Cities must do more to support the environmental and social revolution

Why is decar­bon­is­ing build­ings so impor­tant to the cli­mate change agen­da?

JK: 40% of car­bon emis­sions come from build­ings; in cities, it’s typ­i­cal­ly 60% to 70%. That means the world will not achieve its ambi­tious net-zero car­bon tar­gets with­out address­ing emis­sions from build­ings, in oper­a­tion and con­struc­tion. As these ambi­tions get bold­er, the pres­sure to address build­ing decar­bon­i­sa­tion inten­si­fies.

SH: Dur­ing the pan­dem­ic, peo­ple realised what can be achieved with increased atten­tion on the envi­ron­men­tal agen­da. Our clients and col­leagues across the real estate indus­try have shift­ed focus over the last year from what we should make hap­pen, to how it should hap­pen.

Are cities doing enough to decar­bonise build­ings?

JK: No. Their focus has been on sus­tain­able trans­port and pro­vid­ing clean ener­gy, which are very impor­tant. But build­ings must also move up the agen­da. City gov­ern­ments have only realised that recent­ly, but the tide will turn rapid­ly as they start cal­cu­lat­ing emis­sions from build­ings.

New York, Mel­bourne, and Copen­hagen are at the fore­front of build­ing decar­bon­i­sa­tion ini­tia­tives. New York aims for all new build­ings to be car­bon zero by 2030, and recog­nis­es the need to retro­fit exist­ing build­ings, which is the big­ger issue. They are incen­tivis­ing own­ers to deep ener­gy retro­fit (DER), which takes a whole build­ing approach.

New York also edu­cates devel­op­ers and con­struc­tion com­pa­nies about how to retro­fit for net-zero car­bon. Com­bin­ing reg­u­la­tion and edu­ca­tion brings work­ers and com­pa­nies with them.

SH: Some things investors and occu­piers can’t do alone or have lit­tle con­trol over — such as green­ing ener­gy grids — so they want bold­er decar­bon­i­sa­tion actions from city gov­ern­ments.

In this decade, one where we need to move beyond words to deliv­ery, each city needs to devel­op a com­pre­hen­sive plan where every­one comes togeth­er to realise net zero. The social impact is also essen­tial to con­sid­er how we improve lives by address­ing social inequal­i­ty, par­tic­u­lar­ly since that has widened dur­ing the pan­dem­ic.

In this decade, one where we need to move beyond words to deliv­ery, each city needs to devel­op a com­pre­hen­sive plan where every­one comes togeth­er to realise net zero

What tar­gets should cities pri­ori­tise?

SH: Action, not com­mit­ments. With­out a clear, iter­a­tive roadmap to a net-zero built envi­ron­ment, ini­tia­tives won’t take off. Tan­gi­ble mile­stones and deliv­er­ables are need­ed. Busi­ness­es and investors will wor­ry about start­ing with­out under­stand­ing the over­all plan. They also need to be incen­tivised.

New York is a good exam­ple of incen­tivi­sa­tion, with its finance pro­gramme offer­ing long-term low inter­est rates to fund ener­gy and water effi­cien­cy improve­ments.

Cities also need to tar­get use of onsite renew­ables, solar ener­gy, and bio­phil­ia; and adopt cir­cu­lar prac­tices around water and waste.

There will be a sweet spot when we get the right reg­u­la­tion, incen­tives and sup­port; with investors, devel­op­ers, occu­piers and city gov­ern­ments all work­ing togeth­er.

JK: Tar­gets for new build­ings are the low­er hang­ing fruit, but cities need rapid, ambi­tious retro­fitting tar­gets to decar­bonise. Across mature cities, the refur­bish­ment rate is 1% or 2% a year. They need to ratch­et that up. Only a few cities in the UK have tak­en the lead on retro­fitting.

Cities also need to lead by exam­ple by set­ting tar­gets around decar­bon­is­ing their build­ing stock, and upskilling work­ers on decar­bon­i­sa­tion.

Retro­fitting homes is also an oppor­tu­ni­ty to upgrade inad­e­quate hous­ing stock.

JLL’s report “Decar­bon­is­ing cities and real estate” empha­sis­es the impor­tance of part­ner­ships. How can cities, investors, devel­op­ers and occu­piers part­ner to decar­bonise?

SH: Col­lab­o­ra­tions are devel­op­ing because no sin­gle group can achieve decar­bon­i­sa­tion alone. We’ve seen exam­ples of where investors have made leas­ing terms depen­dent on whether occu­piers meet their green goals. But we need more part­ner­ships and JLL is pri­ori­tis­ing this too.

We’re col­lab­o­rat­ing with British Land to deliv­er our flag­ship office at Broadgate in Lon­don, by 2026. We are both com­mit­ting pub­licly to net-zero tar­gets and the high­est envi­ron­men­tal assess­ments such as BREEAM and WELL Build­ing cer­ti­fi­ca­tion lev­els.

Tech­nol­o­gy and inno­va­tion will be piv­otal to these sus­tain­abil­i­ty part­ner­ships, and that’s hap­pen­ing increas­ing­ly through our JLL Spark ven­ture cap­i­tal invest­ments in prop­er­ty tech­nol­o­gy. Trans­paren­cy, data and met­rics are also impor­tant, so col­lab­o­ra­tions can mea­sure progress and improve. Ulti­mate­ly this is about shared val­ues, com­mit­ments and pri­ori­ti­sa­tion – find­ing like-mind­ed part­ners who realise this goes beyond eco­nom­ic out­comes.

With­out a clear, iter­a­tive roadmap to a net-zero built envi­ron­ment, ini­tia­tives won’t take off

What should be the role of reg­u­la­tion?

JK: Reg­u­la­tions and penal­ties will ensure com­pa­nies are account­able for decar­bon­i­sa­tion. How­ev­er, the real estate indus­try should help bring togeth­er pub­lic and pri­vate sec­tor stake­hold­ers and com­mu­ni­ties to define ambi­tious but achiev­able reg­u­la­to­ry frame­works.

Copen­hagen is a good exam­ple of a col­le­giate approach, in which the city gov­ern­ment works with investors and occu­piers to decar­bonise and reduce ener­gy use in build­ings.

SH: The Bet­ter Build­ings Part­ner­ship cli­mate com­mit­ment is also a good exam­ple of col­lab­o­ra­tion. Cities should see own­ers, devel­op­ers, investors, and occu­piers as long-time part­ners work­ing togeth­er on envi­ron­men­tal goals. I see a gen­uine will­ing­ness to do this.

How is JLL pro­mot­ing ESG prin­ci­ples in the built envi­ron­ment?

SH: We are lead­ing the charge across the sec­tor, and chal­leng­ing and sup­port­ing clients in meet­ing ambi­tious tar­gets.

We also want to focus more on social returns in cities and neigh­bour­hoods, and work with com­mu­ni­ty organ­i­sa­tions to dri­ve a sense of place. King’s Cross in Lon­don has been a great recent exam­ple, and there are many more.

Our refur­bished Man­ches­ter office became the first UK Plat­inum WELL Build­ing cer­ti­fied office out­side Lon­don. It fea­tured a cir­cu­lar design, with recy­cled mate­ri­als; and a focus on air qual­i­ty, and envi­ron­ment qual­i­ty.

We have received amaz­ing feed­back from our col­leagues about how it feels to work there.

We will upgrade all our UK estate using these prin­ci­ples by 2030. It’s inspir­ing to see how excit­ed peo­ple get when you show them around. We’re shar­ing what we’ve learnt and are work­ing close­ly with clients on the same jour­ney.

Build­ing-spe­cif­ic ini­tia­tives will accel­er­ate in the com­ing months. Many peo­ple appre­ci­ate get­ting back togeth­er, but they need to do that in pos­i­tive envi­ron­ments.

We don’t have all the answers yet. But we’ve set our­selves chal­leng­ing social and envi­ron­men­tal tar­gets, with detailed plans. We will hold our­selves account­able and deliv­er them.

For more infor­ma­tion please vis­it us.jll.com/en/cop26-return-on-sustainability

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Pro­mot­ed by JLL