Full Document Text

                
Sustainable Existing 
Non-Domestic Buildings 
Manifesto 
March 2012

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Introduction
We believe that, whilst there is already a strong industry commitment to producing new 
sustainable buildings, through better design, advances in technology and the stipulations 
of the building regulations, tackling the existing commercial property stock remains a 
much more intractable challenge. Much of the existing stock is poor by today’s standards 
of resource consumption and, with annual replacement rates of only 1 – 2%, tackling 
the existing stock (60% of which will still be here in 2050) is a crucial but so far neglected 
element of any credible strategy for improving sustainability. 
Consequently, we have adopted the improvement of sustainability in the non-domestic 
building stock as a key lobbying priority for the next 18 months. 
Our commitments
1. The BPF will promote understanding among stakeholders, including Government, of the 
split responsibilities and incentives of landlords and tenants, and their implications.
Some 60% of commercial buildings are owned by a landlord and occupied by a tenant 
according to the terms of a lease. This means responsibilities for energy and other resource 
efficiencies are divided between landlord and tenant, and this frequently makes for a less 
than effective regime in which to promote physical and operational improvements to lower 
energy consumption. Frequently, it is the landlord who has to pay for building improvements 
to reduce energy usage, but it is the tenant who benefits from lower energy bills. Policy 
makers tend to pay insufficient regard to this issue, and come up with ideas and schemes that 
are difficult to implement because of the differing impacts across the landlord and tenant 
divide. Industry practitioners must also be open to changing standard operating procedures 
to enable landlords and tenants to co-operate.
•	 We will seek to bring home to individual Government departments the problems 
caused by the split responsibilities and incentives of landlords and tenants, and we will 
promote co-operation across Whitehall to encourage better policy outcomes.
•	 We will work with stakeholders to find non-legislative/voluntary means to overcome 
the most significant barriers to landlord and tenant co-operation on sustainability 
matters in rented buildings.

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2. The BPF will work with Government and the industry to make the Green Deal an 
effective option for property owners to finance retrofit of existing non-domestic 
buildings.
The Government intends to introduce, within the year, a financing mechanism - ‘the 
Green Deal’ - that will grant applicants upfront funding to invest in energy efficient retrofit 
of buildings, repaid via a charge on the energy bill.  
The Green Deal primarily seeks to overcome the financial barriers to energy efficient 
retrofit in tenanted buildings (since if the landlord invests in more efficient kit, the tenant 
benefits from the savings). To be successful, the Green Deal will, in addition to providing a 
source of capital funding, need to tackle the legal, operational and administrative barriers 
to energy efficient retrofit.
•	 We will seek to engage Government and industry to ensure that the financial 
terms upon which investors can access finance are preferable, and that the time 
horizon and nature of the measures that the Green Deal provides are beneficial 
for property owners and occupiers.
•	 We will pursue, with other stakeholders (such as RICS), ‘smarter leases’ that seek 
to overcome some of the legal and administrative hurdles to energy efficient 
retrofit.
3. The BPF will campaign to ensure that minimum building energy performance 
standards are introduced in a way that will achieve the Government’s objectives 
without damaging the ability of the industry to deliver accommodation for 
business and a continuing sound investment.
The Government intends to mandate a minimum energy performance rating of E on 
letting non-domestic buildings by 2018, but it has signalled its intent to withhold the 
detail of proposals until much closer to implementation. We consider this position 
unhelpful, since early warning of their precise requirements and content is necessary to 
avoid sharp and significant adverse impact upon property values, and to ensure that the 
market responds in the way that the Government intends.
•	 We will conduct a review of the likely effect of minimum performance standards 
upon the market, and will make recommendations to ministers and officials.

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•	 We will press hard for early release of the detail of minimum standards, while 
encouraging the Government not to make minimum standards binding before 
the industry is equipped to respond.
•	 We will encourage the Government to review the effectiveness of energy 
performance certificates, if minimum standards are to be based upon them.
4. The BPF will campaign for a simplified approach toward taxation of the emissions 
associated with energy use in buildings.
We believe that the Carbon Reduction Commitment Energy Efficiency Scheme (CRCEES), 
having become a revenue raising instrument, is overly complex and its reporting via a 
league table flawed.  The complex arrangements of parallel carbon incentive schemes 
also invite confusion within the market. A simpler approach would be for the Government 
simply to adjust the price under the Climate Change Levy to form a simple tax on the 
carbon associated with energy use that is applied equally to all sectors, and to the carbon 
associated with energy consumption.  
•	 We will continue to campaign for a retrospective carbon tax to set clear 
incentives for carbon reduction, and to reduce the overall administrative burden 
on business.
•	 We will work with other Green Property Alliance partner organisations to 
examine the current effectiveness and appropriateness of carbon incentives and 
penalties, and make recommendations to Government for improvements to the 
current regime.
5. The BPF will investigate the use of incentive schemes to encourage occupiers to demand, 
and landlords to provide, more sustainable space.
We believe that minimum standards, Green Deal finance and market drivers alone will be 
insufficient to encourage owners and occupiers to invest in the energy efficiency required 
to meet Government emissions reduction targets, particularly in the absence of a green 
rental premium for better performing buildings. Instead, we believe fiscal incentives - 
which will not represent a cost to the Exchequer - should be considered to encourage 
occupiers to favour green buildings. This would in turn cause property owners to engage 
in more energy efficient retrofit, or risk their properties being less marketable. Such 
incentives have had notable success in the United States.

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•	 We will work with the RICS and ratings specialists to explore how business 
rates could be reformed in such a way to drive a step change in energy efficient 
retrofit, while being fiscally neutral to HM Treasury.
6.The BPF will promote operational measurement of building resource 
consumption and emissions performance, and in particular champion a roll-out of 
display energy certificates to commercial buildings.
We believe that building performance measurement, based on actual resource 
consumption (energy, water, waste) and greenhouse gas emissions, will provide high 
visibility to potential occupiers of a building’s performance. Consequently, it will act as a 
spur to building owners to ensure the actual building performance matches anticipated 
performance as set out in theoretical instruments, such as energy performance 
certificates. As the Government has indicated that it does not intend to bring forth 
mandatory operational performance measurement requirements (such as display 
energy certificates for non-public buildings), we believe that it is beholden upon the 
industry to show the way.  
•	 We will encourage our members to adopt voluntary display energy certificates 
across their portfolios.
•	 As display energy certificates were designed primarily for public buildings, we 
will support industry initiatives to refine display energy certificate benchmarks 
for application to commercial buildings.  
•	 We will work with organisations within the Green Property Alliance, and in 
particular its occupier members, to encourage wider industry support for 
display energy certificates. 
•	 We will promote corporate sustainability reporting among our membership, 
to recognised standards (such as the Global Reporting Initiative or EPRA’s Best 
Practice Recommendations) to encourage sustainable practices in the wider 
building supply chain.

British Property Federation
St Albans House, 57-59 Haymarket,
London SW1Y 4QX
Tel: 020 7828 0111
Fax: 020 7834 3442
Email: info@bpf.org.uk
www.bpf.org.uk
March 2012
For further information on this paper, please contact:
Patrick Brown
Assistant Director (Sustainability and Construction)
T: 020 7802 0108
E: pbrown@bpf.org.uk