At the BCO’s most recent seminar, Frankie Warner Lacey, Partner at RX London, joined the panel alongside speakers from LGIM, Castle Forge, Simten, and Ridge and Partners to discuss how decarbonisation is reshaping the built environment, and impacting the industry in practice.
Here, Frankie shares her thoughts following the debate:
Decarbonisation Reality Check: Insights from Yesterday’s BCO Seminar
As a panellist at yesterday’s BCO seminar on decarbonisation, I found myself reflecting on where we really stand on this journey. The question posed was provocative: “Are we promising more than we can deliver?” It was an interesting debate, and these are my key takeaways:
The Affordability Challenge
Here’s a sobering thought: from a city market perspective, some five years ago, the cost differential between the “Best and the Rest” was around £20 psf. Today? It’s closer to £50 psf at least, with best-in-class non-tower buildings achieving in excess of £120 psf. With the best will in the world, that puts top-tier sustainable buildings outside the reach of many occupiers. We need to be honest about this reality.
Grid Capacity: The Elephant in the Room
Let’s address the obvious: our grid isn’t fully electric and won’t be for decades. We’re still 20-40% reliant on gas-fired power stations, particularly during peak demand. Yet perfectly efficient buildings are being dismissed because they’re not 100% electric. Also, be careful what you wish for; there currently isn’t sufficient capacity in the system to support the complete removal of gas boilers from commercial buildings.
EPC Ratings: Time for a Rethink?
One thing became crystal clear in our discussion – EPC ratings are no longer fit for purpose. These theoretical assessments bear little resemblance to how buildings actually perform in operation. We’re optimising for compliance rather than efficiency, and that’s creating some perverse outcomes. The focus should shift towards actual energy usage and how buildings are run day-to-day, not just design assumptions.
Retrofit Realities
The retrofit challenge is real, particularly where the tenant is remaining in situ. “Stay put” is no longer the “cheap” option, as the rent needs to justify the landlord’s investment, and it potentially comes with huge disruption to the business. Ultimately, this requires a collaborative approach between the landlord and occupier, with both parties committed to making it work operationally.
Choice, Not Dogma
Ultimately, I’m pro-choice when it comes to considering an approach to building refurbishments. What this means in reality is that you shouldn’t automatically knee-jerk to secure top-tier credentials – this is not always the most appropriate course of action and won’t necessarily yield the best return on investment. We need a range of solutions at different price points to satisfy the broad spectrum of occupier requirements. Not every business can afford the premium for cutting-edge green credentials, and that’s okay. The key is ensuring we have viable pathways for both landlord and occupier.
How Far We’ve Come
It’s worth remembering the journey we’ve been on. Post-COVID, when MEES regulations came into sharp focus, and 80% of buildings weren’t EPC B compliant, green credentials shot to the top of everyone’s agenda. Landlords feared their buildings would become unlettable, and occupiers couldn’t risk being in a non-compliant space and needed to be seen to be making environmentally responsible decisions.
The industry has responded brilliantly. It’s now virtually unheard of for buildings to be marketed without the EPC B compliant benchmark, and landlords are working hard to achieve ambitious credentials across BREEAM, NABERS, WELL, etc. But here’s the thing – this success has made sustainability part of the base specification rather than a headline differentiator. What moves the dial now is more tangible benefits: floorplate design, natural light, terraces and building amenities.
The Path Forward
With thanks to the BCO for hosting this event. I enjoyed the conversation with Michelle Anthony (Oxygen), Michael Kovacs (Castleforge), Charlotte Graimes (Ridge), Stephen Wrack (Spring BC), Sarah Shuttleworth (Simten), Chris Millard (LandSecs), and it was superbly chaired by Nick Wells (LGIM).
This is a debate that is going to rumble on as the market matures and we become better at understanding and articulating what really matters when it comes to the environment and green credentials. The bottom line? We need more honesty about costs, more collaboration on solutions, and more focus on what actually works rather than what looks good on paper.