The Challenge of Decarbonizing Cities and Real Estate by Cynthia Curtis-JLL

The Challenge of Decarbonizing Cities and Real Estate

By Cynthia Curtis, JLL

Cynthia Curtis-JLL-GreenMoneyBased on government estimates, buildings account for 60% of carbon emissions in cities. And with more than 2.5 billion people moving into cities in the next 30 years, there is a responsibility to ensure that the real estate sector, and the permanency of buildings and our communities, are evolving and adapting in a sustainable way. This isn’t only good for the planet – it also benefits job creation, health, and equality.

As the world emerges from the pandemic and seeks to tackle multiple other pressing challenges ranging from war in Ukraine, food shortages, inflation, and cost-of-living pressures, it is vitally important we do not lose collective focus on the catastrophic risks posed by climate change.

Global urbanization offers a time-limited opportunity to work towards widespread climate-resilient development and transformational adaptation. There needs to be an all-in approach in the built environment sector to deliver the critical 1.5oC pathway. A significant majority of the world’s major cities have committed for all new buildings to be net zero by 2030 and all buildings to be net zero by 2050. But with approximately 80% of existing building stock set to still be standing in 2050, meeting this net zero goal is a huge challenge for the real estate sector.

The real estate industry must play a central role in enabling companies, communities, and cities to deliver their net zero goals. It is encouraging to see that our industry’s collective response is spearheaded by the growing number of net zero carbon commitments, as governments and companies act to limit global warming to 1.5oC. The urgency of which was reinforced by the IPCC’s latest report that calls for immediate, ambitious and sustained efforts to slash emissions. At the same time, the pandemic and continuing advances in technology have changed how and where we work, with long term implications for health, wellbeing, and inclusivity.

Taken together, these trends are likely to lead to substantial change, challenges, and opportunities for the real estate industry. For JLL, understanding and responding to these trends is fundamental to our purpose of shaping the future of real estate for a better world.

Responding to the Climate Emergency

To help inform real estate decarbonization strategy – looking beyond current regulation to create competitive advantage and future-proof real assets – JLL has released a new research study examining efforts taking place across 32 world cities.

Our findings point to five key issues:

  • The urgent need to decarbonize real estate: city governments are now recognizing that it’s time for action. They are introducing a raft of measures covering new and existing commercial real estate. Some cities are ahead of their peers in tackling real estate decarbonization – New York, Paris, Singapore, Toronto, and Sydney.
  • You can’t improve what you can’t measure: real estate owners/investors and occupiers are increasingly being asked to comply with mandatory regulations and to benchmark and report emissions, energy, water, and waste. U.S. cities like Boston, New York and Washington DC are leading the way.
  • There is an urgent imperative to address the retrofitting challenge of existing buildings. Around 50% of the world’s raw material is consumed in the development of buildings. And of the 40% of emissions stemming from the built environment, 11% is from embodied carbon from the construction process.1
  • Retrofitting a city’s existing building stock to net zero carbon is going to be central to decarbonizing a city’s economy. To meet the commitment for all buildings to be net zero by 2050, retrofitting rates will have to accelerate from the current level of 1%-to-2% per annum2 to 3%+.
  • Without decarbonizing the energy grid there are limits to what building owners can achieve in reducing their emissions. Most major global cities now have ambitious targets to move to clean energy generation. Leading the way is Munich, which aims to be powered 100% from renewable sources by 2025.3

The research points to a tapestry of responses: some cities are trailblazers, others just starting out. However, the direction of travel points towards harmonization over time and spotlights best practice, which can also be scaled along the way.

Focusing our Sustainability Efforts Where We Can Deliver the Greatest Impacts

JLL believes in leading by example. Being a responsible business is central to our values. Our global sustainability program is focused on three issue areas where we can achieve the greatest impacts: climate action for sustainable real estate, healthy spaces for all people, and inclusive places for thriving communities. These are informed by JLL’s purpose and aligned to the firm’s Beyond Business strategy.

JLL Climate Action Healthy Spaces Inclusive Places REPORT

In June 2022, we released our latest Global Sustainability Report. Key highlights included:

Climate action for sustainable real estate:

  • JLL’s net zero target aims for the full abatement of 95% of its carbon footprint by 2040. By the end of 2021, JLL had reduced Scope 1 and 2 emissions by 17% from our 2018 baseline and the firm is on track to meet its net-zero 2030 target for occupied office space and vehicle fleet.
  • The first real estate company – and one of just seven companies globally – with a net-zero target validated by the Science Based Target initiative (SBTi) – in 2021, the SBTi launched the world’s first corporate Net-Zero Standard, enabling businesses to set emissions reductions target in line with science.
  • 65,301 metric tons CO2e averted by advising clients on renewable energy projects, a three-fold increase on 2020.

JLL--Healthy spacesHealthy Spaces for All People:

As well as the focus on climate change, the program recognizes the importance of promoting health, safety, and wellbeing among our workforce through the buildings which JLL occupies and manages for clients.

  • 390 sustainable building certificates achieved for clients, over 30% more than in 2020.
  • 45% of JLL offices with a sustainable building certificate4, on track for 100% by 2030.

 

 

Inclusive places for thriving communities:

JLL’s sustainability program also puts diversity, equity, and inclusion (DEI) front and center. The firm is determined to create a culture that fosters DEI in all areas of its business.

  • 36% of our top two senior management levels are female, with a target to achieve 40% by 2025.
  • Supported 33 Women’s Business Network Business Resource Groups around the world and launched a global Women Transforming Tech resource group.
  • Continued to grow Business Resource Groups – nine in the Americas, eight in EMEA, and seven in Asia Pacific (along with 11 country and regional DEI groups) – which help drive the business by providing professional development, training and networking opportunities for employees with shared backgrounds, experiences, aspirations and goals.
  • Strengthened our global training to empower every individual to reach their full potential by launching a new learning platform providing access to 25,000 tailored courses and increased our investment per employee by four-fold in 2020, to $316 per employee.
  • $1.97 billion spent with diverse suppliers, doubling spend on the previous year – and set a target to reach $2.5 billion by 2025.
  • $8.9 million contributed to charitable causes – a 15% increase over 2020, with 919 organizations supported – an increase of 40% over 2020.

In the real estate industry, we’ve always been used to collaboration, whether that’s between the owner of a building, the occupier of a building, local governments to get permits in place to retrofit or to build buildings. To drive the change necessary to meet the challenge of decarbonizing our cities and sector, it’s going to take an ‘all-in’ approach. At JLL, we are committed to playing our part and supporting our clients on their journey. To discover how, read our latest JLL 2021 Global Sustainability Report or download the summary report here.

 

Article by Cynthia Curtis, SVP and Corporate Sustainability Officer, Americas for JLL. She is responsible for elevating JLL’s sustainability program across the region and embedding it broadly throughout the business. Included in her scope is delivering against JLL’s net-zero carbon target of reducing scope 3 emissions from the properties that it manages on behalf of clients. She serves as the company’s representative on the World Green Building Council’s Corporate Advisory Board. Cynthia also collaborates with the Investor Relations team to ensure its investors have a more complete understanding of JLL’s competencies, goals and impacts through outreach and disclosure.

Cynthia serves on the Board of Directors for Greenback Renewable Energy Company, LLC, which is dedicated to investing in projects and managing capital for its public shareholders as well as institutional investors in the sustainable infrastructure sector. Previously, Curtis has worked in the public, private and non-profit sectors, including Ceres and CA Technologies, where she served as vice president and chief sustainability officer. 

She lives in the Boston area, is a member of the New England Women in Energy and the Environment, chairs the Wellesley Village Church Energy Committee, and built one of the region’s first gold LEED-certified residences.

Footnotes:
[1] Source: WorldGBC, Bringing Embodied Carbon Upfront, Sept 2019
[2] World Economic Forum, A Framework for the Future of Real Estate, April 2021
[3] Stadtwerke München’s (SWM) target, https://renewablesnow.com/news/munich-on-track-to-reach-100-renewables-in-2025-770469/
[4] For JLL offices over 10,000 sq. ft.

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