As the evidence of climate change becomes increasingly clear, the real estate industry should be taking all possible steps to reach a target goal of net zero carbon emissions, a panel at Nareit’s REITworks: 2021 Conference heard.
The session was moderated by Natalie Teear, SVP, innovation, sustainability, and social impact at Hudson Pacific Properties, Inc. (NYSE: HPP), and featured Alex Green, assistant director at the British Property Federation; Marta Schantz, SVP, ULI Greenprint Center for Building Performance; and Tim Wheeler, national policy manager - sustainability, at the Property Council of Australia.
“We need action now. We cannot wait, we are truly in a crisis,” Schantz said. Meanwhile, both Green and Wheeler said the real estate sectors in the United Kingdom and Australia are making significant progress on the transition to net zero, supported by a number of industry-led initiatives.
The panel’s observations included:
- Government regulations are starting to raise the risk of stranded assets, or buildings becoming financially obsolete if they are not on a path to net zero. “We’re seeing this as a big driver for why real estate is going after net zero so aggressively and so much more than they ever have in the past,” Schantz said.
- Myriad net zero commitments and certifications for real estate exist across the globe, and the “choices are only going to grow,” Schantz said.
- Minimum net zero standards will have a role to play in bringing up the bottom end of the market, Wheeler said.
- The use of offsets to reach net zero is “absolutely a necessary part of the process but is hopefully something that will be less necessary over time,” Green said.
- Pricing for offsets is “going through the roof,” Teear said, so companies should consider multi-year contracts as costs are likely only going to increase.