Making the business case for decarbonisation – the time to start is now

The latest Intergovernmental Panel on Climate Change (IPCC) report, which covered climate change impact vulnerability and adaptation, suggested that any further delay in concerted global action in adaptation and mitigation will miss a brief and rapidly closing window of opportunity to secure a liveable and sustainable future for all.

We all know this is the case. Everyone listened in to COP26 in Glasgow last year and it made it very clear that the onus is on us to make a change and specifically to decarbonise our existing buildings.

We also know what to do in a lot of instances - switching rapidly to clean energy, transitioning to low carbon materials, and running buildings more sustainably.

But there are big challenges around data, cost and risk, because where there is risk you have additional cost.

Climate finance alongside cost is notoriously tricky to define. The Construction Leadership Council (CLC) has estimated it will take £500bn. When you’re looking at the cost needed just to retrofit the UK’s 29 million homes, and what comes from that in terms of energy efficiency and improvements, the big question is where does this money come from?

The plan is that private investment will provide most of the financing required to commercialise these early technologies and scale low carbon sectors. Public finance provides the early investment, interventions and really clear signalling that will create the conditions for that accelerated net zero carbon investment.

Adequate financing is really key to progress in decarbonisation and zero carbon developments, yet quite often we lack awareness of what those upcoming opportunities are. And it’s one of the main obstacles that prevents public institutions from accessing this funding.

Put simply, many of us don’t know where to find that funding or what the requirements are. There isn’t a simple framework that you can go to, in order to find out which one to access.

The good news is that there are lots of available funds. If you take the low carbon skills fund this is very much set up to prepare organisations for the public sector decarbonisation scheme.

The key is making sure that data is all set up and ready to go, so that as soon as a funding portal becomes available you’re ready to submit and access that funding.

Adequate financing is really key to progress in decarbonisation and zero carbon developments, yet quite often we lack awareness of what those upcoming opportunities are. And it’s one of the main obstacles that prevents public institutions from accessing this funding.

But there are other constraints, such as the Social Housing Decarbonisation Fund with a minimum application being £1m, which means you have to be approaching decarbonisation on quite a large scale to access that funding.

The fund is really driving the fabric-first approach which with fuel poverty and rising utility costs, is an absolutely key part of the decarbonisation journey.

In addition, in the spring statement we heard there is now a reduced rate on the VAT, moving from 5% to 0% on energy saving products such as insulation, heat pumps and solar panels.

But as I’ve said, to be able to actually access that funding you need the data in place and ready to go as soon as that portal opens, particular as most of them are on a first-come-first-served basis.

The biggest challenge is often where to start the decarbonisation journey. The SNC-Lavalin Decarbonomics proposition provides a really simple three stage process of Benchmark, Roadmap and Delivery.

Benchmarking is about developing a carbon baseline, it’s providing access to real data and also benchmarking data to provide an overview of the best solution, the best cost and programme solution to getting to a net zero carbon estate.

I think it’s pretty key that there is no one-size-fits-all to decarbonisation. The installations and adaptations needed will vary across sectors, across estates and building by building.

In the Roadmap stage it’s about designing a cost effective carbon reduction pathway. Looking at funding opportunities beside that and presenting a business case to actually move into the delivery stage for net zero carbon.

And finally, Delivery. Implementing those carbon reduction solutions onsite, from building retrofit to behaviour change and also measuring the progress across the portfolio and asset life cycle.

In that Delivery section it’s really key that we’re looking at procurement of local skills and delivery and what the best delivery route is. For instance, for LED interventions it may be your existing facilities managers that handle that. With slightly larger interventions such as PV and renewables it’s making sure that you’ve got those procurement routes in place and you can secure the funding early on.

I think it’s pretty key that there is no one-size-fits-all to decarbonisation. The installations and adaptations needed will vary across sectors, across estates and building by building.

Quite often a good model in the application of applying for funding, is to be looking at conducting pilot projects and monitoring the effects of those, through measurement and verification to see what would best suit your specific needs. And look at those innovations and experimentation to deliver the best business case possible.

Focussing on whole life value is also fundamental, which means thinking in a business case around the social, economic and environmental implications of the decarbonisation process. And above all prioritising the environment within that.

But I think the key message is that to fund decarbonisation it is a large cost and it’s going to take organisations many years to put that funding in in the appropriate places, so the right time to start is now.