The race to a net zero built environment has started. In our webinar, we discussed who is leading the race and how to maintain the momentum.
Fabrizio Varriale, Place and Space Analyst, RICS
27 October 2021
This decade is critical to set the built environment on a realistic trajectory to carbon neutrality by 2050. In the commercial real estate sector, decarbonisation is driven by investor and occupier demand for green buildings, and by new opportunities offered by green finance. Nidhi Baiswar, Sustainability and Climate Leadership Director at JLL, cites a recent JLL survey revealing that 43% of investors and 60% of occupiers have set their own climate targets. Many investors now view climate risk as inseparable from financial risk. The first annual WBEF Sustainability Report, released in August 2021, revealed that “brown discount” is increasingly applied to buildings that fail against carbon targets. The danger for owners is that any such assets will, in time and without remedial work, become stranded.
On the occupier side, large companies are leading the demand for green buildings. By lowering energy use, occupiers can reduce their operational carbon emissions, and the cost of operating their facilities. Moreover, the green credentials of corporate buildings are important for attracting and retaining next-generation talent – the young labour force is especially energised by the climate emergency.
Measuring and reporting carbon emissions remains a challenge for both investors and occupiers. While there are established standards for carbon measurement, there is a lack of harmonisation. Methods and frameworks have proliferated in recent years.”
Measuring and reporting carbon emissions is the first step towards action, but it remains a challenge for both investors and occupiers. While there are established standards for carbon measurement, there is a lack of harmonisation in terms of data structuring and reporting. Methods and frameworks for both have proliferated in recent years. Asset owners face an additional challenge, as they often have little control over how their tenants manage their assets. As a result, green leases – complete with embedded clauses on energy performance – are growing in popularity.
Access to data is essential to the delivery of a net zero built environment. Nathan Doughty, CEO of Asite, sees a convergence between digital technology and the “traditional” built environment professions. Planners, designers, engineers, surveyors and building managers can improve efficiencies by sharing data across the real estate lifecycle. But, together, they need to structure the data if they want to make sense of it. Digital twins can provide this function and help professionals to deliver significant carbon savings during the asset’s operational phase. By integrating BIM, digital twins can also store data on building products and materials. In doing so, they can help drive the transition to a circular economy by allowing for the reuse and recycling of materials as building lifecycles draw down.
In this webinar in partnership with Asite, the panel discuss how can real estate investors, owners, firms and occupiers meet their net zero carbon obligations, and what are the advantages of a “sooner rather than later” approach?
The scale of the effort needed to reach net zero across the economy cannot be overstated. It is fair to say that governments face a great challenge in developing effective policies to support the biggest technological and economic shift since the first industrial revolution. So far, action has focused mainly on low-hanging fruits, which have nonetheless delivered significant improvements. The UK was able to achieve a 45% reduction in carbon emissions from 1990-levels by switching from coal energy generation to less carbon-intensive natural gas. Achieving similar reductions in the transport and buildings sectors is much more challenging, as consumption is largely driven by private households. Phil McNally, Senior Researcher at the Tony Blair Institute for Global Change, believes that governments must raise general awareness of the carbon footprint of our vehicles and homes. From there, they must bring through a range of direct policies, including loans for domestic retrofits and taxes that disincentivise fossil fuel use. Supply chain capacity and skills must also be upgraded. In the UK, a £9bn fund was raised as part of a green recovery plan. Alarmingly, only £1bn was accessed by private households for domestic retrofits, due to a lack of capacity in the supply chain to meet a higher demand.
In the effort to decarbonise the built environment as soon as possible, we must not forget to pursue social resilience and sustainability. Huda Shaka, city advisor and sustainable development expert, points out that UN Sustainable Development Goal 11 targets more inclusive cities. Net zero strategies constitute a vital strand of this pursuit, but only where they form part of a larger whole. Carbon neutrality must not be a singular target, but one among many devised for the betterment of our increasingly urbanised society. Otherwise, we may find ourselves living in a net-zero but fragile world, where social grievances linger and the spoils of the green economy are not equitably distributed.