In our latest edition of ‘Five Minutes with…', we discuss the topic of sustainability and net zero carbon with Jonathan Higgs, CEO of Raven Housing Trust. Raven Housing Trust is a Housing Association that manages more than 7,000 homes in Surrey and Sussex. Berwick Partners’ Tom Neely caught up with Jonathan to find out how Raven is thinking differently towards the net zero carbon target and how the team are changing their mindsets towards building new homes.
The Government has committed in achieving net zero carbon by 2050; but an interim target of as many building projects as possible to be EPC C by 2030; what are Raven’s plan to achieve this?
In November 2019, we commissioned a project to review our carbon footprint as a business which looked at key areas such as our in-house fleet vans for repairs, our office estate and our homes. Clearly, our biggest carbon emitter are our homes, so we then carried out a detailed research project looking at the carbon performance of all of our properties. From there we produced a route map to get to the EPC Level C, followed by net zero carbon. It’s also important to note that the work we are carrying out is to reduce our carbon emissions by 80%, with the expectation that the other 20% will come from the decarbonisation of the grid.
We have taken a strategic view that the route map will allow us to focus on all of our properties rather than one off projects. The regulator has requested organisations’ financial forecast return by September, and that we demonstrate a business plan to evidence the provision of energy efficiencies within properties. This is the starting point of key stakeholders in the sector taking a stand to move forward on the net zero carbon agenda, and this will clearly also be the case with funders and valuers in due course.
On average each property could cost circa £20,000 to become ‘net zero carbon’. It is unlikely that current investment budgets have budgeted for this expenditure and so how is Raven intending to pay for this?
Firstly, there is a debate around whether a contribution should come from the beneficiaries of this investment, i.e. the residents - solutions such as ‘Energie Sprong’ can build this in - but personally, I don’t think we should; our modelling shows that our tenants will save £7 a week on their energy costs, but given that we have increased our rent by £3 a week this year and are likely to continue to increase rents on a yearly basis, residents may feel that they are already paying for this improvement.
Secondly, there is a debate as to how much this is actually going to cost in today’s world. Currently there is a small amount of energy retrofits across the country. In ten years, however, there is an estimate that there will be around 2,200 homes being retrofitted every week given the targets set by government, and so the costs will be dramatically different.
Thirdly, is the question of government support. Will the promise of £3.8bn for the retrofit of homes materialise, and how much of it is going to be made available to Housing Associations? But given the economic costs of the current pandemic, we don’t believe there will be a huge amount of public money when we come through this.
Finally, the debate is around our own programme of works and reviewing our own stock profiling. We are going to see a more robust approach towards demolition, regeneration and disposals which will be an integral part of achieving the net zero carbon challenge. For Raven and our geographical region, the values of properties are high, I don’t believe disposals will be a huge part of the work moving forward; however, demolition and regeneration will be.
I think it’s important to comment that there is no ‘magic bullet’ and every organisation may be slightly different. The cost for the net zero carbon for Raven will be in the order of £115million which wasn’t in the business plan and so it’s vital that we use a combination of the above.
We are in a housing crisis and there are significant pressures to build more homes. What are plans for Raven in building new homes to balance the need, whilst ensuring you hit your net zero carbon target?
Raven has made the decision that there is a standard awaiting approval called the ’Future Homes Standard’ for new builds. We aren’t procuring anything that isn’t to that standard, or which can achieve that standard easily. Where we will need to carry out improvements on products to get them to a ‘Future Homes Standard’ (such as air source heat pumps) we have been reducing our offers to developers by the amount it would cost for us to carry out those improvements.
We are also doing less Section106 agreements and looking to acquire our own land where we can build our properties to a net zero carbon standard.
We are principled as an organisation in making sure we aren’t wasting money. However, we are also acutely aware that we are in a housing crisis and we need to keep building homes for those in need in our local area. From a regeneration perspective, we are heavily involved in an NHF initiative - ’Building Better’ which revolves around off-site manufacturing. We see this as a key part of helping us deliver our own sites, more efficiently, at a much higher carbon performance.
From an organisational perspective, the absence of large-scale commuting has created a positive impact; will this contribute to your thinking moving forward?
Like many others, we already had our transformation plans in place prior to the pandemic to ensure our customers received a better digital service than before. We had already moved towards a more agile workforce with increased numbers of staff working from home, or in residents’ homes with the IT software to support that. The pandemic has clearly accelerated this and 91% of our staff have said that they would only like to be in the office once or twice a week.
We have a working environment group which is currently looking at our office footprint, but also our cultural and managerial behaviours to ensure the above can be achieved whilst improving our residents’ experience. I am sure, however, that we will be moving our office towards a more collaborative hub where employees go to our offices to collaborate and socialise rather than sitting at a desk.
There is a short supply of senior leaders in the sector with a strong knowledge of sustainability; what skills are you looking for from your senior leadership team to achieve the net zero carbon targets?
We put a big emphasis on innovation and curiosity in our senior leadership team to seek out new ways of working. That has to be matched with a critical ability to be able to understand what new innovations will work for Raven and its residents and which won’t. We also put a lot of focus on our senior leadership teams to have a strong network outside of Raven, partly to help find the new innovations but to also bring that collaborative nature of networking into the organisation to ensure collaboration between Directorates to prevent silo working. It’s imperative that our Directors are master of the wider corporate strategy and how each functional expert can assist in driving that forward, which is key for our net zero carbon target.