Buildings and their construction together account for 36% of global energy use and 39% of energy-related carbon dioxide emissions annually, according to the United Nations Environment Program. In order to meet a 1.5˚C mitigation target, businesses, investors, developers and occupiers will all have a large role to play in driving necessary change.
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change” Charles Darwin
The current pandemic gives us an insight into how drastically natural disasters can affect the economy, and in turn the property sector. In the current Covid-19 climate, different property assets and sectors have been affected in very different ways. There has been a surge in Ecommerce which has put pressure on supply networks and boosted demand for logistics, while there is drastic need to repurpose some traditional retail properties. The thriving social scene of Ireland’s bars and restaurants are now lifeless and vacant while healthcare and nursing homes could alter significantly to meet distancing requirements. Meanwhile, in the office sector, a number of executives including Google CEO Eric Schmidt expect that office accommodation will be in greater demand after the coronavirus pandemic subsides as companies will need more physical space to operate. The question is if we can provide the required SMART buildings?
In their April report, consultancy firm McKinsey stated that “Commercial real estate must do more than merely adapt to coronavirus”. They went on to say that “The need for climate action remains as critical as ever” and talked about “building resilient infrastructure’ which they say could “help create much needed jobs and spur the economy”.
While businesses should not seek to directly benefit from a pandemic, those who are faster to adapt will clearly emerge from this unprecedented period in a stronger position. Property developers and investors have an opportunity to make transformative changes, to futureproof their portfolios with sustainability at the core of their strategies.
Erratic weather trends from hurricanes to heatwaves and fires to flooding events of recent years now present direct risks to the economy as a whole and have implications for all sectors of the property market. In order to protect assets and investments, obvious changes are needed for the property sector such as the rollout of net-zero emissions SMART buildings, closed loop value chains, integrating renewable energies, and deep retrofitting of less efficient, older buildings.
“Until everyone on the whole planet gets sustainability, there’s a real competitive advantage in moving in this direction aggressively.” Neil Carson, Johnson Matthey CEO
The “take, make, waste” mentality must be permanently replaced with a circular economy. Aside from environmental, ecological and socioeconomic benefits, meeting international standards such as the LEED and BREEAM criteria enhances any portfolios marketability and will offer a higher rate of return. With energy usage increasing year-on-year, we need to aim to build more than just sustainable buildings and strive instead for sustainable cities, encouraging more sustainable commuting, embracing new innovative technologies and using cleaner renewable energies.
Sustainability is not just about climate change, it’s about people change.
Sustainable buildings will result in operational improvements and just as importantly, can create a better tenant experience by increasing productivity as well as promoting a sense of community and ensuring workplace wellness.
Written by: Jamie Cole
Edited by: Marie Hunt
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