CoStar News, 24 November 2022 | 14:14
By Natali Cooper, Managing Director and Head of Portfolio & Asset Management & ESG – GLP Europe, and Steve Malkin, CEO & Founder – Planet Mark
As we approach 2023, society is left with seven crucial years to effectively convert net zero pledges heard at COP26 into tangible progress. Known as the ‘decade of action’, the period leading up to 2030 is widely considered to be the most important period for tackling the climate emergency. With the swelling global energy crisis giving rise to price shocks, consumers and businesses alike face myriad hurdles in mitigating climate change whilst keeping the lights on.
The global real estate industry – a sector that demands a consistently large amount of energy for its construction and operations – has a vital part to play. Accounting for almost 40% of global emissions, this huge industry has an outsized effect on our planet, but it also has a significant capacity for positive change. It is imperative that real estate, and logistics in particular, acknowledges its impact along with its responsibility to enact change, and put a framework in place to ensure emissions are curbed and eventually eliminated.
A helpful starting point for the sector is through the adoption of frameworks such as the Planet Mark Development Certification. Planet Mark is an internationally recognised sustainability certification for all organisations and real estate, acknowledging continuous progress, encouraging action and building an empowered community of like-minded individuals. It verifies and measures carbon and social data to reduce emissions and support the UN SDGs.
Certifications such as Planet Mark can help developers, suppliers, tenants, and related parties not only to manage and reduce their carbon footprint, but to unlock hidden social and economic value. A good example is GLP, which has been working with Planet Mark to certify their new developments since 2019, achieving an average 26% reduction in embodied carbon against the notional baseline across 22 developments.
GLP also measure and reduce the emissions associated with their business operations through the Planet Mark Business Certification, targeting a 5% year-on-year reduction through the implementation of a range of energy-saving technologies and stronger data management. Through this integration of these sustainable frameworks, the firm has demonstrated to investors, customers, and shareholders that sustainability is important to the company.
Planet Mark’s Property Certification quantifies a building’s ongoing operational carbon footprint and sets annual reduction targets. In doing so it instils a culture of continuous improvement, encouraging companies to commit to wider ESG measures.
In addition, small adjustments across building design and management can result in significant improvements in operational energy efficiencies, which lower both costs and impact on the environment. Controlling temperature set points within a building is just one of these low-cost but effective energy-saving initiatives. Switching to more efficient lighting could be another way of taking control; using solutions such as LED lighting means that maintenance and replacement costs are also reduced. Finally, maintaining and servicing equipment and infrastructure can further streamline energy usage, for example ensuring air conditioning units remain unclogged.
Given today’s growing energy crisis, one of the key benefits for UK businesses who achieve Planet Mark Certification is an economic one. Reducing heat and electricity usage and maximising building efficiency brings about huge energy cost savings, which can be critical to businesses’ survival given the crippling energy bills being faced across Europe. Reducing impact on the environment is not only the right thing to do, but a logical step in ensuring a business’ longevity.
Companies which integrate sustainable business practices in turn become more attractive to outside capital due to their decreased level of climate risk and improved economic longevity. Implementing sustainability into the life cycle helps boost investor confidence due to the concrete commitment to ESG frameworks. Crucially, businesses that integrate sustainability into their core business models are exceedingly better positioned to thrive in a future where environmental consciousness is front and centre.
When asset owners, occupiers and certifiers can come together in full collaboration it should be possible to make a material difference to emissions from logistics and commercial real estate assets. Such approach will also permit better market transparency and allow stakeholders to evaluate and compare assets performance. The challenge is to remove the barriers to take up making continual improvement achievable and the framework affordable. Developers and occupiers must work in harmony to ensure continuous milestones are met in line with climate goals. GLP’s collaboration with Planet Mark makes this very simple as it provides the collaborative framework but crucially also removes the key issue of cost.
By committing to sustainability and carbon reduction, businesses are able to demonstrate to their investors, customers, and shareholders that they are proactively thinking about the industry’s role in addressing climate change. But the industry needs more of this type of collaborative approach. Together, we have the ability to make real, tangible impact.