How to Identify (and Control) Risk Management Priorities for Net Zero Retrofit

To plan and install zero carbon retrofits for millions of social housing homes is an extraordinarily complex task. It carries huge risks – particularly when it involves technologies that haven’t been deployed at anything like this scale before.

So, what are the biggest areas of risk and what should be done to manage them?

The first is the sheer scale. The number of people, materials and activities that have to be coordinated is colossal. To be manageable, the process must be highly industrialised. It should use pre-manufactured componentry and modular approaches wherever possible.

Applying Lean principles to continuously achieve and share improvements in cost, time, quality and safety will deliver huge cumulative advantages. This has to be supported by collaborative tools and processes.

Efficient and responsive supply chains will be essential. To deliver effectively, suppliers will have to invest in technology, skills and equipment, which means they’ll need the commercial confidence that comes with long-term contracts and secured work orders.

Financial Risk Management

Given the scale of contracting opportunities it’s likely that suppliers and contractors will expand rapidly. This brings the risk that a strategically important partner might overextend themselves and their lines of credit. The construction sector has plenty of examples of the disruption caused when contractors fail financially, sometimes by growing too quickly and sometimes by abrupt changes to policy.

Managing this risk calls for sustainable margins with the safeguard of open book accounting. Financial due diligence should also confirm that contractors have a strong enough balance sheet to support rapid growth.

Resident acceptance and behaviour will also be risk factors. If residents aren’t meaningfully engaged there could be difficulties in arranging access for retrofit works. A few reluctant residents could throw out the timings on a much bigger scale. And if residents aren’t educated about how to operate a net zero home they won’t enjoy the benefit of lower energy use and the net zero goal may be missed.

Although substantial, the risks are manageable as long as they’re recognised and planned for up-front.

For ideas about how to approach zero carbon retrofit at scale visit our resource centre or contact Nick Davidge ([email protected]).