Author: Elisabeth Filkin
Going “net positive” is the next big thing on the sustainability agenda for real estate, writes Elisabeth Filkin
The term “net positive” is becoming an increasingly popular buzzword in the real estate sector.
Companies that are seeking to be net positive strive to put back more into society, the environment and the global economy than they take out. With humans extracting resources at twice the rate at which the Earth can regenerate, and in the absence of real and lasting government action, businesses increasingly have a moral imperative to adopt a restorative approach.
Until now, such commitments have been undertaken by consumer brands such as Coca-Cola, BT and Kingfisher, but a growing number of property companies are recognising not just the importance of such an approach, but also the brand, innovation and growth opportunities it presents.
What does it really mean?
While good sustainability strategies have typically been about managing risk and reducing negative impacts and inequity, net positive organisations recognise that it is not enough to seek to be “less bad”. Instead they focus on opportunities that will be a force for good, taking bold steps to ensure that the natural world and society will be better off for their presence.
At its simplest, companies seeking to be net positive will identify one, or a number of, sustainability impact areas in which they will seek the sum of their positive impacts to be greater than the sum of their negative impacts – to be net positive. Critically, there can be no trading of negative or positive impacts across impact areas (for example water savings used to offset carbon emissions from travel); rather it is the sum of carbon costs and benefits alone that will enable an organisation to achieve net positive carbon.
Who is doing it?
Globally, net positive commitments have been made by real estate leaders such as Lendlease, Mirvac, Berkeley Group, Majid Al Futtaim and most recently Hammerson.
These commitments vary in terms of both the breadth and depth of issues covered – from carbon and water to socio-economic issues such as jobs, skills and training, with some focusing on landlord-controlled activities or development-specific impacts. Others are pushing the boundaries further, setting business-wide commitments both up and down the value chain.
Two companies, Hammerson and Lendlease, provide excellent examples of how net positive commitments are being tackled at different levels in the UK.
Lendlease has been working on net positive for a number of years, having committed to be “climate positive” at three of its global neighbourhood developments, including Elephant Park, SE1.
A climate positive development is one that reduces the amount of on-site carbon emissions (from energy, waste and transportation) to below zero through efficient operations and investment in both community infrastructure and onsite energy production. At Elephant Park, achieving this goal involves a significant amount of work, not only in designing and managing out as much operational carbon as possible but also through the implementation of a whole host of carbon reduction activities across the development and broader local community.
The Energy Hub at Elephant Park, a zero-carbon community combined heat and power system, will play an important part in delivering this goal, along with other initiatives such as behaviour change campaigns and retrofitting projects for older properties.
Meanwhile, Hammerson recently launched its business-wide commitment to achieve net positive across a range of issues, including carbon and resource use, by 2030. This commitment will see it take on the major challenge of tackling its equity share of impacts over which it has direct control, as well as those of its tenants and major joint venture investments – Value Retail and VIA Outlets.
To make it manageable, it will be splitting this goal out into five-year budgets or milestones that will see it focus on tackling major impacts in phases – starting with landlord-controlled activities. At the same time, it will also be establishing a programme of strategic partnerships with key stakeholders, such as tenants, to significantly reduce their impacts – a process made easier by the knowledge that 10 tenants alone represent nearly half of all tenant electricity emissions.
Implications for the sector
Above all else, net positive presents an enormous opportunity to address some of the huge social and environmental challenges we face. Landlords, developers, tenants, suppliers and advisers all have a role to play in supporting those that take on this significant challenge.
There are five crucial elements that should be considered:
- Executive buy-in is critical. Without this, achieving the business-wide investment and transformation required to attain net positive goals would not be possible.
- Ensure a significant amount of time and effort is dedicated to building a business case. During this time you will need to focus on undertaking accurate footprinting to understand the scale of your impacts and what the major contributors are, and get buy-in from all employees before setting out long-term goals.
- Once you have established the scale of your impact and agreed the boundaries of your approach, set long-term goals with clear and tangible milestones, backed up by a detailed plan.
- Robust governance, data collection and reporting systems are essential foundations for setting plans, tracking progress and delivering real and lasting results.
- Publish a clear, simple and transparent methodology to ensure buy-in from all key stakeholders.
The successful companies of the future will be those which react positively to external trends and can adapt their business to meet the changing needs of customers and society with fewer resources. Net positive presents an exciting new way to help ensure we remain resilient and push ourselves to change today for a sustainable tomorrow.
Elisabeth Filkin is an associate director in upstream sustainability services at JLL