In contrast to
With buildings responsible for 60% of emissions within cities, real estate is key to a net zero future. But although more companies are making commitments to decarbonize their real estate, it's yet to translate into tangible action, says Nidhi Baiswar, Senior Director - Global Sustainability and Climate Leadership,
Put simply, we are not doing enough, she says. We cannot reach our climate goals without taking urgent action to address energy and emissions in the built environment. The rest of this decade will be critical to meet net zero targets. What's more, the proof will be in the next 12 months when there's a stock take on what governments and corporates have actually achieved - not just what they say they will.
According to UN figures released at
Investments in building energy efficiency increased by 16% in 2021, but growth in floor space outpaced efficiency efforts as construction in most major economies returned to pre-pandemic levels and energy demand rose as offices reopened.
Amid warnings that the 1.5C target is under threat, how can real estate up its game in these crucial coming years?
1. Retrofitting is critical - but the pace is too slow
Buildings continue to waste excessive energy, and there's an urgent requirement to double down on energy efficiency initiatives, electrification, on-site and off-site renewables and microgrids. Retrofitting existing buildings is the quickest and most cost-effective way to accelerate the decarbonization of the built environment.
2. Support the developing world
The loss and damage fund announced at the end of
The Global North has a moral responsibility to share best practice, including technology transfer, alignment of regulatory frameworks and sharing innovative financial solutions
However, developing countries also have different challenges such as managing rapid urban growth, poor city planning and haphazard real estate construction. Unlike the Global North, much of its building stock for 2050 has yet to be constructed. This offers a huge opportunity to leapfrog to sustainable construction.
Energy remains an issue with many developing economies increasing their use of fossil fuels in buildings, according to the UN. At
3. Taking a whole-life carbon approach
New construction must become more carbon-conscious to avoid undermining energy-saving measures and storing up problems for the future. Whole life carbon approaches including regenerative and circular building principles should be embedded into new construction from the start. Alternative materials and decarbonizing conventional materials such as cement, which is responsible for about 7% of global carbon emissions, will also play a role.
At
4. The clean energy transition continues
Investment in renewables has overtaken investment in fossil fuels for the first time, but investment into clean energy still needs to be four times higher to meet targets. As corporate appetite for clean energy continues to grow, more renewable sources are coming online.
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5. Action plans needed
Net zero commitments continue to rise across the business world. At
While commitments are the first stage, companies are increasingly being challenged on implementing their net zero plans and demonstrating progress.
During COP, a UN-convened group launched a major report outlining what defines credible net-zero emissions pledges and pathways for companies, banks and local governments.
Last year,
6. Building climate resilience
With the effects of climate change already being felt, the need to protect communities, infrastructure and buildings from extreme weather events, higher temperatures, rising sea level and biodiversity loss is growing.
The
Thinking long-term
Decarbonizing real estate is a long-term process yet even with the shorter-term risk posed by economic headwinds and geopolitical tensions, delaying plans is a mistake.
Amid ever more stringent regulations and increasing pressure from customers, consumers, and employees to make tangible progress towards net zero goals, the cost of inaction is becoming visible in the market.
Building owners who fall behind the curve will increasingly be penalized, says Baiswar. Now is the time to be implementing plans that that put buildings on a clear pathway to net zero.
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