Climate Crisis and the Real Estate Role

When one thinks of emissions, it is factories and cars that generally come to mind. More than chimneys and tailpipes, it is the real estate sector that accounts for a large volume of greenhouse gas emissions as well as energy consumption. Transportation accounts for a little over 20% of the global carbon footprint.

Estimates from the United Nations have pegged real estate accountable for nearly 40% of the world’s energy consumption. The sector is also responsible for nearly 30% of global carbon emissions. Ensuring a double-digit reduction in energy creates a significant impact on environmental sustainability especially since the sector does not use a lot of power from renewable sources.

Emissions in the real estate sector are not just operating emissions due to day-to-day heating, cooling, and electricity consumption. It is also the embodied carbon emissions that emanate due to the construction activity. It includes building materials from steel and aluminium to plastics and concrete. All these materials are very carbon-intensive to manufacture and transport.

Once a building is complete, the building’s operational activities start emitting carbon. Emissions can arise from activities such as heating, cooling, and ventilating as well as the usage of appliances and devices. There are also repair and maintenance schedules and activities carried out that emit carbon.

The real estate sector can thus perform a key role in managing climate change and the global warming mission of under 1.5°C compared to pre-industrial levels.

How can the sector act responsibly?

• Monitor and track all relevant data of buildings and properties. These include the consumption of energy, waste that gets generated, ion and diversion, and water usage. This helps to gauge the productivity of assets.

• Plot usage and mitigation metrics or standards that can be followed on square footage basis, building occupancy statistics, etc.

• Vital environmental parameters can be evaluated against emission outputs in a customized app or platform.

• Monitor and calculate emissions and reductions across relevant scope emission charts. Opportunities for moving into the net-zero phase can be identified and plans for operationalizing them can be developed

Real estate stakeholders to the rescue

Development teams, architects, and partners can create a significant impact on the built environment. Even asset managers, tenants, offices, and residents can lead the march towards efficient and scalable climate impact solutions that create tangible term value.

Getting compliant with efficiency standards and energy requirements is critical. To lower the energy consumption bill, real estate businesses can retrofit existing heating, cooling, and electricity systems. This could include LED light fixtures as well as gas heating systems for electricity in existing buildings. Switching to clean and renewable energy modes if available must be explored.

More than just contributing towards reducing emissions and saving on energy bills, green buildings offer additional tangible benefits. Organizations and residents view buildings with positive certifications from LEED or BREAM and other such certifications as innovators and eco-conscious businesses.

Also, the buildings that promote the safety and well-being of offices and residents to save on monthly operating costs can easily differentiate their proposition from the competition.

This translated into better rentals and a greater ROI for real estate investors and businesses. The time is now to start managing emissions, energy, and raw material consumption. In addition to the climate crisis, profitability can depend on it.

The Cost of Inaction

Real estate is expected to boom and in this moment of transition, many real estate businesses are now including the cost of carbon in their financial models. Sooner or later, many nations and cities will commence the passing of carbon-centric regulations for the achievement of climate goals. That means real estate businesses need to track, measure, and control their emissions.

A large proportion of the commercial stock in the UK requires further investment to become environmentally sustainable. Nearly 85% of commercial premises in the UK’s major markets have an EPC rating of C or below. This is a global phenomenon that needs strict monitoring and overview.

Within the USA, New York and California have taken steps to effectively ban natural gas lines in new construction, further forcing a shift toward electrification, which demands a significant shift to renewable energy.

Will regulations force businesses to reduce emissions? Most probably yes, but real estate stakeholders across the globe have a unique opportunity to get in front of regulations in their cities and realize the potential cost savings too. Through energy efficiency projects and decarbonization efforts, businesses can gain a reduction in operating costs and protection from volatile energy markets that can be of a sizable financial stature.

Urban mining is one of the ways to manage the climate crisis and promote a circular economy. Buildings need an immense amount of copper as well as aluminum and both of them can be produced through efficient e-waste recycling. By effectively tapping into packed landfills, more than 50 minerals and metals can be recycled.

Greenscape Eco Management has established itself as a formidable player in the urban mining movement since 2007.