At the Global Climate Action summit, the World Green Building Council announced that our premium office fund, AMP Capital Wholesale Office Fund (AWOF), has become a founding signatory of the Net Zero Carbon Buildings Commitment.
In an unprecedented statement of coordinated action, the signatories – 12 businesses, 22 cities and four states and regions – have committed to an ambitious target to eliminate carbon emissions from their building portfolios by 2030.
The Net Zero Carbon Buildings Commitment is an important step for AMP Capital and AWOF because it elevates the public commitment AWOF made last year – to be Zero Net Carbon across our portfolio by 2030 (for Scope 1 and Scope 2 emissions) – to a global level.
As signatories we are now aligned with some of the best, most progressive real estate companies in the world who are showing leadership on sustainability and battling climate change.
But the Commitment is also important and exciting for what it provides the property world in a broader sense: the first global commitment with a ‘step wise’ whole building approach to a long-term zero carbon emissions target.
A practical approach
The step wise approach provides a manageable process for portfolio managers to become carbon neutral by 2030.
It is philosophically robust and follows the principles of ISO 14001 about control and influence. That means to firstly start with what you can directly control and get your own house in order. Then you can begin engaging with tenants, customers and residents of the building; after that you can go a bit further and look down your supply chain.
The approach increases buy in from portfolio managers because they can see it delivers not just a sustainable outcome, but an economically rational and cost-effective path to becoming zero net carbon.
Aligned with AWOF’s journey
The Commitment’s stepped approach aligns closely with AWOF’s strategy for moving to zero carbon for the buildings in its portfolio.
- Our first step is to start with Scope 1 and 2 emissions – such as electricity and gas consumption in the building – which is what we are directly responsible for and can control. We are aiming to hit that by early 2030.
- Once we’ve made our buildings as efficient as we can, we will investigate the options to purchase 100% renewable energy and offset any residual emissions from gas or diesel generators.
- The final step is to focus on Scope 3 emissions which we can ‘influence’, such as lighting, supplementary air conditioning and computer equipment in our tenants’ space. We can also start to work with them on transport emissions and those associated with waste for landfill, as well as embodied carbon in recycling waste and water. We can also perhaps move to offsetting embodied carbon in the building structure, materials and fit out.
AWOF is adopting this approach because it aligns with strong investor and customer expectations.
The office sector has been a major driver of sustainability in the built environment. One of the best ways an organisation can physically demonstrate their sustainability commitment to employees and external stakeholders is to rent space in a sustainable building.
But we also believe that a net zero carbon goal is replicable to other real estate sectors, including retail and industrial. Efficiency wins may be harder to achieve but there are innovative models in both sectors that will enable a path forward.
Delivering a sustainable building platform
The announcement that AWOF has become a signatory to the Net Zero Carbon Building Commitment is an important one. It is a restatement – on a global stage – of our earlier commitment to be zero net carbon across the portfolio by 2030.
The Commitment is also a restatement of our drive to truly provide organisations and their customers a building platform which reflects their own values and commitment to sustainability.
AWOF’s commitment to combatting climate change is part of a broader push by the investment management community to deliver sustainable building platforms.
A 2018 study by the Responsible Investment Association of Australasia (RIAA), which surveyed 48 of the largest superannuation funds in Australia and five significant asset owners in the region with a total of over $1.4 trillion in assets under management, found that trustees of 64% of superannuation funds are actively considering ESG, including an explicit focus on climate risk.
But this isn’t just about sustainability. We believe it also makes economic sense and delivers better investment outcomes, a view backed by a growing body of research that shows investing in sustainability can deliver outperformance.
A significant commitment
The World Green Building Council Net Zero Carbon Building Commitment is also an important part of the broader climate change and sustainability agenda.
This Commitment has the potential to become a very significant, voluntary corporate carbon reduction commitment – up there with the science-based target and renewable energy 100 (RE100) pledges many companies have taken – because its stepped approach provides a practical, consistent and cost-effective strategy for portfolio managers to deliver a zero-carbon outcome by 2030.
Featured image: 700 Bourke Street, Melbourne which has achieved a 6-star Green Star Performance rating, one of the first buildings in Australia to achieve this result.
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