Some of the world’s largest property firms are “sleepwalking” towards climate disaster because of inadequate plans to weed out greenhouse gas emissions from building design and construction, according to a new study.
Fifty firms in property development, construction, and building management were assessed by the World Benchmarking Alliance and CDP, a carbon measurement non-profit.
More than half (54 per cent) of these companies do not have a climate transition plan, and just under half (44 per cent) do not have a target in place to cut their emissions, the study published on Wednesday (29 March) found.
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How buildings firms respond to the climate crisis matters, because the built environment – which relies on emissions-intensive materials such as steel and cement to build the world’s cities – accounts for 37 per cent of all man-made carbon pollution.
The choices that buildings firms make risk locking in emissions over the long term, since the design, construction, and renovation decisions made now will have a lasting impact on companies’ ability to decarbonise at the scale required to meet climate goals, the study warned.
Across the sector we see a lack of the urgent action required if we are to reduce emissions at the scale required.
Amir Sokolowski, global director, climate change, CDP
The research found that only five firms out of 32 companies with significant development or construction activities – including Philippine conglomerate Ayala, Sydney-headquartered Lendlease and South Korean operator Hyundai E&C – have a net-zero target that includes the in-use emissions of delivered buildings.
However, none of these companies have a time-bound roadmap for how they will deliver “zero-carbon-ready” buildings by their target year, according to the study.
In-use emissions refers to the climate footprint of buildings already being used.
Gecina, a French real estate firm, is the only operator in the study that targets the delivery of zero-carbon ready buildings in line with the International Energy Agency’s net-zero scenario requirement that all new properties built from 2030 will be zero-carbon-ready.
Only two firms, Germany’s LEG Immobilien and Gecina, are developing zero-carbon-ready buildings in their operations, the study found.
The research found that the firms most aligned with global climate goals were based in countries with national net-zero emissions targets for no later than 2050 – South Korea, Japan, United States and France.
These companies include Korean firm Hyundai E&C, Japan’s Mitsui, United Kingdom-headquartered Jones Lang LaSalle (JLL), Paris-based Unibail-Rodamco-Westfield (URW) and Gecina.
The study did not include Asian firms including Singapore’s City Developments Limited and CapitaLand, which routinely rank highly in sustainability surveys such as Corporate Knights’ Global 100 and the Dow Jones Sustainability Index.
Amir Sokolowski, CDP’s global director, climate change, described the findings as “alarming”.
“Across the sector we see a lack of the urgent action required if we are to reduce emissions at the scale required. Climate transition plans that include financial commitments are crucial to ensure that companies’ targets are realistic and achievable.”
“A climate transition plan should outline how a company plans to align with a 1.5°C world,” he said, referring to the global warming limit for avoiding catastrophic climate change laid out by the Paris climate accord.
“It must include commitments with clear timescales for their implementation, as well as tracking measures of success. The 54 per cent of companies in the benchmark who currently lack transition plans must urgently put these in place and companies must continue to disclose their commitments and actions to ensure they are kept transparent and accountable,” he said.
The research emerges just a week after a report by the Intergovernmental Panel on Climate Change warned – again – that the world is on the brink of disastrous levels of global heating.