Real estate industry has accelerated its focus on responsibility and social purpose
CHICAGO, June 21, 2021 / PRNewswire / – With the demand for greener, more sustainable places fueled by the current pandemic, residents, investors and city authorities are more ready than ever to commit to fighting climate change. According to a new study by JLL (NYSE: JLL), Responsible Real Estate – Decarbonizing the Built Environment, this decade is a crucial time to decarbonise the real estate industry and build it better for the future. However, turning good intentions into achievable goals requires partnership and transformative thinking.
(PRNewsfoto / JLL-IR)
“The real estate industry is in the spotlight. We cannot reach a zero carbon planet without repurposing our buildings. So what is our answer – can we create a better future for our communities and our world? The only way is to create a commercial investment model that takes into account the environmental and social impact, “said Guy Grainger, Global Head of Sustainability Services and ESG. “This requires a rethink and a much more collaborative approach between building owners and users.”
Increased expectations and important drivers
The senior executives surveyed by JLL, who represent nearly 650 leading global users and investors, say their number one priority is creating human and green places. Users are taking a transformative approach to CO2 reduction by embedding sustainability in their business models. 89% state that sustainability is becoming increasingly important in their corporate strategy. Real estate investors believe that focusing on decarbonization can provide value and a competitive advantage. This is especially true for leading investors who invest in a deep spectrum of sophisticated strategies and align decarbonization strategies with investment strategies.
Several factors are driving the increased focus on sustainability. For one, leading users and investors outperform policymakers in their ambitions because they believe decarbonization is right for their employees, customers, tenants, communities, and the planet. Users and investors want stronger partnerships and a bolder stance from national and city governments.
Second, there is great value in acting responsibly. Research by JLL has shown that 83% of property users and 78% of investors view climate risk as a financial risk. For both users and investors, the myriad of free and low-cost options offer groundbreaking potential to achieve greater operational efficiency and better financial performance. Conversely, the downside of inaction is now too strong, and few consider inaction to be practical.
Requirements and obstacles to achieving sustainability ambitions
The JLL report revealed some key requirements and obstacles that must be considered on the path to net zero carbon emissions. A major hurdle is that the demand for sustainable real estate options such as net-zero buildings exceeds supply. Current supply may not be enough to meet users’ ambitious targets and the imbalance could increase if no more buildings come on the market. As supply exceeds demand, the possibilities for retrofitting buildings are considerable. However, building age and obsolescence as well as inadequate urban infrastructure are major challenges.
A key factor in driving the net zero transition is technology. Data is the single biggest catalyst for green progress as enhanced data capabilities provide opportunities for continuous improvement based on real-time analytics and automated decision-making. Nevertheless, most investors (55%) and users (50%) describe their current data and measurement options as “developing”. The opportunity to close the digital gap and invest in technology offers a considerable opportunity, because the dependency on data will continue to increase in the future, fueled by requirements for more transparency and reporting.
Responsible Real Estate Roadmap
Real estate can play a crucial role in helping users and investors reduce their carbon footprint and make progress towards their carbon reduction goals. As investors and users recognize the role they need to play in reducing carbon emissions, green intentions are translated into ambitious sustainability goals. There is a wide range of options for flattening the climate curve for real estate. However, to unlock the value of these goals requires a well-planned approach.
“This data shows that organizations have been proactive in setting climate goals, but implementation hasn’t really started yet,” Grainger said.
A key component in accelerating the decarbonization journey is an ecosystem of partnerships. JLL’s research shows that 81% of users and investors believe that a strong partnership between cities, users and investors is essential to drive the net-zero carbon agenda. By leaning on an ecosystem, governments, businesses, investors and communities can more easily adopt and scale innovation, bridging the gap between intention and action.
JLL’s sustainability journey
In 2020, JLL set a science-based goal of reducing emissions by 2034 and is also committed to achieving net zero emissions from its own buildings by 2030. including the client sites it manages.
About JLL
JLL (NYSE: JLL) is a leading professional services company specializing in real estate and investment management. JLL is shaping the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our employees and our communities. JLL is a Fortune 500 company with annual sales of $ 16.6 billion in 2020 operations in over 80 countries and more than 91,000 employees worldwide March 31, 2021. JLL is the brand name and registered trademark of Jones Lang LaSalle Incorporated. Visit jll.com for more information.
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SOURCE JLL-IR
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