Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position. Please refer to official GRESB documents for assessment related guidance.
Why is net zero important: As air quality sharply declines in the Pacific Northwest, and the Southeast faces repeated flooding from an already active hurricane season, we see glimpses of climate change exacerbating natural disasters. The globe has already warmed by about 1°C, creating moderate risk from climate change under certain forecasted scenarios. According to the 2018 Intergovernmental Panel on Climate Change (IPCC) Special Report, reaching net zero greenhouse gas (GHG) emissions around 2050 is the most likely way to avoid overshooting warming of 1.5°C, which models indicate as a moderate to high-risk threshold for climate impacts.
What is net zero: Many organizations are actively managing their climate-related impacts, with almost 1,000 companies now committed to setting a science based target (SBT). Beyond the scope of most of these targets is the need to reach net zero GHG emissions by 2050 through a combination of emissions reductions and emissions removals (e.g. carbon capture and storage). The IPCC defines net zero as the point where “anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period.” Net zero targets can have different boundaries, timeframes, and mitigation strategies depending on an organization’s ambition and intent; and the guidance for setting net zero targets is still evolving. This month, the Science Based Targets initiative (SBTi) launched initial guidance for setting net zero targets, informed by IPCC. This guidance offers high-level recommendations that address key considerations for setting and achieving a net zero target, such as coverage and ambition, however, SBTi is still over a year away from official recommendations (1).
What is leading practice for net zero: When it comes to achieving net zero, the balance of cost and benefit for mitigation strategies varies across industries and regions. For many organizations, achieving net zero will require a combination of mitigating direct operations and value chain impacts and investing in emissions removal efforts to further offset impacts. A key difference between net zero and carbon neutrality is the focus of net zero on addressing impacts within the value chain as much as possible before leveraging removals outside the value chain. The idea behind this focus is to ensure meaningful action within an organization’s own sector.
What net zero means for real estate and infrastructure: For real estate and infrastructure, impacts are driven by building materials and operating energy consumption. Energy attribute certificates (EACs) are a low cost and effective way to mitigate emissions from electricity use for direct operations as well as in the value chain (e.g. leased assets). The main outstanding emissions to address are then direct fuel use and building materials. For fuel use, sustainable fuels can be an option, but there are also opportunities to move towards electrification for use cases that have traditionally required fuel, such as heating. Building materials can be more difficult to address when working toward a net zero target. The largest issue for building materials comes with neutralization or the question of whether carbon within the materials themselves are stored sufficiently long enough to warrant inclusion in tracking toward net zero achievement. Leading practice on this topic is still evolving and companies looking to start the journey towards a net zero target now can rely on expert judgment and lead with transparency around the assumptions made when communicating progress.
There are many ways to start engaging around net zero, from joining SBTi’s consultative group on net zero targets to committing to the World Green Building Council’s Net Zero Carbon Buildings Commitment and addressing carbon emissions from direct operations.
(1) For further details, refer to SBTi’s Foundations for Science-Based Net-Zero Target Setting in the Corporate Sector at https://sciencebasedtargets.org/wp-content/uploads/2020/09/foundations-for-net-zero-full-paper.pdf, released on September 15, 2020.