New Industry Task Force to Develop a Real Estate Carbon Pricing Strategy

Seven leading industry associations have announced a new taskforce to develop a comprehensive carbon pricing strategy for the real estate sector that takes a value chain perspective and enables pricing to be incorporated into investment decision making and accelerate its adoption.

Initially developed as part of the C Change program, which was set up by ULI to mobilize the industry to accelerate the decarbonization of the built environment across Europe, the carbon pricing task force is being planned with professional membership organizations including: EPRA (the European Public Real Estate Association), GREEN (Global Real Estate Engagement Network), INREV (the European Association for Investors in Non-Listed Real Estate Vehicles), IIGCC (the Institutional Investors Group on Climate Change), RICS (the Royal Institution of Chartered Surveyors), and WBCSD(the World Business Council for Sustainable Development).

Lisette van Doorn, CEO, ULI Europe, comments, “Real estate is the second-largest contributor of carbon emissions globally, and so industry-wide collaboration is essential for us to jointly develop standards and find solutions we need to tackle climate change. I am so pleased that we are partnering with so many prestigious and influential membership bodies operating across real estate and investment in Europe, and I look forward to working closely with them as we develop the program.”

“While an important tool to help build the business case for low carbon solutions, a recent ULI C Change survey demonstrated that internal carbon pricing is still a ‘minority activity’ in the built environment. Lack of knowledge and consistent data, including financial and educational, were identified as the main barriers to implementation. And that’s why education will play an equally important role in this programme as the co-creation of a strategy.”

As part of the carbon pricing strategy program, a series of workshops will be organized in May aimed at understanding and implementing internal carbon pricing. The program will comprise two streams, one aimed at experts and those already implementing carbon pricing, and a workstream designed to educate and upskill practitioners including developers, owners, and managers who have yet to implement an internal carbon price and are keen to learn more and collaborate.

Hassan Sabir, Finance & ESG Director, EPRA, said, “Across the industry, we all need to collectively take responsibility for the impact the built environment has on our planet, and coordinate action. Collaborating with all actors across the entire value chain of the real estate industry to introduce carbon pricing as a mechanism for lowering emissions of buildings may prove to be one of our biggest opportunities. Through which, we could collectively make a real difference in the transition towards a low carbon economy and help create the sustainable future we all urgently need.”

Vincent van Bijleveld, Director, GREEN, commented, “The built environment is lagging in integrating carbon pricing in financial decision-making, while taking this into account is simply good business risk management given the long-term nature of real estate and the likelihood of future regulatory changes. This initiative aims to ensure that carbon pricing is firmly placed as an actionable item on our industry’s collective agenda.”

Lonneke Löwik, CEO, INREV, comments, “As a collective initiative, the new task force is a potential game-changer for the real estate industry. It aims to create a level playing field and enable informed decision-making in pursuit of both environmental and investment goals. It also reflects INREV’s commitment to broadening market participants’ knowledge and understanding of critical issues – specifically in this case, how best to implement effective carbon pricing.”

Hugh Garnett, Investor Practices Senior Programme Manager - Real Assets, IIGCC, said, “IIGCC is pleased to contribute to this important collaborative initiative looking to address a complex gap in the market and promote adoption of carbon pricing for real estate investors. The development of an industry wide approach to carbon pricing will assist investors to manage climate-related risk and drive investment into sustainable buildings to decarbonize the real estate sector.”

Justin Young, Chief Executive, RICS, said, ‘“RICS is delighted to be part of this initiative; reducing emissions across the built environment is essential if we are going to tackle climate change. RICS has a particular focus on providing practical support to the built environment sector. Creating a carbon pricing framework for the real estate industry is another vital tool to ensure investment is being driven into sustainable buildings.”

Roland Hunziker, Director, Built Environment, WBCSD, comments, “Sustainable transition in the built environment requires mobilizing financial resources to close the investment gap the sector faces. We must halve emissions by 2030 and reach net zero by 2050. Carbon pricing can be an effective tool to help achieve these goals, and this important initiative, aligned with the Market Transformation Action Agenda, will ensure a consistent and coordinated approach across the entire built environment value chain.”

The C Change Carbon Pricing workshops will begin during the week commencing 20 May and there will be an additional session organized for participants at the ULI Europe Conference in Milan (10-13 June). The aim is to then preview the findings of the workshops to members at the C Change Summit in the Autumn.

Contact [email protected] if you’re interested in supporting the development of the C Change Carbon Pricing Strategy or would like to find out more.

The C Change program is sponsored by the following organizations: Catella, Hines, IPUT Real Estate, Longevity Partners, Patrizia, PIMCO, Redevco, Savills Investment Management, Schroders Capital, Sonae Sierra, and Urban Partners.

The C Change program is supported by 103 Ventures.