UK-based real estate consultants, Knight Frank’s second edition of its (Y)OUR SPACE report, which draws on responses from almost 400 businesses around the world, has found that without a major shift towards sustainable buildings, companies that have set a 2030 net-zero carbon target may struggle to achieve their objectives.
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. The US leads the league table with nearly 81,000 green buildings and a city level, London ranks first with 3,000 environmentally accredited buildings.
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 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 represents 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.”
In the post-COVID-19 economy, green credentials of buildings will become a key battleground especially as office footprints are likely to be revised downward as more businesses adopt hybrid working methods, factoring for greater remote working, the report says.
“For landlords across the region, the big question will be around weighing up the cost-benefits of greenifying their portfolios to cater to evolving business expectations. As investors and businesses are increasingly factoring the green credentials of a building in their decision making, it’s clear that the saleability and lettability of non-green-rated buildings will be negatively impacted over the medium to long-term”, added Mr.Durrani.
The report shows 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’. This suggests a real disconnect between real estate and wider corporate thinking on sustainability.
Almost 60 percent of global respondents said that there is only a partial recognition from their wider business that occupying and utilizing real estate differently will impact their ability to achieve net-zero carbon and wider sustainability targets, with a further 15 percent arguing that there is no recognition at all.