Climate crisis: why corporate real estate needs to do more
As corporate carbon reduction targets increase, the role of real estate in their attainment will need to be better recognised and realised.
3 minutes to read
The last time we emerged from the global financial crisis, cost concerns served to terminate mounting occupier interest in sustainable real estate. For the best part of the ensuing decade, the majority of businesses brushed aside the issue.
"As we emerge from the pandemic, will history repeat itself?"
A time for ambition
The outcome absolutely needs to be different. The science is unequivocal – we have no more than 30 years to save the planet from catastrophic climate change. Encouragingly, business leaders are responding; moving en-mass to put in place bold and public net zero carbon targets.
In fact, more than 40% of the global businesses we surveyed as part of our recent (Y)OUR SPACE research already have a net zero carbon target in place. Reflecting the severity of the situation, more than three quarters have target dates of before 2030 – or to put it in real estate terms, one market cycle.
Realising these ambitions does put real estate firmly in the frame, given that The World Economic Forum estimates that both commercial and residential real estate is responsible for around 40% of all global carbon emissions.
A time for real action
Yet (Y)OUR SPACE findings point to an alarming disconnect between these wider ambitions and corporate real estate strategy. Just over one quarter of corporate real estate leaders we surveyed believe that their corporate commitment to a net zero carbon future will have only a marginal effect on their future real estate choices, while a further 15% believe that it will have no impact at all.
Whilst by no means the only option available to business leaders, a move towards more sustainable real estate, both in terms of base build attributes and day-to-day operation, is clearly critical to carbon reduction. On the former point, there is much to do in increasing occupancy of accredited sustainable buildings. (Y)OUR SPACE found that three quarters of the global occupiers we surveyed have less than 25% of their portfolios boasting an official sustainability accreditation, with just one in ten having more than half of their portfolio bearing such credentials. Equally concerning, only just over a third have a clear target in place to increase their occupancy of sustainable buildings.
"The science is unequivocal – we have no more than 30 years to save the planet from catastrophic climate change."
Education and best practice exchange
When it comes to addressing the climate challenge, there is some road to run in aligning stated corporate targets with real estate strategy. Closing the gap is a responsibility for all in the real estate sector. We must share best practice and thinking.
Corporate real estate teams need to educate their business leaders about the potential real estate presents in meeting sustainability goals. Accreditation bodies need to do more to build understanding about their systems and the financial benefits they bring to both owners and occupiers. Developers and owners will need to move beyond mere building labels to better articulate how truly sustainable offices can optimise an occupiers real estate spend and support their wider ambitions.
Addressing the climate challenge is putting corporate reputations at stake. Accordingly, the occupiers of real estate will need to move faster and smarter to meet their targets. They will need support from us all and with the climate clock ticking there is no time to waste.