Posted by Guy Granger, Global Head of Sustainability & ESG, JLL
- A more collaborative approach to achieving clean zero for cities is widely supported.
- Strong partnerships between city officials, property tenants and investors are instrumental in realizing the zero carbon agenda.
- A more collaborative business model will require a change in the mindset of many city administrations, which must view property owners, developers, investors and tenants as long-term partners in achieving environmental goals.
Buildings account for 40% of carbon emissions. Thus, real estate investors, developers and tenants have a key role to play in the race to zero.
However, repurposing existing legacy buildings, equipment and materials is an expensive game involving thousands of suppliers motivated by low-cost solutions rather than low-impact solutions. No single stakeholder group, whether in the public or private sector, has the resources or capacity to decarbonize in isolation.
Thus, as we tackle the problem of decarbonization, an ecosystem of partnerships must be created between property owners, investors and corporate tenants, as well as national and city governments, academic institutions, employee groups and civil society organizations, to work together to achieve common sustainable goals. …
JLL recently examined nearly 1,000 real estate tenants and investors around the world to gauge the level of industry commitment and examine the obstacles they face on the road to decarbonization. The survey found broad support for a more participatory approach. Many organizations have set targets for reducing carbon emissions, but these are not necessarily harmonized. In fact, over 80% of respondents agree that strong partnerships between city officials, property tenants and investors are essential to achieving a zero carbon agenda.
5 ways city officials and leaders can work together to tackle zero impact
1. View real estate players as long-term partners in city-shaping, decarbonising.
Adopting a more collaborative business model will require a change in the mindset of many city governments, which must view property owners, developers, investors and tenants as long-term partners who can help achieve environmental goals that would otherwise be difficult.
There is great potential for harnessing the intelligence, skills, innovation and financial acumen of the real estate sector to achieve environmental goals. From San Francisco Zero Emission Task Force To Melbourne 1200 Buildings Program, more and more cities are coming up with cooperation initiatives.
The real estate industry certainly has a strong appetite for reaffirming its environmental value and supporting action to combat climate change. Many forward-thinking investors and corporate tenants are teaming up to become co-managers in a race to zero. For example, Better Building Partnership Climate Commitment (BPP), a collaboration between leading UK commercial property owners, is working to improve the sustainability of commercial buildings.
Real estate investors and tenants alike have high hopes for the role that city officials must play in advancing the decarbonization agenda. While some cities, such as New York, Los Angeles, Paris, Copenhagen and Melbourne, are noticeably taking action, there is a feeling that the administration as a whole is not doing enough.
Our survey shows that only 29% of respondents strongly agree that first-class cities are taking bold enough measures to mitigate climate risks.
What is the World Economic Forum doing to support the future of real estate?
While investment property has grown more than 55% since 2012 (PwC), the COVID-19 crisis has exposed weaknesses in human and planetary health along with sharp inequalities, leaving a stark reminder of the impact of the built environment on society. and the vulnerabilities that exist during a crisis regarding how spaces work.
As the real estate industry strives to recover, the need for transformation is clear. Portfolios need to be rebalanced and distressed assets re-profiled. Technology must be fully utilized, and sustainability and well-being must be at the core of design and operation. The pre-COVID-19 affordable housing crisis needs to be addressed systematically to ensure access to adequate and affordable housing. If the real estate industry is to drive transformation, it is more important than ever that policies, funding and business decisions are aligned to create better buildings and cities.
The World Economic Forum brought together real estate industry leaders to design Fundamentals of the Future of Real Estate to help the industry move towards a healthier, more accessible, sustainable and resilient world.
2. Create the right balance between regulation and reward.
As urban environmental goals become more ambitious, city officials will use a wide range of tools to create a decarbonized built environment. Working with the real estate sector will help you find the right balance between incentives, rewards and protections versus regulation, fines and taxes.
Binding rules will undoubtedly become more and more important, but successful cities will benefit from building voluntary partnerships that effectively foster multi-stakeholder engagement and encourage stakeholders to actively participate in achieving sustainable development goals.
For example, through him Energy Leap Initiative, Copenhagen partners with major building owners to reduce energy consumption in buildings and implement active energy management.
3. Share knowledge
The City, in collaboration with leading real estate investors and tenants, universities and local green building councils, has an important role to play in educating and disseminating know-how, especially among small companies and individual owners.
In a scenario where heat pump installation is seen as a solution, new skills need to be developed. This will require funding and strategic foresight. Most companies are still in the early stages of the decarbonisation process, and while committed to the task at hand, they often lack the resources and knowledge to take action.
There are already good examples of educational programs for zero energy building construction and deep energy retrofits that include New York City Modernization Booster, then Zero Emission Urban Center of Excellence in Vancouver (ZEBx), UAE Net Zero Center of Excellence and Net Zero Building Technology Accelerator in Los Angeles…
4. Solve the upgrade problem
New buildings alone will not solve the problem. Building construction accounts for 50% of the world’s raw materials consumption. Upgrading existing housing stock to zero carbon emissions is central to decarbonising the city’s economy. Of the nearly 40% of global greenhouse gas emissions associated with the built environment, 11% is embodied carbon.
The problem of urban modernization is huge, but, what is encouraging, in a conversation with a number of leading investors, there is an understanding of the enormous potential in solving the problem of modernization. City officials must be an integral part of building this momentum.
5. Scale up technology
Technology is a key factor in the transition to zero. But this cannot solve everything: people must first accept it.
Data is the biggest catalyst for green progress, as advanced data processing capabilities provide opportunities for continual improvement driven by real-time analytics and automated decision making.
Data and technology are also important for transparent reporting and effective company accountability. Partnerships between governments, academia, the real estate industry and the prop technology sector are needed to fund additional research and development to help scale up emerging technologies, innovations and green solutions as they become widespread. Without such harmonization, the real estate technology landscape risks remaining fragmented.
Bridging the gap between intent and action with teamwork
Whatever the path towards decarbonizing built environments, this decade will be critical to laying the groundwork for a low-carbon future. And that requires teamwork. There are no waiting prizes. With an ecosystem of partnerships and open source best practices, we can learn from each other. We all need to learn how to bridge the gap between “intent” and “action.” Now is not the time to give credit to words or goals; action may be the only measure. And rest assured, this is a vital decade of action.