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.
In the face of escalating climate change concerns, the need for a global transition to net-zero carbon emissions has become increasingly urgent. Where do organizations figure in this reality?
In the UK alone, around 18% of the country’s total carbon emissions come from commercial activity. Commercial asset owners and managers have a critical role to play in accelerating the pace at which we drive change – from deep energy retrofits and sustainable purchasing choices through to customer engagement for environmental stewardship and green technology innovation.
We are making progress, helping organizations around the world that are making bold commitments. However, it is not enough to simply commit to net-zero carbon. An actionable, transparent, and credible climate transition plan must follow. Yet fewer than 0.5% of the 18,600+ companies disclosing to CDP sufficiently responded to all 21 questions that align with a credible transition plan, despite the proliferation of corporate net-zero targets.
True climate leadership means disclosing not just commitments, but also progress and risks consistently to build trust amongst employees, suppliers, customers, and investors. A public net-zero carbon plan serves as a powerful tool. By outlining and communicating specific targets, strategies, and performance indicators, corporations provide a clear roadmap for achieving net-zero emissions, instilling confidence and creating accountability in their commitment. And, it has business benefits too:
- Enhancing business reputation: A clear, public net-zero carbon plan helps paint a picture about an organization’s ESG story, allowing customers, employees, and stakeholders to buy into its commitments, securing brand reputation through transparency.
- Attracting investments: In 2022, the GRESB Real Estate Benchmark covered 1,820 property companies, real estate investment trusts (REITs), funds, and developers, while the GRESB Infrastructure Benchmark covered more than 800 infrastructure funds and assets. Combined, GRESB’s programs represented USD 8.6 trillion in real asset value in 2022.
- Driving innovation and collaboration towards sustainable solutions: Organizations that publicly disclose their net-zero strategies create a space for sharing ideas and collaborating with industries, academia, and governments. And they create space for partnerships, engaging in research, investing in clean technologies, driving innovation, and promoting sustainable practices.
- Provide a competitive edge and differentiation: With a growing population of environmentally conscious citizens, real estate owners and operators attract lucrative tenants who seek efficient, healthy and green certified buildings. Organizations that visibly demonstrate how they’re bringing sustainability into their purpose, supply chain, and operations stand to gain a competitive advantage.
- Attracting and retaining top talent: 90% of millennials surveyed identified sustainability as an important consideration when making career moves.
- Preparing for new and emerging legislation: Recent financial and regulatory developments across the US, EU, and the UK require organizations of all sizes to report their emissions in the coming period. Those who don’t comply will be left behind.
Having insight into these evolving industry, legislative, and societal dynamics is critical. Through Arcadis’ work over the years, with organizations of all types, building actionable public net-zero carbon plans with clear and consistent reporting and communications has emerged as a critical step in driving credibility with stakeholders. At a recent transition planning workshop with a client organization, we’ve seen the process of developing a transition plan drive internal organizational change and improve buy-in and engagement among stakeholders.
Our team helped bring together more than 20 of our client’s stakeholders – across business functions – to identify and prioritize potential verifiable and quantitative key performance indicators (KPIs) that will be ultimately used to measure success on their climate commitments. The workshop aimed to define the KPIs, identify data sources, and establish roles and responsibilities for each KPI. While the team did accomplish this, it wasn’t the only important outcome.
The workshop helped stakeholders to collectively think big and gain an appreciation for the role their individual programs would have in coming together to achieve their overarching climate target. Bringing different voices to the table created a renewed enthusiasm and sense of ownership, helping drive greater change and buy-in from within the organization than if the sustainability team had driven a top-down solution for the business.
This stakeholder engagement was preceded by internal education about climate, such as the basics of scope 1, 2, and 3 GHG emissions, understanding climate risks and opportunities, and how their business activities impact their carbon footprint. This doesn’t have to be complicated, but it is information that should be widely available to employees and tailored to the climate impacts of the business’ own operations and value chain. Education and engagement are key. When employees and stakeholders are equipped with basic climate knowledge, integrated sustainable thinking and actionable solutions are made possible.
The urgency to combat climate change necessitates robust net-zero carbon plans. But the real impact can be taken a step ahead by publicly outlining your organization’s strategies and progress with both internal and external stakeholders to accelerate achieving net-zero carbon emissions. Beyond that, climate transition planning provides an opportunity to further embed sustainability within your organization and create a cadre of professionals across disciplines that are engaged and committed to climate action. Now more than ever, we need everyone to take action, because no one wins unless we all do.
This article was written by Kealy Herman, Global Technical Director, Net Zero Strategy, at Arcadis.
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