Property sector scored for lack of climate plans

IN a study released earlier this week, the world’s major real estate developers have come under fire for being “alarmingly slow” to develop climate action plans. Given the outsized impact of the industry on the climate and the significant impact the industry has on the Philippine economy, this is indeed an alarming revelation, and a problem the country should take immediate steps to address.

The study in question was carried out by the World Benchmarking Alliance and CDP, a carbon measurement non-profit, and assessed 50 of the world’s largest property development, construction and building management companies. The study found that more than half of these companies do not have a climate transition plan, and that nearly half of them do not have a target in place to cut their emissions. Only six firms out of the 50 had what is deemed to be an adequate climate action strategy that includes a sustainability target and time-bound plan to reach it.

The top firms in the study were property managers Jones Lang LaSalle and Gecina, based in the United Kingdom and France, respectively, while at the bottom were Qatar’s state-owned developer Qatari Diar and China’s RiseSun Real Estate Development. In fact, seven of the bottom 10 firms in the ranking are located in China. Ayala Corp., the only Philippine firm of sufficient size to be included in the study, was ranked a modest 17th out of 50, although it was singled out as being one of the few firms that does have a net-zero emissions target that includes in-use buildings, i.e., buildings that it has already built.

The reason for the focus on property developers and managers is that at least 37 percent of man-made greenhouse gas (GHG) emissions are attributable to built environments, which includes buildings as well as infrastructure such as roads and airports, excluding the GHG contributions of the vehicles. The GHG emissions from built environments are a combination of the emissions from the structures themselves, construction activities and the production of building materials.

It may come as an unwelcome surprise to property marketers here who have successfully touted newer buildings’ certifications as LEED (Leadership in Energy and Environmental Design) buildings, but the study points out that this coveted designation, which is given by the US Green Building Council, does not take into consideration construction and supply chains. Thus, many “green” buildings here and elsewhere still contribute heavily to GHG emissions.

The property and construction sector here in the Philippines is one of our economic bright spots, an important driver of growth, source of employment and catalyst for secondary business and value chain expansion. It should continue to be encouraged and supported, but its growth and positive contributions to the country cannot be enforced at the cost of environmental sustainability. Nor does it necessarily have to; with proper coordination among government agencies and regulators, and between government and the private sector, the industry could easily “step up” to the level of places like Singapore, whose property firms were excluded from the study due to consistently having near-perfect scores in the four previous years the study was conducted.