CLIMATE CHANGE

Weeks of torrential rain across northern Germany, Belgium and the Netherlands caused deadly fl ooding

Sustain and deliver

The real estate sector will be in high profi le at COP26 in November, as the world’s attention pivots from the pandemic to the urgent need to create sustainable buildings and communities. Ben Cooper asks what more the built environment — the single largest contributor to greenhouse-gas emissions — can do to help save the planet

SURVEYING the traumatic damage to the town of Schuld in northern Germany after violent flood waters engulfed the region and claimed nearly 200 lives, German chancellor Angela Merkel described the “unreal and horrific situation” before her. There were, she said, “nearly no words in the German language” to describe the devastation — devastation that was repeated in Belgium and the Netherlands after weeks of torrential rain finally took its deadly toll. Armin Laschet, state premier of North Rhine-Westphalia, said the flooding was a “catastrophe of historic dimensions”. The grim reality — and people’s worst fear now — is that Laschet might have been more accurate to say that this was a catastrophe of futuristic dimensions. Should the “bleak” future forewarned in the 2019 UN report into climate change become reality, extreme weather disasters like these could become alarmingly frequent. If the real estate industry was ever in denial about its role in contributing to the problem — or its potential to be part of the solution — there is one key statistic that the whole profession should keep in mind: of all carbon emissions from human activity globally, an astonishing

40% comes from real estate and construction. Put more bluntly: as an industry, real estate is the world’s largest generator of carbon emissions. True, thanks to progressive regulations, made more urgent since the Paris Accord of 2015, buildings are gradually becoming more efficient. But the cold truth remains that with every new build, regardless of sector and regardless of how efficient the end product might be, the world’s carbon emissions go up. So, with the 26th UN Climate Conference of the Parties — better known as COP26 — just around the corner and the world being called to answer for its actions, the question is: what should the real estate industry be doing to tackle climate change and address its own negative contribution?

A webinar hosted by London-based real estate agency Savills on World Earth Day in April, entitled Spotlight: Property and Carbon, gave a glimpse into the breadth and depth of the challenge. On the agenda were some big topics, all crucial to the overall conversation: the life cycle of real estate assets, the operational challenges sector-by-sector, embodied carbon in the construction process, the risk-reward equation, the so-called ‘green premium’ on sustainable buildings, low-emissions vehicles and the immense challenge of carbon offsetting. Some 45% of the UK-based attendees who responded to a survey at the start of the webinar said their company had a climate-change strategy in place, providing some evidence that progress has been made. But to push things further forward, the message was clear: major progress resulting in real results will only be made when real estate firms feel the motivation to do so. Describing the “horrors of climate change and why cutting emissions is so important”, Savills’ head of world research, Sophie Chick, identified the two key drivers for embracing sustainability and progressing to net zero — one of risk, the other of reward. On one hand, Chick said, there are the “risks connected with climate change and their associated costs”, defined by the Bank of England into three broad categories: physical risk, transitional risk (the cost of transitioning to more efficient portfolios and avoiding ‘stranded assets’) and liability risk (the danger of being held legally responsible). But on the other hand, there are the rewards that, as Chick explained, include the fact that owning sustainable assets can improve an investor’s reputation and deliver financial benefits.

Even with such motivations, Professor Dr Sven Bienert, head of the IRE|BS Competence Center of Sustainable Real Estate at the University of Regensburg, says that progress within the industry has historically been slow. But, he adds, the past few years have been an accelerant, both in terms of understanding and actions. “I’ve been researching sustainability in real estate for the last 15 years,” Bienert says. “We were the first university to have a dedicated sustainability chair. I have to say the first years were very much about the certifications but I feel that, lately, especially due to regulation picking up and more and more extreme weather situations, markets are now taking this agenda very seriously. Companies are now saying, ‘OK, now we need to do something…’. Everyone is working seriously on it now.” So what has happened to make real estate firms engage? Bienert says that, ultimately, it comes down to vested interests versus earlier perceptions that climate change was little more than a matter of corporate public relations. “It’s getting more and more financial,” he adds. “All these topics do now have a price tag. Before, people were talking but not doing anything. There’s less greenwashing now. The talks are more serious. They really want to get to the core of the topic. We are having discussions we weren’t having five years ago.”

Savills’ Sophie Chick: owning sustainable assets can deliver fi nancial benefi ts

University of Regensburg’s Professor Dr Sven Bienert

Professor Dr Sven Bienert: “Before, people were talking but not doing anything. There’s less greenwashing now”

Broadly, there are two potential roles for real estate. One entails investing directly in the infrastructure that will provide the sustainable energies of the future. The other lies in reducing the harmful impact of the industry’s own activities. It is the latter that Stephane Villemain, vice-president of corporate social responsibility at international real estate giant Ivanhoe Cambridge, says is the most immediately achievable for companies attending MIPIM. Like many major real estate firms, Ivanhoe Cambridge has its own ambitious target in mind — to be net zero carbon by 2040. It also has more immediate goals, including a commitment to reduce carbon intensity by 25% across its international portfolio by 2025 through energy-efficiency initiatives. And echoing Professor Bienert’s comments, Villemain is frank that self-interest is a key part of the motivation for real estate owners and investors: “We need to realise how exposed we are and how it’s clearly in our best interest to commit to strong climate action. That’s the solid point. There are a number of real estate initiatives out there. We must pick the ones that fit our own objectives best. It’s about future-proofing the portfolios.”

Stephane Villemain: “We need to realise how exposed we are and how it’s clearly in our best interest to commit to strong climate action. It’s about future-proofing the portfolios”

Of course, it is about more than just future-proofing investment portfolios. If the terrible floods in Germany, Belgium and the Netherlands showed us anything, it was that lives are also at risk — potentially millions of them — if serious action is not taken soon. As the world’s biggest contributor to carbon emissions, real estate has a greater responsibility than most to see that it is. 

PLANET

09.30 > 10.15 | Esterel Room - Palais 5

PLANET: NEW WORLD, NEW ERA How to achieve the impossible?

The impossible is not in the reality but in our own way of thinking. Therefore, we need to change our believes if we want to fi nd new solutions.

10.45 > 11.15 | Esterel Room - Palais 5

PLANET: NEW WORLD, NEW ERA Finance: lever to fi ght climate change

How can we improve the e ectiveness of climate fi nance? Is the fi nancial sector the answer to reach the climate agenda objectives? Is the fi nancial sector the answer to reach the climate agenda objectives?

Sponsored by CONFERENCES & EVENTS AT MIPIM

TUESDAY 7 SEPTEMBER

Bertrand PICCARD

Initiator & Chairman of the Solar Impulse Foundation

Lucie PINSON

Executive Director Reclaim Finance

MIPIM SUSTAINABILITY CHARTER TURNING SUSTAINABLE GOALS INTO A REALITY

5

GENDER EQUALTY

18

PARTNERSHIPS FOR THE GOALS

13

CLIMATE ACTION

ACT RESPONSIBLY WITH MIPIM

8

DECENT WORK AND ECONOMIC GROWTH

12

RESPONSIBLE CONSUMPTION AND PRODUCTION As the world’s leading real estate event, we bring together whole industries, in the process playing a role in educating and influencing behaviour with a large number of stakeholders.

MIPIM has an impact, and we are committed to minimising those that are negative while continually seeking ways to positively contribute to sustainable development and also to drive change in our own company.

Our approach is guided by the United Nations’ Sustainable Development Goals, prioritising those where we can do the greatest good and demonstrating leadership through programming content and communicating across MIPIM.

MIPIM IS COMMITTED TO:

Reinforce diversity in the programme of conferences 1

Offer low impact & seasonable food products for our events & cocktails: • Work with local suppliers • Possibility for the participants to buy local and seasonable products 3

Strengthen reusable, recycle and recyclable materials • Wood furniture for our events & cocktails • MIPIM bags • Use sustainable materials for stands and lounges • MIPIM employees and providers to have their own bottles • Sustainable cups throughout MIPIM • Reusable & ecological dishware • MIPIM badges and lanyards and collected at the end of the show 5

Reduce carpet, paper and plastic consumption • Provide drinkable water & stop use of single water bottles • Recyclable carpet or avoid carpet use when possible 7

Train MIPIM cars and buses drivers in eco-driving 9

2

Encourage & promote local employment for the AV equipment, stands, translators, hosts & hostesses, caterers 4

Food surplus given to local associations

6

Increase % of waste collecting or promote circular economy • Collect paper, plastic, glass, cans, cigarette butts, sanitary masks • Click and collect for materials 8

Offer French manufactured products • Hydroalcoholic gel • Sanitary masks