Tackling CRE’s Carbon Footprint
November 07, 2023
The investigation into the carbon reduction policies of the world’s 75 largest real estate owners and managers reveals that while some progress has been made, it is largely driven by regulations and not voluntary action. One investigation found that almost half of these organizations have no decarbonization targets for their real estate portfolios, and the majority of those with targets only address a small portion of their greenhouse gas emissions.
The correlation between an organization’s net-zero carbon target and the target of the country in which it is headquartered is strong, indicating that regulations play a crucial role in shaping real estate owners’ and managers’ emission reduction strategies. Organizations are more likely to take action and set more ambitious targets when there are clear regulations in place that align with climate goals. For example, New York City has some of the stringent real estate emission reduction laws in the world, and it has resulted in behavioral change among property owners.
However, experts point out that regulations are still not widespread and often lack clarity. There is a need for more holistic and comprehensive regulations that consider factors such as embodied carbon and Scope 3 emissions (emissions from tenants and construction activities) at the municipal, national, and global levels. Some interviewees also express concerns about the effectiveness of carbon offsets as a mitigation strategy, and the need for organizations to prioritize reducing their own emissions rather than relying solely on offsets.