The need for speed on the road to net zero
Most people live in cities, so that’s where the sustainability problems are and also where they need to be fixed, reports Nicol Dynes.
The toolkit is all there: the knowledge, the technology, the capital and the motivation to create more sustainable buildings and cities. What is needed is a change in mindset that will speed up the transition.
“We need real acceleration if we want to make sure that we’re having a significant reduction in emissions by 2030, en route to net zero by 2040,” says Clemens Brenninkmeijer, head of sustainable business operations at Redevco. “A behavioural change needs to happen.”
It’s about understanding the scale of the challenge and adopting the solutions that are already available, but it’s also about being willing to embark on a journey of exploration.
“Innovation is about change in itself and we need to use innovation to look at challenges in a different way,” says Elsbeth Quispel, head of innovation at Redevco. “We need to be willing to get moving before we have the actual solution to a problem. That’s what systemic change is about, ultimately: taking a much more iterative approach to finding solutions to challenges big and small.”
There’s plenty of help and resources available to start on the decarbonisation journey.
“We have the technology and we have huge amounts of capital available to decarbonise by 2030 or 2040. And it’s not just the right thing to do, it also makes financial sense,” says Jani Nokkanen, a partner and chief investment officer at NREP. “So there’s no question that we can do it and there are plenty of examples that it can be done efficiently and profitably. We’re investing heavily in it.”
Leading by example
A lack of understanding and a dangerous lack of urgency are the reasons why the process is not being scaled up.
“Our industry, unfortunately, is very slow, but we saw with covid that, in an emergency situation, we can be forced to change,” Nokkanen says. “We need to push the whole ecosystem, the investors and all market players to do it.”
Leading by example is a good way of reaching that objective. It’s not just about making the right choices, but also about sharing experience to encourage others.
“Collaboration is required, but also showcasing – sharing that insight, making that knowledge open source, so it’s available to the market and everyone can pick it up,” says Brenninkmeijer. “This is too important to make it a competitive play, because we all need to accelerate. At Redevco, we are totally open to sharing everything we’re doing, to help everyone to make a difference. We’re optimistic that we can do it with like-minded partners and really make an impact.”
‘We need real acceleration if we want to make sure that we’re having a significant reduction in emissions by 2030.’
Clemens Brenninkmeijer, Redevco
It starts at an asset and portfolio level, and then it can be scaled up to city level. Most people live in cities, so that’s where the problems are and where they need to be fixed.
“You have to look at all the different facets of how you drive environmental performance,” says Brenninkmeijer. “The investor world is looking at [the resilience of a physical asset] as an indicator of what it will be worth in the future and how much less it is going to cost to run.”
Cost is not a barrier: a sustainable building is and will continue to be more valuable, and it will deliver energy savings.
“A change in valuations is needed, otherwise nothing will change,” says Daniel Chang, European head of ESG at Hines. “Incorporating that metric into values is what will mobilise the industry.”
There’s still a misconception that there is a trade-off between profits and decarbonisation, says Nokkanen, but it makes financial sense to use solar panels, geothermal heat pumps, better insulation or more sophisticated technical solutions to circulate energy in buildings. “It is already doable and it makes sense.”
Speeding up the transition
The energy crisis is speeding up the transition to greener energy by providing an incentive to change and become more sustainable.
“The industry has been laser-focused on carbon in the last few years and making net-zero commitments, but now the time has come for them to look at how to get it done,” says Chang. “Data strategies will be fundamental in delivering on those commitments.
“There’s an ongoing search for the right technology and innovation. The natural next step is engaging with tenants, because collaboration is key and can be harnessed at a building level and at a portfolio level,” he adds.
Innovation, technology and data provide the means to move from talk to action.
“Measuring is knowing, and data give us knowledge about a building’s performance and lead to better use of the space,” says Quispel. “They give us an invaluable insight, and that’s why they say that data are the new gold.”
Over the past few years, Redevco has made concerted efforts to track and measure its tenants’ energy consumption, to know which actions need to be taken and what to prioritise to reduce emissions.
“Data is a hugely important part of how we work on our active asset management and redevelopment,” says Brenninkmeijer.
“We use BREEAM as our primary methodology for driving performance and we’ve found that we’ve achieved a 40% improvement on energy intensity. If we focus on that and on eradicating fossil fuels from our assets, I’m convinced that we can get an even better performance and reach 50%, 60% or even 70% reductions versus what we would otherwise get.”
It’s about choosing insulation, double-glazing, investing in solar panels and moving from fossil-fuel-based heating, ventilation and air-conditioning systems to renewable sources of energy.
“Putting all these different things together, we’re confident that we can make a real dent in our operational emissions and move towards net zero,” says Brenninkmeijer.
Technology is providing solutions on materials as well, such as mass timber as an alternative to steel and cement, that lead to a reduction in the upfront and embodied emissions associated with development projects.
“Materials are a solution but they could also be a barrier, if we don’t have enough materials and installation capacity, especially for existing buildings,” says Nokkanen.
“Another issue is the availability of a skilled workforce. We should have started years ago, but now people are more aware of the climate crisis, as it’s getting more tangible, so people are finally waking up and taking action.”