Left: Caroline Milne, Head of Communications at BPIE. Right: Zsolt Toth, Senior Project Manager, BPIE. Credit: BPIE
Development | Feature | Opinion

Paris-Proofing Retail Property: Who Needs to Do What and by When?

“Despite laudable efforts, the retail real estate industry still needs a common vision and strategy to achieve full decarbonization by 2050.”

By Caroline Milne and Zsolt Toth


BPIE is hosting a webinar discussing this very topic head on, together with experts from leading retail property companies. To learn more about the best strategies and their common vision register now:


The challenge is clear: In line with the Paris Agreement and considering the looming threat of climate change, all buildings, including retail, need to be carbon neutral by 2050. However, the recent “A Paris-Proof Retail Real Estate Sector” report, issued by Buildings Performance Institute Europe (BPIE), shows that few organizations in the retail sector are sure of how to achieve a zero-carbon state. While the COVID-19 pandemic has, without a doubt, thrown a wrench in many sustainability plans, several pre-existing barriers to reaching net-zero retail buildings have persisted for years.

Over the last few years, most real estate companies have introduced ambitious pledges to reduce their carbon emissions and have developed strategies to achieve those goals. Such commitments demonstrate engagement to transition to a net-zero world, but they also show the diversity of targets and metrics. The confusion around definitions, concepts, and voluntary standards is symptomatic of the situation that has been faced by the real estate sector for nearly two decades. An ever shifting and increasing number of terms for highly energy-efficient and climate-neutral buildings, such as zero-energy, net zero, nearly zero, zero-carbon, and net zero carbon, are already being integrated into public policy and industry practices, but with a great deal of uncertainty around what they mean.

In addition, those definitions refer to different boundaries: site energy, source energy, cost, or emissions. There may also be further variations in the requirements of those standards depending on whether new or existing, office, retail, or other types of buildings are under consideration. How can a building, especially one with many different types of users, expect to achieve net zero carbon if the very concept itself means different things to different people? How can real estate actors win the credibility of investors, clients, and policymakers and convince the wider public that their assets are indeed on the pathway to climate-neutrality?

A wide range of carbon measurement protocols and standards, ESG frameworks, and green building certificates, adds to the complexity. Understanding the universe of ESG frameworks is critical to effectively meeting stakeholder expectations. However, more than a dozen ESG reporting, disclosure, and ranking platforms are currently used by investors in Europe. While sustainability certification schemes have been very successful in sensitizing the industry to take action (such as BREEAM, DGNB, or HQE), it is increasingly unclear which reporting provisions should be followed.

At least 1,750 sustainability reporting provisions exist worldwide, with an almost tenfold increase in the number of reporting requirements since the introduction of the first frameworks about 25 years ago. The most significant increase in new requirements has taken place over the past five years, and compared to all the other regions, Europe has implemented the largest number of provisions demanding the disclosure of environmental impacts, climate-related risks, and good governance practices.

Those developments demonstrate unequivocal industry progress. However, the proliferation and diversification of those frameworks makes it increasingly challenging to meet ESG disclosure requirements. Critically, they highlight a fundamental lack of coordination both within the industry and between retail property and policymakers. Add to that a highly complex owner-tenant relationship, split incentives, data gaps, and inconsistency of metrics and we have an intricate web of problems and potential solutions – but no clear roadmap towards achieving a net-zero carbon retail property sector by 2050, with definite assignments of responsibilities across the entire industry.

At BPIE, we have observed many excellent sustainability strategies at the company level – there appears to be no shortage of willpower. That said, for a strategy to be executed over the long-term, it requires a supportive policy framework. Currently in the EU, the European Commission is preparing a number of legislative revisions as part of its Renovation Wave strategy, notably the Energy Performance of Buildings Directive (EPBD), which is expected in December 2021.

We can count on seeing the introduction of Minimum Performance Standards, stricter Nearly Zero Energy (NZEB) standards, and improved methodologies with clear objectives to ensure net zero energy and carbon buildings over the whole life cycle by 2050. Such measures are urgently needed if we want a fighting chance to reverse climate change. However, their design and execution should be fit for purpose and should not happen in a policy silo. Policymakers need more engagement from the retail property sector and the ability to speak with one voice, now more than ever.

Over the past year and a half, BPIE has engaged with many industry players to precisely identify the following: For retail real estate to become Paris-Proof, who needs to do what, and by when? We intend to release that strategy at the end of October 2021, and we hope it will provide a strong starting point for retail to build consensus as an industry and to draw closer to policymakers. Regulatory changes made now must work for everyone going forward. The time is ripe for strategic industry action.


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