June 24th, 2022
Making a net zero pledge feels like a big step. It’s a public commitment on which you’re hanging your company’s reputation and if you’re unclear exactly how your business will get there, you’re certainly not alone. The urgency of the climate crisis requires us all to learn on the job.
There are various toolkits out there and net zero frameworks from organisations such as RICS and the GLA, but it’s a fragmented landscape and many organisations are surprised and alarmed to find there’s little in the way of clear practical guidelines telling companies where to start.
I would suggest there are two places to begin: tech and people.
Decarbonisation technology and the creation of a green tech stack is a vital part of the puzzle but before deciding what to buy or build, companies first need to determine where they are right now – and they can’t do that without data.
Building management systems and information modelling helps us understand peaks and troughs in energy usage, identify inefficiencies, and expose wasted geographies within our buildings. Similarly, thermal imaging enables us to carry out energy audits across our portfolios and identify areas of waste or underperformance. Once we know where the gaps are we can take action to fix them through retrofitting buildings, replacing appliances and energy systems and driving collaborative solutions with occupiers.
Moving up to corporate governance, carbon accounting is a critical part of any real estate business’s decarbonisation strategy. Without it, it’s difficult to move beyond asset or portfolio level, through the supply chain to business operations, that is, understanding the carbon footprint of every single purchase made from concrete to paperclips, every new contract tendered, every single journey made by any member of staff.
There’s a carbon cost to all decision-making within any business and while offsetting has a role to play with residual emissions, it’s not a solution. Carbon accounting tools can help steer every staff member towards effective mitigation decisions and away from poor ones. That’s why buy-in across an organisation is critical.
Technology can help but it won’t make any difference without people who understand the importance of the goal and their personal role in making it happen. This needs to come from the top, with good governance, and disseminate down with senior team members bearing a greater burden. Hiring a Head of ESG is a good move, but this individual must be a driving force working in partnership with leaders, rather than relieving them of their responsibilities.
The reality of reaching net zero might well mean being more selective with contractors, declining to work with partners and suppliers who don’t comply, or making difficult decisions around procurement, finance and HR. None of this will be easy, and it will probably cost more.
But as the climate emergency intensifies we should, by now, be aware that not doing anything is going to cost us much more and that those who apply systems thinking to change their approach will benefit. Together the real estate sector is responsible for almost 40% of energy and process-related emissions globally, but that also means that the potential to affect real change is in our hands – and the best place for each of us to start is in our own back yard.
This article, authored by Ami Kotecha, was first published in Property Week.
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