Sustainability and all things associated with it are here to stay. We all know and understand that, but once we delve into the detail, things can become confusing and complex. We must believe that investors, developers and occupiers are trying to ‘do the right thing,’ but the world of carbon, energy, and economic impact has become nuanced. What is the difference between ‘net zero’ and ‘carbon neutral,’ or NABERS and BREEAM? This is what the pilot scheme of the UK Net Zero Carbon Buildings Standard (NZCBS) aims to clarify: to become the badge to cover all badges.

In November 2020, NABERS was launched in the UK. For advisors, this marked a pivotal moment, providing a clear standard to assess office buildings’ energy performance. NABERS has quickly become the preferred standard for this purpose. However, it is just one of many certifications available, albeit a significant one. The NZCBS aims to integrate carbon and energy into one comprehensive standard.

Creating a level playing field

Initially, the standard can be used as a design framework to ensure that net zero principles are in place. It can be rigorous to achieve, but, in theory, it will allow buildings in any sector to be compared equally. From an office leasing perspective, this would hugely simplify what can be a confusing experience for the end user. For example, on tours of office buildings, potential occupiers effectively learn on the job about BREEAM, WELL, and NABERS, having often previously been only familiar with EPCs.

So, in theory, NZCBS significantly helps at the front end of the process, namely in leasing, but it should also positively impact the back end, when the building is sold. In office leasing, we have seen significant interest in carbon, but also an expectation that new or refurbished office buildings are ‘sustainable enough’ without really going into the details. Conversely, the capital markets have dictated that future proofing buildings by making them as sustainable as possible now is mandatory to protect investment value, leading developers to do everything they can to maximise that. Is this the right approach? It’s not for us to say, but at least it is making buildings less carbon intensive.

Could it be a game changer?

A recent webinar discussing the NZCBS’ launch attracted 3,500 participants and generated hundreds of questions. This level of engagement highlights the need for such an initiative and suggests that it has the potential to be a game changer, similar to NABERS, but on a broader scale.

It is rigorous, and if it is too rigorous, there is a danger that developers and investors will revert to what they know works and stick with the badges they are familiar with. However, the prize is significant, and we believe this will be the next big move towards a cleaner, less intensive real estate future.

Further information

Contact Hunter Booth or Alexandros Chalkias

How will the new Net Zero Carbon Buildings standard impact industrial and logistics development?