Decarbonizing real estate: Why businesses are on-board

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In the business world, a growing number of companies are recognizing climate change as a present or future risk. According to a report by the Center for Climate and Energy Solutions, 90 percent of the multi-national, blue chip companies on the Standard and Poor’s Global 100 Index identify climate change as a major risk to business. Their major concerns include damage to assets and facilities, failure of critical infrastructure, higher costs and disruption to supply and distribution chains. Resiliency is becoming a cornerstone of future-proofing businesses, as well as essential to remaining competitive.

The concept of resilience can be viewed through two lenses: mitigation and adaptation. Mitigation aims to curtail climate change by reducing or offsetting greenhouse gas emissions. Adaptation purposes to limit one’s own vulnerability to the impacts of climate change without necessarily addressing the underlying causes. The paradox with real estate is that climate change affects the resiliency of buildings just as buildings largely contribute to the problem of climate change. The building sector alone accounts for nearly 40 percent of carbon emissions in the U.S. per year.

Even as industry traditionally tends to favor less rather than more regulation, nevertheless some of the world’s largest corporations are pushing for more aggressive climate change mitigation through government policies and market mechanisms. In a “Business Manifesto” presented at Davos in 2015, for example, executives from Unilever, KPMG, Philips and others called for world leaders to design a new architecture for sustainable development based on transparency, accountability and market forces.

The global threat of climate change has governments around the world looking for a new model — one that uses market mechanisms such as carbon taxes, cap-and-trade, and regulations requiring industry to disclose carbon emissions. Building owners and corporate occupants find themselves impacted by these increasing government requirements and by demands from investors to decarbonize.

Many U.S. states and municipalities are driving new regulations in order to increase the resiliency of their power, water, transportation and waste management infrastructure. In the face of rising sea levels, New York City, for example, accelerated its climate change mitigation efforts by expanding its renewable energy generation, improving the efficiency of buildings, transitioning to electric vehicles and improving waste management.

In addition to pressure from the government and investors, there is a growing demand for mitigation from the public. A 2015 Pew Research Center poll showed that 70 percent of Americans are concerned about climate change. The people who work in office buildings are a section of this public. As they bring their concerns into the workplace, this is putting pressure on building owners and managers to demonstrate that their buildings are green and sustainable.

Simone Skopek is an Operations Manager in Energy & Sustainability Services at JLL. Simone has been pioneering programs at the firm that address sustainability and productivity in the workplace, as well as building resiliency and emergency management. She was one of the original creators of the Green Globes certification program and BOMA Best. Past careers include Critical Infrastructure Analyst with the government of Canada’s Public Safety department. She was also a high school physics, chemistry and biology teacher, and sailed around the world for seven years in a 30-foot sailboat.

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