Attended by hundreds of sustainability experts from across the built environment industry, the Supply Chain Sustainability School’s Annual Summit provides a chance for people to come together and discuss the key challenges and solutions for the sector on its journey to net zero.

Whether through retrofitting, adopting renewable energy, or engaging with supply chains, the path to net zero is also full of opportunity for businesses in the construction sector and its value chain.

There were sessions throughout the day on energy, supply chain management, carbon reporting, skills and more. With thanks to the specialists on the role of finance and investors in accelerating sustainable development session:

• James Close, our Head of Climate Change
• Sam Carson, Head of Sustainability, Valuations Advisory, CBRE
• Fernanda Amemiya, Sustainability Director, Landsec
• Chair: Holly Hansen-Maughan, Sector Manager, Supply Chain Sustainability School

The construction industry plays a vital role in the UK economy, contributing significantly to regional GDP. It also faces increasing scrutiny for its environmental impact, particularly as the built environment accounts for nearly 40% of global carbon emissions.

Local governments and private developers alike are driving higher standards for sustainability, including the use of eco-friendly materials, energy-efficient technologies, and the incorporation of green spaces. Retrofit projects—which focus on upgrading existing buildings to improve energy efficiency—are central to achieving net zero goals.

Retrofit refers to upgrading existing buildings to make them more energy-efficient by:

• Improving the building fabric (e.g., insulation, windows)
• Adopting cleaner technologies (e.g., heat pumps, solar panels)
• Changing occupier behaviour (e.g., energy management systems)

This process reduces the energy required to heat and power buildings and ensures that the energy used comes from low-carbon sources. Retrofitting is essential for reducing emissions and creating cleaner, healthier spaces for both work and living.

As highlighted by James Close, our Head of Climate Change, alongside other specialists in their field, businesses face significant financial risks if they fail to act on sustainability. Ignoring retrofit and sustainable practices could lead to:

Stranded assets: Buildings that don’t meet upcoming sustainability standards, for example Minimum Energy Efficiency Standards (MEES), risk becoming obsolete or losing value.

Tenant attrition: Tenants increasingly demand energy-efficient spaces that reduce operating costs.

Regulatory penalties: Government regulations are tightening, and businesses must comply to avoid fines or other legal ramifications.

Trade costs: Related to the above, the supply chain will likely need to be mobilised and funded, creating a potential crunch as the regulations ramp up.

Our latest Future Fit research found sustainability could drive competitive advantage as well as longer-term commercial objectives for businesses.

The Future Fit firms identified in our research embrace more sustainable business practices linked to environmental, social and governance (ESG) goals, and are achieving better results than their peers.

While the risks are evident, sustainability presents a major growth opportunity for businesses in the built environment.

• Access to future projects: Sustainability is now a key criterion for winning large contracts, especially in public infrastructure.
• Energy cost savings: Retrofitting can significantly reduce energy costs, potentially leading to better profitability.
• Enhanced brand reputation: Demonstrating leadership in sustainability could attract talent, investors, and clients.

1. Understand and act on EPC Ratings

Buildings will need to meet a minimum EPC rating of C by 2030. Start assessing your portfolio now to identify properties at risk of non-compliance. The sooner upgrades are made, the more competitive your assets will be.

2. Focus on low-hanging fruit in retrofits

Simple retrofitting measures, such as improved insulation and installing energy-efficient windows, can yield immediate results in reducing energy costs and emissions. These quick wins could also help offset the costs of more complex upgrades.

3. Leverage government and financial incentives

Governments are offering grants and subsidies for retrofitting and installing renewable energy systems. In addition, many banks now offer green finance options, providing lower interest rates for sustainable projects. Tapping into these financial resources could reduce upfront costs.

4. Collaborate with supply chains for innovation

Innovation in materials and processes could be key to lowering the costs of sustainable construction. Build strong relationships with suppliers to ensure access to the latest sustainable products and solutions.

 5. Incorporate circular economy principles

Wherever possible, consider reusing materials and avoiding demolition. Retaining the structural elements of a building, as seen in successful projects like Landsec’s Portland House, could significantly reduce embodied carbon and enhance a building’s sustainability credentials.

6. Engage tenants and occupiers early

As highlighted by Landsec, tenant engagement is crucial for successful retrofit projects. Provide tenants with energy data, involve them in decision-making, and educate them on how their behaviour could improve energy efficiency.

7. Prepare for future regulations

Upcoming regulations around embodied carbon and circular economy principles will likely become more stringent. Get ahead of these changes by setting long-term sustainability goals and integrating them into all stages of development and renovation.

To accelerate the journey from carbon-heavy industry to cleaner jobs in the UK requires collaboration across the supply chain.

Our Head of Climate Change, James Close says: “Decarbonising properties requires retrofitting existing buildings to increase their energy efficiency, constructing new energy efficient buildings and decarbonisation of electricity and heating supply. We want to work at scale to increase demand. But we need the skills and companies to carry out the work and we also want to make it as easy for our customers to retrofit as possible.”

By acting now to future-proof your operations, you could reduce risks and even tap into new growth potential. The message from the Summit was think fast, think differently. 

Visit our machinery finance section for more insight and ways we could support you