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Commercial real estate is connected to 40 per cent of global carbon emissions. What are Australia’s key players doing to take action?
At the end of 2023, global commercial real estate Colliers made a bold decision: they signed the Net Zero Carbon Buildings Commitment, which aims for the total decarbonisation of all buildings on the planet.
The commitment, which was founded by the World Green Building Council (WorldGBC), calls for emissions from buildings globally to be cut in half by 2030, and to hit zero by no later than 2050.
The decision by Colliers comes in the wake of growing concern in the commercial sector about the role of real estate service providers in helping clients adapt to a climate-conscious world.
Nearly 40 per cent of carbon emissions worldwide are connected to the built environment. As Sean Drygas, global ESG lead at Colliers, stated: “We have an outsized opportunity and responsibility to ensure our own operations are net zero.”
Chris McLernon, Colliers CEO, explained that “a sustainable future starts with the spaces and buildings we occupy, bring to life, invest in, and manage”.
So how are Australia’s leading commercial real estate firms facilitating a smooth net zero transition?
According to Matthew Clifford, head of sustainability and ESG at Cushman & Wakefield Asia-Pacific, “the greatest impact we can have is with and through our clients”.
“We manage or impact a huge number of client sites – perhaps a thousand times more than we occupy our own offices,” he said. “We can play a critical role in managing and reducing carbon emissions via active management of our client’s portfolio, helping them adopt and drive sustainability targets, and stay ahead of regulation or risks.”
Not only is carbon-neutrality essential to mitigate the impacts of climate change, Mr Clifford emphasised it also has “a fantastic business case”.
“Thousands of organisations across real estate and the wider industry have adopted or achieved carbon neutrality, and found immense benefits via improved financial returns, more engaged employees and stakeholders, ease of complying with regulations and so on,” said Mr Clifford.
Within their own offices, Cushman & Wakefield intend to halve carbon emissions by 2030, and achieve net zero by 2050, including achieving 100 per cent renewable energy globally by 2030 and electrifying their vehicle fleet.
Cushman & Wakefield is also facilitating similar transitions for clients “either through leasing, design, construction, ongoing operations or sales”.
Jenine Cranston, head of ESG at Knight Frank, also underscored the essential role that commercial real estate firms play in addressing the climate crisis.
Ms Cranston said: “Achieving the impact required on climate change in this ‘decisive decade’ for the reduction of carbon emissions in the built environment will require action by the entire industry.”
Once a “nice-to-have”, Ms Cranston emphasised that sustainability is “now fundamental to real estate strategy”.
In the last two years, demand for net zero roadmaps has “increased exponentially”, with momentum for decarbonisation spurred on by both investors and occupiers.
Recently, Knight Frank launched the data management and reporting platform Prism, which will “support our clients with the oncoming mandatory ESG reporting tsunami”.
Ms Cranston stated that the platform allows clients to access “audit-ready data for ESG reporting” in preparation for incoming regulations expected to begin rolling out Australia-wide in 2025.
“The level of ambition has shifted significantly amongst our clients, in a clear shift to taking action on climate change,” said Ms Cranston.
“The task is immense but, as a global real estate firm, Knight Frank is in a well-informed position to guide our clients on the journey.”
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