Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 - 2026
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026 Anchor Development Strategy 2023 – 2033
Contents Introduction
3 4 6
Strategic Context Where we are now Working together Our vision Cutting Carbon Mitigating our Environmental Impact Mitigating Climate Change Risk Living Well Strategic enablers
10 12 16 30 34 35 43
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Introduction We all want a planet that can sustain healthy lives for ourselves and future generations. Achieving that, and being able to enjoy greenery and biodiversity, means shifting to ways of living which don’t rely on burning carbon, while learning to live in a less wasteful society. Reducing, reusing and recycling - and living sustainable lives - changes the way we build and heat our homes, how we travel, the way we produce the food we eat and the clothes we wear. Anchor is England’s largest provider of specialist housing and care for people in later life and a responsible business. We are proudly not-for-profit, which means every penny we make is reinvested into our properties and services, building more and innovating for the future. This strategy is in line with our Business Plan and works alongside our approaches to funding, development and a range of other topics. It sets out our vision, strategic objectives and approach to developing the changes we must make to protect the environment and reach net zero carbon (NZC) by 2050, for the benefit of current and future residents. In short, it sets out how we will enable current and future generations to love living in later life.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Strategic Context Climate urgency and the national policy framework The UK Government is part of the United Nations Framework Convention on Climate Change, which runs the Conference of Parties better known as COP. As such, it has made a statutory commitment to achieving net zero carbon by 2050. However, the statutory independent Climate Change Committee’s progress report to Parliament (June 2022) found: “ Tangible progress is lagging the policy ambition. With an emissions path set for the UK and the Net Zero Strategy published, greater emphasis and focus must be placed on delivery. ” The Climate Change Committee recommended that preparations should provide for a 4 degree increase in temperatures, against a target of 1.5 degrees. The Committee’s latest report to Parliament (29 March 2023), Progress in Adapting to Climate Change – 2023 report to Parliament, found a “striking” lack of climate preparation from Government. The independent report commissioned by the Department for Business, Energy and Industrial Strategy (BEIS) “Mission Zero: Independent Review of Net Zero” provided 169 recommendations on intensifying, raising standards and speeding up progress, including bringing forward a number of key target dates. The UK Government responded with Powering Up Britain (March 2023), bringing together its Energy Security Plan, and Net Zero Growth Plan, creating the new Department for Energy Security and Net Zero. The international and national policy framework will continue developing at pace as the scale of the climate challenge, sense of urgency and willingness to change grows. We are focussed on working in the current context, keeping pace and staying true to our values of being accountable, respectful courageous and honest. Anchor’s role We all have a role to play in tackling climate change, protecting the environment and creating a sustainable future. Following a century of relative stability in the way that we build and live in our homes, our buildings and communities will look very different by 2050. The way we do business, our homes and lifestyles are central to tackling climate change through the transition to a low-carbon economy that protects and nurtures our precious natural environment. How we power and heat our homes is central to meeting the climate change targets for 2050. From 2025, no new build homes will be connected to the gas infrastructure. In the same timeframe, regulations and changes to energy generation, distribution and consumption will see technologies such as renewables, heat pumps and energy storage become mainstream.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
• Achieving better energy efficiency and net zero-carbon emissions will shape how housing is built, maintained and managed for the next 30 years, as well as residents’ bills, health, wellbeing and experience in their homes. All our colleagues, stakeholders and partners will be involved in embedding low-carbon, circular economy and environmental responsibility in the way we work and live our lives. In this context, we are setting a clear approach and priorities for action within this strategy and considering a pathway to science-based targets. Anchor’s business plan sets out four strategic objectives : • More and better homes where people love living in later life • More opportunities for colleagues in career development and reward • More influential by sharing our experiences and thinking with policy makers to drive improvements in older people’s lives • More efficient by challenging ourselves to innovate and do things better Sustainability in its broadest sense, including environmental, social, governance and financial aims, runs through all of the “four mores”.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Where we are now The pathway so far
We have been building our understanding of and approach to sustainability for some time. During 2021, we issued our Sustainability Financing Framework (SFF) as part of refinancing activity supporting our Environmental, Social and Governance work across the organisation. Our sustainability linked loan is linked to the following KPIs: Additional Homes (More and Better Homes) Affordability of Homes (More and Better Homes) Energy Efficiency of Homes (More Efficient) Wellbeing Services (More Efficient) Colleague Diversity (More Opportunities for Colleagues)
Number of new units reaching practical completion (any tenure)
Proportion of rented units with affordable rent defined as being below Local Housing Allowance
Average Energy Efficiency Certificate (EPC) score for all new units reaching practical completion in the relevant year to be above the defined target
Number of resident lives impacted positively through our wellbeing projects (number of interactions)
Number of colleagues lives impacted positively through our diversity projects (number of interactions)
Also in 2021, Anchor commissioned Ankura to conduct an ESG Maturity Assessment which made several recommendations. We have taken these forward in the following key areas: Energy efficiency of existing homes Created a data set of Energy Performance Certificates to inform asset strategy and retrofit planning Heating source for new homes Stopped using gas heating in our new build home specification in 2022 Greenhouse gas emissions Defined the scope of and sources of emissions for Anchor’s carbon footprint and carried out two years of measurements. Provide information to Residents on Sustainability Activity Consulted Residents’ Council and other resident engagement forums on strategy Residents group for Property, Building Safety and Sustainability established
Regular articles and communications in Life magazine Sustainability Annual Report published for 2021 and 2022 Included sustainability reporting in Residents’ Annual Report.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Anchor’s Board approved a pathway in the Spring of 2022 towards an overarching environmental sustainability strategy. This set out how Anchor would build its capacity, developing the team’s expertise and the systems for effective data collection and analysis, establishing governance, including a Sustainability Steering Group, scoping and delivery structures to support the development of an Environmental Sustainability Strategy. The following steps on this pathway have supported the development of this strategy. • Establish governance, scoping and delivery structures to define strategy, including setting up workstream task & finish groups. Form Residents’ Sustainability Panel (In progress) • Establish key data requirements and baselines including carbon scope and footprint (external support advised). Include SECR report in Annual Report. • Continue building to EPC B+ whilst exploring costs and benefits of building to NZC standards and options and cost implications for the speed of adoption within the development pipeline, to inform Anchor’s new build pathway to net zero • Retrofitting existing homes; • Review learning from existing retrofits and define capabilities required to model retrofit costs, benefits and options • Carry out retrofit surveys on a sample of locations • Develop retrofit costs and options model for Anchor’s stock, informing Portfolio Strategy and investment planning • Apply for Social Housing Decarbonisation Funding in a joint bid with the Greener Futures Partnership and if successful, deliver SHDF retrofit programme • Consider Energy Wise capabilities to support retrofit projects • Review business operations (offices, travel) energy use, recycling practices, and sustainable travel arrangements and link to carbon reporting. • Assess options for enhanced environmental and ESG standards in procurement framework, considering costs and benefits. • Set up Electric Vehicle Charge Point pilot; develop strategy & policy Pathway 2022/23
Completed
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
2023/24
Work in progress
• Define acquisition and planned works retrofit standards and approaches • Update standards and specs • Develop position and transition plan for gas replacements • Set targets for annual retrofit programme • Undertake further funding bids • Environmental compliance and practice improvements • Develop responsible sourcing strategy / framework approach • Explore carbon literacy e-learning module • Monitor and evaluate Electric Vehicle Charging Point pilots and develop policy and process map. Our baseline carbon footprint
Anchor has reported for the last two years under the Sustainable Reporting Standards for Social Housing on its environmental, social and governance and has also reported voluntarily under the Streamlined Energy and Carbon Reporting standard (SECR) on scope 1, 2 and 3 carbon emissions. These provide us with baselines from which to measure our progress. In 2022, a much more detailed analysis of our carbon footprint was carried out with the support of environmental advisors Trident Utilities, in line with the Greenhouse Gas Protocol on measuring emissions and we will report this annually. Anchor’s total carbon footprint for FY2021-22 is calculated to be 207,235 tonnes CO2e. This equates to 22.1 tonnes per FTE employee, or 4.1 tonnes per home. Anchor’s carbon footprint
Scope 1 - Direct emissions [gas/fuel purchased directly by Anchor), 27.51% Scope 3 - Water Supply and Treatment, 0.35% Scope 2 - Indirect emissions (electricity purchased directly by Anchor), 8.24% Scope 3 - Emissions from rented and leasehold homes, 31.68% Scope 3 - Employee commuting, business travel and hotel stays, 1.08% Scope 3 - Purchased goods and services, including repairs, maintenance, refuse collection, catering, IT equipment, 26.88% Scope 3 - Capital Goods building of new development, 4.33%
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Most of our emissions come from: Scope 1 , which covers heating and hot water supplied to communal areas and residents’ homes via communal systems, Scope 3 leased assets (heating, hot water and electricity used within residents’ homes), and Scope 3 purchased goods and services. These three categories contribute over 86% of our total carbon footprint and will be reduced by retrofitting and building new homes to ever higher energy efficiency standards. Scope 2 electricity emissions make up 8.24% of total emissions. We purchase electricity which is supplied to communal areas within our homes. We do not purchase electricity on behalf of the majority of residents for use within their own homes, unlike gas or other heating fuels for communal boiler rooms. Some locations are electrically heated with storage heaters or heat pumps, but most rely on gas heating. The implementation of communal LED lighting over recent years may also be another reason why scope 2 electric emissions make up a lower proportion of the overall footprint. Scope 1 emissions are higher than would normally be expected for housing organisations, and scope 3 emissions lower. This is because we have communal/district heating and hot water systems at around half of our locations. At these sites we operate the communal boiler room and purchase gas or alternative fuel on behalf of residents, so that emissions fall within scope 1. Where homes are heated through individual boilers and residents pay fuel bills directly, the emissions fall within scope 3. These measurements are able to tell us where we need to focus our efforts to reduce carbon emission and, in future, they will tell us whether the changes we are making are working. More information about our next steps are outlined in our ‘Cutting Carbon’ chapter on page 16. Understanding carbon emissions Scope 1 = Direct emissions from sources we own or control directly, e.g. gas that we use in our buildings and supply to residents. Scope 2 = Indirect emissions from energy we purchase and use, e.g. electricity that we use in our buildings and supply to residents. Scope 3 = All other emissions produced by our supply chain.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Working together Sustainability runs through everything we do. Our Board, Executive and the Sustainability Steering Group have determined the strategy’s priorities and teams across the organisation are considering how they will contribute. Colleagues across the organisation are central to achieving a sustainable future and we will continue to raise awareness and drive action. Resident engagement – a central role in achieving sustainability This strategy has been developed with residents and we will continue to work with them to achieve it. In addition to resident focus groups, the Sustainability Team held discussions with the Resident Council and a range of resident groups, including the Property, Building Safety and Sustainability Residents’ Group. Residents were highly engaged in the topic and wanted to create an environment fit for the future for their children and grandchildren.
Met with Leaseholders Residents’ Group
4 locations visited
4 x Resident Focus Groups
Developing the Sustainability Strategy with Residents
6-weekly discussions with Residents’ Property, Building Safety & Sustainability Group
2 x Resident Council Meetings
Resident enquiries, complaints and insights
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Residents said: • We should say what we intend to do on environmental sustainability as soon as possible and as clearly as possible and should show energy and enthusiasm in our work to achieve sustainability. • Residents recognised the urgency of climate change action and the need to move to net zero carbon sooner than governments seemed to be moving. • Our teams should work together, avoiding ‘silo’ working practices. • High standards should be set for the procurement of goods and services, ensuring sustainable supply chains, but affordability is important too. • We should consider sustainability in all our contracts and investments. • Start at home! For example, make sure that communal lighting is made sustainable and that recycling is as good as it can be. • Support residents’ projects in pursuit of sustainability, from gardening to walking to raising awareness to setting up Anchor’s own Residents’ COP 23. • A ‘fabric first’ approach makes sense but residents support the adoption of other adaptations where they can reduce residents’ energy bills, particularly solar panels. • Residents are keen to see renewable energy and sustainable transport options grow and be supported. • Residents would like to create a Sustainability sub-group of the Residents’ Council. This strategy will help us to prioritise our resources to invest in the areas which will have the biggest impact on making residents’ homes more energy efficient which reducing carbon emissions. We will continue to have transparent and open conversations with residents about how we achieve this.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Our vision This strategy is focused on protecting the environment, reducing carbon emissions and supporting sustainable lifestyles to limit the effects of climate change on current and future generations. Our vision for this strategy is to enable current and future generations to love living in later life. Throughout its implementation, we will: • Be informed by robust data, adopting science-based targets where practical; • As a minimum, aim to meet national targets and goals; • Engage with residents and colleagues; and • Appraise the benefits and costs of our proposals to current and future residents. Our strategic themes We will focus on four strategic themes:
Cutting Carbon
Protecting the environment
Mitigating climate impacts Mitigating risks including flooding, overheating and extreme weather as well as risks to supply chains and business operations that are driven by climate change
Living well
How we support the wellbeing of our residents through encouraging sustainable lifestyles alongside our Resident Wellbeing Strategy
Mitigating environmental impacts including waste, water, pollution, biodiversity and green spaces)
Reaching Net Zero Carbon by 2050
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Key areas of impact Our strategic themes will inform how we: • Maintain and provide energy to our existing housing • Design and develop new properties • Run our care homes • Buy what we need ethically and responsibly - selecting and working with our supply chain
• Run our business –changing our own operations and behaviours • Walk together with residents and colleagues on this journey
Our objectives are summarised in our strategy on a page and the strategy goes on to outline further context for our strategic objectives, and where possible summarises actions and measures that will take forwards action.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Our vision: To enable current and future generations to love living in later life Our strategic themes: Cutting carbon Protecting the environment (waste, water, pollution, biodiversity and green spaces)
Mitigating climate impacts (flooding, overheating, extreme weather)
Living well (supporting wellbeing through sustainable lifestyles)
Key areas of impact
Our strategic objectives: Make homes more energy efficient, comfortable and affordable to run.
Reduce water use and waste, increase biodiversity & green spaces, support sustainable transport. Reduce the environmental impact of building new homes and enhance the biodiversity of new places, support sustainable transport. Ensure efficient plumbing and waste systems to minimise water wastage and reduce pollution and waste generated by our care homes. Increase biodiversity and green spaces, support sustainable transport. Reduce the environmental impact of the goods and services we buy and support sustainable transport. Reduce office waste and water use and support sustainable travel options.
Understand and mitigate the climate risks our residents’ homes face and the likely timeline for increasing risk. Design new homes to minimise exposure to climate risks such as flooding and overheating.
Support residents in living independently and having healthy, active, and sustainable lifestyles.
Existing housing:
Build new energy efficient homes which are comfortable and affordable to run.
Design homes and locations that support independent living and a healthy, active, and sustainable lifestyle.
New properties
Ensure care homes are energy efficient, comfortable and affordable to run.
Understand the climate risks to our business operations, colleagues and office locations within care homes and appraise mitigation options.
Support residents and colleagues in a healthy, active and sustainable lifestyle, including reducing loneliness and isolation.
Care homes
Reduce the carbon footprint of the goods and services we buy.
Explore how existing and new supply chain relationships can support climate risk mitigation.
Ethical and responsible procurement to support residents in making the changes needed to achieve healthy, active and sustainable lifestyles. Maximising social value to support this. Educate and inspire colleagues to make sustainable decisions in their lives, support colleagues’ wellbeing and improve working environments. Enable colleagues to support and promote sustainable options to residents.
Buying ethically and responsibly
Reduce our operational carbon emissions. Build colleague engagement with carbon reduction.
Understand the climate risks our business operations, colleagues and office locations may face. Appraise options for mitigating these risks.
Run by our business (Colleagues, offices, travel)
Strategic Enablers: Data: Including baseline measurement, modelling and predictive analytics Technology: Technology Strategy, One Plan Communication: Resident Voice Strategy, Resident Wellbeing Strategy, Colleagues Governance: Sustainability Steering Group, Sustainability Committee, Board Reporting & Risk Management
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Cutting Carbon Carbon emissions are the main contributor to climate change. We are committed to achieving net zero carbon by 2050 at the latest. Homes are responsible for about 20% of the UK’s total CO 2 emissions and heating in homes contributes about 13% of the UK’s total CO W emissions. The Climate Change Committee is targeting the housing sector to be carbon free earlier than industry and transport and moves are being made towards bringing the net zero target forward to 2044 for housing. In new developments, the Future Homes Standards and Part L of the Building Regulations are already imposing requirements improving energy efficiency and reducing carbon. There will be no gas heating in all new homes from 2025. Care is needed to protect residents and offset the higher costs of heating homes electrically by specifying better building fabric standards and, wherever possible, efficient heat pumps instead of direct electric. Government wants all fuel poor homes to meet an Energy Performance Certificate (EPC) rating of ‘C’ by 2030, and as many other homes as possible to achieve it by 2035. The Climate Change Committee (CCC) has recommended that this be brought forward to 2028 for social housing. There are some 2.8 million homes in England owned by housing associations. The National Housing Federation reported that housing associations homes are already more efficient than homes of other tenure types: 64.3% are certified EPC C or above, compared with 38.3% of privately rented homes and 35.6% of owner-occupied homes 1 . 83% of our rented homes, 90% of our care homes and 55% of leasehold homes are at energy efficiency levels of EPC C or above (as at 31 March 2023). This section sets out our overall objectives and targets to cut our carbon emissions to net zero, and then takes a more detailed look at our plans to reduce carbon emissions in each of the key areas of impact.
Data
Ambition
Targets
Reporting
Reduce Implementation of carbon saving opportunities across all scopes. Engagement with upstream and downstream activities. Decarbonisation.
Use the data gathered to satisfy numerous legislative, voluntary and customer reporting requirements. SECR etc
Implement software to capture and report Scope 1,2+3 against targets. Carbon Accounting
Create your overarching ambition, alignment with stakeholders, sector, legislation. Competitor Analysis
Ideally Setting GHG or science-based targets to limit warming to 1.5°C. Race to Zero/ SBTi.
1. National Housing Federation, Taking Stock: Understanding the quality and energy efficiency of housing association homes (January 2020).
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Objectives
Targets
• Make existing homes more energy efficient, comfortable and affordable to run • Build new homes which are more energy efficient and affordable to run • Make care homes more energy efficient • Ethical and responsible procurement of services that reduce carbon emissions • Reduce Anchor’s operational carbon emissions • Build colleague understanding of and engagement in carbon reduction • Report our total greenhouse gas emissions annually • Better understand and reduce fuel poverty and the risk of fuel poverty amongst residents • Seek to maximise grant funding opportunities for retrofit works to support as many leasehold homes as possible also reach EPC C by 2030 and net zero by 2050
• Reach net zero across all emissions by 2050 • Reach net zero operational emissions by 2030 • All rented homes will be at least EPC C by 2030 • All care homes to be EPC C well before 2030 • CO 2 / Energy Use / Cost savings average per household from retrofit initiatives and/or resident engagement initiatives
Existing Housing Make housing more energy efficient, comfortable and affordable to run.
Our baseline carbon footprint for 2021-22 identified that 59% of our total carbon footprint is from scope 1 (direct emissions – mostly from heating and hot water supplied to communal areas and residents’ homes via communal systems), and scope 3 leased assets (heating, hot water and electricity used within residents’ homes).
EPC bands - where are we starting from? Anchor Rented And Care Homes EPC Ratings 2022/23
Energy Performance Certificate (EPC) bands are generated from Standard Assessment Procedure (SAP) surveys and assess the energy demand and cost in the home. Band C roughly equates to a space heating demand of 90 kwh/m2/hr.
0% A B
9%
C D E F
74%
11%
5%
0%
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
A strategic priority for us in achieving net zero carbon by 2050 will be making our residents’ homes energy efficient, comfortable and affordable to run and supporting their wellbeing. We’ll do that by scaling up a retrofitting programme that will: • Take a fabric-first approach to insulating residents’ homes • Embrace a shift away from gas heating towards electric forms of heating that can be powered renewably • Use tried and tested components and materials that are reliable and suitable for our residents’ comfort and ease of use. • Integrate retrofit works into planned works programmes to minimise disruption and maximise efficiencies. • Invest in education, upskilling and effective engagement: • on the techniques, technologies and equipment for retrofit • with our colleagues and our long-term supply chain relationships • and importantly, with residents, so they understand and buy into the journey and the changes to their homes in support of reducing carbon emissions. • Measure and report carbon emissions and actual energy use in homes as well as EPC ratings • Achieve a minimum of EPC C for all rented homes by 2030 • Achieve net zero carbon for all rented homes by 2050 • Phase an expanded programme of solar PV and renewable energy generation deployment in the years to come. Taking a fabric first approach means that we prioritise retrofit works to homes as follows.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
How do you retrofit a home to reduce energy use?
Step 3 Install energy efficient heating systems such as communal heat networks or heat pumps
Step 4 Top the building with renewable power generating capablities (solar PV)
Step 1 Stop heat escaping through wall, roof, floors and window & door insulation
Step 2 Ensure good ventilation and low energy lighting
Sequence over time
Retrofitting homes will include:
Phase
Approach
Key milestones EPC C by 2030
1.“No regrets” fabric improvements 2.Heat decarbonisation
Simpler fabric upgrades to lofts, roofs, floors, windows and doors. Harder internal wall insulation. Air source heat pumps on houses Clean heat networks in flats Connection to district heat networks Government hydrogen decision 2026
2025: no new home gas connections 2035: no gas heating replacements
3. Renewables and storage Solar PV and battery storage for energy generated, starting with large communal roofs on flats, possible investment in PV generation
Pathway development 2023-24
4.Decarbonisation of existing heat networks
New connections in urban areas Replacement of gas boilers and CHP with heat pumps or connection to district network. Grid renewables deployment Local deployment (eg solar PV on Anchor stock)
2025: no new home gas connections 2035: no gas heating replacements
5.Grid decarbonisation
National carbon budgets for each sector
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
The Retrofit Journey to 2050
Portfolio Strategy
Building fabric
Clean heating
Renewables
Offset
Replace gas boilers with efficient electric systems and heat pumps Without enhanced fabric, this will increase residents’ bills System suitability for residents Encourage switch to renewable electricity tariffs
Add solar PV to reduce power low carbon heating systems, reduces demand on grid, potential to sell back to grid
Towards net zero carbon
Monitor regulations and options for offset Unlikely to be an option for residential homes
Improvements to building fabric reduce energy consumption in the home
Strategic portfolio plans will develop detailed retrofitting plans and timeline
Holistic, long term plan for each location / building
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
New properties Build new, energy efficient homes which are comfortable and affordable to run. Anchor has an ambitious development programme, planning to build 5.700 new homes over the next decade by: • Redeveloping existing assets - whole buildings, infilling on spare land, building atop existing properties or extending buildings onto adjacent available land. • Finding and developing new and existing sites across England in our priority areas. In new developments, the Future Homes Standards and Part L of the Building Regulations are already imposing requirements to improve energy efficiency and reduce carbon. The 2022 amendments to Building Regulations require CO2 emissions from new build homes to be around 30% lower than previous standards and emissions. Under the Future Homes Standard, new homes built from 2025 will not be permitted to include gas connections. Where homes are built to current Building Regulations and planning requirements, they will need to meet a minimum standard of EPC B. In addition, car parking will need to provide electric vehicle charging points. Care is required to protect residents and offset the higher costs of heating homes electrically by specifying higher building fabric standards and, where practical and possible, efficient heat pumps instead of direct electric. For more than five years, we’ve been designing and building high quality new homes that reach high energy efficiency standards and in 2022 we phased gas heating out of our designs, ahead of current and incoming building regulations which we acknowledge are
not sufficient to achieve net zero carbon emissions. EPC Ratings: New Developments
C B
88 86 84 82 80 78 76 74 72 70
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Anchor has committed to building 5,700 homes over the next decade. We have been building to a minimum standard of EPC B, but from 2023 will be designing to net zero and delivering to a minimum ‘green line’ standard.
72
371
112
64
3
18
17/18
18/19 19/20
20/21 21/22 22/23
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
A strategic priority for us is to define and adopt an operational net zero standard for new build homes but to agree an approach which will realistically assess site constraints where it may not presently be possible to achieve net zero. To achieve this, we will adopt a new Net Zero design standard for all of our new homes from July 2023. Our standard will align to the London Energy Transformation Initiative (LETI) operational net zero definition for new build homes, and we will be focusing on designing homes with; • High fabric standards that support low energy use, aiming to reach a space heating demand of no more that 15 kWh/m2/yr and an energy use intensity of no more than 35 kWh/m2/yr • Low carbon energy supply for heating and electricity with no fossil fuels • A zero carbon balance achieved through the use of renewable energy production on site. We recognise that, today, it remains ambitious and challenging to deliver net zero homes in practice. Technical, site and cost constraints often make achieving full net zero performance standards in operation challenging or not feasible. For this reason, we will adopt a ‘Green Line’ - a minimum standard for all new homes which:
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
• Exceeds 2022 Part L Building Regulations significantly, • Ensures that in aiming to reach net zero, our design standards do not fall below our Green Line standard. • Minimises the impact on resident affordability / running costs. In practice, our green line will be operated as a set of scenarios where we adjust the fabric, heating and renewable energy balance for a building only where technical, site or cost constraints require it. The Green Line ensures Anchor’s new homes meet very high fabric standards and seeks to minimise the impact on the cost of running the home as well as future retrofit requirements. In addition to our aims to cut carbon emissions and build new homes that are energy efficient, comfortable and affordable to run, we will: • Reduce the environmental impact of building new homes and enhance the biodiversity of new places • Support sustainable transport. • Design new homes to minimise exposure to climate risks such as flooding and overheating. • Design homes and locations that support independent living and a healthy, active, and sustainable lifestyle, reducing loneliness and isolation. • Define the “renewable” technologies in this context and ensure data set of capacity is complete. • invest in upskilling our colleagues and developing our supply chain relationships to support these aims. Over the next three years, we will also explore how embodied emissions in our construction supply chain can be measured and reduced, and wider construction impacts can be reduced.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Decarbonising buildings: Net Zero Definitions Net zero 'ready' • Improved building fabric and ventilation • retain heat and boost air quality • Efficient electric heating ready for grid to decarbonise • Renewable energy
Strategic priorities for retrofit, reaching EPC C and reducing space heating demand
Strategic priority for new build, Reaching space heating demand of at least 35kwh/m2/vr
Operational Net Zero • Achieves net zero emissions for all energy use in the home
Full net zero • Reach operational net zero and address embodied carbon from; • The production of construction materials, their transport and assembly, maintenance and replacement of construction elements and future disassembly/demolition.
Future measurement requirement
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
The problem with SAP and EPC Why not use EPC ratings to measure the energy performance of new homes?
Care Homes Making care homes more energy efficient and more cost effective to run Over 90% of our growing portfolio of care homes are rated EPC C or above. We have sought to grow our portfolio in recent years through high quality, recently built homes that support residents with excellent facilities and are already well insulated, communally heated and energy efficient. Our aim will be to reach higher levels of energy efficiency and measurably reduce carbon emissions and operating costs whilst sharing the benefits of this approach with residents and colleagues. We are aiming to reach EPC C or above across all care homes well before 2030, and achieve net zero carbon by 2050. To achieve this we will: • Develop a tailored retrofitting plan for each care home setting out its pathway to net zero carbon by 2050. • Acquire or commission new homes that are able to demonstrate high levels of energy efficiency and carbon reduction impacts, reducing the requirement for future retrofit • Develop a care-specific heating strategy and clean heat transition, looking at how to minimise disruption to residents and colleagues. 1. Royal Institute of British Architects 2. Chartered Institution of Building Services Engineers – see for example CIBSE response to MEES consultation: https://www.cibse.org/News-and-Policy/ Policy/Consultations/Closed-Consultations/Improving-the-energy-performance-of-privately-rent Anchor will be using additional metrics to measure the energy performance of new homes, including measures of space heating demand and energy use intensity. This is because we recognise that reaching net zero requires a more complex set of measures than the EPC / SAP methodologies provide. The EPC methodology uses a set of assumed factors and mainly based on energy costs instead of energy use or CO2 and does not accurately predict energy use, CO 2 emissions or building performance. The method is somewhat useful for targeting fuel poverty but currently favours gas over electricity. The CCC, RIBA 1 and CIBSE 2 all recognise the problems with EPC methodology, especially when using them for energy efficiency and heat decarbonisation objectives. There is a strong industry push for the regulatory environment to shift towards using Energy Use Intensity (EUI) of real buildings 3 using actual measured building performance. EPCs are a useful and widespread tool for communicating and benchmarking energy efficiency and our adoption of additional measures will complement ongoing compliance with EPC requirements.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
• Set up monitoring for energy and water use and link to more efficient operations / cost savings to the benefits of residents and colleagues. In addition, we will explore these areas: • Continue to monitor renewable energy options, including solar power, to see whether there is a business case to generate more energy locally to offset energy costs for homes and reduce emissions. • Explore how enhanced building management systems could support our strategic sustainability aims for care homes of reducing energy use, carbon emissions, and operating cost by better monitoring and optimising energy use, and assessing environmental metrics like air quality. • Explore how the provision of electric vehicle charging points for colleagues, visitors and contractors could support a shift to sustainable transport and help attract and retain colleagues. • Explore the role other technologies such as LED lighting, and energy efficient appliances could play in driving down energy use and cost.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Buying ethically and responsibly Ethical and responsible procurement of services that reduce carbon emissions At Anchor, we procure over £300m of goods and services annually, supporting and enabling services to residents. We already include questions about suppliers’ carbon footprints and reduction strategies in our strategic procurement activity, yet purchased goods and services make up over 25% of Anchor’s baseline carbon footprint. Therefore strengthening our approach to procurement and contract management is a priority. Emissions from purchased goods and services are defined as downstream scope 3 emissions and emerge from our supply chain’s manufacture, distribution and operation of goods and services. From pa perclips to refurbishing a whole property, and from gardening services to consultancy, each activity is associated with generating carbon emissions. Our scope 3 goods and services emissions will tend to be the producing organisation’s scope 1 or 2 emissions -and so there is a shared responsibility and incentive for us all to work together to reach net zero. Reducing these emissions requires close partnership working with our supply chain, and we will support this through: • Identifying strategic contracts and relationships to target for joint discussions on reducing emissions • Improving the quality of our carbon footprint data by working with suppliers to obtain more accurate estimates of the carbon emitted by and embodied in goods and services • Upskilling strategic contract managers and procurement colleagues in carbon literacy to support better conversations with our supply chain and improve how purchasing decisions are made with carbon emission reduction in mind • Reporting annually on carbon emissions from purchased goods and services.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
In selecting new partners, contractors, and suppliers, we will do the following for all strategic contracts: • Implement a strengthened approach to assessing potential suppliers’ carbon reduction commitments to ensure they align to Anchor’s aims • Ask successful suppliers to provide us with data on their emissions to help improve the accuracy of our carbon emissions reduction reporting. • Base an agreed % of our strategic contract-award decisions on bidders’ responses to our questions about social and environmental value (including their carbon reduction commitments). • Review our approach to procurement as needed so that it keeps pace with the market place and developments in carbon reduction policy. • Assess the impact of carbon reduction requirements on the quality and cost of contracts to ensure services remain affordable and financially sustainable.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Running our business Anchor’s business operations extend throughout England and are made up of our people, their travel, our offices and the equipment we use to deliver services to our residents. We’re also made up of our culture, values and ways of working which will also play a critical part in enabling us to cut carbon. Our carbon footprint identifies a small percentage of our emissions stem from energy use in our offices and travel. The way we work will alter as we support the transition to a low-carbon economy; from choosing to use digital tools to reduce travel to improving recycling in our offices and reducing their energy use. Our colleagues are key to embracing this shift. With more than 9,000 of us throughout the country, the difference we can make is significant. Our cutting carbon objectives for our business operations over are to: Objective Net zero ready in terms of carbon emissions by 2030. In order to achieve this target, we will build colleague engagement with carbon reduction. We will: • Develop and roll out carbon literacy training to all colleagues to upskill in our understanding of and engagement with carbon reduction • Define our business operations carbon reduction pathway, priority intervention areas and targets • Report on carbon reduction pathway progress annually • Develop business projects and initiatives that involve colleagues in considering and reducing operational carbon emissions • Reduce energy use and emissions in our offices and workplaces • Promote and support colleagues to adopt sustainable transport options for their commute and work-related travel.
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Mitigating our Environmental Impact Locally and globally, we all depend on the delicate balance of the natural environment. Under carbon-driven climate change, as well as misuse of natural resources, the ecology on which we all depend is at risk. Anchor’s business operations and residents’ homes make a significant ecological impact on our environment and our strategic aim is to seek to understand, mitigate, and – as much as possible – make a positive impact on the environment wherever we work. Under this strategic theme, we will be developing our understanding and exploring impact reduction as well as the positive impacts we can make in each of the following areas of ecological and environmental impact: Waste Water Pollution We are committed to meeting UK and international requirements and targets in each of these areas. Our strategic objectives are as follows. Objectives • Reduce water use and waste. • Increase biodiversity & green spaces, • Increase and support the use of sustainable transport. • Design our locations to mitigate environmental impacts and support biodiversity. • Improve how we design, retrofit and manage care homes to reduce water use, pollution and waste, and increase biodiversity and use of green spaces. • Ethical and responsible procurement of services minimising environmental impacts. • Reduce office waste and water use, explore sustainable technology options and office consumables and increase sustainable travel. Anchor undertook a SHIFT assessment in 2019 which explored and recommended the following measures and targets. The next stage of developing science-based targets across the organisation’s work will be to conduct a further SHIFT analysis, using the more recent and detailed baseline assessment provided by the carbon footprint measurements taken in late 2022 as well as the work carried out under the Sustainable Reporting Standard for Social Housing for which Anchor is entering its third set of data in 2022-23. We will update our SHIFT assessment in 2023/24 and further refine our data, goals, targets and initiatives in support of these objectives. Indicative measures could include the following. Some of these, for example, diversion from landfill, are already embedded in our operations:
Biodiversity & Green Space
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Anchor Environmental Sustainability & Net Zero Carbon Strategy 2023 – 2026
Biodiversity & Green Space Ensure cleaning, gardening, care and medical services use environmentally- friendly products without compromising on quality and safety for residents.
Waste
Water
Pollution
Increase levels of recycling above that of local provision, targeting a 45% increase in residential recycling. 100% target for diversion from landfill including construction waste. Explore opportunities for waste reduction in care. Scope a waste management strategy with supply chain engagement to include food, clinical and hazardous waste.
Reduce water usage. Explore setting and measuring targets for water use in residents’ homes for example, a reduction to 130 litres per day by 2030 (target to be reviewed in light of the next SHIFT assessment).
Increase accessibility and biodiversity of green spaces through updated management practices Biodiversity value target setting above the minimum of meeting planning requirements for net biodiversity gain. Audit green spaces and incorporate into asset data Resident campaigns and initiatives including ‘Going Green’ in Summer 2023.
The developing goals are as follows and the next SHIFT assessment will help to develop and consider science-based targets associated with these goals. Waste and water Anchor works with waste contractors in care homes, retirement villages and some residential sites. On other residential sites, Anchor works with the council as waste collector. Anchor seeks waste contracts which minimise the amount of waste going to landfill and maximise sustainable alternatives, including reducing, reusing and recycling, working with contracted waste services for our commercial waste, including waste from retirement villages and over 120 care homes, and with local authorities for domestic waste. 98% of waste under the commercial contracts is currently diverted from landfill, the vast majority of which is incinerated. Anchor will continue to work to reduce waste. A Waste Management Strategy will be developed to include exploring opportunities for waste reduction in care homes, including looking at food waste and clinical waste. In rented, leasehold and extra care homes, we want to look at how best to separate different types of waste in order to deal with each type appropriately, turning waste into other products and diverting from landfill wherever possible.
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