Seeing is Believing: Unlocking the Low-Carbon Real Estate Market
Leaders of the Urban Future (LOTUF) in partnership with Systemiq
This paper was commissioned by the Leaders of the Urban Future (LOTUF) project that aims to accelerate the decarbonization of unlisted, institutionally-owned real estate by working with and building on existing sector efforts. After the publication of this whitepaper, LOTUF joined forces with GREEN, and the work of LOTUF is now being continued in the systemic workstream of GREEN. Members of the systemic workstream are both new and existing members of GREEN and Leaders of the Urban Future (LOTUF).
In this white paper, LOTUF sets out what it sees as necessary to support a lo w-carbon real estate market aligned with a 1.5 degrees future. It identifies key gaps between this goal and current market practice, including limited transparency on carbon and energy performance and a disconnect between emerging 1.5-degree pathways and existing green certifications. These issues muddy demand signals and make it difficult to link carbon performance to value.
LOTUF proposes actions for real estate owners and other stakeholders to address these gaps and help activate a low-carbon market. While recognizing the role of regulation, the focus is on building the infrastructure of standards, pathways, certifications and data needed for a well-functioning voluntary market. Although out of scope for this project, the importance of climate adaptation and resilience is also acknowledged.
Decarbonising the built environment is not just fundamental to protecting long-term asset values but represents an enormous business opportunity, for those willing to seize it. This action paper – through the North Star – clearly sets out how to activate the low-carbon real estate market. Doing so will require a collective voice and, crucially, collective action. Investors and other industry players need to now come together to put this work into practice, accelerate the sector’s decarbonisation, and benefit from the results
Mikkel Bülow-Lehnsby, Executive Chairperson and Co-founder of Urban Partners
GREEN believes it is vital for the real estate sector to manage the climate risks it faces. Transparency regarding carbon and energy performance and managing progress against science-based pathways are crucial for achieving this. We therefore welcome and support the findings of this report – which align closely with our own investor statement – and urge real estate asset owners and managers to measure and disclose the performance of their buildings and incorporate this information into their financial decision-making. We also advocate for the standardisation of third-party green certifications to help improve transparency and comparability across buildings and portfolios
Maaike Hof, Executive Board Member of GREEN
