eBooks & Guides

The commercial real estate industry is increasingly recognizing the importance of sustainability and environmental, social, and governance (ESG). The built environment generates 40% of annual global CO2 emissions (IEA) and of those total emissions, building operations are responsible for 27% annually. Building and infrastructure materials and construction compromise the additional 13%. As a major component of the built environment, the commercial real estate sector contributes significantly to this share of greenhouse gas emissions with its fragmented and largely privately owned building stock. Commercial real estate firms are therefore uniquely positioned to drive enormous change and capture opportunity when it comes to combating climate change with sustainability measures, advancing the energy transition, and helping cities and governments to meet their net- zero targets. High-emitting industries like commercial real estate will also be especially vulnerable to the physical risk associated with climate change disasters and the transition risks of rapidly evolving regulations around emissions and building standards. The main sources of greenhouse gas emissions and the environmental impacts from the commercial real estate sector What sustainability in the commercial real estate industry looks like, and the tangible steps for implementation The business case for prioritization of sustainability for commercial real estate firms How WatchWire can help guide your organization's sustainability journey through data Examples of policies to achieve net zero that impact the real estate sector include rising carbon prices, building performance standards, renewable energy mandates, and sustainability reporting requirements. In real estate markets around the world, astute investors are seeing that buildings that fail to live up to higher environmental standards will increasingly be seen as less valuable or outright risky to invest in. On the other hand, commercial real estate companies that champion net zero carbon reductions, promote health and wellbeing, and are resilient to climate change will see the benefits of doing so - namely, cost savings, increased property values, and investor approval. There is added urgency in industries like commercial real estate, where capital planning, budgeting, and development cycles can stretch over a decade, and with 2030 being only one business cycle away, firms must act now. The good news is that zero carbon and energy-efficient technologies needed to vastly improve the sustainability of commercial real estate already exist and are fairly mature. In this whitepaper, we'll explore: Waiting to lean into structural and market changes in the world of sustainability is no longer an option for commercial real estate firms that want to ensure the long-term competitive value of their assets portfolio. Expect mandatory emissions regulations to be ramped up during the second half of the decade (2025- 2030) as the climate emergency intensifies. INTRODUCTION

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