Verdantix: more investment in decarbonisation is needed
Owners of office, retail and healthcare properties around the world are significantly underinvesting in decarbonisation initiatives, falling short by an estimated $31 million per company and limiting business resiliency, according to a report just published by the research and advisory firm Verdantix.
“Our analysis highlights that while property owners have made commendable strides towards decarbonising their building portfolios, planned investments fall dramatically short of the level required,” said Claire Stephens, research director, Verdantix. “Without doubling down on decarbonisation investments, companies risk missing crucial sustainability targets and failing to align with stakeholder expectations.”
The report, Building Decarbonisation Barometer, is the first detailed research ever conducted on the extent of underinvestment in decarbonisation across the world.
Verdantix surveyed 300 senior executives worldwide from some of the largest office, retail and healthcare firms, most of whom generate revenue of more than $1 billion a year. It highlights that while companies have allocated significant capital towards decarbonising their property portfolios, current and planned investments fall short of the levels required to deploy decarbonisation initiatives across full company building portfolios.
Despite plans to invest an additional $26 million on average in sustainability initiatives over the next three years, this amount is less than half of what is required to achieve full portfolio coverage of decarbonisation. In the US office sector, for example, there is a total shortfall of $1.1 trillion; the total combined shortfall for the office sectors in Germany and the UK is more than $275 billion; and the total shortfall in the UK healthcare sector is $21 billion.
Office property owners face a $30.8 million shortfall for achieving complete portfolio coverage, retail property owners face a $27.9 million deficit to achieve full coverage and healthcare property owners need to spend an additional $33.3 million beyond current plans to close the gap.
Looking at investment shortfalls by region, in the Americas decarbonisation plans are still $29.4m below what is required. Office owners need to increase supply chain decarbonisation investment by nearly four times, while retail and healthcare decarbonisation investment plans need to double.
In EMEA decarbonisation budgets are less than half the investment needed: office owners’ investment in supply chain decarbonisation must nearly quadruple what has been invested already, retail decarbonisation investment in operational initiatives needs to double and healthcare sustainability plans show a 55% shortfall in required investment for operational initiatives.
In the Asia Pacific region, companies face an average $38.4 million shortfall, with current investment levels less than a third of what is required. Office owners’ investment in supply chain decarbonisation must double current and planned levels, while retail operational decarbonisation investment plans are more than $33 million short on average.
“With resource shortages and geopolitical issues elevating the strain on energy worldwide, it is paramount that firms capitalise on opportunities to increase their building and subsequently, business resiliency,” said Dayann Charles, advisory manager, Verdantix. “A major part of this is investing in energy efficiency and decarbonisation initiatives.”
