In an open letter to the UK government, LGIM’s head of sustainability, head of LGIM Real Assets and CEO of Legal & General Capital, has called on the government to reduce emissions from the built environment
The UK government, which has committed to meeting net-zero emissions by 2050, recently announced a multi-billion pound building and infrastructure package to fuel the country’s recovery following the pandemic.
L&G says that while this ambition is welcome, particularly the introduction of measures such as the retrofit voucher scheme and investments to improve the energy efficiency of public buildings, it fails to address inefficient buildings.
Responding to the challenge
Legal & General is taking action to play its part in addressing the challenge of reducing emissions from the built environment.
This action includes:
- By 2030, all homes built by Legal & General’s housing businesses will be capable of operating at net-zero carbon emissions.
- LGIM Real Assets has set an ambitious commitment to achieving a net-zero emissions real estate portfolio by 2050.
- LGIM’s Investment Stewardship team is expanding its flagship climate-related engagement, the Climate Impact Pledge, to the steel and cement sectors.
Net-zero policy direction
For private sector actors to meet their net-zero ambitions, L&G says the government must urgently clear some of the existing policy barriers, and introduce new regulation to provide a clear direction of travel for the industry.
The letter recommends:
- Reintroducing net zero-carbon standards for new homes
- The £2bn Green Homes Grant is a welcome step to create a sustainable built environment, but it must represent the start of an ambitious National Retrofit Strategy to fund the upgrading of existing homes
- Implementing embodied carbon targets for new public buildings, large public renovations and infrastructure with a clear trajectory towards net-zero standards in the longer term
- Raising Minimum Energy Efficiency Standards (MEES) for non-domestic lettings
- Introducing urgent legislation to improve transparency on the operational energy performance for non-domestic buildings
- Reducing the energy performance gap through transforming mainstream industry initiatives from Design for Compliance to a Design for Performance programme – a move towards measuring a building’s efficiency based upon actual energy use
- Incentivising businesses to support their transition towards net zero through the use of renewable energy on-site.
The letter adds: “As the UK looks beyond Covid-19, it is faced with a deep economic recession coupled with a longstanding housing crisis.
“Whilst government may be focused on its ‘build, build, build’ agenda, it must not lose sight of how this – if not regulated appropriately – will have an irreversible impact on climate change.
“Due to the pandemic, global greenhouse gas emissions have hit a sudden plateau, and the world now has unexpected opportunity to continue to bend the curve. The UK’s net-zero target must be placed at the heart of the recovery.”