Refurbishment needed to save planet not new build

[Photo: Dynamic/Wang, Unsplash]

“Stop building to save the environment”, delegates heard at Real Asset Media’s Re-setting Real Estate: Covid-19 and the rise of ESG and social purpose briefing, which was held online on REALX.Global recently.

“The pandemic will go away but not climate change, which is the biggest threat,” said Olivier Elamine, CEO, Alstria Office REIT. “We need to stop building and start refurbishing existing buildings. Embedded carbon is 50% of the problem, so if you are still building greenfields developments then you’re not concerned with climate change.”

Alstria, the biggest owner of offices in Germany, was the first company to publish a sustainability report and to set emission reduction targets and believes ESG should be a real commitment and not a marketing exercise.

“As a landlord we find there’s a real gap between words and actions,” Elamine said. “People say they want to reduce emissions, but then will insist on having air conditioning in their office. It is important to recognise that there is a contradiction there.”

Green energy can reduce costs and emissions

Alstria started to procure green energy in 2014 and offering it to tenants when they sign the lease, as well as to employees. “It’s a service that we want to offer, it has no economic benefit for us,” said Elamine. “So far 25% of our tenants have signed up to the programme, which has helped us to reduce prices and reduce emissions.”

Take-up has been good, but the fact remains that 75% of tenants have not taken up the offer.

Words and declarations of intent need to be matched by deeds and action. There are signs, however, that things will move in the right direction because of the generational shift that is taking place.

The young tend to be more genuinely interested in and committed to the environment, to the point of being willing to make personal sacrifices for the cause. According to the new CMS annual survey, a considerable number of occupiers would be willing to take a pay cut to work in an environmentally sustainable building.

The highest percentages are in the Netherlands, where 50% of tenants would be willing to give up part of their salary, and in the UK (34%). The percentage is considerably higher among younger occupiers. ‘The young are driving this shift, which makes me optimistic about the future’, said Clare Thomas, partner, CMS.

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