Commercial property is one of the biggest culprits when it comes to carbon emissions. But, slowly yet surely, it is starting to take notice of the green agenda and its impact on global sustainability.
Just last week, the Global Real Estate Sustainability Benchmark revealed that 79% of world’s property companies now monitor their levels of carbon emissions and energy consumption and are actively trying to reduce their carbon footprints. Five years ago, when it started its benchmarking, just 19% of participants in the GRESB survey had information on their energy consumption.
And the collection of data is having a tangible impact on the actions of the real estate industry. Last year, the sector reduced its energy consumption by 0.8%, equivalent to 24,982 homes. Carbon emissions fell by 0.3% – the same as taking 14,586 cars off the road – and water consumption dropped by 2.3%. That is the equivalent of 3,310 Olympic-sized swimming pools.
These figures might seem a drop in the ocean: taking 14,586 cars off the road is not huge. But tackling the industry’s carbon footprint – in a way that helps it and its investors see the benefits – is.
With the real estate industry responsible for around 40% of global greenhouse gases and around 35% of the EU’s carbon emissions, it is also more susceptible to global risks such as rising fuel prices, scarce energy resources and stringent regulatory requirements. Investors are increasingly looking for less risk, so becoming an industry that actually helps reduce environmental impacts is a no-brainer.
“The built environment accounts for a large proportion of carbon emissions and our industry is poised to contribute significantly to global sustainability improvements,” says Gail Haynes, president of the Pension Real Estate Association.
And those improvements will soon be mandatory. In six years’ time, all new construction in European Union countries will need to reach a “nearly zero standard” on carbon emissions. And in less than four years, landlords in England and Wales will have to bring existing properties up to at least an E standard under the government’s Energy Performance Certificate guidelines. The cost to the property sector has been estimated at £29bn, with some 16% of England’s and Wales’s non-domestic stock lying below an E standard (26 April, p43).
With such vast amounts of money involved, it is no surprise that investors increasingly want information on the sustainability performance of assets.
“For the global real estate industry, accurate benchmarking at the portfolio level will increase competition and the speed with which sustainability best practices diffuse into the market,” says GRESB in its survey. “This will enhance and protect the value of real estate investments and ultimately contribute to a more efficient, more sustainable built environment.”
Read the report in full at www.gresb.com/results/overview
Greenest property owners
Every year GRESB ranks the highest-scoring green landlords. Top of the European honour role for 2014 are:
• Legal & General Property
• CBRE Global Investors
• Shaftesbury
• British Land
• Hermes Real Estate
• Grainger Asset Management
