Co-operation between tenants and landlords can save thousands, says Dave Farebrother
The Government has a clear goal to encourage carbon savings through a raft of measures aimed at new buildings. We already know that the Building Regulations will become progressively more challenging and the Code for Sustainable Homes sets ambitious targets for 2016. It is likely that a Code for Sustainable Non-domestic Buildings will follow soon (feature, p78) and the UK Green Building Council recently published a paper that suggests to the government what is realistically achievable and over what timescale.
But does this focus on new build miss a trick? The Energy Performance of Buildings Directive will finally bite this year and the Department for Environment, Food and Rural Affairs (DEFRA) is now proposing a national emissions trading scheme, the Carbon Reduction Commitment, which will also cover much of the property sector, but existing buildings remain the Cinderella story of carbon emissions.
As our CEO, Francis Salway, likes to say, 98% of buildings already exist, referring to the fact that development only changes around 2% of the building stock every year. Even if all of that development could be zero carbon, which is an impossible dream at present, it would take five years to make a 10% difference.
Having joined Land Securities in 1986 from an energy management background, I am well aware of the potential to make a significant difference through relatively minor changes.
I like to refer to these as ‘good housekeeping’.
Four years ago we came second in the European Energy Trophy with a building called Regis House. Without spending any capital on controls or more efficient plant, carbon emissions were reduced by 29% in 12 months.
This was achieved by raising awareness and changing attitudes. Tenants were encouraged to allow security guards to turn off lights at night in unoccupied areas, and to ensure their own IT was turned off when not needed. The building manager persuaded tenants to allow our contractor to tweak the temperature set points and the maintenance company itself was motivated to check the heating times matched occupancy times. Also, plant maintenance was geared towards improving efficiency.
The net result was an energy saving that not only reduced carbon emissions but also shaved £44,000 off the annual energy bill.
How much extra business does a firm need to earn £44,000 profit? How much would they spend on marketing for the same result? And why is it still so difficult to encourage occupiers to take advantage of these opportunities?
Sometimes investment will be needed.
Land Securities Trillium has successfully operated a shared savings mechanism with the Department for Work and Pensions for several years. DWP is very focused on leading the way in the environmental arena and by working in partnership to identify priority action areas, a cumulative investment of around £2m is generating almost £800,000 of savings per year, all shared with the department. Carbon emissions are being reduced by around 5,700 tonnes per year and water usage by almost 260,000 cubic metres.
It is all of these quick wins that need to be implemented now, maybe freeing funds to subsequently install renewable technologies.
It boils down to attitude, a state of mind.
For many years it has been hard to tell this story effectively. But maybe times are changing.
We recently staged an environmental workshop for tenants and their overriding concerns were to reduce energy usage and increase recycling. They recognise that they need to work together as a business community to achieve this but they expect us as the landlord to be the catalyst and provide the technical expertise.
But to truly realise this step change, there needs to be greater co-operation between occupiers, landlords and managing agents to reduce energy consumption and, perhaps ultimately. lead to better property values.
This article first appeared in Property Week.