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Australia is leading the way when it comes to sustainability in a region that produced over half of global carbon emissions in 2021, CBRE’s “Asia Pacific Sustainable City” ranking revealed.
Evaluating cities within the region according to a range of environmental factors, including greenhouse gas emission reduction, physical climate risk, water stress, air pollution, renewable energy use, green bond issuance, and green office building adoption, the report rated five Australian cities — Sydney, Canberra, Melbourne, Brisbane, and Perth — as “currently performing well and will continue to improve”.
Using Z-score methodology to standardise and normalise data across eight variables, CBRE found the five Australian cities outperformed the APAC average. Their results were influenced by several real estate-related policies and targets, including provisions requiring commercial offices that exceed 1,000 square metres to provide energy-efficiency information and the Greenhouse and Energy Minimum Standards Act (2012).
Australian cities reportedly benefit from the fact the nation is 15 years past its peak Co2 emissions period (2007), as well as the net zero targets for 2050 that are in place.
CBRE anticipates that, alongside New Zealand and Japan, the island nation is expected to achieve further significant emissions reductions in the forthcoming decade.
Physical climate risks, such as floods and earthquakes, are only expected to place 5 per cent or less of the cumulative GDP of the five ranked Australian cities between 2015 and 2025. By comparison, that figure rises to nearly 45 per cent for Manila.
As a result, asset resilience against climate risk is becoming a more important location selector factor for occupiers and investors. Of similar importance to tenants is air pollution, specifically indoor air quality. Australia’s five cities ranked below WELL’s acceptable air pollution levels.
Moreover, Australia has recorded significant growth in green financing for real estate alongside Japan, Singapore, Korea, and India. Across the country, the amount of green bond proceeds spent on buildings rose from approximately $1 billion US dollars in 2020 to just above $2 billion a year later.
Similarly, when it comes to green building adoption, Sydney is the APAC leader regarding the portion of green office buildings at approximately 90 per cent, while Brisbane ranks third with roughly 85 per cent. Melbourne (sixth), Canberra (seventh), and Perth (eighth) also feature in the top 10.
CBRE explained this trend is due to government regulations that require all new Australian buildings completed within the last three years to be green-certified.
However, Australia isn’t a regional leader on all fronts. Despite renewable energy almost doubling between 2016 and 2021 due to renewable energy laws and schemes, the current portion of primary energy production from renewable sources (approximately 15 per cent) is well below New Zealand’s 40 per cent.
Additionally, Australia’s water stress is projected to slightly increase in the decade between 2020 and 2030.
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