Lisette highlighted how behind the real estate sector was in terms of decarbonisation.

“The world made an agreement in 2015 to become net zero by 2050.

“Regulation is not there yet, as the furthest [we have got to are] EPCs, which might be a nice step in the right direction — but by no means anywhere near where we need to get to,” she explained. 

She highlighted that while there had been a lot of international coverage on the impact of large oil and gas companies on the climate, the real estate sector was “responsible for a large part of carbon emissions — and this needs to be taken into consideration”.

She estimated that oil and gas account for around 7-9% of direct carbon emissions, with 33% via production, “but the [real estate sector is] responsible for 37% of all carbon emissions,” Lisette stated. 

When discussing why the real estate sector isn’t striving to decarbonise, Lisette stated: “It's actually very hard to execute at the moment.”

She pointed to high construction costs and the challenges around securing finance. 

Lisette added: “It's not just the cost of decarbonisation, it's also the cost of the emissions themselves.”

She pointed out that the way we currently value real estate doesn’t take into account the cost of decarbonisation, and therefore the full cost to get to net zero. 

In 2021, ULI launched C Change, a programme to mobilise the European real estate industry to decarbonise and empower everyone to work together for a sustainable future.

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Its survey in October 2023 emphasised the importance of evolving market practices to adapt to decarbonisation regulations. 

“Over 60% of the companies we surveyed have now set net zero targets, which I think is very positive,” Lisette reported. 

Despite this, she had some concerns about the use of carbon offsets in the market. 

“Many companies still use offsets — around 40%,” Lisette stated.

“More and more we hear that what you might think you signed up to is a legitimate carbon-offsetting scheme and, in practice, it’s actually not as legitimate as the certificate might say. 

“We really need to focus on genuinely reducing emissions from the built environment.”

The use of carbon pricing — which sees companies set a price on carbon emissions, with the money raised then used to fund further initiatives to lower emissions — was also brought up as an emerging mechanism to support the industry to decarbonise. 

However, the C Change report found only 8% of organisations were incorporating fee-paying internal carbon pricing in their financial reporting.

When exploring the barriers of implementing carbon pricing within the industry, a lack of data and consistency was noted by 48% of respondents, with 39% pointing to a dearth of regulation, and 36% blaming the shortage of industry take-up.

There was also a clear need for education with 58% considering more understanding of carbon pricing to be a next best step, with Lisette commenting: “There's a lot of knowledge sharing still needed.

“If we want to make progress and accelerate, we need to reduce the noise, and focus,” she summarised.