Claire Tracey on the biggest challenges in achieving net-zero by 2030

After the Climate Innovation Forum, Climate Action caught up with Claire Tracey, Chief Strategy and Sustainability Officer at Nationwide Building Society, to discuss the biggest challenges we face for getting to net-zero by 2030.

The Climate Innovation Forum was all about action.  What part does Nationwide Building Society play in taking climate action?

As a mutual, we’re driven by the needs of our 16 million members. Helping them make greener choices is one of the many ways we take climate action: whether that’s giving them cashback when they buy an EPC A-rated home, or us earmarking £1bn in ultra low-interest lending to encourage them to make their home greener. Options like this not only raise awareness of - and finance - greener housing choices, they also contribute to our ambition to ensure that 50% of our mortgage portfolio is EPC C rated – or better – by 2030.

In addition to this, we’re building 239 EPC A-rated homes on a new, sustainable development in our hometown, Swindon. The homes at Oakfield will be heated and powered by air source heat pumps and solar panels – and we’re doing all we can to use our learnings to encourage others to build to these high standards.

But we recognise that there is a limit to what we can do alone – which is why we’re working with industry partners as part of our Future of Home Green Homes Action Group to develop innovative solutions to the challenges that stop people from making their homes greener. Watch this space for exciting new announcements…

What do you think are the biggest challenges we face for getting to net-zero by 2030?

That depends on what or who you mean by ‘we’! Every single industry will have to make major changes in order to help the UK meet our net zero targets. That means that every single industry will have very specific operational and policy challenges they need to address. It’s vital that organisations work with one another and with Government to come up with the solutions and strategies to make those changes.

That said, Nationwide are doing plenty – alone and with others – to address the challenges we face in getting to net zero. As a mutual – not a bank – Nationwide don’t have to think about divesting from carbon-intensive investments, because we already don’t invest in them. But we are the UK’s second biggest mortgage lender. So, we have to think about what we can do to make the homes on our mortgage book more sustainable. That means developing those innovative green products I mentioned, but it also means working with partners in skills, finance,  construction, energy, planning, housing, and – crucially – the Government, to ensure that we’re all working together towards the same ambition: making it easy and economical to make your home greener. 

This is a huge challenge. There are 26 million homes in the UK, and if we don’t make them more energy efficient, we can’t hit net zero. That’s why we’re working hard with cross-sector partners to develop solutions to the challenges that stop people from retrofitting – hopefully delivering some practical solutions in the not too distant future.

Nationwide’s Claire Tracey spoke on our green homes panel.  Why are green homes a climate problem, and what steps need to be taken to successfully decarbonise homes? 

The UK’s homes are responsible for an estimated 15% of our net greenhouse gas emissions – one of the top five sources of emissions, up there with the transport and energy supply sectors. We urgently need to do something about this, but it’s hard to develop solutions to a problem people aren’t aware of: Nationwide’s own research in our Future of Home report shows that 55% of home-owners are unconcerned by their home’s carbon emissions, often because they simply don’t think about their home when they think about going green.

We know we won’t hit net zero unless we start decarbonising the UK’s homes at scale. But right now, retrofitting homes to make them more energy efficient can be expensive and complicated to research. That’s why in addition to the product development and problem-solving work Nationwide are undertaking that I discussed earlier, we’re also doing our utmost to work with partners to encourage the Government to develop a long-term retrofit strategy. A major part of this would involve educating people as to how they can make their home greener, as well as setting out the benefits this could deliver: includinglower energy bills and a warmer home.

What new financing mechanisms do you think will be most important in achieving a net-zero housing stock?

This is one of the biggest questions in the debate around retrofit – and for good reason.

Nationwide’s Future of Home report revealed that 25% of those who hadn’t made any energy efficiency enhancing improvements in their home in the past five years said that this was due to the costs outweighing the benefit. People are understandably nervous about investing large sums of money in their home – especially when the pay-back time is uncertain.

Money is a major obstacle to delivering a ‘net zero housing stock’. There is a role for both grant funding and private sector finance in getting the UK’s homes net-zero ready. It’s crucial for obvious reasons that adequate funding is available for low-income households to make their homes greener – cheaper to heat and run. But grants also have a role to play in stimulating demand in the ‘able-to-pay market.’ There was considerable appetite for the Government’s Green Homes Grant, which received c. 41,000 applications in its final month. Lenders are raring to lend to homeowners looking to make their homes greener – again, Nationwide has committed £1bn to this – but consumer interest is relatively low. There is a role for grants in getting consumer interest up and stimulating demand for retrofit products.

How optimistic are you about our ability to address climate change and achieve net-zero in time?

Optimism is nice, but action is better. Collective action, underpinned by a detailed and long-term public policy framework, is better still. Scientific consensus is that we only have the next decade in which to get climate change under control. This is only feasible if we see massive ambition from and collaboration between industries and Government – on a scale we’ve never seen before.

Nationwide are staunchly committed to playing an active role in facilitating this kind of collaboration. We plan to play a major role in making sure the UK’s homes help – not hinder – the path to net zero. This means offering innovative green lending, working with partners in the public and private sector to remove the obstacles to retrofit, and campaigning for new builds to be built to the highest possible standard. We are continuing to set ourselves ambitious targets, and push for a policy environment that makes ‘going green’ the most easy and economical choice for consumers. But if we are to truly tackle climate change, we need to see not only high levels of ambition across all high-emissions sectors (such as transport, energy and agriculture) but long-term, detailed and practical government policies to support these sectors to transition to a net-zero future.  

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Claire Tracey spoke at the Climate Innovation Forum 2021 which took place 29 June - 1 July during London Climate Action Week. Missed it? Don't worry, you can now watch all sessions on demand here.