Real Estate report 2023. An interview with Luke
We have recently published our report on the current net zero position of the real estate industry and what the key drivers and foci will be for 2023. This is based on the results of a survey we conducted to understand the thoughts of our clients and members of the real estate community as well as views from our expert team.
One of the consultants who prepared the report, Luke Riseborough, answers some questions about the themes of the report in this short video:
Here is a summarised transcript:
What are the key features which have defined the net zero transition in 2022?
2022 has been a really busy year for sustainability professionals. There have obviously been a lot of climate change related natural disasters and these have increased in frequency in the last year. There have also been a number of regulatory drivers. These two things have increased public and investor sentiment towards net zero. In addition to this, soaring energy prices have provided a financial incentive for energy efficiency measures and other low carbon solutions.
What steps have the real estate market leaders taken in 2022, which others can follow?
The real market leaders in the real estate industry have gone from setting their targets to acting on them. They are implementing strategies which are putting low carbon solutions into place and actually driving change throughout their supply chain. We are seeing this through various programs to engage with tenants or leverage their influence on their procurement supply chain. This means that those scope 3 emissions, which account for a large proportion of real estate carbon footprints are being driven down. Embodied carbon is also a large consideration for these real estate actors and the market leaders are not only incorporating embodied carbon considerations into the actual construction processes and phases, but are also looking to integrate end of life considerations through those initial design phases to ensure that they are not locking in any carbon that is going to be released at the disposal or demolition phase of the property lifecycle.
Integrating net zero into operational processes is a priority for 2023, what are your tips to achieve this?
Top tip 1.
Utelise the linchpins within your organisational structure- facility managers or procurement specialists. They might not necessarily be aware of sustainability best practices so its crucial to engage with them and share your knowledge to help drive change across the supply chain. This is something we are helping clients with, to make sure that the gap between the sustainability team and the broader supply chain is filled.
Top tip 2.
Prioritise low carbon approaches in the correct way. Before anything else, remove fossil fuels at the earliest intervention point. For example if a gas boiler is coming to the end of its lifecycle, don’t replace it with another gas boiler, stop the lock-in of carbon and use a decarbonised heat solution instead. This is then followed up with a reduction in demand through energy efficiency measures and the installation of renewables. Verco are helping clients set these investment strategies at a higher portfolio level, planning how and when these need to be rolled out over the next 20-30 years. We are also working at the asset level, going into properties and helping clients identify the most feasible solutions in this space and the most feasible scheduling of these solutions, tailoring to asset specific requirements.
Top tip 3.
Make the most of digital. This might be for data sharing between parties or continuing to track your performance. Data is a real gap in the market at the moment. Without data you can’t measure your carbon and what you can’t measure, you can’t manage- and if you aren’t managing it, you can’t reduce it. So we really need to facilitate the sharing of data before any further steps can be taken. Digital solutions are the best way to do this in an efficient manner.
What are the guidance and frameworks changes to look out for in 2023?
A number of frameworks and guidelines are due to be published this year. The most notable, which has been published just a few weeks ago, is the update to the Carbon Risk Real Estate Monitor (CRREM). This second version of their tool will really help drive risk management related to climate and carbon considerations for the real estate sector. But there is also the SBTi Buildings Framework and for stakeholders with U.K interests, the net zero carbon building standard is going to be a really very key framework and we are all very excited to see what that’s going to entail. We have members in Verco who are involved with the working groups, helping to develop the most robust framework that they can. There is also an increasing number of national regulations that we are anticipating will come into place and these are not just U.K based, but into broader geographies as well, so a lot to look out for in 2023!
What is your key takeaway for real estate stakeholders?
Integrate carbon considerations across the asset lifecycle, from pre-acquisition due diligence, to end of life disposal routes. Just make sure that you are considering carbon and driving down your emissions throughout that process. I appreciate that we don’t want to have ‘carbon tunnel vision’ and there are broader considerations to take into account here such as socioeconomic considerations, biodiversity and other natural impacts, but from a carbon perspective, just make sure that the operational considerations and the embodied carbon considerations are all there and that the financing mechanisms are in place to support your strategies in reducing carbon emissions.
Download the report
The report discusses the key findings from the survey as well as insight, case studies and perspectives from our real estate experts.