Sector trends

Net zero 2050: The future of construction

Discover how the sector is working to build a more sustainable future and the critical role retrofit plays.

What is retrofit?

Retrofit refers to any improvement work on an existing building to improve its energy efficiency, making them easier to heat, able to retain that heat for longer, and replacing fossil fuels with renewable energy. 

As 80% of the buildings that will be standing in 2050 already exist, the UK may not deliver against its net zero ambitions without significant retrofitting of its buildings. As well as carbon reduction, retrofit offers the potential to elevate the quality of life for millions while generating employment opportunities.

We are part of the Sustainable Homes and Buildings Coalition

To discover some of the lessons learned and growth opportunities for UK businesses around energy efficiency and buildings, download the latest Home is Where the Heat Is: Outcomes Report

Exploring the best routes to net zero

At the Supply Chain Sustainability School’s (“the School”) Net Zero Summit 2023 we heard how industry leaders are collaborating to meet the challenges faced by the sector, bringing innovative technical solutions to market, and supporting the skills drive to deliver a more sustainable future.

Although the built environment sector is a significant part of the carbon emissions problem – it’s responsible for approximately 25% of total UK greenhouse gas emissions – it can be a significant part of the solution, too.

Speaking at the event, Fergus Harradence, Deputy Director of Construction at the Department for Business and Trade, spoke about how a data-led, systems approach could yield positive sustainability results without sacrificing productivity. He shared examples of how the sector is innovating to reduce carbon and waste as well as improve efficiencies.

One was the Glasgow Smart Canal, which will use sensor and predictive weather technology to provide early warning of wet weather before moving excess rainfall from residential and business areas. The project will also help manage the impact of climate change on the sewer network.

The other example was the SEISMIC Product Platform, which offers contractors the opportunity to deliver their projects faster (a 75% improvement in efficiency) and with lower carbon emissions (70% reduction in carbon emissions) than by traditional construction methods.

The retrofit challenge: panel discussion

We also heard from specialists about how the sector is tackling some of the pressing questions surrounding the growing retrofit industry.


Holly Hansen-Maughan, Retrofit Sector Manager, Supply Chain Sustainability School

Maria Carvalho, Head of Climate Economics and Data, NatWest

Penny McCallum, Sustainability Director, BW: Workplace Experts

Carl Yale, Refurbishment Director, Lovell Partnerships

Chris Newman, Zero Carbon Design Manager, Mitsubishi Electric Living Environmental Systems UK

There are opportunities to address climate change and tackle higher energy bills

In an environment where headwinds include high inflation, energy bills and energy security, retrofitting existing buildings could enable individuals and businesses to be more sustainable. A good retrofit solution requires a unified approach, explained Carl at Lovell: financial support, builders with the relevant training and skills, and quality design measures that complement each other.

Our learning:

Understanding the processes of retrofit, which may need to happen at pace and at scale, is a steep learning curve. The industry recognises it’s the right thing to do and could elevate quality of life and generate employment opportunities.

Building owners and tenants are often the ones driving change

Penny at BW described the national opportunities from commercial retrofit as huge, especially with Energy Performance Certificates (EPC) becoming increasingly important for commercial property owners over the coming years. Owners don’t want a “stranded asset”, she explained, and tenants always want the best sustainable buildings out there meaning there’s a real demand for retrofit.

Our learning:

The industry had been working towards EPC C for new domestic rented buildings by 2025 and 2028 for all lettings before a change in government policy in September 2023. Our panel noted demand for retrofit is high in the domestic and commercial space, which means organisations from across the built environment sector are adapting to include retrofit in their work. – despite the changes in policy.

Retrofit is an ideal opportunity to try and reduce the carbon of a building

Chris at Mitsubishi shared how retrofit can be one of the “easier” options to reduce energy consumption and carbon in a building because it’s something asset owners or tenants can take control of. By driving energy usage down and reducing energy consumption, you’re usually reducing carbon. Moving away from fossil fuel to electrification, for example, can bring big savings in operational carbon emissions, he said.

Our learning:

To make buildings fit for the future, retrofit specialists are looking at the concept of embodied carbon, which means looking at the whole life impact of a building. How will decarbonisation measures made now play out during the lifecycle of a building and will they make it more investable, more valuable, and a more desirable place to work in?

Despite challenges, retrofit can be a beneficial process

We’ve gathered lots of insight on domestic retrofit from our Greener homes retrofit project, where we teamed up with British Gas and Worcester Bosch to cover the cost of home retrofits for nine of our customers, with co-ordination help from Quidos. What the nine pilot residents realised, said Maria, is that while the home improvement process involved disruption, the resulting cosiness of their home immediately made the change worth it.

Our learning:

It could help to think of retrofit as an upgrade: more energy efficient, bringing down bills, improving the comfort of your home, and helping support carbon reduction targets.

Retrofit is a demand opportunity

The School says twenty-nine million homes need to be retrofitted to enable the UK to hit its 2050 carbon emissions targets. For this to happen, the retrofitting industry needs to grow by 10 times its current size. Retrofit isn’t only required in domestic settings; commercial, public, and historical buildings need improving too.

Our learning:

Whether it’s driven by legislation or customer demand, we recognise the need for collaboration and upskilling around retrofit and stand ready to support builders as the supply chain matures. 

There could be huge gains from optimising existing buildings

There are benefits from retrofitting commercial buildings. Whether it’s fabric first - carefully considering the design and construction of your building envelope in the initial design stages, before any building work begins; passive principles – a voluntary standard for energy efficiency, which reduces the building's ecological footprint; decarbonising lighting, improving ventilation.

Our learning:

There could be a 15% energy saving just by double checking how the building is currently operating, noted Carl at Lovell Partnership. Start measuring the data: what’s the heat demand, what’s the ventilation rate, what’s the energy consumption of one floor, what’s the occupancy? By measuring everything now, you are more likely to know where to start when it comes to a building upgrade

Sign up to the retrofit launch event this November

The School’s retrofit programme, sponsored by NatWest, will be unveiled through a virtual conference taking place on 7th November 2023. This will introduce CPD-accredited virtual training encompassing e-learning modules, online assessments, conferences, workshops and webinars running until Autumn 2024. These valuable resources will be freely accessible to professionals in the built environment, including NatWest Group's clients and School members.

Register for the launch event here by signing up to a free account on the Supply Chain Sustainability School.

Check back in for more insight and future news about our partnership with the Supply Chain Sustainability School.

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