The key to reducing carbon emissions - know your targets
Corporate real estate leaders must be aligned with their organization’s ambitious science-based target or net-zero commitment pledges now
Corporate real estate leaders stand at the forefront of the fight to address climate change. As the number of companies making ambitious climate pledges continues to grow, so does the pressure to align an organization’s stated goals with sound real estate strategy.
With real estate accounting for nearly 40% of the world’s carbon emissions and energy typically accounting for 20-40% of a building’s annual operating costs, the success of your organization’s sustainability plan hinges on your ability to measure and reduce the carbon emissions of your portfolio.
Clearly, a shift toward more sustainable real estate -- both in terms of building construction and operation -- is critical to achieving real carbon reduction. But to start shrinking your carbon footprint, you first need to understand what your organization has promised.
Ideally, milestones have been put in place, along with pathways to get there, that address the carbon emissions of buildings across these three scopes:
Greenhouse Gas Protocol diagram of scopes and emissions across the value chain
Science-based Targets and Net-Zero Commitments
One of the biggest challenges organizations must contend with as they strive to reduce their carbon footprint is the confusing array of regulations, commitments, frameworks, certifications and other terms.
Among the various targets that companies can set to pursue their sustainability goals, two terms are often mentioned: science-based targets and net-zero commitments. While similar in their end goals, they do not mean the same thing.
As a real estate leader, it’s vitally important to know what target you’ve committed to and what that means for your organization. Here is a look at the leading approaches and implications for corporate real estate:
Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement to limit global warming to above pre-industrial levels to 1.5°C (or 2.7°F). The SBTi (Science Based Target initiative) is a global partnership that champions science-based target setting and officially approves these targets. To be considered a science-based target, it must be approved by SBTi.
The SBTi requires companies to set science-based targets based on emission reductions to be achieved through direct action within their direct operations and value chains. Science-based targets do not allow carbon offsetting. Also, the SBTi requires that companies set ambitious targets to reduce Scope 3 emissions if they represent more than 40% of the company’s overall footprint.
In the simplest terms, a net-zero commitment is an aim to become carbon neutral (removing or offsetting the same amount of carbon that is emitted into the atmosphere) by a certain date.
A net-zero carbon target differs from a science-based target in that offsets can be used to reach zero – and these offsets can be utilized at the corporate, portfolio or building level. That means the scope of each approach to net-zero can differ. Also, with net-zero targets, companies are at their own discretion when it comes to reporting Scope 3 emissions, which are not directly controlled by the company itself.
As more and more organizations make net-zero commitments covering a range of different scopes, timelines, and pathways – often not underpinned by climate science – the SBTi set out to develop a consistent and objective approach to net-zero targets: the Net-Zero Standard.
JLL is a Net-Zero Standard organization
With the help of experts and industry partners - including JLL - the SBTi developed the Net-Zero Standard to provide organizations with a clear framework to bring their net-zero plans in line with climate science. It includes guidance, criteria and recommendations organizations need to set net-zero targets consistent with limiting global temperature rise to 1.5°C (or 2.7°F).
The Net-Zero Standard is the first global science-based standard to guide organizations setting net-zero targets and encourages them to follow the principles of the mitigation hierarchy. This means that companies should prioritize actions and strategies to achieve emissions reductions before engaging in neutralization.
The SBTi defines “beyond value chain mitigation” as action or investments that fall outside of a company’s value chain. This includes activities that avoid or reduce greenhouse gas emissions, and those that remove and store greenhouse gases from the atmosphere.
After helping create Version 1.0 of the Net-Zero Standard, JLL has applied this new framework for net-zero target setting to our own business, which was approved by the SBTi in October 2021.
A path forward for corporate real estate
Whether pursuing science-based targets or a net-zero commitment, knowing what and how to measure is critical to meeting your sustainability goals on or ahead of schedule.
As a corporate real estate leader, you must:
Know your organization’s commitment and targets
Understand your current and projected emissions on both the portfolio and building levels
Categorize your emissions using the three scopes
To ensure you are following the right guidelines and the most up-to-date federal, state and local regulations, it’s important to seek out a partner that can help you craft a carbon reduction strategy that meets your organization’s unique goals and aspirations – from the local market to the global market and everywhere in between.
Once you have a real-time, single source of truth to measure your carbon footprint -- and a plan to reduce it – you’ll have the tools and data you need to satisfy various stakeholders and embed a philosophy of carbon reduction into your organization.
To learn more, download The real estate leader’s guide to decarbonizing your portfolio or talk to a real estate sustainability expert today.