BONUS: Why do we need to radically improve the sustainability of the built environment

Anna-Marie:

Hello, and welcome to ESG Matters @ Ashurts. I'm Anna-Marie Slot, Ashurts's Global Sustainability ESG partner. And this is our latest special episode. I'm very pleased today to be joined by Julie Hirigoyen, the CEO of UKGBC, the UK's leading NGO campaigning for a sustainable built environment. This is our first in-person podcast recording at COP26 so very exciting for us all. And thank you so much for joining me today, Julie.

Anna-Marie:

Maybe we could start off with just giving a little background around UKGBC and what you're doing, and how you came to be at COP.

Julie:

Sure, no problem. And thanks for having me today. UKGBC is one of many green building councils around the world. There's about 70 of us, we're a charity. And above all, we are an industry network with a mission to radically improve the sustainability of the built environment. That's across all types of built assets, all stages of the life cycle of buildings and infrastructure.

Julie:

And so climate change, mitigation, resilience and adaptation, resource efficiency and circularity, nature and bio diversity, health and wellbeing, social value, these are all issues that are right at the core of our vision, which is a built environment that enables both people and planet to thrive. Hence why we are here at COP26, we really want to put the built environment front and first as a major source of solutions, I guess, to both the climate and the nature crisis.

Anna-Marie:

No, absolutely. And a really interesting place to focus. We walk by our buildings every day, we live in them, we go to work around them and it's a huge area of emissions.

Julie:

Correct.

Anna-Marie:

I think people don't recognize both what's already there and everything that's going to be built going forward. We've talked a lot in our podcasts about how the attitudes of people have changed in the last 18 months, 24 months, towards ESG and where that it sits on the agenda for people. Are you seeing that, are you seeing that reflected here?

Julie:

Yeah, I mean the last ... I've been in sustainable real estate for 25 years, showing my age now. And I have seen more change in the last 18 to 24 months than I have in the previous 23 years. Absolutely phenomenal influx of interest and jumping on the bandwagon, hopefully not just for show, but really because it's becoming quite mainstream. So a huge wave of interest right across the value chain actually, not just investors and developers and property companies, but architects, engineers, product manufacturers, agents, valuers. There's just this inexorable shift.

Julie:

I think it's fair to say that an enormous part of that has been around climate mitigation and this whole concept of net zero in particular. And now that in the UK we've legislated for net zero carbon by 2050 as an economy, every industry sector has to be scratching its head thinking, "Well, what does that mean for us?" And as you rightly pointed out, Anna-Marie, this is probably the single largest source of emissions in one sector.

Julie:

We've done a latest footprinting of the UK's built environment, and buildings and infrastructure directly responsible for about 25% of our national carbon footprint. But if you add to that surface transport, which of course we use to get between buildings and in and around our urban centers and so on, it comes to 42%. Which is the figure that people are most familiar with, that sort of 40% figure. That does include the transport industry, the transport sector as well, but of course that's a big part of our built environment.

Julie:

It's absolutely massive and I think the recognition that therefore the sector needs to step up, businesses need to step up in order to address that footprint, is one of the reasons why we're seeing this huge wave of appetite. And just to give you an illustrative example. Our membership has gone from what was a fairly steady 400 or so members for quite a few years to suddenly we're 600 plus, just in the last 18 months that's happened. Actually throughout the COVID pandemic. And I also think the pandemic has raised awareness of the significance of these issues once they hit, it's a global systemic risk.

Anna-Marie:

Excellent. Really funny, because I was just thinking, maybe in part because people have been in their buildings quite a lot during COVID. And so they're starting to think about their buildings a lot more and they thinking about their real estate in a different way.

Anna-Marie:

That's a fascinating change and shift, and you talk about the money going into the built environment. I think investors, and investors asking those questions, is a huge shift that we've seen as well across this. We're here in Glasgow today, it's actually blue skies.

Julie:

It's been amazing. I must admit I've been quite surprised. My brolly hasn't come out once.

Anna-Marie:

I know, yeah. It's like a week and a half of beautiful weather, and only people who live in the UK will understand why have to talk about the weather.

Anna-Marie:

But so what are you feeling or seeing at a COP? There's a lot of people all over the place in terms of, they think it's coming out with good things, they think it's an emotion, they think it's all a light show that's being put on for the masses. What are your feelings?

Julie:

It is very challenging to call that at this point in time. I think you're quite right, in the first week we saw almost a sort of blizzard of announcements. There was a clearly a staged announcement every day. We had the Methane Pledge, which I was really excited about, and then we had a deforestation pact, to end deforestation over 100 countries signing up to that. That was also awesome, and I hope that that gains real traction.

Julie:

And we've also seen the analysis and the research from some of these global institutions coming out with their evaluation of what the nationally determined contributions that were submitted ahead of COP, all now mount up to. And this is really the critical question, isn't it, is we came out of Paris with an agreement, which was fantastic, but all of the national determined contributions, which by the way, is a bit jargony, is effectively the nation state commitments, their targets and what they've committed to do by when.

Julie:

Coming out of Paris, that was three and a half degrees, it wasn't going to get us to where we needed to get to, but at least we had this agreement. And the agreement, and the really significant part of COP26, is it's the first five-year ... Well, it's actually six because it was postponed from COVID from last year, but the first five-year COP since Paris, and every five years the agreement said you ratchet up the nationally determined contribution. So the really big test for this COP's success is the extent to which those have been raised since Paris, and the extent to which they get us closer to that 1.5 degree warming that we are trying to limit global temperature rise to.

Julie:

So there's been some fantastic analysis done by the International Energy Agency, suggesting that we're actually closer to 1.8, 1.9 from the various kind of commitments that have been put forward by nation states ahead of COP. Which was a great read and a really fantastic piece of news. However, where the debate comes in in terms of where we are at in reality is the gap between ambition and action. And there's also, for every one of those stories, there's an equivalent story that says ... For instance, the UNFCCC or UNAP have come out saying actually the production, the amount that each country's investing in fossil fuel production for instance would get us, is just incompatible with that 1.5 degrees. And increased investment in some of those fossil fuels or indeed subsidies. I mean, here we are subsidizing heavily our fossil fuel industries.

Julie:

That's where the debates sits. And then there's also been some criticism and various other studies that the way in which we are reporting, or nation states are reporting their emissions, is fundamentally quite flawed. And the fact that, for example, they're allowed to include land-use offsets. So many of the countries are almost halving their emissions on the basis that, "Well, we've got all this land and it must be absorbing all this CO2." There's just so much complexity to the topic, and it is a really deeply scientific mathematical topic.

Julie:

And so yeah, I'd say we're seeing some really positive things and we are definitely seeing a shift in the right direction, but the real debate comes with, is the action on the table enough? And right now it's definitely not.

Anna-Marie:

Yeah, yeah, yeah, yeah. So actioning the ambition. I mean, that's really the key to it. And as you say, data, which is the non-romantic, non headline-grabbing bit, but really where you need to get to, to see what's there and what's actually happening and how much are you able to take out, and how effective is any of that.

Anna-Marie:

The built environment, I think, in particular is something that's high on everyone's list, not just for this net zero and what we're happily now talking about, beyond net zero. How do you get to a place where you start extracting? But also in particular, I think, the circular economy conversation, which is just starting to come into play. The built environment is huge in that because you can build a beautiful new building that's BREEAM excellent, but if you've teared down an existing building that could have been retrofitted, where are you net on that equation? Are you having conversations like that with people in that granularity now?

Julie:

Yeah, I think that you are quite right that that level of debate, and it's particularly the existing versus new and not tearing down in particular, has been much more up for discussion than it ever has before. I mean, if I'd tried to have that conversation five years ago I would've been laughed out of the room. We don't yet have policies that in that direction necessarily, but there is definitely a ongoing dialogue within the industry around we should retrofit first. Should we even get to the stage where we just don't ever tear something down, unless it's actually genuinely dangerous or it really needs to be demolished.

Julie:

And not just that, but also, shouldn't we be building buildings with much more flexibility and adaptability in mind, much less strict uses and zoning and these sorts of things so it can be transformed into a different use or a different asset type over time. And shouldn't the materials and component parts be dismantleable, reusable, in the same way that we do for cars and phones, and you can take them all apart and we use different bits. So we're really, really quite behind as an industry, I would say, in the built environment, in not having progressed that far down that journey. But it is rising up the agenda, for sure.

Anna-Marie:

I guess if you had a wishlist from these conversations this week, what would be things that you'd love to see happen? Is it regulation that lets you shift zoning? We've talked a bit in other places with particularly procurement rules around who wins the bids from things, so you do you change that so that innovation is more on the forefront as opposed to a cost analysis. What do you think, if you could have anything.

Julie:

Well, I'd probably say all of the above and be really greedy. But there's different ways in which I could answer that. Thinking about COP26 itself, there's clearly a geopolitical series of outcomes that we're all wanting to see. One is clearly not to just, yes, absolutely, agreements to limit warming to 1.5 and commitments to get us closer to that, but also detailed action plans, nation-by-nation, sector-by-sector.

Julie:

And that's when you get into the granularity of how are we actually going to get there. And not just by 2050, the really significant bit, and right at the top of my wishlist, would be what's the plan in the next eight years? How are we going to half emissions by 2030? Because that's very soon. And for an industry like ours, where the product takes ages to ... Five, six, seven years to come out of the ground from inception to completion, that's one lifetime. That's nothing.

Julie:

So I think that 2030 threshold for me is crucial. And then of course I would say this, but for built environment plans to be an absolutely integral part of those detailed nation-by-nation action plan. But a positive on that and a stat I heard just to today at an event I was earlier in the Blue Zone, I think 180 plus NDCs, National Determined Contributions, now reference buildings and the built environment. And that's up from something like 80 back in Paris. That's really encouraging and I'd really want to see that ratcheting up again.

Julie:

And I'd love to see the commitments that emerge from COP to say, actually it's not ratting up your ambitions every five years, it's every year. And we have a COP every year, so we should we revisiting that year one year. Particularly as the signs every year seems to be more frightening.

Julie:

Those are big picture things and built environment-related. UK-specific, tomorrow we will be launching as UKGBC in the Blue Zone here at COP exactly that, a UK whole life carbon roadmap for the built environment sector here. We know that we need these sectoral decarbonization pathways, and they will need to add up to know more than this committee on climate change's final residual amount. I think it's 100 megatons of CO2 equivalent. But we all need to make sure that we're not taking too much of our share of that sector-by-sector.

Julie:

So we're launching that tomorrow. And clearly it's based on a whole series of assumptions that we've put into a model, which the positive is that, and spoiler alert, but it says we can make it. We can actually get to a really small amount of residual emissions for the built environment sector in the UK. However, we won't make it unless we very urgently and really quickly introduce more policy, more regulation, more certainty around some of the big ticket items like homes and the energy use in our homes. So a huge retrofit, national retrofit strategy. I mean, absolutely top of my wish list.

Julie:

And embodied carbon, which is the carbon associated with the manufactured transportation and assembly of construction products and materials on site and throughout the lifetime of the building. We're not even remotely starting to regulate for that. Unless and until we do those things, we won't make that residual small amount by 2050. And they're hard nuts to crack in some instances, they're not easy.

Anna-Marie:

No, definitely. And I think, I wish also for the best for your wishes, but I think embedding that new view and having that roadmap there for people to look at, a pathway, so that they understand the cost and they understand what they have to do. And so they can make informed market decisions, is really key to getting that transformation in terms of people delivering different types of solutions.

Julie:

Yeah, yeah.

Anna-Marie:

Definitely. Thank you so much for joining us. A really, really great conversation and I'm glad you're here. It's fantastic that you're launching tomorrow. I think industry efforts like that are so helpful for companies because companies just don't have the bandwidth to sit down and figure it out on their own. And they do need help on really actioning what we're trying to get to.

Julie:

Thank you.

Anna-Marie:

So well done on your launch tomorrow, hasn't even come yet but I'm congratulating you. And thanks for joining me today.

Julie:

You're very welcome. Thanks for having me.

Anna-Marie:

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Anna-Marie:

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