Emily Hamilton

Businesses have to be transparent about how much they are really doing.

In the real estate sector, the primary organisation driving change is the Better Buildings Partnership, where over 40 or organisations with around $375bn under management are signed up to a climate commitment. Emily says: “That commits real estate businesses to demonstrate how their portfolio is going to get to net zero by 2050. But what is different to a lot of the other net zero commitments is the transparency that BBP is asking for. How much of your portfolio is under that commitment? Sometimes that information is quite hard to find. Is it an intensity target? Is it an absolute target? What are you doing about renewables? How much of your tenants’ emissions are you including?  It is extremely detailed. And that's what we need, and it's really starting to drive this huge change now.”

Emily also co-chairs the BBP owner-occupier forum which looks at issues of sharing data and dividing fairly the cost of getting a building to net zero

The pressures for adaptation: our industry would rather adapt than divest.

Emily says: “To be really honest, a lot of us have done our assessments, we understand the key risks. We've done a global assessment on our portfolios, we can now say which ones are at risk of flooding, which are at risk of heat stress, and what are the cumulative impacts? But how do we adapt them? And at what point do you adapt versus divest? That's going to be the next bit that we've got to figure out. I think our approach is that we don't want to divest unless we absolutely have to, that these buildings need fixing somehow. Two thirds of our buildings will be here in 2040 and they're not going away. So we've got to find a way to make it financially viable to retrofit them.”

She adds: “I think some divestment is happening behind the scenes. I don't think many are being public about it, because of the impact to the value of the portfolios. There's a big transparency issue there.”

The financial sector could be driving this harder.

Emily says future-proofing buildings needs technology and top-down leadership. Not knowing how to go about it, and how much it will cost, creates a massive barrier. But investors, if they are committed, can make a difference.

“More and more you're finding the investors in real estate are pushing asset managers and real estate investment managers to have detailed delivery plans, rather than just corporate commitments. But that's very much in Europe, and in places like Asia, it's still not as high up the global agenda at all. One of the biggest barriers is that everything needs to be country-specific at the moment, is that investment managers need to respond to country specific legislation as there’s very little global regulation for ESG in real estate and none for net zero carbon. However, with the EU rolling out it’s Sustainable Finance Plan and the implementation of the Sustainable Financial Disclosure Regulations, regulation is becoming more region focused because of specific regulations like SFDR and the pace of change across financial services.”

In the UK, new sustainable buildings built by a respected developer  will likely have as a minimum very low embodied carbon and follow more stringent processes to demonstrate how they are net zero in operation “Whereas in Asia, in places like Malaysia for example, having energy efficiency initiatives implemented is seen as a really good start. So that relative point is difficult to deal with.”

In corporate responsibility, businesses have to address the areas they are best suited to.

Emily’s firm has decided to use the UN SDGs as a framework, but she cautions: “We recognise they are all interconnected, but to try and say we're going to tackle all 17 is disingenuous. So we've said there are some key SDGs we think we can make a bigger impact on like sustainable cities, for example. And if you focus on sustainable cities, that's got a lot in there around reducing inequality around affordable housing, which then indirectly could link to another SDG, the one about eradicating poverty. So we've just gone with six that we think we can genuinely contribute towards, whilst recognising that all the SDGs are linked and whatever we do on one will have an impact on another.”

Stranded assets in this sector are being monitored but still being built.

The industry has an initiative called the carbon risk real estate environmental monitor (CRREM) part-funded by the EU.  It has produced operational decarbonisation pathways for real estate in each country and what that means in relation to the energy and the carbon that a building should be using. Emily explains: “So when real estate is assessing whether we've got a stranded asset from a transition perspective, that's what we're using, even though some of the pathways set for meeting a target of 1.5 are highly ambitious. It’s fair to say whilst there’s been some early movers in the industry, real estate has arrived late to addressing climate change but  I feel like real estate is now understanding that we have to do something about it and at pace.”

But there’s the issue of future needs. “What I think more about is the building of buildings without necessarily thinking about their future purpose, and then they become stranded. So logistics is a massive booming market at the moment for real estate. For how long will we want all these big logistics buildings, all these big motorway areas, will there be a point when those buildings become stranded, because we've decided that we're going to get our products to people in a different way?”

Emily says one solution may be to focus on deconstructing assets and making them demountable and movable. “There are some really good buildings that can be taken apart and they can move bits to other places.” 

Solutions to climate change cannot rely on individual efforts, we need to work collaboratively.

Emily says individuals on their own can only do so much, but the role of private equity, particularly high net worth individuals can do a lot. “My personal view is that the given the inequality between the top 1% of earners in society and everyone else, private equity can have a significant role. There’s no shortage of private finance, it’s how to channel that private finance and focus on long term stable returns rather than short term risky returns which damage the planet and society.   That's what we need to be able to tap into and (using Cambridge Institute of Sustainability Leadership’s phrase) rewire the economy, we've got to be a lot more radical. Every single building needs to be at least electric, highly energy efficient and things like green roofs can help cool a building, but we haven't really been talking about that as much. 

“I believe we have to connect the dots a lot more on the social and the environmental because the two are interlinked. At the moment I do think that it's almost a bit of a smokescreen to say that if everyone does their bit we’ll be fine.”

The data to 2030 and beyond: we won’t necessarily fail.

Emily says: “Seeing climate change in the news every day and all this data can be overwhelming, but I still remain amazingly positive because you see all the young people, some as young as 6 who are recognised sustainability champions and growing and their focus and what they see. And when you read that 70% of millennials only want to buy from companies that care about the planet and 70% of employees only want to work for those organisations, that's what gives me hope.  So I actually think we are going through a huge transformation.”

She says two or three years ago terms like carbon emissions, net zero and biodiversity were not general currency but now they are.

“I think there's a big role for experts, and a huge role for the younger generation to have their voices heard, and to keep being a catalyst and keep challenging politicians. And I think young activists like Greta Thunberg, Isra Hisi and Alexandra Villaseñor are inspiring with the relentless energy and commitment to holding global leaders to account.”