Industry Insights: The climate crisis makes itself known in the UK

By Jen Heil | August 11, 2022

Welcome to the latest edition of Industry Insights. We’re examining what the recent heatwave shows about the impact of the climate crisis in the UK and beyond, exploring the opportunities and threats of the fluctuating house building market and reflecting on the implications of the new Digital Marketing Act. 

UK heatwaves shows the climate crisis is biting  

With the temperature set to rise yet again in the coming weeks, conversations around the climate crisis are heating up as well. Whether you love or loathe the hot weather, it is impossible to talk about without the context of climate change, with a new rapid attribution study indicating that the record-breaking UK heatwave of 18-19 July 2022 was made “at least 10 times more likely” by human-caused climate change 

The impacts of extreme weather events such as this are significant and widespread – especially in countries like the UK that are simply not equipped to deal with the heat. As well as contributing to sleep loss, mental illness, and increased mortality and suicide rates – disproportionately affecting vulnerable communities – the higher temperatures cause significant disruption to infrastructure. During July’s heatwave, train tracks buckled and burst into flame, tarmac melted causing road closures and flight suspensions, and homes and countryside succumbed to fire. 

The reality is that this is not enjoyable ‘break out the barbeque’ weather. This is an example of a dangerous extreme weather event – the kind of which is only set to become more likely. In 2020, the Met Office issued projections suggesting that these kinds of temperatures might occur somewhat routinely by 2050. Just two years later, the supposed 30-years-away prediction has become our right-here-right-now reality. And that is concerning. 

In addition to the continuous push for mitigation through emissions reduction, the UK Green Building Council has issued a direct call to action for the government to implement 3 key policies to ensure our built environment can effectively adapt to the changing climate: 

  1. Upgrade existing homes so that they are cool in the summer and warm in the winter 
  2. Ensure that mitigating overheating is baked into new building standards 
  3. Put climate at the heart of the planning system through amendments to the Levelling Up and Regeneration Bill currently passing through Parliament 

Despite the bleakness of the headlines and the implications of what we are facing, it’s essential that we don’t lapse into apathy or defeatism. Yes, our current climate reality is scary. Yes, the risks facing humanity – and vulnerable communities in particular – are huge. But the opportunities open to us to address this issue are also significant. Particularly within the built environment, advances in modern methods of construction, green infrastructure and technology for energy decarbonisation open up a vast array of means through which we can reduce our carbon emissions and create more adaptive buildings whilst also enhancing wellbeing and addressing social inequalities. 

The construction industry currently accounts for around 40% of global energy and process-related carbon emissions. Being a big part of the problem means we can be a big part of the solution, too. 

Housing market appears to be ready to weather the storm   

The latest Glenigan UK Construction Industry Forecast 2022-24 was also released at the end of the month. One of the positive reflections from it was that the new homes market will not take the hit feared by many in the face of our current economic downturn. Housebuilder’s share prices have lost around a third of their value in the first half of 2022 as investors get nervous about the impact higher interest rates and a recession could have on the sales of new homes. However, actual activity in the private housing sector is steady, with major housebuilders reporting healthy sales levels. The Glenigan Forecast also shows promising medium-term prospects in the sector. After a 26% rise in 2021, the value of underlying private housing project starts is predicted to dip by just 5% this year and to come back with a 14% increase in 2023. A further small rise is expected in 2024. This is supported by the experiences and forecasting from some of the UK’s largest housebuilders. 

It will however be interesting to see if the New Homes Ombudsman, set to be introduced by the Building Safety Act in Autumn 2022, will have any impact on the predictions. Quality of new build homes is still a point of contention for many people from all generations, from tales of flooded gardens to TikToks highlighting some horror-story snags like fake weep vents, unsealed windows and doors, and unsecured fittings. This is enough to make any buyer nervous. Will the Ombudsman present an opportunity for housebuilders to demonstrate their commitment to quality and therefore drive more sales? Or will this result in a back log of snags, issues and more? Time will tell.    

The impact of the European Union’s Digital Markets Act   

Expected to be adopted in Q4 of 2022, the EU is making final preparations to implement the Digital Markets Act. In a bold step to combat the oligopoly of online behemoths, the DMA looks to create a fairer online marketplace, where ‘Gatekeepers’ have increased responsibility in areas of advertising, data and software. Although this is a European initiative, with around 680 million users in the European market alone, the changes made to comply with EU users, much like we’ve seen with user privacy regulation in recent years, will impact countries not in the EU, like the US and UK, depending on regulatory appetite. 

Gatekeepers are defined as businesses with an annual turnover above €7.5bn, a market cap above €75bn, 45 million active monthly end-users and 10,000 yearly business users. This incredibly high bar tells us just how focused the act is, targeting only the largest tech companies (think Google, Apple, Facebook and Amazon as a guide for size). Their new requirements are spread across various digital regions:  

Data – gatekeepers are now prohibited from combining information gathered on their own platform with that bought or acquired from their other services – unless users give explicit consent. They also have to support data portability so that if a user decides to leave a platform, big tech companies can no longer keep data hostage. 

Advertising – gatekeepers are required to be much more transparent, with businesses in particular, regarding the performance and pricing of advertising services. This means greater insight into Pay Per Click rationale, promoted posts and sponsored products.  

Preferencing – when ranking goods or services, gatekeepers are no longer allowed to favour their own goods and services above competitors, simply for being their own.  

Software – in a blow for the walled gardens of the tech world, gatekeepers must allow devices using their operating systems to uninstall baked-in software and allow for the download of third-party versions instead. They are wholly responsible for ensuring this is seamless across operating systems, hardware and software.  

With the European Commission taking up enforcement for the new Digital Markets Act – with the power to inflict a fine of up to 10% of a company’s global turnover for a first offence, and up to 20% if repeated – this legislation has serious teeth.  

For businesses active in the digital marketplace, from PR agencies to product sellers, this is a huge win. More clarity on advertising performance, more tools available across platforms and a fairer, more realistic ranking mechanism for products sold on the largest marketplaces will support equality across the web, enabling more merit-based exposure.  

Find out more here. 

 

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