Retrofitting aging commercial property, rather than demolishing then constructing new buildings, could offer net zero gains and make business sense for many owners, according to a panel of experts at a recent webinar.

The Scaling Up Retrofit in Scotland virtual conference, hosted by the Supply Chain Sustainability School in partnership with NatWest Group, brought together experts from across the construction, commercial property and finance sectors, to discuss the opportunities and challenges of retrofitting non-domestic buildings.

Judith Cruickshank, Managing Director of the Royal Bank of Scotland’s commercial mid-market business, delivered the key address and said there was a “critical need” for retrofitting to improve Energy Performance Rating (EPC) of buildings. She pointed out that Scotland's 230,000 non-domestic buildings account for an estimated 12% of the nation's energy consumption and 7% of emissions.

"Almost three in four of these premises currently have an EPC rating of ‘E’ or worse, with only 5% rating EPC ‘B’ or better,” she said. “Given that buildings that already stand today represent 80% of those that we expect to be standing in 2050, there's a clear need to retrofit and decarbonise over the next 20 years if we're to achieve our net zero goals.”

The speakers pointed out the multifaceted approach required to achieve Scotland's retrofit goals and comply with future regulation, including technological innovation, regulatory support, financial investment, and stakeholder collaboration. And Judith stressed the urgent need for action in the sector and explained that retrofitting projects would stimulate job creation, boost local economies, and foster innovation.

“Stakeholder engagement and collaboration across a range of players will be key to driving collective action towards decarbonisation,” she said. “Retrofitting non-domestic buildings can often be expensive, with significant upfront investment required, and this challenge is amplified by the fact that the building is typically empty while doing retrofit and therefore not generating income.

“Furthermore, many building owners lack knowledge about available technologies, funding options and best practices. And the technology is still evolving, meaning that current solutions like ground-source heat pumps could become obsolete in the future.”

She added: “Many non-domestic buildings in Scotland hold historical or architectural significance, requiring us to strike a delicate balance between our retrofit goals, and heritage preservation. However, despite all these challenges, non-domestic retrofit represents a pivotal component of Scotland's journey to net zero.”

Judith highlighted the Scottish Government's public sector Heat Decarbonisation Fund and the proposed regulatory standards for zero-emissions heating as crucial steps forward. She emphasised the importance of financial institutions like Royal Bank of Scotland in providing the necessary capital and advisory support for retrofit projects.

She said: “While there are challenges and complexities in transitioning to a net-zero economy, we believe there's significant opportunity to be had if we collaborate to build solutions and share best practices. Financial institutions have an undeniable role to play to drive change and catalyse widespread adoption of retrofit.”

Catriona Jordan, Head of Retrofit Programmes at BE-ST (Built Environment – Smarter Transformation), a National Innovation Centre for the built environment in Scotland, told the group that buildings make a significant contribution to greenhouse gas emissions.

But the built environment also plays a crucial contribution to society, research and development, investment and job generation in Scotland, she said.

BE-ST is currently developing its accelerator lab (A-Lab) to be Scotland’s National Retrofit Centre and is in the process of retrofitting the lab’s own premises for the project.

Catriona said: “Our main ambition is to use this project as a learning tool and develop the A-Lab to become an incubator for businesses. We’ll be using products and systems that can be trialed and tested during the process and the opportunity is that we can share all our learnings with businesses afterwards.”

Aby Wardrop and Anson Mackay from the construction firm Robertson Group presented real-world examples of retrofit projects being undertaken in Scotland, at the King's Theatre in Edinburgh and the Rothesay Pavilion on the Isle of Bute.

Aby, Site Manager at the King’s Theatre, explained the challenges of retrofitting a building that was built in 1905 to be modern, energy efficient and accessible to everyone. "Accessibility and modernisation are key drivers to ensure the theatre serves the community for generations to come," she said.

Anson highlighted the unique challenges and successes of the Rothesay Pavilion project, emphasising the importance of preserving the historical and architectural significance while enhancing the building's energy performance.

Howard Crawshaw, Managing Director of the Knight Property Group, described the experience of retrofitting a 43,000 m2 office building in Edinburgh Park, on the outskirts of the Scottish capital.

He said his company considered a proposal to demolish the existing premises to build a new, larger office building. But after careful consideration of the costs involved, commercial prospects upon completion and carbon savings, the company decided to retrofit the existing building instead.

He said the carbon savings made by retrofitting was estimated at 3,200 tonnes – the typical energy use of 385 homes over the course of a year. Additionally, installing solar panels and a fully electric heating and cooling system has made the building effectively run carbon neutral, he said.

“The carbon decision for us was a no-brainer,” he said. “But sticking to our budget was key too. Our business needs to generate profit so that we can carry out the next retrofit and drive the carbon agenda in the right direction.”

If you’d like to learn more about retrofitting commercial buildings, you can watch the entire virtual conference. This session was part of the wider retrofit programme delivered by the Supply Chain Sustainability School, sponsored by NatWest Group. You can sign up to future sessions and access on-demand retrofit learning by visiting the Supply Chain Sustainability School retrofit page.