RICS calls for clarity on Minimum Energy Efficiency Standards for Non-Domestic Properties

RICS is urging for decisive action in setting clear and achievable Minimum Energy Efficiency Standards (MEES) for non-domestic properties.

The current proposed timeline and trajectory are increasingly viewed as unrealistic, and there are concerns about the lack of implementation mechanisms. Without action, there is a risk that up to 50% of commercial buildings could be stranded by 2035.

Recent data from RICS's Q4 2023 Commercial Property Monitor paints a troubling picture of confidence in the investment landscape. The indicator for all-property investment enquiries reflects a net balance of -19% in Q4, mirroring the concerns observed in the preceding quarter. Additionally, overseas investment enquiries continue to decline across all sectors, underscoring the urgency for a robust plan supported by policy and financial mechanisms.

To address these challenges, RICS is advocating for a comprehensive strategy that includes clear policy frameworks, financial incentives to promote sustainability and the adoption of the Whole Life Carbon Assessment 2nd Edition as a vital benchmarking tool to guide improvements and boost investor and occupier confidence.

To establish clarity and long-term certainty the following actions should be taken:

• To publish the Governments response to the 2021 consultation as soon as feasible.
• To provide a new clear and reasonable timeline outlining the stages for transition of non-domestic properties to be updated.
• To reform EPCs for non-domestic properties, recognising the diversity of building types, sizes and other relevant factors.
• To support the Climate Change Committee’s (CCC) Annual Progress Report 2022 recommendations on the implementation of an in-use performance-based rating scheme for offices, and the progressive extension of this scheme to other non-domestic building types by resuming plans with a pilot scheme.
• To reintroduce the Government’s Energy Efficiency Taskforce, to provide advice to ministers on supporting demand and leveraging private investments.
• To formally recognise the Whole Life Carbon Assessment (WLCA) second edition. WLCA provides detailed guidance on the process and harmonisation of reporting frameworks aiding those looking to understand and report their buildings carbon impact.

Mechanisms to enforce and support delivery should also be introduced:

• To offer additional financial support for landlords and occupiers looking to transition including the use of Business Rates Relief. Other financial enablers could also be introduced to encourage the adoption of the standards and could have a limited timeframe.
• To introduce a transparent and reliable mechanism for local authorities to access, co-ordinate and act on existing and future data on EPC’s for non-domestic properties. This would enable a local integrated evidenced-based approach to planning and policies.
• To establish funding routes and mechanisms to enable access to funding streams whose objectives align with delivering MEES targets. Including but not limited to national programmes to fund retrofit projects, reducing emissions and energy bills, lowering energy demand, and improving indoor conditions, asset value and creating employment.

RICS is actively advocating, collaborating and engaging with key stakeholders such as the Department for Energy Security and Net Zero (DESNZ) and the Built Environment Committee to drive meaningful progress and help establish clear, realistic, credible and forward-looking non-domestic property MEES targets.