COP28 – What progress has real estate really made?

Posted by Knight Frank Newcastle on 19th March 2024 -

David Goatman, Global Head of Energy and Sustainability, explores how COP remains a crucial lever in global cooperation where governments, organisations, academia and sustainability leaders gather to maintain momentum towards a sustainable future.

The COP28 climate summit held in Dubai in 2023 demonstrated the huge challenge of finding a meeting ground between western nations and the rest of the world, particularly those nations economically dependent upon fossil fuels.

In the end, an agreement presents some hope for a step-up in global decarbonisation efforts, but one could be forgiven cynicism when the ‘global stocktake’ showed clearly that most nations are failing to meet commitments made previously at COPs. Each year this continues, the new commitments being made become harder to believe.

The built environment also has a performance gap it needs to address.

The UKGBC updated report on Net Zero (a progress report on the Net Zero Whole Life Carbon roadmap) presented a clear picture of the gap between performance currently and where we need to be by 2025.

Yet our ESG Property Investor Survey has also shown that 77% of respondents have stipulated challenging climate targets for new acquisitions and 74% currently use CRREM analysis to plot the pathway(s) of their assets to net zero.

So an uncomfortable question presents itself, why when we are all saying we are committed to improving our portfolios and using best-in-class measurement protocols and KPIs, are we underperforming when it comes to the real-world emissions of our properties?

Chris Skidmore’s report from January 2023 was well-received across the political spectrum for its rare combination of ambition and practical relevance. Simply put, we are not yet doing at scale the things that Chris’ report states we easily could. Chris himself has now resigned as an MP in protest at the government’s plans to offer new oil and gas licenses.  

A ‘Buildings Breakthrough’ at COP?

At COP28, the big announcement for the built environment sector was the ‘Buildings Breakthrough’. 27 countries, including the UK, signed up. The commitment made by these nations is to ‘make near zero carbon emissions and climate-resilient buildings the new normal by 2030.’

If we take ‘near zero’ and ‘climate resilient’ to mean (at least in part) the very top end of any energy efficiency or green building metric and ‘new normal’ to be the majority position of the real estate sector (across all classes and typologies of building) then the next 6 years will need to see transformative change.

Currently, only 12-15% of UK commercial EPCs are B or better. Getting to a state of ‘near zero’ and ‘climate resilience’ is about a lot more than EPC ratings, but it shows the extent of the change needed.

Speaking to a senior RE fund manager recently, I was told how advanced their measurement and reporting practices for GHG emissions now were. But when I asked roughly what % of their buildings currently had significant climate improvement projects underway (taking a very broad definition including energy/resource efficiency, renewables, fabric, MEP, etc) the answer was silence, and when pushed the best estimate was ‘under 10%, probably nearer 5%’.

It is absolutely right, and something that we should be proud of, that the built environment sector stood out at COP28 with an ambitious and noteworthy commitment to transformational change; but we now (finally) need to get serious about changing the way our buildings are operated, refurbished and redeveloped. We need to massively up our game when it comes to utilising new technologies.

Given the time it takes to analyse options, conduct feasibility exercises, cost projects, procure and implement, we cannot afford the next 6 years to 2030 to be as much about measurement and reporting as the last 10 years.

Measurement, management practice and certification might achieve a good portfolio rating (such as via GRESB), but alone will not achieve the ambition of the Buildings Breakthrough. That will require bolder investment decisions, particularly in regard to transforming existing buildings.

80%+ of the buildings that will be standing in 2050 have already been built. This is where a breakthrough is most urgently needed and if we are honest about it where we as an industry have achieved the least up to now.

Catch up on the built environment discussion 

We were delighted to attend COP28 and to be part of the built environment discussion hosted by the UK Green Building Council (UKGBC) panel.

I was fortunate enough to share my views across a range of ESG themes, including the flight to quality for sustainable buildings, climate resilience, and sustainable technology infrastructure, among other key considerations across commercial and residential properties.

Catch up on the full discussion.

If you’d like to learn how we can support your ESG and sustainability goals across assets, please get in touch.

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