COP26 and net zero a catalyst for greater collaboration in the construction sector

COP26, which ended last month, shone a spotlight on net zero as a key element of the global challenge to keep the rise in the world’s atmospheric temperatures to within 1.5 degrees by 2050. For the real estate sector, the implications of net zero on existing and new-build projects are very real and far-reaching. The vast majority of buildings that will exist in 2050 are already in place, so there’s a critical imperative to improve the energy performance and sustainability credentials of existing building stock, and to make all new buildings as close to net zero as quickly as possible.

Although the net zero challenge is not a new one, the imperative to achieve this is greater now than ever before. Reusing existing building structures is both challenging and potentially expensive, but it is essential to the real estate sector’s net zero goals; an objective that is increasingly demanded of developers by prospective buyers, tenants and investors.

There are already examples of building projects that have successfully achieved net zero by reusing existing structures. At London’s 100 Liverpool Street within the Broadgate Campus, for example, developer, British Land (and JV partner, GIC), recently partnered with contractor, Sir Robert McAlpine, to deliver one of the city's most prestigious net zero carbon developments, garnering an Outstanding BREEAM rating in the process. 32% of the new development’s steel frame came from the existing building along with 49% of the building’s concrete – including 100% of the foundations. British Land was able to achieve net zero by offsetting the remaining embodied carbon.

Signposting the way ahead

The need to embrace sustainability and net zero is clear and has been publicly endorsed by the UK's major developers in the real estate world. As well as the motive to ‘do the right thing’, there are other more pragmatic reasons for this embrace. Investors, shareholders, future buyers and occupiers are demanding sustainable building stock, so the threat of devalued real estate assets is a major driver. It will inevitably become increasingly difficult for developers to sell a new building profitably without it being A-grade for sustainability. Legislative developments and more defined industry standards will further drive change.

Collective collaboration

Within the context of an increasingly difficult environment for the industry - where the drive towards net zero is just one of a number of challenges it's currently facing - the construction sector should use COP26 as a catalyst for thinking harder about collaborative opportunities with stakeholders. Collaboration is key to finding ways to improvise, to innovate and to take considered risks. To achieve net zero we will need to seize every opportunity we can.

British Land and Sir Robert McAlpine’s successful collaboration on the regeneration of Broadgate is based around a strong project culture, using a 10-year framework agreement. On the 100 Liverpool Street development, the team embraced a motto which permeated the entirety of the project: “trust, honesty and collaboration”.

To see this kind of approach filter across the construction sector, contractual mechanisms are needed that encourage the sharing of risk and improve project culture but which also protect the commercial position of both parties. Construction contracts can achieve these goals in a number of ways, for example, by providing for: KPIs that set out a shared purpose in relation to net zero targets; early contractor involvement; consistency of key team members; good faith obligations; shared financial motivation; and dispute avoidance and early warning mechanisms. Such provisions, of course, go hand-in-hand with a more collaborative approach towards design and technology, which can be facilitated by embedding BIM across the construction contracts as a shared tool for storing and using data to drive sustainability through the build and operational phases of the asset.

Next steps

While "business collaboration" is often seen as an oxymoron in terms of corporate success, meeting net zero will be impossible without it. With the increased urgency around reducing the carbon footprint of the built environment, the industry is running out of time quickly in terms of finding solutions. There is no single magic bullet that will make net zero happen but collaboration that instils purpose and trust will be a cornerstone of how we get there.