The legislation for sustainability disclosures in Europe will be reformed in 2021, as part of a major overhaul of financial market regulation. Importantly, these reforms include plans to create accompanying reporting standards.
Similar to financial accounting, sustainability reporting is essential for improved corporate management of risks and opportunities. Focusing on relevant and meaningful disclosures is key to produce high-quality and decision-useful reporting for organisations and investors alike. Using information reported on risks and impacts connected to climate change and broader sustainability matters, investors can best understand an organisation’s activities and strategies.
The European Commission will present a proposal for a reform in early 2021, while the EU Parliament will vote on the issue in Autumn.
EU Commissioner for Financial Services Mairead McGuinness clearly stated in December 2020 that “the rules of the game must be transformed to fully integrate sustainability at every step of the financial value chain” and identified the reform of the EU Non-Financial Reporting Directive as “one of the priorities to strengthen the foundations for sustainable investment”.
Other reporting proposals have also recently stirred the reporting landscape, including:
A Statement of Intent to Work Together from five reporting framework and standard-setting organisations that emphasises alignment and harmonisation;
A proposal from the International Financial Reporting Standards (IFRS) Foundation to create a new Sustainability Standards Board (SSB) that would develop global sustainability standards;
The World Economic Forum International Business Council white paper that puts forth a common metrics for consistent reporting disclosure, building on existing sustainability reporting standards and frameworks.
These developments imply future changes to an organisation’s reporting structure and process. They lay the groundwork for framework that has close linkage to financial reporting, ultimately meaning that companies will need to treat sustainability information with a higher level of rigor, akin to information included in financial reporting.
EVORA works with companies all along the reporting journey, from those working on their first sustainability report to expert reporters who need help developing a long-term reporting strategy. By reporting, they capture numerous external and internal benefits, including meeting regulatory requirements, improving relationships with stakeholders, enhancing trustworthiness and reputation, clarifying on ESG performance, and identifying sustainability risks and opportunities.
https://evoraglobal.com/wp-content/uploads/2021/01/sunflare_461157133.jpg9961500Joanna Tomlinsonhttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngJoanna Tomlinson2021-01-08 10:50:262021-01-08 10:50:28The State of Corporate Sustainability Reporting in the EU
EVORA Global is incredibly proud to have supported Hines pan European Core Fund (HECF) in achieving GRESB European Diversified Fund Sector Leader for an unprecedented fourth year in a row.
GRESB, one of the leading ESG benchmarks for real estate and infrastructure investments across the world, has named HECF one of the “best of the best” in sustainability leadership across the real estate sector.
Achievements this year include 100% Sustainability Certificate coverage across the portfolio, as well as a 15.7% reduction in landlord-controlled energy use and a 23.8% reduction in landlord-controlled greenhouse gas emissions since 2016, for like-for-like assets. The Fund also ensured that at all landlord-controlled electricity supplies were either transferred to 100% renewable energy sources, or scheduled to transfer as early as possible in 2020.
HECF also ranked first out of all global 412 GRESB participants which participated in the optional Resilience module, demonstrating the portfolio’s ability to future-proof the value of its assets over time.
This is an incredible achievement and highlights Hines commitment to ESG. Congratulations to everyone involved!
“We are once again delighted on behalf of our client for these numerous excellent outcomes. It is great to have both Hines’ and EVORA’s hard work validated in this way. It’s a strong partnership that clearly brings great things out of one another. And now we must turn our attention to next year and beyond because – of course – there is still plenty more progress to make within ESG!”
Oli Pye, Director EVORA
“I wanted to take a moment to thank the EVORA team for all of the hard work, diligence and creativity throughout the year to deliver these outstanding GRESB results. As the impact of climate change accelerates, so should our ESG efforts, and I am happy to say that as a team we have been able to keep our eye on the ball and prepare the HECF portfolio in order to stay one step ahead. I look forward to continuing to sharpen our pencils as we move forward.”
Daniel Chang, Managing Director, Hines
https://evoraglobal.com/wp-content/uploads/2020/12/jakob-owens-205638-scaled.jpg10001500EVORAhttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngEVORA2020-12-16 16:14:112020-12-16 16:14:12Fourth Consecutive Year Sector Leader Status for Hines in the 2020 GRESB Real Estate Survey
On January 1, 2021, the CO2 price will be introduced in the German heating market. It will start at EUR 25/t and then rise in a predictable manner to EUR 65 by 2026, before the price is freely determined via emissions trading from 2027. Most estimates predict that they will then quickly reach triple digits.
In 2019, when the then German ‘Klimakabinett’ made its decisions it was still seen as one of the key drivers for achieving Germany’s CO2 reduction targets. Today, there is little sign of that. The price is considered too low to have a strong steering effect. The governing coalition is also divided on the question of who should carry the costs: is it the tenants, the landlords, or both? If no cap is introduced, and it does not look like it will, landlords will initially be allowed to pass on the full CO2 price to tenants as part of their normal heating costs. In this scenario the energy supplier would simply add the CO2 price to the energy bill and currently doesn’t even have to declare it separately.
Have you already talked to your key tenants about what the CO2 price will cost them in the next few years and how these added costs can be reduced? Have you analysed the impact that this levy could have on the value development of your assets?
Let’s talk about it. For 10 years, EVORA has been successfully helping clients with understanding climate policy risks and opportunities and with positioning themselves strategically, making their funds or individual assets productive, profitable, and resilient to change. Now also in Germany.
https://evoraglobal.com/wp-content/uploads/2020/12/dmitri-popov-286502-scaled.jpg10001500Meike Borchershttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngMeike Borchers2020-12-15 16:48:312020-12-15 16:48:36It is less than a month until the introduction of CO2 pricing in the German building sector - are property owners and tenants prepared?
Infrastructure is vital for living comfortable, convenient modern lives. Every day, infrastructure systems are working beneath the ground, on the land, and above our heads. Each morning, when you turn on the tap, power up your computer, or step outside to travel to work, you are interacting with infrastructure. Infrastructure has a life of its own and without it our modern lives would be very different.
Infrastructure is a huge area of investment globally which attracts both government and private sector funding. Due to its size and complexity, it often requires a complex mix of investment strategies including debt, equity and bonds. Infrastructure assets, alongside real estate, are categorised as real asset investments and therefore they share similar Environmental, Social and Governance (ESG) risks and opportunities. However, the scale and complexity of infrastructure assets can create some unique challenges.
The United Nations predicts that population growth will continue, reaching 9.7billion people on the planet by 2050. Much of this population growth will be in urban areas, and infrastructure provisions will need to grow alongside the population. As a result of the continued and growing demand for infrastructure provisions, infrastructure assets have significant potential to positively affect the environment and society. These assets will also play a role in creating a successful and resilient response to the challenges of a changing climate, as well as being affected by climate change themselves.
Due to the pivotal role infrastructure assets hold in meeting current and future demand, and their centrality in addressing climate change, they have varied and wide ranging stakeholder interest groups with high levels of expectation when it comes to ESG delivery. For this reason, EVORA are seeing many investors coalesce and gravitate toward the United Nations Sustainable Development Goals (UN SDGs) as a suitable framework that addresses stakeholders concerns and which they know and understand. Increasingly, there is a growing expectation that implementing effective ESG strategies aligned to the UN SDG’S which address the associated risks and opportunities and link actions to outcomes is becoming the minimum requirement.
This year, the Covid-19 pandemic has profoundly impacted the global economy, causing many to take stock, reflect and consider the future of society. We face dual crises: responding to the pandemic and addressing and responding to environmental and social challenges, including climate change. In a post-Covid world, infrastructure can be central to addressing these multiple challenges. This has been solidified by both the UK Government and the new US administration pledging to place investment in infrastructure at the heart of their ‘build back better’ programs.
So why look at infrastructure now? Firstly, investment in infrastructure development is urgently needed to replace aging and poorly performing assets with assets fit for the 21st century that positively address the climate crisis. Secondly, infrastructure assets are fundamentally about investing in future generations but also, crucially, provide much needed jobs today, thereby providing an excellent way to rebuild and diversify regional and national economies. With these factors in mind, having robust ESG management becomes essential in managing outcomes as well as demonstrating effective use of funding vehicles.
In the recent Aviva Real Assets Study 2020 [1], in which global institutions were asked about their views on ESG post-COVID, the overwhelming response showed ESG as front and centre for investors’ concerns. 81% of respondents stated that ESG objectives and delivering on sustainability is a primary duty of their organisations. Furthermore, 91% of global insurance and pension fund investors are now committed to delivering Net Zero. As a result, infrastructure assets in all its various classes and forms are the foundation for how the Net Zero commitment will be realised. The Aviva survey also indicates that ESG has evolved in its sophistication and needs to be considered as a balanced a score card between the ‘E’ and ‘S’ and not simply about environmental risk management that has been the focus in the past.
So how can the ESG and sustainability agenda be delivered in practice? There are a variety of excellent reporting frameworks, such as GRESB and the UN Principles for Responsible Investment (PRI), for investors to work within which provide globally recognised frameworks which set a baseline for benchmarking performance. Launched in 2016, GRESB Infrastructure continues to grow in popularity, with over 426 assets totalling $579billion assets under management participating in 2020. As the scheme evolves, greater focus is given to performance outcomes rather than just good intentions. Now more than ever, it is imperative for investors to analyse, understand and seek ways to optimise ESG performance in their investments. Reporting is a great place to start.
We have been working with closely with investors over the past decade to deliver best-in-class ESG practices, helping them strive to constantly do better by setting ever more ambitious targets to improve ESG performance. EVORA can help you understand and optimise your infrastructure ESG approach. If you are interested in finding out more, contact the team at infrastructure@evoraglobal.com.
Meike joins EVORA at a hugely significant time as we continue with our international growth strategy, having recently opened offices in Frankfurt, Milan and India. This is another landmark appointment for EVORA and further underpins capabilities as we develop both depth of expertise and geographies for the real estate investment market. Meike brings with her a wealth of expertise, having spent a number of years in the US, UK and most recently in Germany. She has a strong technical background, which is critical for our end-to-end service offerings, and is an expert in building assessment and certification. As such she embodies EVORA’s holistic approach to long term value.
Meike will be responsible for introducing the EVORA suite of ESG services to the real estate sector in Germany and the wider DACH region, with a particular understanding and focus on the specific national and regional aspects as well client expectations.
The timing of the entry into the German market couldn’t be better; it coincides with the introduction of a number of game-changing developments in the real estate sector such as the adoption of the Taxonomy Regulation by the European Commission, the development of the EU’s Green Deal components and most recently the European commitment to speed up effort and to cut greenhouse gas emissions by at least 55% by 2030 while still targeting climate neutrality by 2050.
‘Having worked in sustainable real estate consulting for over a decade, it seems to me that the time is finally ripe for big meaningful steps to a low carbon future and a sustainable and healthy built environment. Shaping this future takes a range of technical and economic expertise paired with passion and innovative tools which I am very happy to have found with the EVORA team. Auf geht’s!’
Meike Borchers. Head of Germany
Also joining the German team is Melf Asmussen who will be leading our technical services and certifications work. While EVORA has deep expertise in ESG Strategies and GRESB reporting, the ability to drive these policies into the buildings themselves is a critical element in our approach. Melf has a Masters in Energy and Environmental Management as is perfectly placed to lead our technical teams in the DACH region.
“We are delighted to welcome Meike and Melf to the EVORA family at such a critical time for our market and the wider investment community. Public perception, investor expectations and regulatory disclosure requirements are combining to create a time of unprecedented change and the formal opening of our office in Germany allows us to support our existing and new German clients more fully in their transition to a low carbon economy. Only 10 years to meet a 60% reduction in emissions!”
Philippa Gill , Director – Europe
https://evoraglobal.com/wp-content/uploads/2020/11/WiredScore-Header-3.png196600EVORAhttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngEVORA2020-12-01 10:24:112020-12-01 10:24:13EVORA Global is delighted to announce that Meike Borchers has joined as Head of Germany and the wider DACH region.
With market uncertainty pervasive and belief in business deteriorating, using the annual sustainability report to restore confidence with all stakeholders is more important than ever.
Your next report will need to provide a clear, trustworthy narrative, detailing specific insights on how the pandemic has impacted on your sustainability strategy, business model, risks and stakeholder commitments.
Sustainability frameworks enable companies to provide reasonably comparable and useful information. However, no such template exists to compare how companies have responded to COVID-19.
EVORA have been making in-roads in accounting for the COVID crisis in our reporting for clients since March, learning more with each report, and share key areas below to consider during your next round of reporting:
1) Controlling the content
COVID-19 has impacted people in many ways. Employees may have experienced challenges adapting to a new way of working; property managers dealing with a whole new set of procedures and protocols to follow; tenants juggling the ‘return to work’ safely and local communities may have experienced unexpected environmental and social impacts.
By including a COVID-19 one-off section in the report; the opportunity may be missed to communicate the impacts of the pandemic in a more nuanced way, tailored to the different stakeholders affected. Instead, it will be more authentic weaved in specific messaging throughout the sustainability reporting, where relevant, through the voice of the affected stakeholder, for example a direct quote from an employee or a tenant.
We also encourage the simplification of the message – avoiding jargon, cliches and overly technical language, and, instead, using straight-forward, clear and concise language.
2) Mapping what is material
Materiality assessments inform meaningful sustainability communications, enabling companies to identify sustainability issues that are important to both their stakeholders and to business success. Used to their full potential they can help shape company strategy, galvanise internal functions and gain senior buy-in, as well as uniting disparate teams and processes.
As society deals with the pandemic, materiality assessments should be reassessed to better integrate sustainability into business strategy and to explore the relationship between a company’s impacts on a sustainability issue and the impact of that issue on the business.
3) Dealing with the data
The shift to homeworking presents a unique challenge. Companies will be demonstrating a reduction in Scope 1 and 2 greenhouse gas emissions in line with the reduction of office building energy consumption.
This presents several possible issues for the reporting company:
Any movement in reported emissions could mask the impacts of any genuine reduction activities
Distortion against targets set
Justification may be required for smaller energy reductions than others in the sector, or anticipated, because they have seen a lesser impact from the pandemic, for instance through keeping offices open, with higher ventilation requirements, rather than closing buildings completely.
Emissions have not been eliminated, rather they have been relocated to employee homes beyond the company’s direct control. Some might argue that the decrease in commuting related emissions makes up for this. In order to provide a credible comparison of year on year performance, quantifiable homeworking emissions should be considered for recognition.
Our initial response is to always explain data with fully contextualised narrative.
4) Shift to online-first
We recommend an online-first approach for corporate sustainability reporting. This enables the audience to more easily search, navigate and locate information. This format can enhance storytelling – enabling more in-depth features and linking direct to other relevant documents.
Stakeholder scrutiny of how organisations are responding to the COVID-19 pandemic is bringing heightened attention to the importance of corporate transparency on sustainability issues. EVORA design reporting strategies for organisations, enabling them to apply frameworks, communicate meaningful sustainability outcomes and impacts to key stakeholders and use reporting as a tool to improve sustainability performance. Get in touch with the EVORA reporting team today.
https://evoraglobal.com/wp-content/uploads/2020/11/max-bender-olXfar5J3WE-unsplash-scaled.jpg10011500Joanna Tomlinsonhttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngJoanna Tomlinson2020-11-09 13:29:312020-11-09 13:29:32Communicating COVID-19 impacts through Sustainability Reporting
The current World GBC Health & Wellbeing Framework has been in the making for many years now but there is no doubt that living in the midst of a global pandemic has focused our minds on what both places, and better, means for us as a species.
The first essential question is what is ‘place’?
It means so many different things to each of us, both individually, culturally and as a society. In the current situation, it has come to mean both refuge and prison, not least due to the impact of the lack of choices imposed on us and what that does to our mental health.
The definition of office space has been changing rapidly over the last 5 years, driven by new trends in employee engagement, better understanding of the science behind productivity within the workplace, and wider realisation of the impact that unseen threats (long before COVID-19) have on both our short and long term health, happiness and performance.
The recent realisation that most office workers can function well from home is naturally leading to another round of floor tile-gazing as the commercial market asks itself ‘what do people want now?’. Sadly, I suspect the answer is some way off…but it may be a better answer for people.
How did we get here?
I can’t possibly begin to address the myriad responses to that issue, and are surely being written right now, in an attempt to answer this. For me, part of the issue comes in our persistent refusal to consider ourselves a mammalian species, occupying the same spaces as other species on a single planet (not the place here to embark on single planet living and the anthroposcene). Despite all our best efforts, we still have the same respiratory systems, neurological and physicals responses and social needs that our tribal ancestors did. No amount of stone, clothing or behaviour can change the fundamentals of the Homo sapiens as a species, even if our jaw bite has altered slightly over the centuries.
As such, it should come as no surprise to us to discover that what matters to us is the people in those places that we miss most (see the copious employee surveys for evidence) and the sense of belonging to a tribe, be that family, colleagues or a combination. Place, however, is now tinged with a sense of fear, and we must work harder than ever to alleviate that fear and visualise the invisible threats that we are all living with.
What is a ‘better place’?
Philosophically, of course, the first question has to be, “compared to what?” In the resplendent glass houses of the developed cities, where there is an overwhelming choice of types of milk for your coffee in the lobby café, attention has focused on occupier facilities, flexible working space types and more human features within the office environment. However, lest we forget the inequality inherent in air quality issues, the intensity metric of poor air quality versus ‘months of potential life reduced’ is brutal and unforgiving. Focusing on key issue in isolation tend to lead to unintended consequences, which is why we are whole-heartedly supporting the 6 key principles of the new Health& Wellbeing Framework[1], which address both the inter-related factors of healthy places but also the whole building lifecycle.
Since we evolved into our original habitat, complete with sabre tooth tigers and other hungry predators, our natural defences evolved with us; smell, taste, hearing. We did not need to “see” air quality, since we lived mostly outdoors; we did not need to go to the gym, since our food needed to be picked, or chased; we did not need to meet our friends online, since the survival of the tribe depended on our sticking together.
As we stand on the border of a new era of engagement, understanding and opportunity, we do have the chance to reset the parameters of both place and human relationships. A better place, for people, in this context, signifies one which both protects and nurtures, and to do so in the 21st Century requires new eyes and ears in the form of constant monitoring, and new reassurance in the form of visible compliance with new regimes. The good news is that the impact of place on human health is now primary in everyone’s thoughts, and also that the technology is now available to provide the feedback we need from those places. Whether that is our own bedrooms, the road outside or our office, solutions are now at hand that were inconceivable even 10 years ago.
As we reconsider what it will take to get us back to better, this WGBC Framework could not come at a more relevant time. Each crisis brings opportunity.
EVORA’s uniquely broad expertise enables the seamless embedding of health and wellbeing with broader ESG strategy, processes, and reporting commitments for holistic optimisation. Contact our team of 11+ qualified health and wellbeing experts for support.
https://evoraglobal.com/wp-content/uploads/2020/11/daniel-funes-fuentes-TyLw3IQALMs-unsplash-scaled.jpg10001500Philippa Gillhttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngPhilippa Gill2020-11-04 09:40:072020-11-04 09:40:09What is a better place, for people?
Embodied Carbon accounts for the total greenhouse gas emissions released to the air as a result of constructing a building
Commitments have been made to achieve Net Zero Carbon by 2050, Embodied Carbon must be considered and reduced to achieve this
Climate change poses a number of financial risks
Embodied Carbon studies can increase climate resilience and therefore reduce risk and increase return
What is Embodied Carbon?
Have you ever walked past a building site and wondered where all the materials have come from? Whether the timber began life as a tree in the UK or abroad? While I was on work experience on one of my Father’s building sites, I found the idea that materials from potentially all around the world have come together to make something new, fascinating. I wondered about the work and energy that went into getting them onto the building site; first the raw materials are extracted, then transported to an industrial site where they are processed into a product, then transported again to the construction site and finally put into place. At each of these stages, energy is consumed and therefore emissions of greenhouse gases are released to the air (measured as emissions of CO2 equivalent, in this article, ‘carbon’). As such, each individual building material has a certain amount of carbon associated with it – the emissions released as a result of that product’s life. These emissions are the embodied carbon of the product, and as a wise person once said, ‘One brick does not a house make’, so the total emissions from all of the products and processes that go into making a building, form the total embodied carbon of that building.
The embodied carbon during construction, along with the operational carbon during the building’s life, such as energy used for HVAC, in addition to the end of life activities such as demolition or deconstruction – depending on where the system boundary is considered – all sum to the total carbon that is released as a result of the building’s life. Accounting for and reducing total carbon emissions has never been more important as the effects of anthropologic climate change continue to devastate parts of the world.
Why is Embodied Carbon becoming more important?
Following the Paris Agreement in 2015, governments around the world agreed that climate change must be limited to ‘well below 2⁰C’, and in our industry a figure of 1.5⁰C has been widely adopted as the target maximum [1]. This can only be achieved by countries and industries achieving a balance between carbon emissions and carbon sinks, resulting in the amount of carbon released to the atmosphere totalling ‘Net Zero’, by 2050 [2]. These commitments are binding, and increasingly severe fines will be issued to those who emit excessive carbon. To be successful, is it vital that governments and companies alike create pathways to Net Zero, to plan the transition to a decarbonised future and ensure that this future aligns with a 1.5⁰C trajectory (see figure 1). It is also important to consider both the total volume of emissions and the rate at which they are released, therefore change must happen in the short term, as sudden reductions in 2040 for example, will not be as successful in limiting the impact of climate change [3].
Figure 1: Global Warming Projections[12]
In commercial real estate, 23 of the leading commercial property owners have committed to becoming Net Zero by just 2030, under the Better Building Partnership Climate Change Commitment [4]. Under this agreement, scope 3, or all other greenhouse gas emissions that occur due to its activities, but which it has no direct ownership or control over, are also included, which covers embodied carbon. With current technology, generating embodied carbon through construction is unavoidable, therefore the only options to balance embodied carbon are to reduce it as much as possible, then offset the rest.
What are some of the risks posed by climate change?
The EU Emissions Trading Scheme operates under a ‘cap and trade’ principle, meaning although offsets can be brought, they will be capped and reduced over time and eventually there is a risk that offsets will no longer be available, or the prices be too high to be economically viable [5]. Similarly, in the voluntary offsetting market, there are a finite number of projects delivering offset ‘credits’, and over time, the low hanging fruit will be depleted so that financing projects becomes ever more expensive. This could lead to the more significant risk of fines being imposed for excessive emissions, along with a carbon tax on the remaining embodied carbon. Furthermore, although industry leaders have placed more responsibility on themselves to improve climate resilience and reduce emissions, there is a transitional risk that regulation will change in the future, leaving some assets stranded. For example, regulation could restrict the use of inefficient technologies or improve carbon accounting and bring more sources of emissions into scope. Should companies refuse to act now and continue with business as usual, they risk being caught out later and be forced to make sudden adjustments to align with new regulations, which could prove extremely costly. Such regulations include the draft new London Plan policy GG6: Increasing efficiency and resilience [6], this policy requires those involved in planning and development to improve energy efficiency and support the move to a low carbon circular economy. As such, planning permission could be refused to developers who do not align to this policy.
The requirements around disclosing climate resilience and environmental performance is becoming more commonplace, the Taskforce for Climate-Related Financial Disclosure (TCFD) is increasing transparency in this area by requesting organisations disclosure their climate-related financial risk publicly [7]. While currently voluntary, emerging Sustainable Financial Disclosure Regulations mean that this is unlikely to stay this way long term. There is therefore a reputational risk that stigmatisation of poor climate resilience could grow, and negative stakeholder feedback could arise. This in turn could prove material should a company lose out on investors because of this, who will be aware of the various financial risks climate change poses and view these as investment risks.
The physical risks of climate change will also be material for any entity with physical assets, which includes real estate, property could be damaged, for example by increased rainfall or flooding, or induce additional operating costs, for example higher temperatures leading to increased use of HVAC equipment, thus requiring additional maintenance. Therefore, it is in the best interest of the industry to limit the physical effects of climate change by sticking to a 1.5⁰C trajectory, where is it widely reported that these risks will be more significant at 2⁰C and above [3].
It must be noted that there is risk in adopting new technology, as it is unknown how that technology will perform in the long term and could have unforeseen consequences, for example new HVAC equipment could cause a building to overheat in certain conditions, potentially contributing to the urban heat island effect. However, new technology and innovations will be required if climate change commitments are to be met, which is why it is important that there is collaboration across the industry to develop and trial new technology and share best practise, which is already evident in companies with robust Net Zero Carbon Pathways, such as Derwent [8]. Considering the challenge of reducing scope 3 emissions, such as during tenant fit out, since developers do not control this activity directly but are still responsible for the carbon, collaboration and stakeholder engagement will be of great importance.
Where does embodied carbon fit into the bigger picture, and how can it increase climate resilience?
Embodied carbon studies can help to increase climate resilience in a number of ways, for example, as such studies become more widespread, increased accountability for developers will help reduce redundant building and encourage developers to think critically about their projects, potentially leading to increased major refurbishment works in preference to new construction. Furthermore, embodied carbon studies can encourage leaner and lighter building, as the simplest way to reduce embodied carbon is to use fewer materials, through identifying and removing redundant building elements. Material hotspots with high carbon intensity can also be identified, and alternatives with lower embodied carbon, such as recycled and reused materials, are promoted which also helps to progress towards a circular economy as highlighted in the European Green Deal [9]. Moreover, by considering embodied carbon during the design phase, strategies can be put in place to reduce it, such as designing for deconstruction, allowing building elements to be disassembled and reused or recycled more easily at the end of life.
Best practice dictates that accounting for embodied carbon emissions falls both with the initial developer and first-time purchaser of buildings [10], because both can have an influence over the design and construction which takes place. Whilst later purchasers of that building will not assume liability for the embodied carbon, it does present an increasing transition risk to developers and purchasers of new buildings, because over time, embodied carbon will contribute an increased proportion of the overall building lifecycle carbon as operational emissions fall. As a financial value is assigned to this risk, the incentive to minimise embodied carbon in future will become ever more critical in investment decision making.
Fortunately, years of varying approaches to measuring and managing embodied carbon have now given way to increased industry consensus, through the publication of key guidance, such as the RICS Whole Life Carbon Assessment for the Built Environment [11]. Several tools now also exist to enable efficient construction of embodied carbon models and identification of best practice enhancements. EVORA utilise One Click LCA for this purpose, saving clients precious time and resource in fast moving design processes.
Embodied Carbon Studies should also be incorporated into a Net Zero Carbon Pathway, as this sends a clear market signal that the financial risks of climate change have been understood and accounted for, which in turn is likely to attract investors, improve stakeholder relations, and could even attract tenants and increase asset value as the market develops over time. However, it is important to plan out a pathway sooner rather than later, reducing the likelihood that a sudden transition is required, which in turn reduces the financial risk of climate change.
https://evoraglobal.com/wp-content/uploads/2020/09/LinkedIn-Posts.png6281200Michael Nortonhttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngMichael Norton2020-09-18 13:56:272020-09-18 13:56:29Embodied Carbon and its Role in Achieving Net Zero Carbon
EVORA Global is delighted to announce that Alberto Ballardini has joined the company as Associate Director, Italy.
Alberto has joined EVORA at an exciting time. Whilst recognising the challenges faced by the current COVID-19 pandemic, the EVORA Board is looking ahead. Our clients, both based directly in Italy and with pan European portfolios, require more support than ever to future proof their assets, address the climate crisis challenges and have a positive social impact on their communities.
Alberto brings over 13 years of sustainability and real estate experience to the business, he is a green building certification specialist with accreditations covering LEED, BREEAM and Wired Score. With a deep understating of local market and practices, Alberto also has experience in providing GRESB support to Italian clients. He was instrumental in founding GBC Italia and used his long term vision and international network to support the accreditation of REbuild Italia as the leading innovation platform in the Italian real estate community.
Alberto will be responsible for developing, managing and delivering client sustainability programmes. Alberto will also work with our specialist teams to roll out of Climate Resilience, Green Building Certification, Audit, Net Zero, Health and Wellbeing, Wired Score and Social Value services to our Italian client base.
Paul Sutcliffe, Director and Co-Founder comments,
“EVORA is delighted that Alberto has chosen to join us at this exciting time in our expansion of our business. I have personally known Alberto for a number of years. Alberto’s passion for sustainability and drive to deliver client value, coupled with his sense of adventure make for exciting times ahead in Italy. I look forward to visiting (post lock-down and when safe to do so of course).”
Alberto Ballardini states,
“Having worked with founders, Chris, Ed and Paul and the wider team at EVORA for some time now, it felt like the right time for me to join. The lockdown gave me the opportunity to realise that I could use my skills and the second half of my life to accelerate market transformation, slow-down or stop climate change and have a positive impact on my country. Our corporate values of Respect, Inclusion, Collaboration, Innovation and Excellence are my values as well. I am excited to lead the local expansion of a company where talent and passion can flourish for a good cause!”
https://evoraglobal.com/wp-content/uploads/2020/07/alex-vasey-rnc4-Z4Zk8M-unsplash-scaled.jpg10001500EVORAhttps://evoraglobal.com/wp-content/uploads/2017/06/EVORA-logo-for-small-applications-WHITE-300x172.pngEVORA2020-07-16 14:13:292020-07-16 14:13:30Alberto Ballardini joins EVORA Global to lead business growth and delivery in Italy
We are delighted that Sarah has agreed to join our board as a Non-Executive Director. Sarah’s truly deep and rich experience within the commercial real estate sector over the past 20 years will provide hugely valuable insights as we continue to build our business.
In addition to her thought leadership on the critical role of real estate in delivering sustainability, Sarah’s testing of our strategy and operating models will help to inform the sustainable growth of the business and bring a fresh external perspective to our thinking and practice.
We can’t wait to get started.
“As climate change remains on the top of the agenda in the real estate sector, sustainability consultancies have a vital role to play in supporting and influencing the industry. I’m delighted to be joining EVORA as a Non-Executive Director to help them navigate through these exciting times.”
Sarah Ratcliffe
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