Global companies that have set a 2030 net zero carbon target may struggle to achieve their objectives if they do not introduce major shifts towards sustainable buildings, a new report from a property consultancy has revealed.
Knight Frank’s second edition of its (Y)OUR SPACE survey, drew on responses from almost 400 businesses around the world, representing a combined headcount in excess of 10 million. It provided an insight into workplace strategies and the real estate needs of businesses.
The UAE is currently home to 869 green-rated buildings, the 14th highest national concentration globally and the only country in the region in the top 30. Qatar ranks in 32nd place with 140 green-rated buildings, while Saudi Arabia (54th place) has 38 green-rated buildings. Kuwait and Oman have 12 green-accredited buildings each and rank 69th and 70th, respectively.
The US leads the league table with almost 81,000 green buildings, but at the city level London ranks first with 3,000 environmentally accredited buildings.
“The climate crisis has spawned a global green reawakening and businesses in the Middle East are alive to the climate challenge. Three-quarters of businesses in the Middle East sample of the (Y)our Space global survey, which represent 7,800 staff, say that their real estate choices in the future will be influenced by their net zero targets; however the vast majority say that less than 25 percent of their global portfolios are green or sustainable,” Knight Frank’s Head of Middle East Research Faisal Durrani said.
“The message to landlords is loud and clear: green credentials of buildings will become a key battleground in post-COVID economy, particularly as office footprints are likely to be revised downward as more businesses adopt hybrid working methods, factoring for greater remote working.”
Durrani indicated that the biggest challenge facing businesses is creating a safe and Covid-19-secure work environment.
“As investors and businesses are increasingly factoring the green credentials of a building in their decision making, it’s clear that the salability and lettability of non-green-rated buildings will be negatively impacted over the medium to long-term”, he explained.
“For landlords across the region, the big question will be around weighing up the cost-benefits of greenifying their portfolios in order to cater to evolving business expectations.”
The report showed a growing desire for global businesses to be sustainable, with 40 percent of firms having set a net zero carbon target and, of those, 77 percent are aiming to achieve this by 2030. Yet despite real estate accounting for as much as 40 percent of global carbon emissions, and with growing pressure from the increasingly robust environmental, social and governance (ESG) agendas of investors, over 87 percent of firms said that less than half of their current global real estate portfolios are either ‘green’ or ‘sustainable.’
“Developers and landlords in the Middle East have made great strides in delivering world-leading green buildings, incorporating stunning technologies, such as the condensation harvesting system on the Burj Khalifa, or the three integrated wind-turbines on the Bahrain World Trade Centre, but such technologies need to be adopted more widely if landlords are to compete on a level playing field for increasingly green conscious businesses,” Durrani concluded.