Decarbonizing Commercial Real Estate: A Guide to Sustainable Strategy Development
As global leaders and organizations around the world focus more on climate change, the urgency to reduce carbon emissions and foster sustainable environments has significantly risen. Commercial real estate stands as a substantial contributor to carbon emissions, accounting for 37% of global carbon emissions and demanding 34% of the energy use worldwide.
Understanding the necessity of drastic measures, this article from CBRE aims to guide you through the essential steps to making your carbon-reduction strategy a reality, helping you navigate the challenges and opportunities that lie ahead in decarbonizing commercial real estate.
The Pressure is Mounting
Climate change effects are increasingly clear, leading to a surge in demands from various stakeholders — including consumers, employees, and governments — for businesses to play an active role in reducing their carbon footprint.
The Paris Agreement, a landmark international treaty, set the ambitious goal to limit global warming to well below 2, preferably 1.5 degrees Celsius, compared to pre-industrial levels. Despite commitments from COP26 in Glasgow to reduce 90% of global emissions to zero, the gap between targets and reality remains substantial, emphasizing the urgent need for actionable strategies.
Understanding Decarbonization
Decarbonization refers to the permanent removal of carbon emissions from an organization's value chain. It entails implementing sustainable, clean energy systems and adopting a low-tolerance approach to residual emissions.
As a business, working towards decarbonization means focusing on clear strategies, targets, and roadmaps that adhere to the principles of sustainability and reduce your carbon footprint effectively.
It’s Time to Act
With more than 450 firms committing $130 trillion to achieve net zero through the Glasgow Financial Alliance for Net Zero (GFANZ), there is considerable momentum in the corporate sector to decarbonize global assets over the next 30 years.
However, the challenge is immense. Current statistics reveal that only 15% of global assets align with the 1.5°C target set by the Paris Agreement. The real estate sector thus faces the colossal task of decarbonizing 37% of global buildings by 2030.
Crafting Your Decarbonization Strategy
It’s critical for every company to establish a proactive decarbonization plan that spans operations, leasing, and capital expenditure (Capex) while setting precise performance targets. Being equipped with a plan not only helps in managing upfront costs and regulations but averts business liabilities and contributes to reducing global socio-economic and environmental risk.
Understanding the difference between net zero and carbon neutral is vital in this journey. Achieving net zero entails a comprehensive approach that encompasses the entire value chain of a company, reducing carbon emissions through efficiency, electrification, and the use of renewable energy. In contrast, carbon neutrality focuses on offsetting the carbon already emitted through the purchase of credits, without addressing the company's value chain fundamentally.
As businesses globally understand the risks associated with delaying action, including threats to economies and environments, crafting a robust framework for your decarbonization strategy is more important than ever.
Taking the First Step
Navigating the road to decarbonization is a complex yet necessary journey. It demands a robust strategy, a clear understanding of the goals, and a proactive approach to sustainable development.
Taking the first step might seem daunting, but remember, the time to act is now. To help you further, we’ve prepared a detailed checklist and plan development guide to steer your business in the right direction, grounded on sustainability and responsibility.
To view the checklist and plan development guide, visit: CBRE Decarbonizing Commercial Real Estate