According to the Climate Change Committee’s (CCC) latest Carbon Budget.

The UK is moving towards an 87% emissions reduction by 2040. That means big changes ahead for commercial property. In 2023, non-residential buildings made up 5% of UK emissions. By 2040, those emissions must shrink from 20.8 MtCO2e to just 2.7 MtCO2e.

So, what does that actually mean for property owners?

The Key Changes Coming

Stricter energy efficiency standards are expected. The CCC is pushing for tighter EPC requirements and mandatory improvements to building performance.

Heating will shift away from fossil fuels. The UK installs about 60,000 heat pumps a year right now. That number needs to rise to 450,000 annually by 2030 to phase out gas boilers and move to electrified heating and district networks.

Renewables will play a much bigger role. Electricity demand is expected to double by 2040, and renewable sources will be supplying most of it. This puts more emphasis on solar PV, battery storage, and electrification at the building level.

The Risks of Waiting Too Long

Delaying energy upgrades could become a serious liability. The CCC warns that buildings failing to meet evolving standards could lose value, struggle to attract tenants, and face higher insurance costs.

Retrofitting will also get more expensive over time. Labour shortages, supply chain issues, and stricter future regulations mean businesses that wait will pay more for upgrades later.

Securing capital could also become harder. Lenders and investors are prioritising low-carbon buildings. Those with poor efficiency ratings may face higher borrowing costs or be denied financing altogether.

Opportunities in the Net Zero Transition

For property owners who act early, there are clear advantages. Green finance and ESG-linked loans are making capital more accessible for buildings that meet sustainability goals.

Government-backed incentives for heat pumps, insulation, and renewable energy are expanding, making investments in energy efficiency more financially viable.

At the same time, operational savings will be significant. Lower energy bills, reduced exposure to fossil fuel price fluctuations, and long-term cost stability will make net-zero buildings more attractive to tenants and investors alike.

How Low Carbon Alliance Can Help

Our team works with landlords, asset managers, and investors to help them future-proof their portfolios. We provide:

• Intelligent energy performance assessments (iEPC™) to understand where buildings stand today
• Practical decarbonisation roadmaps tailored to each property
• Renewable energy and efficiency solutions to improve compliance and reduce costs

The transition is coming—those who act now will be the ones best positioned for the future.

📩 Talk to us about how these reforms could impact your portfolio.