The real estate industry has made significant progress over the past 10 years in reducing carbon emissions and energy consumption while increasing asset value, according to a new report from the Urban Land Institute’s (ULI) Greenprint Center for Building Performance.
The report also finds that Greenprint members are still on track to reduce carbon emissions by 50 percent by 2030.
“For the past10 years Greenprint has worked with the real estate investment community to help expand and improve upon sustainability best practices within the commercial real estate sector,” said Daniel M. Cashdan, president, HFF Securities and chairman of The Center for Sustainability and Economic Performance, which houses the Greenprint Center. “As the race against climate change’s various impacts on our cities picks up, the focus of global fiduciaries has become sharpened. Greenprint, as part of our Center for Sustainability and Economic Performance, exists to serve as a resource hub for investors across the globe.”
This year, Greenprint members identified three trends that are pushing real estate companies to stay innovative and continue integrating sustainability into their core business. These trends are:
- A move toward a circular economy: To fully address the environmental impact of buildings, real estate must move toward a circular economy where waste of materials is minimized. This includes incorporating a “reduce, reuse, recycle” mindset for building materials.
- Intensification of climate legislation that sets building performance standards: In the absence of federal guidance, more than 30 major cities — from San Francisco to Atlanta — have set energy benchmarking policies for buildings. Cities are also beginning to set minimum performance standards that become more stringent over time.
- Heightened investor pressure on ESG initiatives: Investors are asking real estate owners and asset managers for more information on their real estate funds’ environmental, social and governance (ESG) programs. Many investors now see ESG initiatives as material to long-term investment returns and work with asset managers to balance ESG and financial returns.
The number of properties included in this year’s report has risen by 12 percent from last year, as Greenprint continues to expand both its membership and the building data collected from members. The portfolio has also grown by 15 percent in terms of floor area, and now includes more than 190 million square meters (over 2 billion square feet) of office, multifamily, industrial, retail, and hotel property. The 8,900-plus buildings in the portfolio are located across 32 countries. Greenprint members hold more than $750 billion of real estate assets under management, which is almost 4 percent of the value of high-quality commercial properties globally.