Market Insight

Climate emergency and the office of responsibility

December 2, 2019

Following the recent coming together of 11,000 scientists in 153 counties to declare a climate emergency, dire warnings have been issued about what will happen to our world if we don’t commit to huge shifts in the way we live.

Indeed, some scientists believe we may already have passed the tipping point beyond which there is an ‘existential threat to civilisation’ as the environmental impact of the way we live leads to cascade of unstoppable events. 

Meanwhile, Greta Thunberg continues her transatlantic voyage to reach the UN climate conference in Madrid this week to deliver her next scathing message to the grown ups who still aren’t listening, and fires still burn in California, Australia and South America.

But whilst we can control what we eat, what or whether we drive, how we heat our homes, where we invest and what we consume on a daily basis, very few of us has control over the environmental impact of our place of work. 

So, when it comes to the energy consumption of the office building we travel to and spend 7.5 hours a day, 5 days a week in – a brightly lit, well heated and air conditioned environment – what can we do to play our green part? 

With services being the 4th largest energy user behind transport, domestic and industry, there are significant inroads which landlords and tenants can make to reduce energy expenditure, such as LED lighting and movement sensor lighting which is up to 80% more efficient and has allowed many offices to significantly reduce energy consumption.

In 2018, the Government introduced minimum energy efficiency standards (MEES) which aimed to improve the worst performing buildings. 

From April 2018, landlords of non-domestic properties have not been allowed to grant a new tenancy or to extend or renew an existing tenancy if their property had an EPC rating of an F or G. 

And from 1 April 2023, this will also apply to all non-domestic properties in the private rented sector which will need to be achieve an EPC rating of at least an E. 

With a stated plan to reduce greenhouse gas emissions to ‘net-zero’ levels by 2050, the Government, in the midst of election chaos, has now introduced a consultation on whether the minimum EPC should be B by 1st April 2030. 

Many new developments are already reaching these standards with recent new developments being rates EPC A, B or alternatively BREEAM Excellent. 

However, these new buildings are the exception as the majority of office stock in the Thames Valley, for example, falls below EPC B. 

With lease events occurring between now and 2023 to 2030, significant care needs to be taken when signing or renewing leases about who is responsible for the cost of complying with environmental legislation.

Notwithstanding the cost of upgrading a building’s mechanical and electrical efficiency, there is also the cost of energy consumption to take into account, the potential effect on recruitment and retention by not being located in an energy efficient building, not to mention the cost to the planet.

When EPC certificates were introduced in 2007 they were seen as a minor irritation that had to be carried out to comply with new legislation. Indeed, I remember one tenant whom I was showing around a building stating “I’m not buying a fridge”, when asked if he would like to see the EPC. 

Today, from a CSR point of view, I am thankful that the environmental impact of office buildings has moved a lot further up the agenda.

As the profile around climate change continues to gain momentum with scientists and young (and old) activists playing their part to help bring about change, so too is it the time for developers, landlords and tenants to ensure that our workplaces play their part. 

For further advice on acquiring office buildings or for more information about refurbishment to comply with existing or planned environmental legislation, don’t hesitate to get in touch.


Energy consumption in UK 

Non-domestic private rented sector MEES future trajectory to 203