“Our house is on fire”, Greta Thunberg told delegates at last year’s World Economic Forum. Echoing this stark warning, the renowned naturalist and broadcaster David Attenborough this year told the BBC that the “moment of crisis has come” in efforts to tackle climate change, referencing the devastating bushfires that have ravaged large parts of Australia. In the 2015 Paris Agreement, most nations committed to keeping the increase in global average temperature to less than 2.0C (3.6F) above pre-industrial times. Scientists say current emissions levels are not on line with this target. Clearly companies’ investment decisions play a key role in mitigating climate warming. The Governor of the Bank of England, Mark Carney, has warned of financial collapse linked to a climate emergency. So, unless immediate action is taken to curb global warming, scientists warn of ‘catastrophic’ consequences.
In a recent study showing investors’ most desirable property characteristics, ‘Green’ certification ranked 2nd, up from 10th in 2006. Green real estate can play a key role in helping cities cut their carbon footprint and regulation will have a huge impact on the future of green real estate around the world. Following the Paris agreement, sustainability regulations are becoming increasingly relevant to global real estate investors. Many EU cities are aiming for net-zero buildings as a regulatory requirement, however implementing this will certainly pose a challenge. As capital sources make investment decisions, a body of data is beginning to substantiate above-average operational and financial performance of ‘Green’ office portfolios in Europe. Green buildings are becoming the new prime: they offer reduced obsolescence, the potential for better long-term returns and increased liquidity.