Rob Simpson, Senior Director, Sustainability
The latest IPCC report, published in early April, calls on all economic actors to redouble their efforts to limit global warming. The responsibility of the real estate sector, in the design of cities and the construction of buildings, gives it a major role in meeting this challenge.
The latest Intergovernmental Panel on Climate Change (IPCC) report is once again an appeal for the future of our planet. Experts remind us that, if we collectively want to limit global warming to 1.5°C, it is more vital than ever to reduce greenhouse gas (GHG) emissions in all sectors of the global economy, rapidly and sustainably. In recent years, GHG emissions have continued to rise – albeit at a slowing rate – and it will be impossible to stay below 1.5°C without stronger climate action in this decade. Rapid decarbonization of our economy requires substantial reductions in fossil fuel use and improved energy efficiency, such as through electrification and the rapid uptake of low-emission energy sources.
In this regard, real estate players have a major role to play as the implications are numerous in terms of cities as well as buildings themselves.
The IPCC expects urban land areas to triple between 2015 and 2050, with significant negative impacts on GHG emissions. Even so, modeling changes in GHG emissions in cities is complex: it requires an in-depth understanding of the connections between population size, incomes, amenities, infrastructure, energy sources, and land availability. How cities are designed, constructed, managed, and powered will lock in behavior and lifestyles and future urban GHG emissions.
Despite this worrying situation, solutions exist. As the IPCC reminds us, mitigation strategies include reducing or changing urban energy and material use toward more sustainable production and consumption in all sectors, electrification, and moving to low-carbon energy sources. In addition, there is scientific consensus that green and blue infrastructure – such as urban forests and green roofs – can mitigate climate change through carbon sequestration, avoided emissions, and reduced energy use, with significant co-benefits for the physical and mental health of residents and better air quality.
“Up to 61% of global building emissions could be cut by 2050”
This important challenge facing cities cannot be met without significant efforts at the building level. And for good reason: in 2019, buildings accounted for 31% of global energy demand, 18% of electricity demand, and 30% to 40% of global CO2 emissions.
In such a context, if mitigation measures were implemented from the design phase, such as by limiting the demand for carbon- and energy-intensive materials, IPCC experts are convinced that buildings around the world could reach net-zero GHG emissions “while ensuring decent living standards.” In fact, mitigation solutions already exist. We can reduce emissions by limiting the amount of new floor space required, deploying material-efficiency measures that improve building design, switching to lower-carbon alternative materials, and opting for scrap recovery and reuse.
According to the IPCC, up to 61% of global building emissions could be cut by 2050 with energy-efficiency policies, renewable energy policies, and measures that directly affect consumer behavior and limit the use of energy, water, materials, and land.
As a long-term investor, we are already fully committed to carbon neutrality. In 2017, we implemented a proactive policy to reduce our carbon intensity and we formalized it in 2021 with the ambition of achieving operational carbon neutrality for our entire global portfolio by 2040.
To achieve the transition to a low-carbon economy, it is imperative that the economic interests of all actors in the real estate value chain be aligned. Encouraging our partner ecosystem is a key element to create a broad transformational movement across our real estate industry. Today more than ever, let’s act collectively to make the right choices for our planet.