Hillbreak was the principal author on a major new report on the global real estate implications of the Paris Agreement on Climate Change, published today by the Urban Land Institute. The publication of the report coincides with the gathering of world leaders at the United Nations in New York, during which progress on the ratification of the Paris Agreement gathered significant pace.
The central element of the Paris Agreement is the aggressive scientific objective of holding the increase in the global average temperature to well below 2°C above pre-industrial levels and of pursuing efforts to limit the temperature increase to 1.5°C. The agreement is expected to have significant and far-reaching implications for national and municipal policy making and for business and investment decisions.
Here’s today’s press release on the report:
REAL ESTATE INDUSTRY MUST ADDRESS CLIMATE CHANGE TO MAINTAIN COMPETITIVENESS, SAYS NEW RESEARCH FROM THE URBAN LAND INSTITUTE
Paper analyzes the real estate implications of UN Paris Agreement on climate change
WASHINGTON (September 21, 2016) – As world leaders gather at the United Nations this week to ratify the Paris Agreement on climate change, a new paper released today by the Urban Land Institute (ULI) argues that many real estate organizations are not adequately prepared for the implications of the agreement, which was made at last year’s 21st annual Conference of the Parties in Paris (COP-21).
Entitled L’Accord de Paris: A Potential Game Changer for the Global Real Estate Industry, the paper provides an overview of the key issues that arose from the COP-21 agreement and outlines steps that the real estate industry can take in response. Since buildings account for nearly one-third of global climate-changing carbon emissions, the agreement could trigger significant changes in requirements for building design, development, operations and management. In order to remain competitive, the industry must proactively limit and respond to the effects of climate change, the paper says.
It notes that from a business perspective, taking action to address climate change can help real estate organizations manage risks and capitalize on new opportunities. Investors and developers who proactively respond to impacts of the Paris agreement can ensure that their buildings remain competitive within changing policy, market, and climate conditions. They are also likely to see bottom-line benefits, as improving energy efficiency to reduce the carbon impact of buildings is one of the most cost-effective solutions to mitigating climate change.
“As leaders in the responsible use of land, ULI’s global members have a pivotal role to play in addressing some of the greatest challenges facing our rapidly urbanizing world, including the pressing threat of climate change,” said Patrick Phillips, ULI’s Global Chief Executive Officer. “The Paris Agreement on climate change will have important implications for both developed and emerging real estate markets, including new business and investment opportunities. ULI has published this paper to support our members in navigating the implications of this agreement, and charting strategies for success.”
ULI leader Jon Lovell, cofounder of Hillbreak and principal author of the report, said, “the Paris Agreement was undoubtedly a landmark diplomatic success, but was only possible because of the groundswell of demand, action and support from business leaders, investors, mayors and industry bodies from across the world.” He added, “Given the value at stake and the weight of evidence collated by this paper, it would be naive to think that investors, tenants and regulators won’t all begin to turn the screws on real estate companies and asset owners. The message is clear — act now to address the implications of the Paris Agreement or face irrelevance in the market.”
According to the paper, the Paris Agreement has catalyzed a change in attitudes and expectations surrounding the real estate market. Organizations are under increasing pressure to divest from carbon-intensive companies and assets, and to engage with policymakers and stakeholders on sustainability issues. Furthermore, they are expected to demonstrate a heightened disclosure of carbon performance and the risk posed by climate change to their assets, and to retrofit development standards through new technologies and financing models. Assets that do not conform to these new standards risk low demand and suppressed value.
The first priority for real estate organizations, says the report, should be to audit their resilience against post-COP-21 impacts. The audit should include a review of the risk exposure of their assets and the capabilities and expectations of their stakeholders. The paper suggests a list of specific questions on the topics of climate risk, client and stakeholder expectations, competitor approaches, policy change, asset performance, value chain, people and processes.
L’Accord de Paris: A Potential Game Changer for the Global Real Estate Industry is a precursor for a more detailed report, including case studies, scheduled for release in October.
About the Urban Land Institute
The Urban Land Institute is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the institute has nearly 40,000 members worldwide representing all aspects of land use and development disciplines. For more information, please visit uli.org or follow us on Twitter, Facebook, LinkedIn, and Instagram.
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Hillbreak is the new name in training and advisory services for organisations seeking competitive advantage in a changing urban world. Its mission is to expedite the transition to a sustainable policy, business and investment environment by bringing intelligence, challenge and inspiration to its clients and stakeholders. Please visit hillbreak.com for further information of follow us on Twitter, Facebook, and LinkedIn.
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