Farrer & Co-backed research sets out vital steps to close property’s net zero data gap

Landmark research backed by leading law firm Farrer & Co has today been published by the British Property Federation (BPF), revealing the energy data challenges facing the tenanted property industry and the key steps to bridge the data gap to move to net zero.

The Climate Change Committee’s 2023 progress report identified that buildings remain the UK’s second highest emitting sector, and that progress in making substantial emission reductions has “stalled” since 2010.

A lack of robust energy data has been identified as one of the key barriers to a net zero future in tenanted property. Sponsored by Farrer & Co alongside Get Living and Position Green, and conducted by Savills, the BPF’s “Closing the Data Deficit” research was based on a wide literature review and interviews with stakeholders from high-profile organisations in the commercial (including office, retail and logistics) and residential sectors to understand the primary challenges they face in collecting and using the data they need to set net zero trajectories.

This report highlights the variety of legal, organisational, behavioural and technological factors which impact energy data collection and analysis and add to the obstacles facing landlords and stakeholders keen to reduce their carbon emissions – and sets out key recommendations to tackle “Closing the Data Deficit”.

Some of the key barriers to data collection and analysis were identified as:

• Over-reliance on manual data collection, which can result in incorrect and incomplete data
• Reluctance regarding data-sharing between occupiers and owners; with data privacy also a hindrance in the residential market
• Lack of awareness among asset and property managers with regards to data and energy efficiency
• Costs and operational requirements related to smart meter instalment and maintenance
  
  

The BPF report goes on to identify five headline measures to help the industry achieve net zero:

• Mandating data-sharing between tenants and landlords to improve understanding of energy performance and to facilitate jointly working on low carbon measures
• Encouraging smart meter rollout to ensure accurate and reliable data collection and to move away from costly and time-consuming manual collection
• Creating a Building Energy Data Taskforce to promote collaboration between the real estate and energy sectors to foster knowledge-sharing and data compatibility between providers and users and to deepen understanding of available technological solutions
• Advocating "green leases" to improve landlord-tenant collaboration on environmental measures
• Promoting performance-based energy metrics which look at the operational energy use of a building, (as opposed to using EPCs, which do not) and the use of performance-based rating schemes which would encourage collaboration between owners and occupiers
  
  

The report recommends engagement between the Government and real estate and energy industry stakeholders to find the most suitable way to implement these measures and that policy solutions should focus on the purposes for collecting data, be user-friendly and be mindful of time and cost burdens for occupiers.

Mark Gauguier, Head of Commercial Real Estate at Farrer & Co, said: “Access to accurate and timely energy data is essential for the commercial property sector to meet the net zero challenge, and the Closing the Data Deficit report lays bare the extent of the barriers to collecting and analysing energy data. We need a holistic policy framework which drives collaboration between owners and tenants in sharing data and jointly working on net zero objectives.

“We are proud to have supported the Closing the Data Deficit report which calls for all stakeholders – the Government, owners, occupiers, developers and investors and energy and data providers – to work together to tackle this issue.”

Rob Wall, Assistant Director at the BPF, said: “Commercial and industrial buildings account for around one third of all building emissions. Quite simply, we will not deliver a net zero carbon property sector unless we decarbonise our offices, our retail units, our industrial centres and our warehouses.

“Our research shines a light on the critical role of data in understanding how buildings perform, in developing and delivering net zero plans and in cutting energy bills for tenants. We look forward to working with the next Government to tackle the challenges highlighted in the research and accelerate the transition to a net zero carbon property industry.”

© Farrer & Co LLP, June 2024