BPIE (Buildings Performance Institute Europe) has published today a vision and a step-wise roadmap for retail real estate to reach 2050 net zero carbon emissions, in line with the Paris Agreement. The roadmap is the result of over one year of engagement with 14 retail European and global property developers, investors and managers. A first-of-its-kind effort, it provides detailed guidance for the entire retail property value chain to reach net-zero carbon, which includes the property sector, policymakers, commercial tenants, the construction sector, and financial institutions, by 2025, 2030, and 2040.
“The vision is clear,” says Oliver Rapf, Executive Director of BPIE. “Retail real estate buildings and portfolios must achieve zero carbon throughout their lifecycle, including development, refurbishment, and operation. Importantly, the construction of new buildings and renovation of existing assets will need to happen without further depleting our carbon budget.”
Retail real estate companies are facing increasing pressure from regulators and the investment community to report what they see as their upcoming climate risks. Retail real estate investment and management organizations are beginning to recognize carbon- and climate-related risks, as well as the importance of minimizing those risks. The efforts to contribute to Paris alignment need to be articulated, developed, and scaled across the sector rapidly. As part of the climate alignment efforts, the sector will create sustainable places and contribute to maintaining the social fabric by providing environmental and social infrastructure.
“It’s high time for both the retail property sector, construction, financial institutions, tenants and policymakers to step up efforts to intensify collaboration, and BPIE’s roadmap is a promising start. This collective vision sends out a clear message that the sector is ready to take action,” says Clemens Brenninkmeijer, Head of Sustainability at Redevco B.V, a sustainable property investment manager based in the Netherlands.
“We have a great starting point; it’s now in the hands of the retail property sector to take this opportunity forward,” continues Brenninkmeijer. “We must ensure goals and thresholds are as robust and relevant as possible, and that they reflect the state of the markets and progress on climate outcomes.” While major efforts are already being taken at company level to achieve net-zero carbon, the retail industry is simultaneously going through a rapid transformation of its own.
The increase in online shopping is changing the industry’s building usage, and this trend will only continue. This indicates the low-carbon agenda should be considered against the background of changing shopping habits and user expectations. A successful low energy and low carbon refurbishment therefore needs to be coupled closely with non-energy related retrofitting activity and social benefits. The biggest such opportunities occur when the interests of customers, retailers and landlords are aligned.
Joost Koomen, Secretary General of the European Council of Shopping Places (ECSP), said: “This is about mitigating risk and preparing for the future, but it is also an opportunity. Retail properties play an important role in reducing emissions and improved rebuilding efforts to tackle climate change. Those companies that are adapting first will be at a competitive advantage, being best prepared for the challenges ahead, driven by new innovative ways of doing things and access to potential new partnerships and funding”.
The European Commission is now preparing a package of legislative revisions as part of its Renovation Wave strategy, notably the Energy Performance of Buildings Directive (EPBD), expected in December 2021. The decision-making and consultative process will continue into 2022 and represent an ideal opportunity for the retail property sector and policymakers to increase engagement and take coordinated strategic action.