Understanding Net Zero Commercial Real Estate
Since the Paris Agreement in 2015, the number of companies and countries signed up to some form of a Net Zero target has increased considerably (UNFCCC, 2015).
The latest University of Oxford-led Net Zero Stocktake report shows how 87% of GHG emissions are now covered by national Net Zero targets while 67% of total annual revenue is covered by companies with Net Zero targets (Net Zero Tracker, 2024). Other Net Zero metrics are documented in that same report showing how, over a 4-year period between 2020 and 2024, the global share of GDP, GHG emissions and population covered by a Net Zero claim has increased by 25%, 26% and 36% respectively.
A similar upward trajectory is observed by looking at the historical search-frequency of Net Zero. The chart on the left shows the long-term search trend of “Net Zero” between 2009 and 2024 – compared with “carbon neutral” for reference. The ramp-up in searches since 2019 lines up with the increased policy coverage. But while the global coverage of Net Zero targets continues to increase, the same report warns of limited signs of “Net Zero integrity” (Net Zero Tracker, 2024).
Net Zero integrity is defined in accordance with the UNFCCC’ Race to Zero campaign (UNFCCC, 2024) “Carbon Neutral”
who cite five key requirements, grouped under 5 key
“P”s. The World Green Building Council (WGBC, 2024) have a similar set of key components which loosely overlay the Race to Zero’s five Ps.
UNFCCC:
Pledge – Plan – Proceed – Publish – Persuade
WGBC:
Commit – Disclose – Act – Verify – Advocate
Low “integrity” scores imply a high probability that the disclosed ambition won’t be met. A gap is clearly emerging between ambition and implementation. And while this can be partly explained by the understandable lag between a planned action and the action itself, other rationale exist which are explored in this report. This sectoral-wide gap is also prevalent in the commercial real estate sector, the subject of this report.
