation into the hands of a third party. It has been able to do this because of the relationship it has with Knapp; it is a strategic partnership.

“Property companies put their reputations in the hands of managing agents, but their relationship is nothing like the one between John Lewis and Knapp. Why would managing agents embrace risk or invest in technology when there is no long-term partnership?

“Our blueprint is about taking best practice from outside the industry and working with our clients to apply it to the world of property,” says Lovell.

To collaborate successfully, Lovell points out that owners and managing agents must work together on a business plan which identifies a mutual vision and documents key areas of responsibility, risk and reward. Having clear, outcome-based objectives across the spectrum of financial performance, customer experience, environmental responsibility and community impact means each partner knows exactly what they bring to the relationship and how they are accountable.

Being on the same page enables the creation of benchmarks or indicators to monitor progress, while recognising strengths and weaknesses allows each partner to utilise their particular expertise and concentrate on their core competencies.

Any arrangement must have the complete commitment of the senior executives of both parties and be promoted consistently to customers as a partnership of equals. Financial rewards should be based on key performance indicators and provide incentives while, in terms of governance, the arrangement should be reviewed regularly, in a spirit of collaboration and improvement rather than conflict and an ever-poised stick of retendering risk.

Bear in mind too, that partnerships can take time to flourish and need nurturing.

Morgan points out that research suggests it is cultural differences, rather than financial or corporate considerations, which cause partnerships to break down, hence his enthusiasm for putting the customer at the heart of every property company’s business strategy.

Lovell says: “Dissatisfaction of landlords with the service provided by managing agents is one of the key motivations for increasing the frequency of re-tendering. They see it as a way of incentivising performance but actually it’s part of a downward spiral; a race to the bottom which actually disincentivises investment in innovation and skills.

“We need to find an inclusive approach to performance management and remuneration to incentivise performance. Investor expectations are strengthening and likewise the demands of the occupier market.

“Strategic partnerships are being trialled but currently only really in the area of energy savings and, in many cases, with the managing agent having been circumvented by the client searching for a more reliable and responsive solution.

Morgan and Lovell do not underestimate the challenge to create an upward spiral of quality and reward.

“Unfortunately, clients have, over a sustained period, driven the agenda, which has been focused on realising more outcome for less money. Margins are very, very low as a result.”

Morgan is also frustrated that customer engagement is not factored into the performance of investment managers despite evidence proving that high customer satisfaction can improve the bottom line by almost two per cent.

“You can typically get information on energy, waste and water consumption but you can’t get information on occupier engagement,” he says.

Morgan and Lovell believe that occupiers will become increasingly vocal and willing to up sticks if they can’t get the solution and quality they want from their landlords, having seen new levels of aspirational workspace entering the market through disruptors such as WeWork.

As Morgan says: “Our approach is fundamentally about creating an alignment of interests between the owner, manager and occupier.” As the strategic partnership of John Lewis and Knapp shows, it’s ultimately the customer who benefits and there lies the key source of sustainable, competitive advantage in business.”

This article was authored jointly by Jon Lovell, Co-Founder & Director of Hillbreak, and Howard Morgan, Managing Director of RealService.

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Jon Lovell to speak at Digital Opportunities 2018: Proptech from strategy to implementation

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On Thursday 8 February 2018 the Manchester Central Convention Complex will play host to a Place North West event; ‘Digital Opportunities 2018: Proptech from strategy to implementation’. The conference will feature a variety of panel discussions and presentations exploring emerging strategies for digital transformation as well as pitches from tech innovators and disruptors.

As a featured speaker, Hillbreak director Jon Lovell will be putting the #PropTech revolution, its opportunities and risks, in the wider context of future trends and the growing expectations of investors on corporate governance, environmental and social responsibility.

Other speakers to appear include Malcolm Stagg, director of BIM & digital engineering, Skanska; Doug Ward, founder of Node; Sam Lawson Johnston, director, LJ Partnership; Tom Shrive, chief executive, AskPorter; and William Bainborough, chief executive and co-founder, Doordeck.

The event is sponsored by Mills & Reeve, IBI Group, Datscha and Node, whom attendees can also expect to hear from.

Those interested in attending can find out more and register here.

Real Estate Fundamentals

Real Estate Fundamentals for ESG Professionals – 2018 Course Dates

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Two further “Real Estate Fundamentals” training dates for sustainability and responsible property investment professionals have been announced by Hillbreak.

The UK Green Building Council (UK-GBC) will host one session on 12 January and Tuffin Ferraby Taylor LLP (TFT) will host another on 27 February.

The course is designed to enhance the confidence and ability of delegates to engage with their colleagues and stakeholders in the furtherance of positive ESG outcomes, and to enhance their contribution to the strategic, operational and financial goals of their employer organisations and investor clients.

Topics covered include the current state of the UK property market and its challenges; the property investment and development process; and property value, valuations and appraisals, including the integration of sustainability factors.

The training, which has received excellent feedback from organisations including LandSec, Intu, The Crown Estate, Capital & Counties and Peel Land & Property, will be delivered by Hillbreak co-founders Miles Keeping MRICS and Jon Lovell.

The unique course, tailored specifically for real estate sustainability professionals, is run in a roundtable format with a combination of classroom-style teaching, Q&A, individual and group exercises and facilitated discussions. In this way, it is hoped that all participants will learn by having the opportunity to steer content whilst interacting with each other and the facilitators.

Places are limited to 12 delegates per session and are available on a first-come, first-served basis and a number of places have already been reserved. Registration and further details are available below:

12 January (@ UK-GBC)
27 February (@ TFT)
Risk & Value Management 2

Jon Lovell joins line-up for Property Investor Europe Summit 2017

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Hillbreak Director and co-founder, Jon Lovell, will be appearing as part of a discussion panel on sustainability at The Property Investor Europe Summit, to be held in London on the 14th of November. The panel, moderated by journalist Frances Robinson, will also feature Graham Baxter, Head of Sustainable Real Estate Investments, Standard Life Investments.

The panel will be focusing discussions on key market and investor engagement trends, the benefits of responsible property investment practices, how green real estate technology is evolving and the rise of well-being standards. Jon will be providing insights from the extensive, strategic advice provided by Hillbreak to international investment managers and real estate companies, as well as thoughts on the key opportunities and risks associated with the burgeoning ESG agenda.

Experts in the property investment industry from across Europe have been invited to attend the educational event to discuss topics including risk management, technology, capital flows, innovation, political risks, PRS and Europe’s core markets.

Real Estate Fundamentals

Real Estate Fundamentals for ESG Professionals – New Course Date Announced

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Hillbreak is pleased to release a further date for its highly-regarded “Real Estate Fundamentals” training course for sustainability and responsible property investment professionals.

The intensive one-day course is open for registration now and is exclusively available for those with an Environmental, Social and Corporate Governance focus working within property companies and real estate investment management organisations. The course is designed to enhance the confidence and ability of delegates to engage with their colleagues and stakeholders in the furtherance of positive ESG outcomes, and to enhance their contribution to the strategic, operational and financial goals of their employer organisations and investor clients.

The training will be held in central London on 11 December 2017 and will include coverage of topics including: the current state of the UK property market and its challenges; the property investment process; property value, valuations and appraisals, including the integration of sustainability factors.

The training, which has received excellent feedback from organisations including LandSec, Intu, The Crown Estate, Capital & Counties and Peel Land & Property, will be delivered by Hillbreak co-founders Miles Keeping MRICS and Jon Lovell.

The unique course, tailored specifically for real estate sustainability professionals, will be run in a roundtable format with a combination of classroom-style teaching, Q&A, individual and group exercises and facilitated discussions. In this way, it is hoped that all participants will learn by having the opportunity to steer content whilst interacting with each other and the facilitators.

Places are limited to 12 delegates and are available on a first-come, first-served basis.

Download the prospectus and book you place here.

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Potential £10bn rental bombshell just twelve months away

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London – Friday 14 April 2017

Potential £10bn rental bombshell just twelve months away in buildings failing green standards

Research on the impact of new green standards has estimated the value of failing commercial property in England and Wales could be as much as £10bn in annual rents.

The estimate is based on data included in a major new report by global advisory, broking and solutions company Willis Towers Watson, which calls for radical policy measures to green the UK’s building stock.

Willis Towers Watson – Real Estate Climate Risk Report 2017

The report, to which Hillbreak was a principal contributor, contains research by big data firm DealX showing that nearly a fifth of commercial properties in England and Wales are currently failing the Minimum energy efficiency standards (MEES) due to come into force from April next year.

The research has found over 115,000 commercial buildings – 17.5 percent of those rated – in England and Wales have Energy Performance Certificates (EPC) rated F or G. Landlords will be forbidden from re-letting commercial buildings with EPCs below E from next April.

Analysis of the figures by property consultancy Daniel Watney LLP based on the EPC data and the new business rates valuations estimates that the equivalent annual rental value of F or G-rated commercial buildings could be as much as £10bn. Figures released by the Investment Property Forum last year estimated the annual 2015 value of UK commercial property rents to be £55bn.

The Willis Towers Watson Real Estate Climate Risk Report brings together major listed firms and high street names including British Land, Land Securities, Lendlease, NatWest and the John Lewis Partnership to examine how to best bring property up to standard and help the UK meet the targets enshrined in the Paris Agreement, the world’s

The listed firms say that while they can leverage their economies of scale and the latest technology to achieve substantial energy efficiency gains, the key challenge will be to get smaller businesses to green their buildings.

Recommendations in the report for greening real estate include:

  • Government funding for a mass retrofitting programme
  • Ratcheting up the minimum energy efficiency standard to an EPC D rating by 2020
  • The industry-wide adoption of Display Energy Certificates
  • Potentially combining DECs with science-based targets in future legislation to drive ongoing emissions reductions

The report also details the potential harm to real estate if action is not taken to limit climate risk, proposing tougher stress testing and increased translation of climate risk to balance sheets. Many firms are not adequately insured against extreme weather events, as seen in the wake of the UK’s 2015/16 winter floods, which caused £600m in uninsured damage.

Paul Chetwynd-Talbot, managing director of the real estate practice at Willis Towers Watson, said:

“Buildings create 40% of carbon emissions and the fact than one in five properties are falling short of standards is worrying. Investors – many of whom are pension funds – increasingly recognise the risks associated with climate change. But we need to see more affirmative action from Government to help retrofit older buildings and drive forward take up of renewable energy.”

Miles Keeping, co-founder and director of sustainability consultancy Hillbreak, said:

“It is of course impossible to identify the precise value of the total rents at risk due to MEES. But relying on rateable value data gives us a very tangible sense of the money landlords are putting at risk if they do not attend to their EPC-related risks appropriately and very soon.”

Martin Siegert, co-director of the Grantham Institute for Climate Change and the Environment at Imperial College London, said:

“The need to decarbonise our economy is critical. It is going to be a profound change: the developed world will need to have no net carbon emissions by 2050. Ending emissions from our electricity system, manufacturing, transport and supply chains will be challenging enough for our larger companies, but we will need all of our smaller companies to achieve this too.”

Sarah Cary, head of sustainable places at British Land, said: 

“Retrofitting old buildings on a mass scale requires a far more complex solution than simple tax incentives to replace boilers or windows. Retrofitting should be set as a priority for a national infrastructure programme.

“The benefits would be twofold: it would be a boon for job creation, and it would work wonders in helping reach energy goals.”

Paul King, managing director of sustainability at Lendlease Europe, said:

 “We need to make sustainability easier for everyone to engage with – both in terms of consumers and companies. An industry-wide agreement to have LCD screens on the front of every building showing real-time energy use would be more than welcome. Just as with the example of energy labelling on white goods, while it may not directly cause many consumers to switch from one business to another, the incentive to a CEO to avoid having a negative label compared with a competitor could generate real results in driving businesses to retrofit their buildings.”

Caroline Hill, head of sustainability at Land Securities, said:

“Changes in technology and the ability to access growing pools of data have allowed us to set increasingly ambitious commitments to reduce both energy intensity and emissions by 40% per square metre by 2030. If more leading businesses agreed to using 100% renewable power, this could provoke a serious step-change in how society approaches the challenges we face.

“Giving property owners a hard stop deadline to improve buildings or lose the right to rent them out has clearly had some positive effect. Ratcheting MEES so all buildings must be at least D grade by 2020 would provide the impetus for inefficient buildings to get the investment they need.”

Andrew McAllan, managing director of Oxford Properties Group and chairman of the Canadian Green Building Council, said: 

“Most ‘Tier 1’ companies – those with the greatest capital reserves and profits – are by and large already taking the necessary action on making their buildings greener and making more efficient use of energy. It’s that next level down of ‘Tier 2’ companies that need engaging and support. Mandatory reporting of energy consumption would be useful: what gets measured gets managed.

“The best sustainability strategies are built on a foundation of good data, and there are ways of bringing in these measures without making them onerous for smaller businesses. Once you have that compulsory recording in place, smaller businesses then see the easy efficiencies they can make on their utility costs. Combined with something like carbon pricing to add impetus to the need to invest in more efficient installations, that is how we can effect the change we need.”

Richard Garner, head of commercial agency at property consultancy Daniel Watney LLP, said: 

“As our research into the value of England and Wales’ F and G rated buildings shows, many investors in commercial property face a ticking timebomb with their properties being potentially unlettable from April next year – this is particularly the case in the office hotspots of Westminster, Kensington and the City, which have commercial space with a collective annual rental estimate of nearly £800m currently not up to standard.

All the evidence demonstrates that adding sustainable features to offices adds value and drives worker productivity and satisfaction, advantages that will serve landlords well over the long term.”

Jon Lovell, co-founder and director at sustainability consultancy Hillbreak, said:

“It is important that that the government clarifies some of the glaring gaps in the confusing regulations. Many large fund managers and REITs are on top of them, but we have a real concern for the long tail of smaller landlords, businesses and family trusts, who own a disproportionate amount of F&G rated properties and will suffer if they don’t get their acts together very quickly.”

— ENDS —

Contributors to the Willis Towers Watson Real Estate Climate Risk Report 2017 included Hillbreak, British Land, Land Securities, Lend Lease, Oxford Properties, John Lewis Partnership, Nattiest, Hermes Investment Management, Blackstock, Grantham Institute for Climate Change & the Environment and DealX.

 

For more information, please contact Blackstock Consulting / Tyron Wilson / tyron@blackstockpr.com / 07725 197364

Notes for editors

Daniel Watney LLP is not a contributor to the report, but their research on the value of F + G-rated property is based on the DealX data within the report. The rental estimates are based on the latest rateable values used to calculate business rates, calculated using the average rateable value in each local authority and the number of F + G-rated buildings in each district.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

About Hillbreak

Hillbreak is a unique training and advisory firm that helps organisations seeking competitive advantage in a changing urban world. Its mission is to expedite the transition to a sustainable policy, business and investment environment by bringing intelligence, challenge and inspiration to its clients and stakeholders. Please visit hillbreak.com for further information or follow us on Twitter, Facebook, and LinkedIn.