Business

Janey Douglas: Upgrading listed buildings is key to the net-zero drive

Businesses across the country have plans in place to help Scotland reduce its carbon emissions and combat climate change, with many firms setting their own net zero targets.

COP26 underlined how urgently we must now make progress against these plans. While operational changes, such as using renewable energy and incentivising staff to use public transport, are undoubtedly effective, in isolation they are not enough to turn the tide.

For a significant number of Scottish businesses – particularly in our city centres – the biggest obstacle to achieving net zero are the buildings they occupy.

Our recent Sustainability and Value in the Regions report found just five per cent of offices in Edinburgh and 11% in offices in Glasgow have a BREEAM rating of Good to Excellent – a widely recognised sustainability assessment method for buildings – with no buildings in either city rated Outstanding. This means office stock in Scotland’s biggest economic centres are not where they need to be from a sustainability perspective, which could derail both government and privately held net zero targets.

It’s a challenge we can’t build our way through. Several schemes currently in development are expected to set a new standard for sustainable office space in Scotland, including Parabola’s One New Park Square in Edinburgh Park, but supply is not keeping up with demand. Most of today’s commercial real estate will still be in use in 2045 when Scotland plans to be net zero. The only way we can feasibly hit this target is to upgrade buildings already in use. Three-quarters of Edinburgh’s city centre is listed and more than 1,800 buildings in Glasgow are deemed of special architectural or historical interest.

Upgrading these buildings can be complicated from a planning perspective. The character of the building can’t be damaged, and landlords have to liaise with their local authority planning officer and usually apply to Historic Environment Scotland for listed building consent before undertaking works. However, going through this process can be beneficial for both landlords and their tenants. By retrofitting to support the occupier market’s net-zero ambitions now, landlords can provide fit for purpose, future-proofed accommodation, which will ultimately maximise investor appeal and mitigate devaluation risk as legislation evolves.

Scottish firms with offices in older buildings should, therefore, collaborate closely with their landlords to start these conversations and maximise the mutual net -zero benefits of a retrofit. Every building is different and, by working together, businesses and landlords can identify and prioritise approaches and improvements that will have the biggest impact and generate the most value.

Introducing measures such as low-energy lighting and heating systems and more effective insulation will reduce the business’ operational carbon footprint in the long-term and ensure the property, and the businesses that occupy it, remains eligible for relevant net-zero standards – which are evolving to support business’ ambitions.

The UK Green Building Council, for example, currently has the same guidance and carbon emission targets for new net-zero buildings and net-zero retrofits. A more pragmatic approach is now required here, as net-zero retrofits can be completed to alternative targets and still have the same outcome.

There is general industry consensus that this will be addressed in due course. But, in the meantime, if business occupiers and their landlords get around the table to discuss how best to retrofit their offices with net zero in mind now, they will be in good position for the future.

Scotland is still at the start of its retrofitting journey, but I’m confident industry leaders’ dedication to becoming more environmentally sustainable will see more firms get started as we work towards our national and corporate net-zero ambitions.

Janey Douglas is an associate at property specialist JLL

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