Real estate industry experts anticipate a growing acceptance of, and scope of responsibility for, the race to net zero in 2022, according to a new report from the Urban Land Institute’s (ULI) Greenprint Center for Building Performance in collaboration with Ferguson Partners. To accelerate decarbonization and create a more sustainable future for the built environment, the report emphasizes the need for unified leadership and a holistic approach driven by a long-term strategy, aggressive capital management, and agility to adapt to climate change.
ULI Global Sustainability Outlook 2022 addresses many of the challenges in the market and raises some of the issues that require more industry leadership and collaboration amid the growing climate crisis. The report is an annual publication first launched in 2021, and is a vehicle for ULI to share insights from member experts on the key environmental, social, and governance (ESG) issues that will impact strategic decision-making each coming year.
“The real estate sustainability industry is evolving and advancing faster than ever before,” said Marta Schantz, senior vice president of the ULI Greenprint Center for Building Performance. “Rising stakeholder expectations from investors, governments, and occupants are increasing pressure on real estate owners and developers to address their impact on climate change in transparent and accelerated ways – all while still achieving traditional returns and fiduciary duties. The Global Sustainability Outlook 2022 demonstrates the increasing sophistication of the global real estate industry when it comes to ESG, the progress of which is critical amidst the urgency of the climate crisis.”
The second annual Sustainability Outlook is based on interviews with members of ULI Americas Sustainable Development Council, ULI Europe Sustainability Council, and ULI Asia Pacific Resilient Cities Council who were asked what sustainability topics and issues are on the rise, why they matter, and what the industry should do about it. On the basis of the knowledge shared by these experts, Greenprint identified five issues that will shape real estate decision making in the months ahead and beyond:
- Advancing the net zero agenda: Many leading companies have already set realistic net zero goals for their portfolios, but for most, the adoption curve is still in the early innovation stage. As more firms buy-in to carbon neutrality, the scope of responsibility real estate will be held accountable for will expand.
- Navigating the reporting and measurement landscape: Data transparency and accuracy on building performance is going to become more important, and the burden for owners to measure and report on that is only going to get greater. Clear guidance on the impact measures of ESG performance and how to interpret them is needed.
- Confronting climate risk: Risk assessment is critical to the long-term viability of our buildings and communities, and resilience is a key consideration. Making progress in addressing climate risk, both physical and transition, will come back to regulatory consistency.
- Prioritizing existing buildings: The real estate industry cannot reach net zero carbon without developing a cost-effective and feasible way to deeply retrofit existing buildings. Innovations that advance the sophistication and impact of building equipment, materials, and operations are quickly strengthening the business case for decarbonization.
- Focusing on building materials: The life cycle impacts of buildings start with its materials, both in terms of health and sustainability. Tools to measure building materials’ health and embodied carbon content are available though not yet widely adopted, with significant support needed from the supply chain to facilitate improvements.
“We are proud to partner with ULI on this year’s ULI Global Sustainability Outlook,” said Ferguson Partners’ managing director and global head of innovation + technology, Linda Isaacson, who is also a ULI Global Governing Trustee and sits on the ULI Americas Executive Committee. “The excellent work of ULI to convene experts to raise awareness and share best practices will help bring much-needed progress on all these topics amid the growing climate crisis that we face across the globe.”
The full ULI Global Sustainability Outlook 2022 report is available on ULI’s Knowledge Finder platform.