Making the business case for retrofit
We’re all familiar with the data: the UK built environment is responsible for 25% of the UK’s greenhouse gas emissions[1]. The CCC[2] has highlighted the urgent need to accelerate decarbonisation in the building sector to meet UK’s 2030 targets, while the IPCC emphasises the growing need for climate adaptation. Our built environment is the first line of defence in a changing climate[3], and our built assets need to be resilient and adaptable. Despite this urgency, carbon emissions from building stock have rebounded in recent years.
The LSE estimates that, under current policies, the total cost of climate change could rise from 1.1% of UK GDP today to 3.3% by 2050. Increasing extreme weather events threaten higher maintenance and repair costs, operational disruption, insurance premiums, and, in extreme cases, obsolescence. Buildings must be resilient and adaptable. However, policy signals are often inconsistent. Long-term, clear messaging, regulatory frameworks, and financial incentivisation are essential to foster trust and encourage interventions, as well as investment in skills across all levels. From on-site teams to professional services.
To enable mitigation and adaptation, we must make a clear business case for investment in existing buildings. Importantly, retrofit cannot be treated as a ‘sustainability bolt-on’, it must be integral to asset management strategies for value retention and financial de-risking. Funding mechanisms should support the business case by mitigating the potential cost uplift of sustainable interventions.
Accurate data on asset performance is fundamental. Where tenants are present, sharing relevant data helps them make informed decisions about their own interventions, fostering collaboration. We need to bring everyone on the journey through good communication.
Evaluating the business case at asset or portfolio level requires understanding current performance in context, including market rents, values, and local variations across a nation, to assess economic viability and ROI.
Portfolio-level considerations should include identifying high-performing assets, compliance with regulations such as MEES, lease events, and future retention or sale to help inform prioritisation of interventions and retrofit. Planning for sale should not prevent interventions - evidence shows retrofitted assets can command rental and sale premiums are possible for better performing assets. Interventions can also generate intangible value, such as tenant retention, increased resilience to weather damage, and improved occupant wellbeing, which supports health, productivity, and long-term asset performance. This has positive implications for all building typologies.
Programmatic or portfolio-scale retrofits offer opportunities for cost efficiencies through shared preliminaries or coordinated works. Planned maintenance can serve as a vehicle for incremental improvements, integrating sustainability and resilience upgrades alongside maintenance activities. While phased approaches may not achieve rapid carbon reductions, they can support energy and carbon savings within budget constraints. Crucially, whether full or incremental retrofit, joined-up planning is needed to avoid unintended consequences, and qualified professionals should guide decisions. Frameworks such as PAS 2035, PAS 2038, or the voluntary Net Zero Carbon Building Standard provide structured support for these interventions.
Incentivisation and removal of disincentives remain vital, including equalisation of VAT, tax rebates, and national infrastructure support, such as grid capacity for electrification.
As stated in Stern’s 2006 review , the longer we wait to act, the more expensive action becomes. In addition to rising extreme weather impacts, shortages of skilled labour and materials risk inflation and higher intervention costs.
Retrofitting our buildings becomes a way of building resilience and managing risk. In short, it’s a business imperative. But this needs support through consistent, clear, joined-up policy and regulation, financial incentives and wider skill development to accelerate pace of improvements without causing negative unintended consequences.
[3] https://ukgbc.org/our-work/topics/resilience-roadmap/