Commitments toward climate action pick up pace

Global Real Estate Perspective, August 2021

The second quarter continued to lock in strong commitments towards climate action from investors, occupiers, and government entities. Over 683 corporations committed to science-based targets during the first half of 2021, already eclipsing full-year 2020 commitments from 483 corporations. In addition, the Net Zero Asset Manager Initiative, launched in December 2020, has quickly amassed commitments from 128 of the globe’s largest asset managers, representing US$42 trillion in assets under management. The UK and the EU have set into law their climate commitments and the U.S. has made a commitment to cut emissions by 50% from 2005 levels by 2030.

In June 2021, JLL released the Responsible Real Estate Survey: Decarbonizing the Built Environment (the JLL RRE Survey). The global survey – of 426 occupiers and 221 investors – set out to understand the level of climate commitment among organizations. It shows that the mantra ‘Climate risk is financial risk’ has gone mainstream, and while almost 20% of investor and occupier respondents are leaders in the decarbonization process, most are early in their journey but showing a commitment to working through the many complexities of the task at hand.

While the critical nature of the moment emerges, so does the complexity

The JLL RRE Survey highlights the many barriers that investors and occupiers face in the journey to lowering their carbon and environmental footprints. Occupiers list difficulties in designing strategy and a lack of landlord support as their top barriers. Investors, on the other hand, cite aging building infrastructure and building systems as their number one barrier to progress. Both investors and occupiers also consider technology infrastructure as a major barrier and a top investment priority.

Both investors and occupiers (53% of combined respondents) identify operational efficiency and lowering expenses as a top driver for action. Over time, as the use of building monitoring technology continues to grow and with the use of green leases and other mechanisms, increased communication and transparency between tenant and landlord is anticipated, bringing both parties closer to the whole-building picture that supports each of their respective climate commitment goals.