Feature: Responding to COVID-19 and Climate Change – a view from inside the commercial real estate industry
By Wybo Wijnbergen, CEO, infinitSpace
The commercial real estate industry currently finds itself trapped between two seismic cultural shifts – the urgency to respond to the climate emergency and a significant change in working patterns, accelerated by the Covid-19 pandemic. Responding to these challenges in tandem is critical to the CRE’s long-term outlook.
Where climate change is concerned, the built environment has a huge impact on global carbon emissions, with the latest estimates attributing it to be responsible for 47% of carbon emissions across the world. With such high carbon impacts, the need to ensure that commercial buildings are reaching maximum usage is essential if CRE is to become more sustainable.
Carbon emissions – how do buildings generate them?
Carbon emissions stemming from real estate fall under two distinct groups: operational carbon and embodied carbon, with the latter holding considerable importance within the wider argument of redevelopment versus retrofitting.
Operational carbon refers to the total carbon emitted as a result of a site’s energy usage. For both redevelopment and retrofitting, an integral aim is to create sites which have a lower operational carbon usage than the existing ones. Operational carbon accounts for 27% of the aforementioned CO2 emissions for which the built environment is responsible.
Meanwhile, embodied carbon currently accounts for 20%. It includes the carbon emitted as a result of the construction, maintenance, waste management and demolition of a site.
Redevelopment versus retrofitting – what is the argument all about?
Redevelopment involves the substantial demolition of an existing site and the construction of an entirely new one. Meanwhile, retrofitting involves the substantial retention of an exterior structure alongside the replacement of outdated and inefficient interior elements.
At the centre of the argument is how sustainable the solution is and how long it takes for the embodied carbon, released as a result of either redevelopment or retrofitting, to be offset by the savings made in the improved energy efficiency of the new site.
It will come as no surprise that, given the demolition and construction requirements of redevelopment, retrofitting causes significantly fewer emissions through embodied carbon, making it the more sustainable solution. Moreover, retrofitting allows for the desperately needed transformation of outdated office sites into the flexible, technological spaces of the future, without the heavy carbon emissions associated with new development.
It is of no surprise, then that earlier this year Sadiq Khan, the mayor of London, said the retention of existing buildings must be “the starting point” for major London developments. He wants to see more done with the infrastructure that is already there.
The changing commercial real estate landscape
The change in working patterns following Covid-19 has reset the requirements of a fit-for-purpose office building. With the five-day office routine having been thoroughly thrown into the annals of history, the ideal office building must cater by offering flexible and adjustable space for its tenants.
Despite the urgent need for adaptation in the commercial real estate sector, traditional office sites are continuing to be built and persevered with. By failing to serve a modern purpose, such sites will find themselves without tenants and having contributed to unnecessary carbon emissions. Indeed, a study commissioned by infinitSpace among 200 office landlords recently revealed that 62% are struggling to secure traditional tenants, and an even greater number (64%) said that they had witnessed a notable shift in the demands of existing and prospective tenants
The need to marry these two objectives – resetting the real estate industry’s contribution to carbon emissions and ensuring workspaces meet today’s requirements from businesses – is essential to both improving the relationship of employees with the office and to protecting our planet.
Achieving such goals lies in making better use of the commercial real estate already available. Where existing sites have the sub-structure to support a modern purpose, we must focus our goals on transforming outdated and traditional offices into the flexible workspaces demanded in the wake of Covid-19. Such a strategy allows us to avoid the needless development of new buildings and the staggering embodied carbon emissions embodied that accompany them.