COP26: Real Estate Industry- Strategies to achieve ‘net zero’ by 2050

The UN Climate Change Conference UK 2021, also known as COP26, took place in Glasgow between Sunday 31^st October to Friday 12^th November 2021.

World leaders gathered to accelerate the discussions on how to tackle Climate Change, this time, as a matter of urgency. They were discussing ambitious targets to reduce emissions by 2030 aligned with reaching ‘net zero’ by 2050.

Under the Paris agreement on Climate Change adopted in 2015, countries agreed to reduce emission and work towards keeping a global temperature of our earth to 1.5 degrees Celsius.

In the UK, Real Estate contributes to a 42% of carbon footprint. Moreover, 38% of all CO2 emissions globally come from the built environment. Our industry has a huge responsibility to drive radical change to prevent global warming.

Furthermore, our industry players acknowledge that Environmental, Social, and Corporate Governance (ESG) data is a key tool to mitigate climate risk and build resilient property assets. The data also helps to make more accurate decisions and is becoming an indicator of a company success.

See below several examples of a few Real Estate players strategy to achieve ‘net zero’ goals:

Blackrock committed to support the goal of net zero emission by 2050 or sooner.

Publishing a temperature alignment metric for public equity and bond funds, for any markets with sufficiently reliable data.
Through Aladdin Climate, track on investment portfolios. This is to help investors with their climate change-related goals.
Implementing a ‘heightened-scrutiny model’ as a framework to manage companies that bring significant climate risk
Adding climate risk variables into capital market assumptions and models.
Using investment stewardships focus on sustainability to ensure their clients invest in opportunities aligned with ‘net zero’ goal

Savills (UK) Ltd: committed to achieve net zero carbon by 2030.

The 17 sustainable development goals (SGDs) have been chosen as a sustainability strategy as they give a common language for sustainability reporting to their stakeholders.
Occupy assets that are ‘net zero’ operational by 2030
Disclose energy consumption and carbon emissions data publicly
Implementation of a decarbonisation roadmap
Obtain certifications on the energy consumption and emissions data from third parties
Advocate for industry transformation.

Deloitte is committed to achieving net-zero emissions by 2030

Minimise carbon emissions from their real estate, business travel and supply chain.
Drive change through products and services by working with their clients to embed responsible climate practices
Work with suppliers that have set their own carbon reduction targets
Offset all residual operational and value chain emissions through high-quality schemes.
Use their network to accelerate the transformation of entire industries

CBRE is committed to achieve net zero carbon emissions by 2040.

CBRE has joined Amazon Pledge commitments:

Regular reporting about greenhouse gas emissions
Carbon elimination in line with the Paris Agreement
Credible offsets

JLL commitment is to achieve net zero carbon for the UK workplaces by 2030.

JLL was certified by the SBTi and it has also joined the Climate Pledge:

Only occupy workplaces which are net zero carbon in operation
Create transparency by tracking net zero carbon in core markets
Advise decision makers in how to develop net zero carbon strategy for their portfolios
Innovation to reduce embodied carbon in development

Grosvenor is committed to achieve net zero by 2030 and aims to be carbon neutral by 2025

Think Zero strategy
Reducing building emissions: Accelerated retrofit and energy efficiency programme for the Mayfair and Belgravia Portfolio.
Reduce the embodied carbon intensity of our developments by 50%
Reduce the carbon emissions from the supply chain

To achieve “net zero” emissions by 2050, the players mentioned above have clear strategies. Overall, the key areas of commitment are data transparency, including ESG into investment decision making, reducing carbon emission from their portfolio of buildings, and finally working collaboratively with stakeholders to align their business model with the ‘net zero’ strategy by 2050.

Author: Sonia Martin-Gutierrez

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