Buildings: A source and a solution to the climate challenge / Buildings: The villains or heroes of climate change
Posted on: 28/07/2023
Building a better tomorrow: reducing carbon and mitigating climate risks
The climate crisis is real. It’s happening right here, right now. Mother Nature is revealing our most compelling evidence. Global warming is creating higher temperatures, causing more extreme and intense weather events, from heat waves to droughts, hurricanes to flash floods, and wildfires. The impacts are significant and wide-ranging, wreaking severe damage to our buildings and infrastructure, societies, and economies.
According to reinsurance broker Gallagher Re, the total damage caused by weather disasters cost $360 billion globally in 2022. The 2023 World Economic Forum’s Global Risks Report warns that half of our most severe global risks are climate related. Climate change not only causes extreme weather events and major natural disasters, but it also brings about ecosystem collapse and involuntary mass migrations.
The Paris Agreement, ratified by 192 states including the UK, Europe, and the US, has increased global pressure to reduce carbon emissions and mitigate the impact of climate change. It aims to limit temperatures to 1.5oC or a minimum 2oC by halving greenhouse gas emissions by 2030.
Despite government disagreement about how to address climate change, there’s a rising wave of public pressure to recognise the already inflicted damage and take action. Meanwhile, the real estate industry has also reached a consensus on the urgency to act.
The role of real estate in tackling the climate crisis
The built environment is responsible for almost 40% of global greenhouse gas emissions. The significance of real estate taking measures to combat climate change cannot be overstated. It’s crucial that we reduce carbon emissions linked to real estate investment and infrastructure.
In light of more frequent extreme weather events, stricter regulations across the globe, and a heightened concern about reputational risk, the real estate industry is steadily adopting improved environmental, social, and governance (ESG) practices. Real estate investors are prioritising ESG risk management and integrating it into their investment decisions to a greater extent.
Buildings not only contribute significantly to carbon emissions and climate change but are highly vulnerable to the impacts of climate risk. In 2023, EVORA Global conducted its annual Insights into Real Estate Investment Sustainability (IRIS) report, surveying 102 respondents in real estate investment with $3.3 trillion Assets Under Management. Almost half (46%) reported that physical climate risk has impacted their real estate investments.
With this in mind, it’s imperative that the real estate sector makes buildings more resilient to the effects of climate change. Climate risk must be incorporated into real estate investment decisions. This means putting strategies in place to reduce property-related carbon emissions while safeguarding against physical and transitional climate risks.
Companies in the UK and EU are legally obliged to disclose their climate risks. In the US, the Securities and Exchange Commission (SEC) is considering a comparable requirement. A significant mindset shift means that more investors are acknowledging the importance of ESG and climate resilience in the US real estate industry. In Europe, investors have been conscious of climate change risks for some time and are taking bold steps to mitigate those risks in their real estate investments.
Although the term ESG has been politicised to some extent, there is a growing recognition that addressing climate risk and related ESG factors is essential, not only from a moral and ethical standpoint but also from a financial perspective. Companies that prioritise ESG now are more likely to be sustainable and resilient in the long run, making them more attractive to investors.
Collaborative expertise for a collective real estate transformation
Addressing the climate crisis is an ambitious challenge, but it also presents a new opportunity to influence large-scale change in real estate.
Since EVORA Global launched in 2011, climate risk and sustainability have climbed closer to the top of the ecopolitical agenda. And as the world wakes up to the impacts of climate change, we’re experiencing a synchronous demand for our sustainability services and ESG software, SIERA. Driven by this pressing demand for more sustainable real estate and infrastructure, our team has grown to more than 200 passionate and empowered professionals operating from regional offices in the UK, Europe, and the US.
Now the world’s leading sustainable real estate company, EVORA Global collaborates with real estate, infrastructure, and investment clients to improve their sustainability and carbon performance. We combine over a decade of experience with expert sustainability consultants, managed services, and proprietary data management software to help make buildings more sustainable, resilient, and environmentally responsible.
Recognised as a thought leader in the global real asset investment market, EVORA Global is also proud to feature in this year’s prestigious FT 1000: Europe’s Fastest Growing Companies. As ESG risk management gains investor importance and companies are increasingly mandated to disclose their climate risks, we look forward to implementing personalised sustainability investment strategies for climate-resilient assets, funds, and portfolios.
Together, we can leverage our human expertise and smart technology to take a stand against carbon emissions, achieve net zero, and mitigate physical and transitional climate risks for a safer built environment across the globe.