Real estate firms are increasingly realizing the importance of setting carbon reduction and climate mitigation goals.
In late 2018, the United Nations Intergovernmental Panel on Climate Change (UN IPCC) published an alarming report stating that planet temperatures likely will climb 1.5 degrees Celsius above pre-industrial levels by 2030. The IPCC went on to explain that if climate change–mitigation strategies are not enacted, the risk of catastrophic disasters will increase in the coming years.
With buildings accounting for estimated 40 percent of the world’s carbon emissions, real estate companies can take solace in knowing there are ways to reduce those emissions and address the global risk, all while increasing asset value. But with the wide range of potential sustainability goals and metrics, what are real estate leaders doing to identify and set the proper targets?
Whereas many companies start their sustainability efforts by setting a static goal, such as reducing energy use by 20 percent by 2030, the Science Based Targets (SBTs) approach provides backbone and introduces strategy to carbon-emission reduction goals instead of ambiguity. SBTs are the most comprehensive, data-driven approach to achieve widespread reductions in carbon emissions.
SBTs are goals set by companies across all sectors to reduce their greenhouse gas (GHG) emissions as part of a corporation-driven effort to keep global temperature increases under 2⁰C. The SBT initiative is a cross-collaborative nongovernment organization that oversees and approves all targets.
The data-backed SBTs often specify the reduction percentage, deadline year, and baseline year for each scope of emissions (scope 1, scope 2, and scope 3). For example, Kilroy Realty Corporation has committed to reducing its scopes 1, 2, and 3 emissions on an absolute basis by 31 percent by 2030 from a 2017 base year, with a longer-term goal of a 72 percent reduction by 2050 in alignment with the IPCC Fifth Assessment Report.
More and more leading real estate companies are turning to SBTs as their chosen method for ensuring that energy and sustainability goals are in line with the Paris Accord (the agreement from the U.N. Framework Convention on Climate Change detailing needed global action on GHG emissions) and that their reductions are at the level necessary to keep global carbon emissions in check.
So far, 546 companies across all sectors have committed to taking action through the SBT program with either a pledge to reduce emissions or fully approved targets. Of those 546 companies, 200 have approved targets. To date, 34 real estate companies have either pledged or received target approval.
ULI’s Greenprint Center for Building Performance recently published a primer for real estate companies looking to start their journey toward approved SBTs. In the primer, representatives from Prologis, Kilroy Realty Corporation, CommonWealth Partners, and Brookfield Properties (formerly Forest City Realty Trust) share firsthand experience in setting Science Based Targets, explain their companies’ SBTs, and provide tips for other firms looking to set their own targets.
ULI Greenprint members are already moving the needle forward on carbon reductions by committing to a 50 percent emissions cut by 2030, and SBTs complement this momentum by offering a data-driven method for real estate leaders looking to gain a competitive edge. Tips shared by these experts in the primer include how real estate companies can manage scope 3 emissions—emissions that result from a company’s operations and actions but not directly controlled by the company—and what free tools and consulting services are available to those just starting their efforts to cut reduce emissions.
Companies interested in SBTs can pledge to take action as they work through the steps toward achieving an approved target.
Jessica Loeper, director of sustainability for CommonWealth Partners, which is currently working through getting its targets approved, explained why her organization chose SBTs.
“CommonWealth Partners is committed to the decarbonization solution for climate change, while also increasing business resilience and improving profitability,” Loeper says. “Pursuing the Science Based Targets initiative enables CommonWealth Partners to be proactive about our scope 3 emissions and ensures that, as a portfolio, we are minimizing carbon impacts of our assets. We are proud to take climate action to help maintain global temperatures under the 2°C threshold.” CommonWealth Partners is currently awaiting final approval of its submitted SBTs.
More information on setting Science Based Targets in real estate and the SBT efforts by the interviewed companies can be found in the primer, Science Based Targets: The Next Level of Carbon Reduction and Sustainability Goals in Real Estate.
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