Cities across the U.S. have been working with businesses and investors to accelerate emissions-cutting policies that mobilize efforts for more sustainable urban environments.
Increasing urbanisation and a growing understanding of the realities of climate risk, are driving the momentum, says Cynthia Curtis, SVP, Sustainability at JLL.
“We are already starting to see more public-private partnerships between developers, property management companies and city planners as understanding grows that properties must adapt for the future.”
While most action has historically been in the country’s coastal cities, that’s changing.
Chicago is leading the charge. As the world’s first city to sign onto the UN Principles for Responsible Investment, the city recently screened its entire investment portfolio – around US$8 billion in assets – for GHG-emitting factors. The measures are part of the Chicago Climate Action Plan (CCAP) to reduce greenhouse gases by 25 percent below 1990 levels by 2020 and 80 percent below 1990 levels by 2050, often referred to as 80 by 20, in order to avoid the worst global impacts of climate change.
Philadelphia is another major city prioritizing sustainability measures. Between 2008 and 2014, a city-run programme helped retrofit 17,000 homes for energy efficiency.
Atlanta’s city council recently adopted a plan to transition the city to 100 percent clean energy by 2035.
Cities leading the charge here are set to have a major outcome. The built sector is responsible for upwards of 40 percent of the world’s Greenhouse Gas (GHG) emissions.
The U.S. is the leader in Leadership in Energy and Environmental Design (LEED) – the world’s most widely used green building program – with over 400 million of LEED-certified square meters.
But to succeed, these city programs require cooperation with both property companies and investors.
Property companies’ number one approach has been to focus on energy efficiency initiatives, says Tom Roundell Greene, Director, Global Sustainability at JLL. “We are seeing significant improvements in heating, ventilation and air conditioning equipment, along with greater use of efficient lighting, and a focus on improved plant and infrastructure.”
Efficient lighting equipment is proving one of the most cost effective and impactful ways to reduce building emissions, as it directly and immediately reduces energy consumption, he says. “And the improvements in technologies, coupled with reduction in acquisition costs have accelerated adoption.”
And, it’s not just good for the environment, it’s good for business too.
“The business case isn’t around reducing emissions per se, rather the benefits that flow from the actions taken,” says Curtis.
Lower operating costs stemming from efficiency gains is an obvious one. Then there is risk mitigation, brand enhancement and heightened innovation since emissions reduction goals often foster more innovative processes. Employee recruitment, retention and productivity are another.
“Evidence now shows that a real estate strategy incorporating sustainability not only improves property and asset value and enhances the occupier experience, it’s the hallmark of true leadership,” says Roundell-Greene.
So far, some 860 companies worth nearly US$17 trillion in market capital, equal to 20 percent of global GDP, have committed to steps reducing their carbon footprint, from food and beverage giants like Nestlé, Kellogg and Coca-Cola, to Gap, CitiGroup, General Motors and L’Oréal.
For many the commitments challenge standard operating procedure, leading to process changes and innovations.
Coca-Cola’s goal to reduce the carbon footprint of “the drink in your hand”, has already reduced CO2 by 19 percent below 2010 levels and made an impact throughout the supply chain.
“Sustainable innovation actually enables business transformation,” said Company Chairman, Muhtar Kent.
Click to read more on why global real estate is taking up the sustainability challenge.