By Jacqueline Li, Associate
In recent years, drivers and pressures on firms to adopt sustainability-driven management have become clearer and sharper. Companies face growing risks and uncertainties such as the scarcity of natural resources, carbon’s rising price tag, energy benchmarking policies and forthcoming environmental legislation. Additionally, external pressures from consumers, supply chain customers, advocacy groups and investors have driven the sustainability agenda. Now, companies are looking toward a world where sustainability is an international pursuit and a mainstream business imperative.
On December 12, 2015, representatives of 195 nations reached a landmark climate agreement that commits nearly every country to address climate change. The agreement marks the culmination of over twenty years of negotiations on the UN Framework on Climate Change (UNFCCC) at the annual Conference of Parties (COP). The universal and binding decision requires some form of action from every country, rich or poor. Each participating nation has developed a commitment for itself in a series of Intended Nationally Determined Contributions (INDCs) and is responsible for creating their own decarbonization plans. COP21, also known as the 2015 Paris Climate Conference, set a goal to limit global warming to less than 2 degrees and achieve zero overall global emission in the second half of this century.
Now that this landmark climate agreement has finally been reached, we have officially entered the era of carbon reduction and sustainability. The newly signed accord provides market certainty to business and investors that the world is all aboard the train to a low-carbon future. The signal is bold: It’s time for banks, investment funds, utilities, energy firms and technology companies to shift focus towards renewable energy. Now, nations must determine how to make their industries part of the solution. Since the agreement, The Paris Pledge for Action has been launched, which unites businesses, cities, investors, regions and other non-state actors around the world to demonstrate that all parties in the agreement will effectively implement and accelerate the changes needed to achieve climate goals.
We are energized by this groundbreaking moment in history and see the climate agreement as an exciting opportunity to strengthen our economy and reinvent the way we work, shop and live. The implication for global real estate markets and property management is undeniable. Since buildings are major energy consumers, building owners and tenants have the unique opportunity to become champions of progress and sustainability. Well-managed sustainability strategies not only reduce the use of carbon, they also yield cost savings, healthier and more productive work environments and more valuable real estate assets.
We urge everyone in the extended business community to reflect on the important shift in ideology that the climate agreement represents. Historically, the pursuit of profit and economic growth has been regarded as a separate, and usually opposing, force to environmental protection. Major industry reform has typically been reactionary. Consider the Clean Air Act of 1963, the Motor Vehicle Air Pollution Control Act of 1965, the chemical industry’s negative response to Rachel Carson’s Silent Spring and the subsequent ban of DDT in 1972, and the long-term dioxin contamination at Love Canal followed by the passing of Superfund legislation in 1980. The modern environmental movement paved the way for a more sophisticated understanding regarding the mutually reinforcing relationship between a healthy economy, society and environment.
The old mindset of profit versus environmental stewardship and social responsibility has evolved into a growing discussion around the triple bottom line, corporate social responsibility and corporate sustainability. All of these concepts suggest that the private sector should take a proactive role in protecting people and the planet, and that it is also in their best interest to do so. The 195 nations that signed the climate agreement at COP21 are also 195 flashing signals towards an economy with a new and improved framework: What is good for the planet and the community is also good for business.
As global drivers have come into sharper focus, Cushman & Wakefield’s sustainability practice has evolved. Today, we believe that the health of employees, communities and the environment is inextricably linked to the global success of real estate. As we raise the bar for ourselves as we enter the new year, we invite others to join us. The key takeaway from Paris is that we are all stakeholders in the environment, and we all depend heavily on the earth’s resources. If COP21 were boiled down to a single sentiment, it would be that we can all do better. Will you?
Jacqueline Li is an Associate in Cushman & Wakefield’s Sustainability Strategies team and a Masters candidate in Urban Planning at New York University’s Wagner School of Public Service. Prior to joining the Cushman & Wakefield team, she was a Policy Fellow to The Nature Conservancy and designed a pilot environmental education curriculum for The Los Angeles Audubon Society. Jacqueline has studied sustainable development in Australia and China, and received her BA, cum laude, in Environmental Studies and English from Bowdoin College.