Getting ahead of the climate agenda is key for the sector

Despite economic headwinds, it is crucial for the BTR sector to frame challenges as an opportunity for innovation in sustainable building.

Getting ahead of the climate agenda is key for the BTR sector if we are to drive the government’s commitment to Net Zero - Telford Homes | BTR News

Driving the government’s commitment to Net Zero and a green recovery over the last year has not been an easy journey. Sustainable house building efforts have been hampered, as we have seen global demand continue to outstrip supply for construction materials, leading to product shortages and rising prices.

By John O’Dwyer, Head of Sustainability, Telford Homes

Despite these economic headwinds, it is crucial for the Build to Rent sector to frame these challenges as an opportunity for innovation in sustainable house building and placemaking, adopting integrated strategies where customer, community and partner aspirations are aligned.

Thoughtful design continues to be at the top of the agenda for house builders aiming for Net Zero in a post pandemic world. We have seen the effectiveness of developers offering more green space and prospects for community-living than their competitors. However, with the cost of living crisis resulting in the tightening of the purse strings, consumer attention is increasingly diverted towards cost-effective ways of living, as well as those that are sustainable.

Housebuilders have to think beyond ‘safe’ carbon-friendly designs that have always worked in the past, and instead encourage innovation in our supply chains to tune into the evolving sustainability landscape. Adopting creative building solutions such as passive design strategies are ways in which housebuilders can protect tenants from cost-of-living pressure points such as rising energy costs.

We have also seen the effectiveness of undertaking Post Occupancy Evaluations – closing the performance gap between design and operational energy use. Implementing technology that provides these insights complements London’s Energy Hierarchy, enabling us to go beyond standard Building Regulation requirements. Using HomeViews has been an important part of ensuring tenant satisfaction across our completed projects – another element that ensures we can respond to growing sustainability trends.

However, we have noticed that it is not just tenant demand shifting. By embedding ESG strategies into their assets, investors are beginning to take a longer-term view in transitioning towards a more sustainable OPEX model in their financial decision-making. By quantifying sustainability credentials, such as forming a framework to align emissions to climate science, developers can maintain transparency between themselves and financial stakeholders. Earlier this year we published our second Task Force on Climate-Related Financial Disclosures Recommendations, identifying the risk and opportunities to operate below 2°C or 1.5°C pathways. Getting ahead of potential periods of uncertainty has reinforced our commitment to future-proofing our strategy. We also recognise the value of the NextGeneration sustainable housing benchmark in driving the ESG agenda across the housing sector, and are delighted that we topped the benchmark for a second year running. Developing comprehensive, credible reporting standards not only informs stakeholders and investors but it protects against ‘greenwashing’.

Being one step ahead of the climate agenda has always been an important part of our sustainability strategy, and we were one of the first developers to set out an integrated 2030 Net Zero sustainability roadmap. At present, we cannot ignore the fast-approaching Future Homes Standard (FHS) that the Build to Rent sector must be prepared for, requiring all new-build homes to be future-proofed with less carbon emissions by 2025, and we continue to engage with the Future Homes Hub in this space. With European gas prices soaring and the relentless supply crunch, making critical decisions such as pivoting from gas-led infrastructure to fossil-fuel free, decarbonised electrified systems, are all key for compliance. Through our close collaboration with Future Homes Hub Working groups, we are currently forecasting 55% reduction in new project regulated CO2, with work to do to meet the anticipated 75% reduction requirements from 2025.

Looking ahead to 2023 and beyond, as an industry we must recognise that we still have significant progress to make if we are to drive the government’s commitment to Net Zero. Whilst the Build to Rent sector has remained resilient, even through adverse market conditions, this is a key moment in time as government legislation will likely move towards more ambitious sustainability targets, placing the industry under a magnifying glass.