13 July 2020
Enough Greenwashing — We Need To Show Which Buildings Are Really Sustainable
Tor Burrows, Director of Sustainability & Innovation for Grosvenor Britain & Ireland shared an article with Bisnow discussing the need to “walk the walk” in delivering energy reduction and sustainable design.
To date, sustainability transparency in the real estate sector has been piecemeal at best. At the worst extreme, companies could be hiding the actual mediocre energy performance of their properties behind ineffectual sustainability targets. Are we asking the right questions or letting ourselves be carried away by greenwash?
The tide is beginning to turn, however. You no longer get a pass if you produce a sustainability report and are done with it. There is an increasing understanding that a real estate company must demonstrate that entire properties and their operations are actually walking the walk in terms of energy reduction and sustainable design. Many investors now will only consider placing their money in a company that has a credible pathway to reach net-zero carbon emissions.
“One challenge to sustainability reporting has always been the ability to report on the whole picture,” Grosvenor Britain & Ireland Director of Sustainability and Innovation Tor Burrows said. “It’s easy to encourage staff to cycle to work, for example, which is great, but the emissions saved will be a drop in the ocean compared with the entire footprint of a business or building. The question is how companies can set a credible scope for their reporting. Thanks to efforts such as those from the Better Buildings Partnership, or BBP, this should now be possible.”
An Industrywide Commitment
Burrows is referring to an ambitious project initiated by the BBP in 2019. Twenty-five of the UK’s largest real estate companies have now signed a pledge with the BBP to establish a climate change commitment.
At the end of the year the group will publish a net-zero pathway and each member will publish its own framework for how to get there. As well as Grosvenor, members include British Land, M&G and Aviva Investors. The group has committed to disclose its progress towards the pathway annually and by 2022 to have developed climate change resilience strategies.
“Net zero means different things to different people,” Burrows said. “The main challenge can be assessing both the landlord’s and the tenant’s impact. In this case, net zero means the whole building, from development processes to the landlord’s energy use, the tenant’s energy use and the whole supply chain. It’s the most holistic approach possible and will help a company to share what the whole consumption of a building is and a company’s full emissions.”
As the commitment takes in the entire building, following the pathway will require a lot of cooperation. Landlords and tenants will have to work not just with each other but with their suppliers. The BBP has set up an Owner Occupier Forum to assist.
Crucial to the BBP’s new framework is transparency, which means being open about what areas of a portfolio need to be improved. In Grosvenor’s case, this could mean working on the energy performance of a range of heritage buildings which can pose a greater challenge than improving more modern buildings.
“Lots of reporting mechanisms only focus on what a company is good at, not what it’s bad at,” Burrows said. “It’s important to show what a company finds challenging, what it needs to work on. The whole point of a benchmark is to create a way to communicate and to highlight improvements.”
The BBP is also working on an initiative called Design for Performance that aims to provide an approach to ensure new buildings deliver on their design intent. Intent is one thing, but how a building truly performs is another. Grosvenor is currently trialling Design for Performance on two major developments, 65 Davies Street and the South Molton Triangle, both in Mayfair. Grosvenor Britain and Ireland
A Stronger Business Case for Sustainability
Stronger sustainability reporting will shine a light on which members of the real estate market are paying lip service to sustainability and which are taking effective actions. However, it’s not only members of the real estate sector that are calling on each other to do away with greenwashing.
Larger occupiers need to be able to quantify the environmental performance of a building to meet their own sustainability credentials. Occupiers large and small are today far more focused on sustainability and creating a healthy working environment for staff that are extremely conscious of environmental issues. Crucially, those that hold the purse strings are also more focused on climate change risk.
“If you look where investment is going, ESG funds outperformed others during the COVID-19 pandemic,” Burrows said. “This presents a real business case for sustainability. Climate change risk is already starting to feel far more real than even a few years ago. Given the way the market is heading, we won’t have any kind of economic recovery post-COVID-19 if property owners and users don’t put money into the area of sustainability.”
The coronavirus has forced all industries and sectors to react extremely quickly to protect staff and find new ways to operate. Climate change has been a threat for decades, but reactions have so far been incredibly slow. However, with an increased business case biting at the heels of those falling behind, there is a real argument that now is the time to get sustainability reporting right. Only then will the real estate sector truly understand how its properties are currently performing.
This article was originally published on Bisnow.com