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COP27
Key highlights for the Real Estate, Planning & Construction industries.

COP27:  Key Considerations for the Real Estate, Planning and Construction Sectors

The built environment is responsible for approximately 40% of carbon emissions and as such real estate is a vital part of a global effort to decarbonise the planet.  It is therefore important for all people in the real estate, planning and construction industries to be aware of any progress or movement in environmental and climate change initiatives. 

Here are the key points to come out of this year’s United Nations Climate Conference (COP27) held in Egypt, which brought together political, business and environmental leaders.  The aim was to drive action around decarbonisation, mitigating and adapting to the affects of climate change and to build resilience. 

Decarbonisation and combatting greenwashing

The extent of the carbon problem was highlighted in a special analysis, released at COP27.  In a study of global carbon emissions, scientists concluded that if current levels of carbon emissions continue, there is a 50% chance that the world will see the global warming limit of 1.5°C exceeded within the next decade.  This put investment into decarbonisation of the highest emitting sectors – including those relating to the built environment – and the development of new technology right at the front and centre of discussions. 

DJB Senior Partner, Madeleine Davitt said: “Whilst many developers, investors, landlords and estates managers have increased their time and resource spend on environmental matters since COP26 last year, they will inevitably come under increasing pressure now from regulators and consumers to increase the pace when it comes to decarbonisation.”

80% of UK buildings that will be operational in 2050 have already been built, which outlines the enormous challenge facing the government and private operators as they seek to decarbonise this existing estate. 

DJB Partner, Stephen Chalcraft commented: “Decarbonisation is inevitable and will be extremely costly for the real estate and construction sectors.  At DJB our main concern is that Government pressure and legislation will dictate a pace of change of that far outstrips the sectors’ ability to respond in an economically effective manner, and that could destabilise a critical part of our national economy.  The only way I can see this working is via a sensible and programmed set of measures that (i) promote Green Growth and (ii) builds in resilience which allows us to adapt in a sustainable manner.  This is critical to the future success of decarbonisation, and the Government will need to elaborate on these issues and further develop net zero funding strategies.

For more on decarbonisation and greenwashing please click here.  

Construction materials come under the spotlight

In a development that will interest those in the construction and development sectors, the First Movers Coalition (a global initiative harnessing the purchasing power of companies to decarbonise seven “hard to abate” industrial sectors) has partnered with the World Economic Forum and Mission Possible Partnership to launch the “FMC Cement & Concrete Commitment”. Signatories to this Commitment have pledged to purchase at least 10% near zero carbon cement and concrete by 2030.

 

This is seen as a significant step forward as cement is the second most-used product on earth after water and is responsible for an estimated 7% of global emissions.

For more information, click here.

 

Cities a key strategic target at COP27

The key message coming out of COP27 is that city wide improvements must be prioritised to significantly improve climate mitigation, while also increasing resilience to better manage adverse climate impacts. 

Cities have been a key focus at COP27 for two reasons:

  1. They produce about 70% of global greenhouse gas emissions, making them a significant contributor to climate change.

  2. Climate change is exposing cities to extreme affects including extreme weather events, climbing average temperatures and biodiversity loss. 

At COP27, the UN launched SURGe (Sustainable Urban Resilience for the Next Generation) to encourage cities to share targets and co-create a holistic programme for climate adaption in urban areas. The focus is on decarbonisation, climate adaption, reaching nature-positivity, preserving culture all while promoting human and biodiversity health. 

 

Further initiatives to improve cities include Beat the Heat: Nature for Cool Cities Challenge.  Cities in developing countries are invited to participate in the challenge by pledging to increase nature based solutions in their urban areas by 2030 and demonstrate tangible progress by 2025. Participants will be supported via funding, technical assistance, partnership opportunities, and communications support.

 

The strategic focus on cities particularly in relation to resilience and decarbonisation will no doubt travel back with government leaders from all 196 nation states, making this in an interesting discussion point for UK local authorities, developers and other relevant institutions.

COP27 focuses on improving transport and transport infrastructure

The key focus on solutions day was transport, a priority given that transport is responsible for approximately 25% of global emissions. 

The UK Government provided an update on the Zero Emissions Vehicles Declaration, one year after it launched at COP26. A total of 214 new signatories have signed the Declaration requiring them to develop plans to end the sale of light vehicles which are not zero-emission by 2035 in leading markets, and 2040 elsewhere. 

The COP27 Presidency released an initiative call Low Carbon Transport for Urban Sustainability (LOTUS) aimed at decarbonising the global urban mobility landscape. Transport experts will attempt to transform urban mobility systems to decrease reliance on internal combustion engine vehicles (ICE) and decarbonise public transport. 

In further transport related news, The Collective for Clean Transport Finance was also launched with the aim of creating the tools to change risk profiles of investment in zero-emission transport. The Collective is launched by five leading organisations and the High-Level Climate Champions.

EV’s and transport improvements will form a key part of local and national discussions in the coming months and years.  For more information on EV’s listen to the DJB Real World Podcast interview (parts 1 & 2) here.

 

Push for renewable energy development and investment

There was a call for action to move away from fossil fuels and instead rapidly increase  global renewable power capacity by 2030. Currently, only 29% of global electricity generation comes from renewables. 23% of global greenhouse gas emissions are caused by electricity generation, so this is a key target for nations. 

The UK renewable energy project pipeline is encouraging, and currently indicates that the UK could hit net zero electricity targets.  There are some concerns about delivery as a result of delays in receiving planning consent, rising construction costs, and the capacity of existing grid infrastructure to accommodate new renewable energy generation. 

In the 2022 Autumn Statement, the Chancellor Jeremey Hunt promised action to bolster the UK's energy independence through investment in renewables.  However, Hunt's speech offered no new policies on renewables, and tax rates have been increased on clean technologies, extending the windfall tax on oil and gas firms to cover clean power generators such as renewables.   

Click here for more on renewable energy discussions at COP27. 

 

Biodiversity agenda set to influence UK planning

Biodiversity was a much discussed and debated issue at COP27, with a key focus on the impacts of climate change on nature. 

These discussions set the tone for the upcoming Biodiversity COP15, due to take place in Montreal, Canada from 7th December 2022.  This COP is overseeing the creation of a new ‘Paris-style’ agreement for nature and will see all nations committing to halt nature loss and bring the world into a period of widespread nature restoration. 

The results of which will inevitably trickle down to the real estate sector as DJB Senior Partner Madeleine Davitt explains: “Both national and local Government are already developing and implementing planning policy and legislation in support of more global frameworks on biodiversity and we can expect more as a result of discussions at COP27 and the upcoming Biodiversity COP15.  The recent Government Property Sustainability Strategy also makes improving biodiversity in the Government estate a key part of their plans.  I would therefore encourage the commercial real estate sector to begin looking at nature based solutions as an opportunity rather than an unnecessary cost or box-ticking exercise.”

The key takeaway around biodiversity at COP27 was clear:  Nations need to come together to halt biodiversity loss, and fast not just to reverse the nature crisis but also to help achieve a global net zero future.  

Nigel Hewitson (Partner – Planning and Heritage) explains how this may impact UK developers in the immediate future: “In some senses UK domestic law and policy is ahead of the curve on biodiversity. The Environment Act 2021 introduced a requirement, which is anticipated to come into force in the course of 2023, for new developments to provide for a 10% increase in biodiversity over what was present on site prior to permission being granted. This is referred to as Biodiversity Net Gain or BNG. Many local authorities have, in advance of the change in the law, adopted policies on BNG and are already securing net gains on new developments. BNG will clearly often be easier to achieve on brownfield sites than on greenfield so this may become a driver for developers to favour brownfield sites. The other impact may well be on density. If space has to be set aside for biodiversity it may well be that less development can be got onto the site than would otherwise be the case.”

Relevant posts

KEY CONTACTS

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Madeleine Davitt 
Senior Partner

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Nigel Hewitson
Partner - Planning & Heritage Law

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Stephanie Hall
Partner - Planning & Environmental Law

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Yohanna Weber
Partner - Planning & Environmental Law

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Gillian Lewis
Partner - Real Estate

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Louisa Swanton
Partner - Real Estate 

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Stephen Chalcraft
Partner - Real Estate

Jonathan Warner-Reed
Partner - Real Estate Litigation

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