06 Apr 2021

The climate has changed

Over the last two years, there has been a dramatic increase in action by the sector on zero carbon; a change that was underlined by the newly published UK Housing Review 2021 that has outlined in detail the challenges and opportunities for housing, in its chapter on “The Zero Carbon Challenge”. Can the sector now start to write its own low carbon future and lay out a manifesto for action?

There is a lot of noise out there right now, whether it’s around new homes, existing homes or Environmental, Social and Governance (ESG) requirements but there are only three things that the sector needs to focus on: zero carbon, zero carbon, zero-carbon. Having worked with many housing providers on developing their pathway to zero carbon we have gathered up some of the lessons and thoughts on what this manifesto might begin to look like.

  1. The housing sector needs to stop listening. The low carbon industry is high on opinions and talk and is always keen to tell housing how it should do things. Just now housing needs to stop listening and decide how it needs to take the agenda forward. For sure it will need some help in the future, but now it needs to get together and start shaping its own future – by housing, for housing, of housing.
  2. The housing sector needs to stop buying. There are plenty of shiny new things that all say they will deliver zero carbon. The sector needs to be working out what it needs and what is good for business and customers in order to build that its own knowledge and confidence. Housing providers can then challenge and engage with their traditional supply chain and those who have the exciting new products and services.
  3. Housing needs to start collaborating. The sector has always had a polite but quite sharp edge of competition, but that competition needs to be smart, and with the zero-carbon agenda there is lots to be gained from working together, particularly in developing research and development and creating a voice for the sector. This should not only be housing providers but also the bodies that represent them. This is also especially true of the next challenge.
  4. Housing needs to do real research and development. We cannot carry on doing the pilots, the one-offs, the funky stuff that had a lovely picture and great story. This £ multibillion housing industry needs to set out what it needs, when it needs it and critically how much it can invest for what return. And it needs to learn the lessons – good, bad and ugly. That’s why it's research AND development. There are many challenges, but two are emerging as key issues:

    - Finance: our work with clients has not surprisingly shown that zero-carbon doesn’t come at zero cost. In fact, it’s a huge cost. Internal resources and grants cover half the cost at best, so we need new sources of finance including, amongst others, “warm rents” that reflect savings to tenants on their heating bills and energy flexibility. Great work is now being done by the likes of the Energy System Catapult and the sector needs to get behind this.

    - Data: zero carbon is going to drive the need for different and better data. And to build in that data flexibility the sector needs to be developing open-source data platforms that meet its needs and not those who want to sell the sector black boxes that use the sector’s own data.
  5. Housing should largely ignore government policy right now. But it does need to shape government policy soon. We have seen yet another debacle with the Green Homes Grant and this tells you all you need to know about current policy. The sector should look to be making a deal with government; in return for delivering zero carbon (and the jobs, knowledge and growth that go with this) there are some asks that will sort out blockages, begin real engagement with the sector and tackling where funding or policy diverts from zero-carbon. And part of this is recognising the real potential of the sector and in some ways this the most important part of this manifesto.
  6. The sector needs to recognise its potential and the opportunities it has. And so does government. The housing sector is unique in managing and investing in very large portfolios of homes over long periods of time. No other sector does this. It also has the potential – through real research and development – to help the UK build world a leading low carbon housing industry. One that can sell its know-how, its skills and its products to the rest of the world.

The housing sector is now addressing the zero carbon agenda and this comes with challenges and opportunities for sure, but could end up being responsible for realising its real potential for the next generation. Now it’s down to the sector to make it happen.

Written by Nicholas Doyle

Nicholas Doyle is the director of Adecoe.