How to establish a roadmap to Carbon Net Zero for your organisation
Where should you start?
You need to establish your organisation’s carbon emissions baseline by measuring your current carbon footprint. Measuring your carbon footprint was covered in more detail in the NHMF Best Practice article: Planning your organisation’s decarbonisation strategy. What is important is to ensure that your carbon footprint (starting point) is accurate i.e., ensuring you have up-to-date and accurate stock condition information and SAP ratings, good records of energy and transport use for your organisation’s activities.
Having developed your decarbonisation strategy, you will have determined all the activities you need to include in your roadmap and whether you will set the same timetable to address them all. Your strategy will also have decided how practical it is to address all the Scope 3 emissions, particularly since your suppliers and contractors may not be able to supply you with accurate carbon emissions data.
Environmental reporting and measuring your carbon footprint will provide a gap analysis to help you identify where you need more detailed data and information, as well as inform where you need to concentrate effort. From 1 April 2019, quoted companies have had to report on their global energy use and large businesses must disclose their UK annual energy use and greenhouse gas emissions as required by the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. Government has published Measuring and reporting environmental impacts: guidance for businesses to help businesses measure and report their environmental impacts, including greenhouse gas emissions. Understanding and reporting these impacts can help identify ways to improve environmental performance and cut costs. Government has also published Environmental reporting guidelines: including Streamlined Energy and Carbon Reporting (SECR) requirements to help companies comply with the SECR regulations, including greenhouse gas (GHG) reporting. Banks required metrics, including Scope 3 emissions and also responsible sourcing of materials, to answer Environmental, Social and Governance (ESG) questions when securing finance. These need verifiable data and will help identify data gaps.
Where do you want to get to with Decarbonisation/Carbon Net Zero?
For your corporate activities, it may be relatively straightforward to set your emissions targets, for example ensuring that all the electricity you use is generated renewably. For other aspects, Government policy will determine when organisations need to move away from using fossil fuels, such as the proposed bans on the sale of new petrol and diesel cars and also on new gas boilers. Consequently, organisations will have to change their business fleet to electric-powered vehicles and will no longer be able to replace or instal gas boilers. Setting emissions targets for your Scope 3 emissions will be less straightforward because it will depend on the accuracy and quality of your suppliers’ and contractors’ emissions data. It will take longer to establish their baselines and how much their emissions can be reduced.
In relation to your existing housing stock, once you have confirmed you have up-to-date and accurate stock condition information and SAP ratings, you can start to analyse how much it is practical and affordable to reduce emissions. Some organisations will have properties that are straightforward and cost-effective to retrofit so that they could set ambitious SAP ratings. Other organisations, particularly in dense urban areas, may have many properties that are expensive and difficult to retrofit, such as solid-walled terraced house and tenement blocks. These difficulties may be compounded by some also being in conservation areas. For such homes, it will not be practical to set such ambitious SAP ratings. Most social landlords are likely to have a range of properties – some can have ambitious targets set while others may struggle to achieve the Government’s 2030 target of EPC Band C. However, Government policy, such as the proposed requirement for all private rented homes to be at least EPC Band C by 2030 and the legal fuel poverty target for England to improve as many fuel poor homes as is reasonably practicable to a minimum energy efficiency rating of Band C, by the end of 2030.
While average SAP ratings are often reported, care needs to be taken to ensure that averages do not mask the expensive and difficult to treat properties that will still need to be retrofitted to achieve the Band C targets set by Government.
How should you develop your targets and timetable?
It is very important to spend time on your initial stock analysis before proposing any carbon emissions reductions or SAP targets. Your analysis needs to follow PAS 2030 and 2035 to develop a holistic approach to retrofitting dwellings (whole house approach). This will involve a proper assessment of the building – including building pathology, thermal modelling and calculations, ventilation, interaction between energy efficiency measures, as well as testing, commissioning, monitoring and evaluation – to develop appropriate proposals and specifications of what work should be carried out to make the required improvements to the building’s energy efficiency. There are also some very specific technical requirements in relation to ventilation and the calculation of energy loss. While a whole-house plan is the result, you do not need to carry out all the measures at the same time as long as when you plan to implement these measures, they will achieve the final plan. What is important, is that any retrofitting should be part of this overall plan and no measures should compromise these future measures.
A good approach is to adopt the Committee on Climate Change’s (CCC) recommendations in its UK housing: Fit for the future? report that proposed retrofitting existing homes so that they were low-carbon and resilient to the changing climate. The CCC’s Balanced Net Zero Pathway takes as its starting point plans to improve the energy efficiency of all buildings over the next 10-15 years, as well as phasing-out the installation of new high-carbon fossil fuels and expanding heat networks. Other options for reducing emissions include: behavioural change to reduce the consumption of energy; and fuel-switching away from fossil fuels to low-carbon alternatives.
The CCC published a series of sector summaries as part of The Sixth Carbon Budget. The summary on Buildings identified direct building CO₂ emissions from buildings of 85 MtCO₂ in 2019, with 77% from homes. These result primarily from the use of fossil fuels for heating and around 74% of the UK’s heating and hot water demand in buildings is met by natural gas. Indirect building emissions, where buildings are responsible for 59% of UK electricity consumption, equivalent to a further 31 MtCO₂e of indirect emissions. In homes most electricity use (counted as indirect emissions) stems from appliances and lighting.
Well-insulated homes will provide multiple benefits by reducing energy demand for space heating, reducing carbon emissions, as well as providing warm homes for your residents and so reducing the risk of fuel poverty. They will also improve resident satisfaction and indoor air quality. Your stock’s energy efficiency should be improved before considering moving to low or zero carbon energy for space heating. This has the advantage of allowing time for the costs and supply chains to improve, as well as new solutions to be developed. In simple terms, social landlords should start with improving the energy efficiency of the fabric of their existing homes and then examine low carbon ways to provide space heating and hot water, as well as the use of renewable energy. Adecoe presented a matrix comparing the different opex and capex with expected carbon reductions and consumer costs.
When do you want to be Carbon Net Zero?
The deadline set by the Government is 2050 but some organisations want to be Carbon Net Zero before then. To help your organisation determine its timetable to achieve Carbon Net Zero, you need to undertake the detailed analysis above, including costs and benefits and assess any business case. An important factor will be determining how much you can reduce your carbon emissions. This will be dependent on costs and practicality but you will need to achieve a reduction of at least 78% by 2035 to meet target was included in The Carbon Budget Order 2021 that came into force on 24th June 2021. This is in line with the UK’s sixth Carbon Budget, covering 2033 to 2037, as recommended in the CCC’s 2021 Progress in Reducing Emissions report. The UK’s Net Zero Strategy: Build Back Greener sets out the Government’s plans for reducing emissions to achieve net zero by 2050.
Your emissions’ reduction target will determine how much you need to off-set emissions. While a lower carbon emissions’ reduction target and a higher off-setting target is likely to be achievable in shorter timescale because it relies on more off-setting, it does not reduce the total emissions required to address the risks of global warming and climate change. Longer term, there may be limits on the amount of off-setting to achieve carbon net zero. This balance should be determined as a result of your analysis. It would also be useful to identify clearly which emissions you cannot remove and explain why this is the case. You need to keep your assumptions kept under review as policies, regulations and technology change.
What intermediate targets and dates do you want to set?
Having determined where your organisation needs to be and by when, you can set 5-year (or possibly 10-year) targets to achieve carbon net zero roadmap. It will be important that the Board and Senior Management understand these targets are not negotiable. They may want to ensure progress against these targets is reported and assessed regularly because it will cost your business in many ways if you do not achieve the targets. The arguments for acting now are set out more fully in the NHMF Best Practice article: Why should social landlords start decarbonisation now?
How should you develop your roadmap to achieve Carbon Net Zero?
Your 5-year targets will enable you to identify what you need to do and by when so that you can plan the necessary actions for each 5-year period. These actions will form a key part of your decarbonisation plan or roadmap.
What are other social landlords doing?
One housing association has made a firm commitment to achieve carbon net zero in its operations by 2030, and to become carbon net zero in its homes and supply chain before 2050. Orbit has published its Net Zero Carbon Roadmap, which sets out how the organisation will deliver its commitments across its operations, homes and supply chain. Solihull Community Housing presented its Net Zero Strategy at the NHMF webinar for it to be carbon net zero as an organisation by 2030. It has set a target of EPC band C for all homes by 2030 because its stock was in reasonable condition for energy efficiency (70% at or above EPC Band C) but is carrying out in-depth surveys & options appraisals, particularly for its non-traditional homes. Its Asset Management & investment strategies will be updated with a phased investment approach starting with building fabric, smart controls & renewables.
Some social landlords have built up their own expertise for calculating their carbon footprints and for environmental reporting, such as Accent (NHMF webinar). Others use the services of SHIFT Environment, Adecoe and the Carbon Trust to review, audit and report their carbon emissions, help them develop strategies and plan their roadmap to carbon net zero.
What other things should social landlords be doing to address the risks from climate change?
The impact of climate change is seen in more frequent and severe weather events and in rising sea levels. These changes could affect social landlords’ assets, particularly existing homes and the risks should be assessed so that they can be reduced and managed. Part of this will be ensuring that existing homes are more resilient to the effects of climate change, such as flooding or subsidence. These risks should be reported to the Board and Senior Management and possible adaptations should be incorporated into decarbonisation plans as appropriate.
What resources and information are available to plan a roadmap to Carbon Net Zero?
- Measuring and reporting environmental impacts: guidance for businesses
- Environmental reporting guidelines
- Net Zero Strategy: Build Back Greener
- Decarbonisation: a guide for housing associations
- Decarbonising the housing association sector: costs and funding options
Organisations providing advice and consultancy services to help develop carbon net zero roadmaps:
NHMF webinar presentations: The Social Sector Response to Zero Carbon.
Note: This is part of series of Best Practice articles and case studies that the NHMF is producing. NHMF is planning further carbon net zero webinars for 2022.