The Sustainability Challenge: Old vs. New
Why the greenest building is the one that is already built - a look at sustainable solutions to drive change in the real estate industry.
The climate crisis has created heightened expectations for greater accountability, transparency and action.
Growing pressure on organisations at every level—from employees and shareholders to tenants and clients—as well as from society at large, is motivating businesses to adopt more responsible and sustainable business practices.
This decade is a pivotal time to decarbonise the built environment and create spaces for a resilient future. However, in order to translate good intentions into achievable targets, we need to dive deeper and apply critical thinking.
New Zealand must start now
By and large, cities’ climate action plans do not give sufficient attention to buildings. This leaves a massive gap, given their contribution to overall emissions. According to estimations by the World Green Building Council, buildings account for 60 percent of carbon emissions in cities.
While some cities overseas are creating the regulations, incentives or conditions that can accelerate the decarbonisation of the built environment, New Zealand’s own metropolises lag in this area. However, those waiting to lean into these structural changes could be too late and may need to play significant catch-up in years to come.
The New Zealand Government splits its sustainability focuses across many areas. The complex nature of building emissions poses a challenge given the fragmented, largely privately-owned building stock in New Zealand.
New builds are only part of the solution
In initial efforts to achieve ‘green’ status, local governments have focused attention on new buildings - and for good reason. It’s often easier to start with a ‘clean slate’ and take advantage of the latest processes and technologies.
While work needs to be done to make ‘net zero’ and ‘circularity’ mainstream in the development process, it isn’t entirely through new development that we will decarbonise the built environment.
Knocking down an old building to build a new—albeit greener—building is ‘net net’ more detrimental than retrofitting existing stock.
40-50% of the world’s raw materials are consumed in the development of buildings.
Of the almost 40 percent of global greenhouse gas (GHG) emissions that stem from the built environment, 11% is embodied carbon from the construction process.
The greenest building is the one that’s already built
“The business community globally is committed to ESG* and, in particular, we are seeing a growing focus on Net Zero Carbon targets,” says Caitlin Uren, Head of ESG – Capital Markets at JLL Australia. “As an agency, we are uniquely placed to influence capital investment globally into more sustainable investments and to encourage and clarify the value add and returns associated with repositioning existing assets.”
ESG strategy that drives real impact isn’t just an opportunity – it will soon be a necessity, believes Mike DeDera, who was recently appointed Sustainability Lead at JLL NZ.
JLL’s Decarbonising the Built Environment report found that 63% of leading investors strongly agree that green strategies can drive higher occupancy, higher rents, higher tenant retention and overall higher value.
The retrofitting challenge
Retrofitting a city’s existing building stock to net zero carbon is central to decarbonising a city’s economy. “New buildings and construction alone will not get us to net zero,” says DeDera.
The retrofitting challenge for cities is huge and the current pace must be accelerated. Most mature cities are seeing renovation rates of only one to two percent per year and, even then, most are not renovated with net zero carbon or circularity in mind.
“We first need to prioritise the better use, repurposing and retrofit of existing building stock and infrastructure across the city to ensure their optimal use, before new construction projects are considered,” says DeDera.
A key component of DeDera’s new role entails dealing with investors in the built environment to reduce carbon emissions of existing buildings.
“Most landlords want to attract strong, global tenants (like JLL). The problem with attracting these businesses, particularly those headquartered in Europe, is they have their own climate targets set,” he explains. While New Zealand hasn’t yet imposed mandatory regulations—although it’s likely in the not-too-distant future—the market is regulating itself regardless. “In order to attract clients of the desired calibre, buildings need to consider their carbon credentials,” he adds. It’s a key part of the decision-making process, hence companies are less likely to entertain a building that doesn’t meet their sustainability criteria.
What we’re doing
JLL NZ is committed to supporting clients through this transition and positively impacting the decarbonisation of the built environment. It’s an essential step to future-proofing clients’ buildings to meet impending regulations.
“Many of our clients have sustainability commitments but it can be a challenge for them to identify how they deliver on those ambitions,” says Uren. “Our goal is to support clients through every stage of the real estate journey, in a way that prioritises energy efficiency, greater collaboration between landlord and tenants and ultimately protects the value of our clients’ portfolios.”
At an internal level, JLL is committed to reducing our carbon emissions by 51 percent by 2030 and 95 percent by 2040. “This encourages us to influence all landlords of the assets we have under management to decarbonise their buildings by this time too,” says Uren.
JLL is leading from the front on this and has committed to the World Green Council Commitment: To achieve net-zero operational carbon emissions across all JLL offices by 2030. This means every JLL office globally must be operationally net zero in 7.5 years.
In a powerful call to action for the industry, the New Zealand JLL offices are switching to certified net-zero energy, dramatically reducing our Scope 1 emissions, and we will achieve this implementation within the year. The next decade will be critical if real estate is to truly play its part in a more sustainable, just and equitable future – a net-zero future.
New JLL NZ Position: Mike DeDera, Sustainability Lead
The sustainability space is inherently driven by passion. It’s also, for many, an issue that’s personal.
“As a father, I often think about what kind of planet my children will inherit,” says DeDera.
“The future generation stands on the precipice of a climate crisis and I want to do everything I can to leave the place better than I found it.” While it can feel doom and gloom, and sometimes overwhelmingly beyond our control, it isn’t.
When asked what attracted him to the role, DeDera says it felt like a position where he could enact change and make a real difference.
*Explained. What is ESG?
ESG means using Environmental, Social and Governance factors to evaluate companies and countries on how advanced they are with sustainability.