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Reporting and Decarbonization Remain Important Sustainability Issues
The year 2023 saw a heightened interest in and increased activity toward issues like decarbonization, sustainability, and standard measurement protocols to ensure that goals were met. Cortex Sustainability Intelligence’s Year-End Review and 2024 Predictions highlighted three significant themes impacting ESG now and into 2024, as shared by commercial real estate experts nationwide.
#1 – Increased Pressure to Decarbonize
Pressure from investors, regulatory actions, and tenant demands are moving sustainability into a business strategy and imperative. “Tenants are playing an increasingly influential role in the push for decarbonization,” especially as they indicate a willingness to pay a lease premium for sustainability, according to a Cortex release. Green leases and data-sharing agreements also provide sustainability collaboration between landlords and tenants.
“Whereas, five years ago carbon reduction was a mere consideration; now it must be at the heart of our business strategy. Investors mandate it, and our success hinges on our ability to deliver exceptional returns while minimizing our carbon footprint,” said Bryan Bennett, founder and CEO of Cortex Sustainability Intelligence, in a press release about the report.
#2 – Continued Challenges in Measuring and Reporting
The Global ESG Benchmark for Real Assets (GRESB) emerged as a recognized method of measuring sustainability progress. However, there remain challenges with uniform terminology, reporting and standard methodologies. SEC climate disclosure regulations and the international Corporate Sustainability Reporting Directive mean that high-quality, standard data must be introduced to ensure transparency and tracking.
#3 – Ongoing Focus on Profitable Decarbonization
CRE leaders are focused on profitable decarbonization activities. These include operational improvements (like digitized building systems and increasing use of renewables), which provide ways to reduce carbon emissions and energy costs. The report pointed out that such initiatives can reduce operational carbon emissions by up to 4%.
“It’s not just about embracing ESG; it’s about finding a balance that ensures sustainability without compromising financial prudence in the face of what promises to be a challenging year,” Bennett said.
- ◦Development
- ◦Policy/Gov't
