The Climate Pledge: What are some of the challenges to reducing carbon emissions that are specific to the commercial real estate sector?
Meezan: The pathway to net-zero buildings is clear. We know it's about reducing energy consumption in the building; switching to renewables, and ultimately on-site generation; and credibly offsetting any remaining emissions. Where companies struggle is assembling the right teams, and making sure they’re embedded across every stage of building services. It’s important to acknowledge internally that this goes above and beyond what we're typically asking our real estate teams to do. Before you get to the tactics, you have to create a designated team that’s structured in a cross-functional, multidisciplinary way.
The industry still struggles with a massive awareness gap. We’ll tell people who’ve been in commercial real estate for their entire lives that the operations and construction of buildings accounts for
nearly 40% of global carbon emissions, and they’ll be shocked. They don’t realize we’re in a sector where our work in climate really has an impact, and that we can’t afford to wait. We’ve taken it upon ourselves to be leaders, to show the rest of the sector how to do this work, and to demonstrate what the opportunity is.
The Climate Pledge: Let’s talk more about that opportunity. Are you seeing increased demand for lower-emission buildings, and how are you positioning yourselves to capture that demand?
Meezan: There’s been a massive acceleration in demand over the past couple of years, and frankly a lot of companies aren’t ready to meet it. More than
6,000 companies have adopted science-based targets to reduce their emissions, and the vast majority of those commitments were made over the past two years. For most companies, building emissions aren’t the first part of operations that they’re focused on mitigating, but they are ultimately an important part of meeting Scope 1 and 2 targets.
We’re in a situation now where demand for low carbon buildings is about to significantly outstrip the supply. We
conducted research in 21 cities globally and calculated that 30% of the projected demand for low-carbon spaces will not be met by 2025 based on corporate sustainability commitments and the current levels of office stock and the development pipeline. When you get to 2030, the data shows a gap between demand and supply of 70%.
We’re working with both owners and tenants to reduce that gap. Building owners have been reluctant to invest in emission-reduction projects because they feel like the incentives aren’t in their favor. Now we’re taking this research to them and showing them the market opportunity that’s there if they move quickly. On the tenant side, we’re advising clients that they can’t afford to wait. If they wait until 2030 to look at their building emissions, there’s a chance there won’t be any lower-emission building stock available to rent.