The ULI Europe Young Leaders Group, which currently includes over 1,100 members, is launching a new initiative looking at bridging the knowledge and innovation gap between the decarbonization goals set out by our industry/governmental leaders and the tools at our disposal to meet them. Several leading members recently hosted a roundtable discussion on this issue and provided a summary of the key takeaways and next steps to tackle this important issue.
In 2019, the United Nations Environment Program Global Status Report for Building & Construction indicated that “the real estate sector is responsible for 40 percent of the world’s energy consumption and one third of all greenhouse emissions.”
Against this backdrop we have witnessed, firsthand, the increasing importance of sustainability in our urban environment. The last years have seen a rapid acceleration of this trend, driven by consumer demand, capital markets and the commitments of large global organizations. The enormous emissions reduction potential, however, has remained largely untapped as we continue using fossil fuel-based assets and because of insufficient investment in sustainable buildings.
From research and conversations with a wide variety of stakeholders, the ULI Europe Young Leaders Group have identified a clear disconnect between industry/geopolitical rhetoric and the capacity of firms to keep pace with ever more ambitious environmental, social, and governance (ESG) targets.
For this reason, we invited selected experts across a range of fields, (real estate operators, developers, investors, property technology and green venture capitalists, corporate users, architects) at the end of September, under a Chatham House Rules framework, to help us deliver a focused, solutions-based approach, and kick-start a new initiative. Our findings in this discussion (summarized by the Klaxoon Mind Map below) have provided us with the foundation for a new initiative going forwards, which we will be calling “Bridging the Gap.”
Key takeaways from the meeting included:
- Many organizations are creating ambitious and admirable targets without currently having the ability to deliver them and without the correct network of stakeholders to help them on their journey. For several reasons:
- Attitude to risk, budgets, existing structures, inability to collaborate openly.
- Legislation and regulation also act as an obstacle on these topics.
- Research and development presents itself as a more impactful investment of resources than carbon credits.
- There is no viable pathway to net zero energy. The pathway to net zero carbon is much clearer but depends on factors that take place outside of the building.
- When thinking about decarbonization, embodied carbon is more likely to increase in importance.
Overall, we recognize the need to address the growing importance of sustainability in our industry and have identified decarbonization as the key pillar to hitting ambitious environmental targets.
Investor pressure is driving an increasing flow of commitments to net zero carbon that will be measured and tracked by way of science-based targets. Not a week goes by without further commitments to ambitious decarbonization plans made by nations and major global organizations.
In this context of changing investment criteria, accelerated commitments of companies/municipalities, and tightening legislation, real estate owners are faced with the need to change their proposition and product to remain relevant. Success in this period of increasingly disruptive change will be defined by the ability to adapt to the now rapidly evolving market environment.
The stock of ageing commercial buildings is sizable, and the transformation of these buildings to more sustainable operation models is a pivotal challenge that most of us will have to face head on. Given the importance of addressing the problem and the existing mainstream technologies at hand, the ability to innovate becomes a critical factor.
On a positive note, we believe that through examining the capabilities of company structures, moderated discussions around environmental topics and showcasing innovative ideas, we can help tackle the environmental challenges being faced. Our aim is to do this through collaboratively addressing the topic of carbon emissions with ULI members and by increasing their awareness around these topics. Over the next year we will be actively engaging with members and are looking to produce a steady stream of content and collaborative events.
For more information about the ULI Europe Young Leaders Group initiative, contact the Bridging the Gap lead, Philipp Braunwalder.