Real estate firms with more than £300bn of assets under management have signed a groundbreaking commitment to tackle the growing risk of climate change.
The signing of the pledge comes as people around the world join a youth-led global climate strike. The commitment, drawn up by the Better Buildings Partnership, has been signed by 23 of its members, which between them contribute more than 1.2m tonnes of C02 to the environment.
The commitment asks more than just pledging to be net zero by 2050 – it asks real estate owners to publish their pathway to how they get to net zero. Crucially, the pathways have to apply to both new and existing buildings, and cover both operational and embodied carbon and the whole building, including the energy consumed by tenants.
“The significance of this commitment cannot be underestimated,” said Sarah Ratcliffe, chief executive of the Better Buildings Partnership. “The signatories have more than £300bn of AUM spanning diverse UK, European and global portfolios. These senior leaders have acknowledged the scale and urgency of action on climate change that is required, and have committed to delivering net zero carbon buildings, to improving transparency and driving market transformation.”
Bill Hughes, head of LGIM Real Assets, one of the signatories to the commitment, said: “Avoiding climate catastrophe is our greatest global priority. LGIM Real Assets is committed to being at the leading edge of the sustainability agenda, recognising that our business activities result in direct and indirect environmental impacts.”
Tony Brown, head of M&G Real Estate, added: “The whole real estate market must come on this journey with us if we are to limit the worst impacts of climate change. We fully support the BBP members’ commitment and the signal this provides to all in the real estate sector to deliver the transition to a low-carbon economy.”
The commitment, which the BBP is calling for all real estate owners to sign up to, regardless of whether they are members or not, was developed following an address by climate change scientist Chris Rapley to a group of real estate chief executives and chief investment officers that stunned them into silence and then prompted them into action.
Real estate is conservatively estimated to consume 40% of global energy annually and account for 20% of international carbon emissions, meaning that property has a crucial role to play in helping to limit global warming to 1.5°C and reduce the risks associated with long-lasting or irreversible changes to the earth’s atmosphere and ecosystems.
The commitment
1. By the end of 2020, we will each publish our own net zero carbon pathway, outlining our trajectory towards net zero carbon new and existing buildings and will address:
a) operational carbon, critically covering whole-building performance, including tenants’ activities;
b) embodied carbon of development, refurbishment and fit-out works.
2. We will each annually disclose our progress towards our net zero carbon pathway and, in doing so, explain the scope and implementation of this commitment as it relates to our individual business.
3. We will publicly disclose the energy performance of our portfolios, where we have permission to do so, as a minimum at a portfolio level by geography, and ideally at a property level, and support efforts to develop consistent industry performance disclosure and benchmarks.
4. By 2022 we will develop comprehensive climate change resilience strategies for our portfolios and work together to develop consistent industry disclosure on climate change risks in line with industry standards, including the Task Force on Climate-Related Financial Disclosures.
5. To support the implementation of this commitment, we will work with the BBP to develop guidance on net zero carbon pathways for property owners to encourage greater consistency in definitions and boundaries, develop clear guidance for the industry on the procurement of renewable energy for real estate assets to ensure that any purchasing in the UK creates additional capacity, and convene an owner/occupier forum inviting our tenants to challenge property owners and engage with us to improve the performance of the space they occupy in line with our net zero carbon pathways.
The signatories
- Aberdeen Standard Investments
- Aviva Investors Real Estate
- British Land
- Bruntwood
- Canary Wharf Group
- Capital & Regional
- DWS
- Great Portland Estates
- Grosvenor Britain & Ireland
- Grosvenor Europe
- Hammerson
- Hermes Investment Management
- intu
- Landsec
- LaSalle Investment Management
- Lendlease Europe
- LGIM Real Assets
- Low-Carbon Workplace
- M&G Real Estate
- Nuveen Real Estate
- Schroder Real Estate Investment Management
- SEGRO
- Transport for London
- Workspace Group
Read more about how real estate is committing to the climate change challenge >>
