In the months and years to come, the real estate sector must play a critical role in creating a decarbonized environment — helping society prepare, respond, re-enter and ultimately re-imagine a sustainable future.
Today, the built environment is estimated to account for roughly 40 percent of global energy consumption. While companies across sectors have committed to bold, aggressive goals to combat the climate crisis, a gap exists for many organizations who lack the concrete plans needed to reach these aspirational targets.
The truth is, investing in sustainability is no longer optional: A recent study from Morrow Sodali, for example, found that 100 percent of institutional investors considered environmental, social and governance (ESG) risks and opportunities in their-decision making over the past year. Further to this, funds that invest according to ESG principles saw net inflows of $71.1bn globally between April and June 2020, according to Morningstar. Companies seeking investment will need to disclose their ESG metrics and show progress against sustainability goals.
One way to realize a sustainable future is to evaluate the way we build and manage real estate. And with more than 2.5 billion people moving into cities over the next 30 years, we have a responsibility to help ensure the built environment evolves and adapts in a sustainable way.
An opportunity to shape how we combat greater challenges ahead
As COVID-19 continues to leave lasting impacts on our world, public health and government officials will be tasked with addressing not only the pandemic itself — but how these outbreaks intersect with other global crises, including climate change. However, in the face of the unanticipated and historically disruptive challenges of 2020, the pandemic also represents a unique moment in time to shape how we combat these broader sustainability challenges ahead.
Businesses have never been forced to transform more quickly than they have in this past year — where the pandemic has fundamentally disrupted and changed the traditional context for decision-making. Looking ahead, we need to harness that same energy and direct it toward how we combat even greater global challenges ahead, driven by climate change.
At this historic crossroad, COVID-19 has given us a once-in-a-generation opportunity to reopen business sustainably — ensuring short-term emergency and recovery measures that help increase resiliency through sustainable investment and corporate policies and practices. If addressed right in a coordinated global response, the choices made by businesses, governments and investors during the pandemic recovery window can help us meet critical global targets outlined in the Paris Agreement and the United Nations Sustainable Development Goals — the blueprints to achieve a better, fair and more sustainable future for all.
Closing the action plan gap
Nearly three years ago, more than 140 global business leaders signed the World Economic Forum Compact for Responsive and Responsible Leadership, committing their companies to deliver on the promise of stakeholder capitalism. Since then, we’ve seen many examples of companies committing to bold goals to achieve this aim. It’s important to note, however, that progressive sustainability agendas won’t mean anything without an action plan to achieve them.
Often, organizations commit to aggressive goal-setting with executive support — but lack the concrete plans needed to reach these aspirational targets. It’s important to think through the entire life cycle of a goal and outline what’s achievable during your timeline, so the goal can be realized; at the end of the day, a target without a plan isn’t going to be met. For the real estate industry specifically, this means establishing a plan for measurement and reporting to achieve the solution to one of our sector’s biggest problems: the built environment’s carbon footprint.
We can’t afford to delay any longer. The time to drive momentum toward decarbonization is now; and there is plenty of low-hanging fruit as companies begin their journey to net zero — such as lighting retrofit to replace inefficient equipment or centralizing utility bill management. Just last year at JLL, we achieved 240 sustainable building certifications for clients and averted 112,674 metric tons of CO2e by advising clients on renewable energy.
Other recommended actions to achieve the tangible, measurable progress needed to achieve net-zero emissions across our industry include:
Committing to only occupying assets that achieve net-zero operational carbon globally.
Measuring, assessing and publicly disclosing the energy and carbon emissions performance of your portfolio.
Increasing energy-efficiency measures in both new and existing buildings; switching to electric, low-emission and alternative-fuel vehicles; using renewable energy in offices; and buying renewable energy certificates when there is no direct supply.
Verifying Scope 1 and 2 emissions and related energy consumption annually through assurance at a site and portfolio level, in accordance with internationally recognized standards.
Committing to educating and influencing clients and suppliers to mainstream net-zero carbon — influencing policymakers and decisions, and driving action through industry engagement.
None of us could have anticipated the unique challenges and devastating impacts that would arise from the events of 2020. In the context of the COVID-19 pandemic, the stakes have never been higher for corporate response to climate change threats as our global social and economic ecosystem recovers.
A sustainable future is our only future, and the companies who don’t make the pivot to carbon-neutral investments now will assume even greater risk to their bottom line. In the months and years to come, the real estate sector must play a critical role in creating a decarbonized environment — helping society prepare, respond, re-enter and ultimately re-imagine a sustainable future; where we can unlock a clean recovery that benefits our people, planet and economies.