As the case for net-zero spreads worldwide, commercial real estate is under pressure to meet climate guidelines set in motion by a wave of regulations imposing a phased approach to emissions reduction. This includes laws like the EU’sthat there must be a 50% reduction in direct building emissions and a 60% reduction in indirect emissions by the year 2030.
Unfortunately, many of the world’s buildings aren't on track to hit these targets. Historically, reducing carbon emissions within the built environment has been perceived as costly, burdensome and laborious, without tangible proof of bottom-line returns. As a result, many commercial property owners and operators are weary that the pursuit of sustainability, although a nice-to-have, doesn't always tie back to measurable business outcomes.
The second factor is that much of the existing built environment lacks advanced intelligence systems to reach the efficiency levels targeted by looming regulatory interventions. An"reveals that as much as 70% of the total inventory faces an alarming period of repricing due to fast-paced obsolescence, accelerated by Covid-19 but exacerbated by evolving environmental and health standards." Similar challenges exist abroad, where a lot of the built environment predates buildings in the U.
This means that building owners and operators who don’t start planning and investing toward emissions benchmarks now are likely to face substantial penalties and fines once regulatory standards become mandatory. In this case, the threat of financial impact will increase the speed at which compliance measures are deployed. The stakeholders that activate and scale first will be better positioned for growth in the market.