Taking the measure of it

News and comment on carbon reductions regularly feature on the pages of this magazine. Does that mean, as an industry, we’ve got it sorted?

I don’t think so. I think we’re only just at the start of this particular journey - and we’ve got a long way to travel in a short space of time.

The UK target of an 80% cut in carbon by 2050 has been around for a while now. However, while it’s a big number, it’s also sufficiently far away for it to be someone else’s problem. That’s all going to change, because the government has now committed, at the recommendation of the independent Committee on Climate Change, to frontload that effort - reaching the 50% point by 2025. Suddenly, this is all going to get very real and the commercial property sector needs to be on the front foot.

Probably the biggest obstacle preventing our sector kicking its carbon habit is that despite the plethora of policy initiatives we’ve dealt with over the years, there is still no common method or rating system for the measurement of operational energy use in non-domestic buildings. And it’s a truism for a reason: if you can’t measure it, you can’t manage it.

The most obvious way to tackle this is through display energy certificates (DECs) which are currently only required for public buildings over 1,000m2 (10,764ft²). Energy performance certificates (EPCs) are mandatory for commercial buildings but crucially these only measure design performance, not operational energy use. Design function data in isolation does not provide enough information to highlight hidden areas where energy could be reduced, particularly in older stock. DECs provide data on how a building is performing which is essential to allow the design and implementation of an effective energy reduction strategy. Savings of 5-30% can be made through simple, low cost changes to the way a building is managed and occupied, and mandatory ratings, based on actual energy use, are a crucial first step.

The government has committed to extending DECs to the commercial sector by October 2012, but for that target to be met, it really needs to use the Energy Bill now going through parliament to put down the necessary legislation. But unless the government accepts the principle of Zac Goldsmith’s amendment tabled last week, it will miss this opportunity, which is concerning because it calls into question the strength of the commitment in the first place.

I know first hand that DECs can be useful, because Lend Lease has voluntarily produced DECs for our shopping centre portfolio, in addition to the mandatory certificates prepared for the public buildings we manage. According to our shopping centre teams - who have welcomed them - they have been very useful tools in understanding the energy consumption of the assets and provide a good comparison between centres. As an added benefit, their public display highlights the centre rating and maximises awareness among our customers.

But if we want to see change across the whole of the property sector - from top to bottom - a voluntary approach is unlikely to be enough. Competitors need a level playing field and we need a mass roll-out in order to gather enough data to make improvements to the methodology, around benchmarking, for example.

There is always going to be a question about regulatory burden and costs, particularly for small business, and it is absolutely right to address this. DECs offer the opportunity to get to grips, once and for all, with the plethora of policies I mentioned earlier. By providing a common methodology, they could provide the basis for other property-related policy, such as the Carbon Reduction Commitment and the Green Deal for Business and could eventually provide the basis for streamlining some of this, actually reducing the overall cost of compliance.

But the real beauty of DECs is that although there is a cost to getting one carried out, particularly if a site visit is required by an assessor, this is far outweighed by potential savings to be made on energy bills, both through low and no-cost measures. Forget about carbon - this is just good business.

You would have thought this would happen anyway - if a measure is cost-effective, why isn’t it being taken up? The problem, again, is the lack of knowledge. DECs force the issue. Before cars were rated A-G for their energy performance, how many consumers knew whether 225g/km was good, bad or indifferent? Now consumers are told that 225g/km is a G rating - and suddenly it can become a part of the decision-making process.

Energy - and carbon - need to feature more strongly as part of this sector’s decision-making process. Our contribution to the 2025 target will require a lot more cross-industry carbon literacy, effective legislation, innovation, leadership and a better evidence base that sustainability can go hand in hand with profitability and growth. DECs aren’t a silver bullet, but they’re a start.

Dan Labbad is chief executive of Lend Lease Europe, Middle East and Africa and chairman of the UK Green Building Council