With COP26 now closed and having spent a number of days at COP over the last two weeks, I thought it would be useful to share some takeaways focused on our built environment perspective. Beyond the headline grabbing hyperbole.
We were there as part of the senior leadership from the property sector, having been advocating for radical change in our industry since our inception nearly a decade ago. We also happen to have the first and only Net Zero Carbon office in Glasgow, Cadworks, construction coincidentally being completed at the same time COP was going on. We were pleased to launch Cadworks at COP26 with events held in partnership at Savills and EG, including the largest gathering of property professionals at COP. By hosting these events at COP, over 250 people got to see what Net Zero looks like in person.
The Winners. Glasgow. The city shone in its best light over the last two weeks. Great weather and plenty of sunshine helped, but equally so too did the well-oiled city machine where transportation infrastructure worked flawlessly, the thousands of protesters that rightfully came to have their voice heard were treated with respect, the vibrant city centre was on full display. Open and welcoming cultural centres, the engagement of a progressive local government, all symbols of a city in its ascendancy. I think the legacy of COP26 will be positive and enduring for Glasgow.
The losers. Simplicity. For the built environment at least, there was no overarching, clarifying, a-ha moment. A number of important initiatives were launched but government in particular was notably quiet in terms of the property sector, which of course is responsible for 40% of the carbon problem. Many of us there were hoping for a set of clear, harmonised actions designed to keep the planetary temperature increase below its current 2.7 deg C trajectory. This did not happen, and the patchwork policy quilt persists for property. While there were no all-encompassing new policies from government, I was encouraged to see the clear focus on hard to abate sectors of carbon and steel through new government procurement policies, and the significant announcements in the financial sector that will drive capital into low carbon property investment strategies such as ours at FORE.
The leaders. COP was a clear demonstration that there has been a penny drop moment for the private sector. It is an ongoing theme of ours that local leadership, including business as well as civic government, will drive urban transformation in the world in which federal politicians and policymakers are off fighting bigger battles on the economic and geopolitical stage. I was amazed by the number of private sector companies present, the senior level of leadership who were there, and the passionate conviction with which they spoke about the existential threat of climate and social purpose that is enveloping their firms. In public and in my private conversations, the business sector clearly has come out of its shell and as demonstrated at COP – with or without government – it will be taking the reins to transform faster and more boldly then perhaps anyone had expected. Regardless of the watered-down final statement from COP, businesses are on the move.
The Relegation zone. I continue to be surprised that some property industry stalwarts were noticeably absent from COP, in particular industry bodies that have historically over decades, asserted leadership and influence both in terms of policy setting and also through developing and advocating practical tools for industry professionals and building owners. This vacuum of leadership has been taken up by green-leaning players such as the Better Buildings Partnership and UKGBC, and more locally by general actors such as the local Chamber of Commerce in Glasgow and the Race to Zero coalition. The absence of the industry old guard from the pitch likely permanently sends them into the relegation zone.
Painkillers vs vitamins. With so many large property asset owners present, I had the opportunity to hear directly about their strategies for the tens of thousands of carbon-intense assets in their portfolios. Many of these assets will become unsellable and unlettable, either by government action or market force, probably much sooner than anyone anticipates. On podiums and in side conversations, my peers were challenged about this stranded asset risk: whether these assets will be modernised or sold, how decisions will be taken and plans implemented, building by building, street by street. And not only how, but also if this is even possible. From what I heard, while there are solid initiatives being trialed, there are few if any detailed, comprehensive plans in place to deal with potentially stranded assets, nor have these assets even been fully identified within large portfolios. Treating the inevitable pain that will be inflicted by stranded assets certainly will be a growing theme going forward, as much as will be giving the booster shot to positive green initiatives.
Embodied carbon. And finally, embodied carbon. Much of the focus to date has been on the carbon generated from occupying and operating buildings. COP signalled that attention has undoubtedly turned from operational carbon towards the carbon that is created from the construction and de-construction of buildings, which typically represents well over half the problem. There were a number of key initiatives rolled out at COP, not least of all the UK GBC whole life carbon roadmap which sets clear, actionable steps that asset owners need to take to minimise carbon comprehensively over the lifespan of a building. We expect to see embodied carbon rise further on the agenda, which will drive innovation capital from new builds towards retrofits, already a key focus of FORE’s strategy.
Onwards into 2022 with a sense of urgency, and hope.