9 minute read
The Briefing
Sustainability
A Sustainable Legacy
MIDDLE EAST Having a viable and effective sustainability agenda is absolutely vital writes CBRE’s Alexander Barzycki
The year 2019 was a landmark year for the sustainability agenda. With the acknowledgment of climate change as an existential threat to our way of life, and the acceptance that the lack of meaningful action taken to date, meant we were on the verge of tipping into an irrecoverable climate crisis.
It is now 2022 and this realisation has just become more important than we could have ever imagined. This isn’t hyperbole. Today, our news feeds are filled with the evidence that the physical effects of climate change – stronger and more frequent hurricanes, storm surges, wildfires, heavy rainfall, and wave after wave of storms – are now happening with increasing frequency.
The challenge, as set out in the 2016 Paris Agreement, was to ensure that action was taken to hard limit global average temperature increases to 2-degrees Celsius above preindustrial levels by 2050, however
40%
The built environment contributes about 40% of global carbon emissions
do everything possible to not go beyond 1.5-degrees. Commitments were made at corporate and national levels, including in the UAE where it launched its Energy Strategy 2025. The strategy aims to increase the contribution of ‘clean energy’ from 25% to 50% of total energy consumption by 2050 and reduce the carbon footprint of power generation by 70%.
The pandemic has also played a part in focusing on this global issue. Whilst in the vast majority of cases the pandemic has led to numerous negative externalities, arguably, one positive externality comes from economic recovery plans enacted.
GREEN PLANS The Organisation for Economic Co-operation and Development (OECD) estimates that member countries have allocated approximately $336bn to the green recovery, as part of these plans. However, it is important to put this in context, this only accounts for 17% of the total.
Clearly, more must be done, and the built environment will continue to be a significant area of focus given it accounts for an estimated 40% of carbon emission around the globe.
It all seemed to be going so well. Levels of cautious optimism ahead of COP26 (held by the United Kingdom at the end of 2020) were rising and there was real hope that we may now see global action to mitigate the risk posed by climate change, until COVID-19 stopped the world virtually overnight.
The period of lockdown imposed by nations to reduce the impact of the virus led to huge reductions in carbon emissions due to plummeting car, air and rail travel for business and leisure. The question is, as the world opens again, how do we maintain the reductions catalysed by the lockdowns and push on to achieve net-zero carbon?
We believe that the office sector will be a key area of focus in the future, their use will continue to be a central part of our working lives, albeit in a different form. While we believe that the office will always be a key feature of cities around the world, how they are used will undoubtedly change.
In order to maximise the opportunity this presents, it is essential that there is responsive collaboration between owners, occupiers, property management, engineering and sustainability teams. The demand changes of reoccupation will vary based on the occupier’s needs and on the future direction of the virus itself.
Early implementation
The industry must be able to improvise, adapt, share knowledge and implement strategies early.
LEGACY OF THE PANDEMIC From an operational perspective, this might mean reconfiguring access control systems to reduce the operational area of a building
Responsive collaboration
In order to maximise the opportunities presented by office work culture changing, stakeholders must collaborate in response to changing needs. and, in turn, the area requiring full lighting and ventilation and prioritising the monitoring of internal air quality to enable better control of energy use and better health outcomes for building users.
Such strategies would need developing for each building to account for the subtle differences between them and take steps to ensure that all the systems are ‘COVID compliant’, and they are being maintained and adjusted to meet changes in demand.
The changing working practices leads to a positive opportunity such as ageing plants requiring considerable downtime to replace and causing disruption to occupiers, or costs to replace out of hours, could be replaced with a more energy efficient system during periods of decreased occupancy, reducing capital cost and decreasing future energy consumption.
Whatever happens from here, our clients need knowledgeable and trusted advisors to react quickly to future shocks based on the lessons learnt over the last couple of years, provide facts, reassurance, and support.
We need to be able to improvise in the current situation, adapt by following credible science and engineering and sharing our knowledge, and overcome challenges by implementing strategies early.
Development in the Age of Sustainability
MIDDLE EAST Dr Ioannis Spanos of KEO International Consultants, explains why real estate developers need to have sustainability at the heart of everything they do from now on
WHAT DOES IT MEANS TO BE TRULY SUSTAINABLE? To better understand how a project can be truly sustainable, we first need to understand the history and meaning of the term “sustainable development”. Initially the term was used to describe a project developed to meet the needs of the present by maintaining the current quality of life while not minimising the potential for the future generations to have the same quality of life. For the real-estate sector, that can mean projects that have, and will continue to have, after 30+ years, indoor and outdoor environments that comply with the best practice international standards and provide buildings that have the lowest environmental impact overall.
Building certification schemes such as, LEED, WELL, ESTIDAMA, GSAS and CEEQUAL provide the design criteria. With a higher certification rating the owner and user know that the development complies with more of the best socio-environmental international standards. However, sustainability and environmental certifications systems are just the tools for assessment against best practice standards and guides.
Truly sustainable developments need to start from a brief where design solutions consider most, if not all, of the United Nations Sustainability Development Goals (UN SDG). Considering the Climate Change implications of the United Nations Intergovernmental Panel on Climate Change, new developments also need to consider an optimum path for decarbonisation and adaptation to extreme climatic conditions within the next few decades, when most of these developments will be used and thrive.
Highly sustainable developments should start by questioning how solutions can be found within the architectural concept. These solutions should target resource efficiency, community improvement, the health and well-being of occupants and labour, net positive land and biodiversity value, equality and education, climate change risk mitigation and opportunities, reduction of energy and water to the minimum possible, responsible consumption and supply chains, and improving life overall.
THE FINANCIAL BENEFITS Financial profitability is directly linked with the valuation of the final real estate or infrastructure asset against the initial investment of the development. The valuation of a real estate development is linked with the demand for such a development and the scale of mitigation of the potential climate-change environmental risks within 50-60 years, the minimum expected life of a real estate asset.
For buildings, the actual building cost is circa 1:20 of the cost of human output and production that will be delivered within the building. Assume that a fully sustainable building will cost, under a worst-case scenario, 20% more than one that complies with the minimum local building regulations. This initial cost of the investment is only 1% of the total operations value output.
During the last few years, academic research has concluded that worker productivity, which is a reasonable indicator of work output and revenue performance, in highly sustainable buildings is improved by 2-10% against those considered for a typical development. It is not a surprise therefore that international and global organisations have included, as part of their policies, that new buildings and new leases need to be highly sustainable.
A comparable situation is observed in the education sector. For the residential sector, it is important to understand who the future buyers are. Several global studies indicate that younger generations are willing to pay
COP impact
The upcoming COP events in Egypt and the UAE will have a significant impact on the regional construction and real estate industries, says Dr Ioannis Spanos.
Optimum path
New developments must consider an optimum path for decarbonisation and adaptation to extreme climatic conditions.
2050
a price premium for a product that considers the impact and mitigation of climate change. They are the ones who will need to live with any environmental stresses caused by climate change, and they would like to have a home that is ‘sustainable’.
This increased willingness to pay is a trend in the Asia-Pacific region and seems to be an increasing trend in the Middle East as some of our most highly sustainable developments have high rental and occupancy rates.
Financial profitability is also linked to the terms of the borrowed cash for the investment; green funding and Environmental-Social-Governance (ESG) requirements of financial institutions and listed companies integrated annual reporting provide an additional incentive to finance and be involved in highly sustainable projects.
THE COP IMPACT The COP27 in Egypt and the COP28 in the UAE are two key events for global decisions on limiting the impacts of climate change. The first United Nations Climate Change Conference in the region was COP18 in Doha in 2012, which discussed adaptation, financing, mitigation, and technological solutions. In COP27 and COP28, the great work that was partially completed in COP26 in Glasgow needs to be finalised, as scientific communities are still projecting a global average temperature increase of more than 1.5°C.
Escalation of average temperatures above 1.5°C will have an impact on land and ecosystem, energy, urban and infrastructure, and industrial systems. One of the highly potential impacts will be that 1 in 100 / 200year weather events will instead be likely to happen in 1 in 30 / 50 years.
During COP26, the UAE and the KSA announced ‘net zero emissions by 2050’ and ‘net zero’ carbon emissions by 2060 pledges respectively: positive statements to a global audience. The minimum lifespan of a real estate and infrastructure asset can be 50-60 years; 2050 and 2060 are within its lifespan design considerations.
Even subsystems within buildings, such as electro-mechanical installations, last a minimum of 25years. Existing buildings will be remodelled and renovated during this period too. It is of no surprise therefore that full decarbonisation of assets and reduction of ecological impact during construction is in the current briefs of institutional and large-scale developers. During the next two years such studies and considerations are expected to increase.
Considering these changes in the construction industry, the next question is how these decarbonization plans will be implemented, from the national level down to small developers. Thought will need to be given to the supply chain of design, resources, materials, and the optimisation of electro-mechanical solutions to ensure they do not have a significant impact on project costs.
Various national forums in almost all Gulf countries have started discussing these issues. The only way forward is with the full collaboration of all parties involved in the industry using data-based decision-making and continual discussions to seek optimised solutions. Steadily increasing the minimum building-related regulatory framework on decarbonisation is only a small part of the overall climate change mitigation solution.
