Australia’s real estate industry is pushing to green everything from concrete to cranes to customer utilities, as the focus shifts to cutting carbon emissions throughout the entire value chain.
At the ESG in Real Estate Summit in Sydney this week, many real estate businesses shared their sustainability strategies that they had in place to tackle their own carbon emissions and even some indirect emissions.
But real estate sustainability leaders have now set their sights on the much more difficult task of scope 3 emissions.
Scope 3 covers all of the emissions that are associated, not with the company itself, but what the organisation is indirectly responsible for – up and down the value chain – such as suppliers, building materials and even tenant utilities once the property is leased.
“I think we need to start tackling scope three because we need to send those market signals to our suppliers – upstream and downstream – that we’re really serious about decarbonising,” Jo-Ann Gamble, National Sustainability Manager – Investment Management at Lendlease, told the summit.
Lendlease has set an ambitious absolute zero carbon emissions target by 2040, including scope one, two and three emissions, as well as no carbon offsets.
“One of the hardest things about scope three is getting the data because it’s everything upstream and downstream, so all the materials or services coming into your real estate assets and going out.”
Gamble said the targets were having an impact on and driving change among some suppliers, resulting in examples like concrete companies producing net zero products.
Dr Louise Camenzuli, Partner and Head of Environment and Planning at Corrs Chambers Westgarth, said a significant risk was the net zero pledges that real estate businesses were making and the statements around those pledges.
“It’s really critical right now to be very clear about those statements and the extent to which they apply to scope one emissions, scope two emissions and whether they do or don’t include scope three emissions,” Camenzuli said.
“And to the extent that you’re trying to drive change, in terms of sustainability practices in the supply chain, it’s really important that any disclosures that you make around scope three emissions also display the assumptions that underpin those statements that you’re making, particularly when you’re making representations around future forecasts.”
Max Van Biene, Head of ESG and Sustainability Strategy at Edge Environment, said procurement teams within real estate businesses needed to be involved early on and part of the journey in tackling scope three emissions.
“I think the procurement team needs to be involved and they need to be part of this journey, just as they need to realise that carbon is part of their role, and is integrated at the very beginning, no matter what organisation is,” Van Biene said.
He said real estate businesses also needed to have the right tools to engage suppliers in a way that didn’t put too much pressure on them in terms of reporting and driving change.
Photo credit: FuturePlace