STORY INLINE POST
Net zero is currently the most important global commitment for combatting the effects of climate change but there are many different approaches to achieving it. Net-zero carbon emissions may not be a regulatory requirement in Mexico yet, but it is a global commitment that as a human race we should all be striving to achieve to protect our planet. We are already experiencing the effects of climate change globally but also locally – Mexico registered a temperature rise of 1.6°C in 2020. If we wait any longer, the negative impacts will not only continue to get worse but the gap and ground to cover to reverse these effects will be much larger and much more difficult to achieve.
The COVID-19 pandemic has demonstrated the importance of resilience and has given rise to ESG + R (Environment, Social, Governance + Resilience). Achieving Net-zero carbon will not only protect the environment but it will also increase its and our resilience as a human race. There are many effects of climate change that are no longer reversible and that we must now learn to live with. For example, the winter storms in Texas last year left millions of homes and businesses without power for days. Steps have been taken to improve the resilience of the Texas power grid to avoid a repeat of this situation, demonstrating that taking these new conditions into account before beginning a net-zero journey is crucial for future-proofing an organization. The net-zero landscape, however, can be somewhat confusing, with many types of commitments, regulations, incentives and reporting requirements. In addition, achieving these targets will require significant changes in the way we operate and run our organizations.
One of the first places a company can start on their journey to net zero is by securing commitment and defining a vision. You don’t have to be the leader or set the most ambitious goals, the important thing is to be clear about where you are going and developing a clear plan to achieve that goal, whatever that goal may be for your organization. If you don’t know where you’re going or have everyone on board, it’s going to be very hard to reach the end goal. A clear commitment and vision are the core elements of a good sustainability strategy but defining a baseline is also vital to monitor progress and to be able to set interim goals that help maintain a solid trajectory. We are fortunate in the current context that we have access to an incredible amount of data, technology and information but data on carbon emissions often takes time to collect. If we wait until we have all the exact data on our company operations, it will be too late to take action, so accepting that we are working with incomplete data allows us to move forward and define a strategy that will be strengthened and refined as more data becomes available.
As a real estate company, at Jll, we are very aware of the contribution of buildings to carbon emissions (contributing 60 percent of carbon in cities globally) but while we are clear that our role is vital in decarbonizing cities, we are also clear that there are many more stakeholders in cities that need to play an active role in this journey. According to the UN, 70 percent of the world’s population will live in cities by 2050, so cities will need to grow but they should grow without having further negative environmental or social impacts. This responsibility does not lie solely with real estate companies; anyone who owns, occupies or invests in a building should be thinking about how they can reduce the carbon footprint of their building.
The 10 Green Building Principles published by the World Economic Forum in collaboration with JLL last year set out a clear roadmap of how to go about decarbonizing buildings. JLL research has found that 90 percent of our clients have goals but only 20 percent have an action plan and so the essence behind this roadmap is to help organizations move from the planning stage to delivering action, and it all starts with setting an objective (a vision and commitment). It’s common to assume that a quick and easy solution is to simply shift the energy supply to renewable energy as that would effectively bring the operational scope 1 carbon emissions to zero. But what about the embodied carbon within the building and the scope 3 emissions from suppliers and employees who all contribute to the successful operation of the organization? Embodied carbon is much more difficult to eliminate entirely but there are many ways that it can and should be reduced when designing a new building or a retrofit. This should be the first consideration when looking at decarbonizing your portfolio: can the building be repurposed and is there really a need for a new building? A good way to begin this process in both scenarios is by looking at relevant certifications (LEED, BREEAM, EDGE, etc) as they help us to focus on incorporating processes, materials and technology that reduce embodied carbon and reduce energy demand. The best energy is that which is not consumed and so energy efficiency and energy conservation measures, materials and design can have a huge impact on the remaining energy balance that would then need to be sourced from renewable energy. This hierarchy not only helps with reducing the carbon footprint of a building but also helps to reduce the amount of raw materials and processes used that require additional materials and resources for their production, as well as the pressure on energy grids ensuring that as we grow as a population, we can meet the increasing energy demand more sustainably and without leaving anyone behind.
The renewable energy infrastructure context is complicated and varies from country to country but we are consistently seeing new and innovative approaches to raising the US$4 trillion needed by 2030 to reach net zero by 2050. Governments, financial institutions and private companies will all need to work together to make renewable energy accessible to all. One example of these three parties working together is the tax-equity model, where a tax incentive helps finance the installation of solar panels for a private company and provide renewable energy both for the private company and a third party.
Even with 100 percent renewable energy supply though, many buildings cannot eliminate the carbon already embodied within their build, and so we need to compensate for this, or even better, remove the equivalent remaining carbon from the atmosphere. Quality carbon offsets should have two core characteristics: the carbon sequestration should be permanent and they should be additional to already planned carbon capture and storage projects. The ideal scenario is that eventually all offsets focus on removing CO2 from the atmosphere rather than simply compensating for existing emissions.
All of these steps sound very logical in theory but coordination and communication are key to putting them into practice. The life cycle of a building involves many different parties, from design and construction to operation and demolition or retrofit. Every one of these parties must be engaged in the net-zero carbon journey. For example, scope 3 emissions are the biggest source of emissions for many companies, JLL included (95 percent of our emissions come from client operations) and so organizations have a social responsibility to help their suppliers reduce the emissions generated in providing a service or raw material to them. This also includes reducing the carbon footprint of their employees.
There is still a long way to go to achieving net-zero carbon globally but the more organizations that commit and define net-zero goals and the more information, tools and initiatives we can share between parties and sectors, the higher the probability that we will achieve it. The key is to be proactive and take action now instead of waiting and being forced to react in an uncoordinated or unplanned manner.