Time for adaptive change

The extent of future climate change largely depends on what actions we do or do not take

In our lives, there are events and milestones that become pivotal for ourselves and our communities. Sometimes, these events change everything. One such event is the COVID-19 pandemic, which has certainly been an unprecedented driver of change. It has upended the way we live, signalling the start of a new era.

COVID-19 has also significantly changed the foundational assumptions we would normally have and got us thinking if anything will return to normal again. But in terms of sustainability, the phrase “business as usual” should apply. To achieve sustainability, we need to change progressively and build on the past but not be limited by it. For this, we need reliable data to support a common vision, objectives, and goals.

To discuss this and other related issues, over 70 speakers and panellists came together at the PropertyGuru Asia Real Estate Summit (ARES) 2020 and 2021. Together, they discussed the real estate industry’s needs, the need to adapt to a changed world, and the quest for more sustainable outcomes.

CO2 emissions progress update

Sustainability is the path for positive change and progress. It is the path that so many of us are gladly dedicated to, but dedication, passion, and vision are not enough. Actual outcomes are the only real measure of success.

Carbon emissions and CO2 levels are a direct measure to climate change concerns. These are also an indirect measure of the levels of pollution, inefficiency, waste, and other concerns that need to be addressed to achieve a sustainable future.

At ARES 2020 and 2021, we highlighted the consistent rise in CO2 emissions since the formation of the Intergovernmental Panel for Climate Change in 1988. Despite all the attention and focus on CO2 in previous decades, CO2 levels have consistently and steadily risen.

With the COVID-19 pandemic causing all the business disruptions, economic slump, lockdowns, and travel slowdown, it was expected that there might be one positive outcome: that CO2 emissions would be reduced. But this did not happen. Global CO2 levels only kept increasing.

The following chart from the NASA website shows the National Oceanic and Atmospheric Administration readings of CO2 levels from 2005 to October 2022.

There has effectively been no interruption to the rise of CO2 levels at any point in time; this shows how entrenched carbon emissions are in our lives that even the global pandemic did not make an impact.

With great focus, it is possible to achieve desired outcomes, but this is not happening yet in terms of reducing CO2 emissions.

If organisations resolve to make slow yet steady improvements every year, then outstanding results will be achieved.

The Conference of the Parties (COP 26) in Glasgow held in 2021 did achieve some outcomes and broadened the focus for environmental sustainability in a number of areas. The outcome on the longstanding issue of carbon emissions was for all parties to further consider increasing their commitments and meet a year later at COP 27 in November 2022. COP 27 has occurred and yet these binding and/or assured commitments and actions did not occur as expected or required.

While there appears to be some progress in global meetings, pledges, and other actions, there are still issues with timing, scope, and surety.

As reported by the BBC, delegates from fossil fuel companies at COP 26 in 2021 outnumbered the representatives from many individual countries.

It seems remarkable that representatives from the fossil fuel industry are at the table pledging to take significant action. However, people are concerned that the reduction of carbon emissions will continue to be delayed. 62 percent of anthropogenic CO2 emissions, or the emissions caused by man, come from fossil fuels, mostly coal and gas. It was reported by the BBC in 2022 that the delegation from the fossil fuel industry increased a further 25 percent at COP 27.

The promises, pledges, and intentions to achieve carbon neutrality by 2050 need to be assessed and considered as promises or aims, not assurances.

To achieve this commitment in under 28 years, we would have to completely stop electricity production from coal, gas, and other energy sources. Realistically, this might not happen given the timeframe. In ARES 2020 and ARES 2021, delegates have explored the challenges and actions required in the real estate sector, and this remained a hot topic in ARES 2022.

Just a piece of the puzzle

CO2 emissions are only a part of the story. To illustrate, 25 percent of anthropogenic climate change, or the changes caused by man, come from methane, which is not CO2 but a type of gas that can be converted into CO2. CO2 gets a lot of attention while methane does not.

COP 27 was recently held in Egypt in November 2022, and there was mixed reaction to the outcomes. The ‘Loss and Damage Fund‘ for vulnerable countries was considered progress, however, while other actions associated with climate change fell short of expectations at COP 26. COP 28 in the UAE to be held in November 2023 will need to have very different outcomes if the intentions discussed in 2022, which is to halt the rise of CO2 by 2025, is to be achieved by that date or even by 2030. The full range of carbon emissions (CO2, methane, etc.) is not the only one that needs to be considered, as carbon is only a part of the overall sustainability agenda.

Holistic approaches and strategies are required from all perspectives

In the real estate sector, sustainability applies not only to new buildings but also to existing buildings. Thus, there needs to be a step-by-step approach in building managers’ facilities management programmes. An example of a highly beneficial, achievable goal is to aim for an annual 3.5 percent reduction in energy consumption.

Simply put, every real estate company should be engaged in sustainability action now. The goal is not just to achieve results by a specific period in the distant future like 2030 or 2050 but as soon as in 2023 or 2024, and beyond.

Advancing sustainability causes tend to be easier with capital renewal programmes, major real estate refurbishments, and new project developments. Regardless, several challenges remain. For instance, in many new projects worldwide, sustainability practices are not being comprehensively applied or even considered.

With so many opportunities and rewards for businesses, what is holding them back?

The 4 pillars of sustainability

In ARES 2020 and ARES 2021, there was an emphasis on the importance of sustainability across four pillars: environment, human, social, and financial.

Environmental sustainability does not pertain only to CO2 emissions or even overall carbon emissions. That said, the levels of reduced carbon emissions are highly indicative of a holistic approach to achieve environmental sustainability.

Also important are the other three sustainability pillars: human, social, and financial. All these come into play with how the pandemic has changed the way we conduct our daily affairs. It has changed our needs in the workplace in terms of office space, purpose, and amenities. It has changed the way we make transactions, with many retail stores shifting their focus to online channels.

These major changes present both challenges and opportunities for the real estate sector.

More: PropertyGuru Asia Real Estate Summit 2021 virtual edition calls to harness the power of data to revolutionise the sector

Not a cost but an opportunity

Many people think that sustainability comes at a huge cost, but this is simply not true. Sustainability initiatives may increase capital costs, but investment costs are earned back in the form of operational savings over time. This is why businesses and organisations must review and take into account all aspects of sustainability so they can see that integrating sustainability into projects can invariably reduce costs.

Achieving sustainability does not, in fact, have to be costly. It almost always has positive financial outcomes and may result in savings in upfront costs and ongoing costs. Business decisions should therefore not boil down to choosing between making profits and being more sustainable. With holistic reviews and data-driven planning, both can be achieved.

Strategic and holistic actions

Another barrier to sustainability efforts is greenwashing, which involves the misuse of data primarily by presenting information that is incomplete, misleading, or incorrect. Most of the feedback we received in ARES 2020 strongly supported our calling out of greenwashing as a significant issue.

Unfortunately, greenwashing has been widely practised across the industry. More alarmingly, its perpetrators may even believe what they are promoting because of their misguided belief in their mission. But with the explosion of data, benchmarking, and comparative reviews, the impacts of greenwashing are rapidly diminished. Greenwashing is also becoming a serious liability for organisations, which must make concerted efforts to eliminate greenwash so that only authentically green products and services are developed and marketed.

In other words, overreliance on data does not assure progress. The real estate sector should instead take a holistic approach, utilise data, and consider all four pillars of sustainability to gain a broad perspective with which to view, analyse, and formulate the most successful strategies to achieve desired sustainability outcomes.

It’s in our hands

Every company in every country knows and accepts that attaining sustainability status will be a key differentiator for them. This is evident in the statements being made by every leader in private enterprises and government organisations worldwide.

But there is no magic bullet. Everyone must take immediate action if we are to see results. Looking at the biggest lessons from COP 1 in 1988 to COP 27 in 2022, from the UN Sustainable Development Goals launch in 2015, and from every organisation and government, we are taught that lasting changes are made in small, strategic, and holistic increments.

Ultimately, making strides in advancing sustainability efforts does not entail huge costs. It is merely a fallacy that sustainability always costs more. Progress is in our hands, and it will cost us more if we fumble.

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