For those companies that own and occupy real estate, ensuring that they do so responsibly and sustainably is becoming increasingly crucial to meet their own ESG targets, attract and retain staff, remain accountable to clients and maintain commercial value. However, there remains a large question mark over achieving sustainability credentials in buildings where there is no commercial drive to support this – a key issue for Local Authorities (LAs).

While all LAs are different with varying political landscapes, priorities and objectives, they all have an overriding commitment to provide the best service they can for their communities. For some LAs, particularly the larger urban authorities, economic regeneration is a central theme, but this typically means thinking outside their own estate. 

There is often no obvious reason which could be seen as a legitimate way to spend public money to focus on sustainability within their own, often extensive, estates. However, they are bound by legal requirements to achieve certain carbon neutral/net zero targets in line with government legislation. How can they balance these seemingly opposing needs?

The real estate portfolio of an LA is mixed and will include their own operational assets such as offices and public amenities as well assets that they lease out or which they occupy as tenants. This diversity makes managing sustainability credentials more challenging. In many instances they will pass the responsibility at an operational level to their tenants. Again, for internal policies relating to internal operations, the process will be ad hoc and specific to each LA – similar to businesses managing their own roadmap to net zero.

The possible solutions for LAs to achieve sustainability across their portfolios may lie in combining economic and social agendas with their internal operational priorities to create mixed use assets that drive regeneration and Covid-19 recovery at a local level.

This would also include leveraging the various government funds and implementing the ESG agenda as a way to attract inward investment to communities. Many council buildings, particularly in less affluent wards, are old and not fit for purpose under the new workplace requirement, so repurposing and reinventing how they are used and how they relate to social and economic agendas, will be central.

Of course there is no silver bullet, and each LA will have different challenges to overcome when repurposing and realigning its estate. But a good starting point is to understand what assets it actually owns, how they are used, how they perform and how they can be aligned to social, political and economic agendas. In the same way that a commercial organisation which wants to derive maximum value from its assets to support overall business objectives would carry out a portfolio review, LAs need to do the same. 

However, LAs need to derive maximum value in a broader sense which encompasses political, economic, social and environmental benefits for their communities, while future proofing their own operational estates and retaining talent. By combining all of these into one strategy, could LAs have it all: serve their local communities, provide resources their residents need, leverage government funding and inward investment and address the ESG agenda, to create sustainable, thriving local economies?

Further information

Contact Jacqui Gee

Contact Worldwide Occupier Services