|
The reason for cities' interest in the programme is that city disclosure will enable them to identify opportunities to increase their economic competiveness and potentially to communicate the ‘societal value’ of energy and carbon efficiency to citizens and business, as well as to improve their climate and resources risk management.
Cities are also keen to attract global investment, and realise that in order to do that city spaces and buildings must be vibrant and varied, well-connected and well-built. One of the lessons learnt by the private sector is that measuring and reporting on carbon emissions helps identify cost savings in the management of buildings.The same should be true for city authorities and the real estate they occupy. City spaces also, increasingly, need to be adapted to environmental risks such as flooding and droughts.
Finally, cities want to flex their economic muscles in the new low carbon economy. In London, for example, the Mayor announced the creation of a Green Business District last year, estimating that a low carbon marketplace could generate between £40 billion ($64 billion) and £140 billion ($224 billion) of investment and create 200,000 new jobs by 2025. CDP Cities enables its participants to compare their aspirations for green investment and green collar jobs, and to see which cities achieve their goals for the growth of a low carbon economy.
For more on the CDP Cities’ programme, listen to our podcast with Nigel Topping, Chief Innovation Officer, at CDP.
Who is involved?
CDP Cities is working in partnership with the Clinton Climate Initiative and the C40, an organization of 40 major cities and 19 affiliate cities around the world that have committed to tackling climate change. As well as these partnerships, CDP Cities is sponsored by Autodesk – a leading company in 3D design, engineering and entertainment software - and by Jones Lang LaSalle.
Jones Lang LaSalle is providing CDP with input and assistance in the evolution of the questionnaire for municipal governments to report data relating to global climate change issues as well as sustainability policies and trends in urban areas. Jones Lang LaSalle will support CDP Cities in its education efforts through seminars, webinars and city events. Our intention is to bring expertise in the built environment and an in-depth understanding of the effects of climate change on the sector. We also want to use the data collected by CDP Cities to inform and develop expert advice, building it into decision making for our own client base.
"CDP is delighted to welcome Jones Lang LaSalle as a partner on the program, with its knowledge in property sustainability, global reach and strong track record in environmental action”
Conor Riffle, Head of CDP Cities
What does the first CDP Cities Report talk about?
The 2010/2011 information request covered four main climate change related areas – governance, greenhouse gas (GHG) emissions, adaptation and strategy. Cities could choose to report separately on emissions linked to their municipal operations and/or on city-wide community emissions. It allowed cities to report both quantitative climate change data and qualitative information that contextualises the unique characteristics of individual cities.
“The Carbon Disclosure Project plays a tremendous role in increasing the prominence of environmental factors in business and investment decisions.
With the CDP cities program, they have already shown that reliable, transparent information can guide cities to environmental policies and priorities to reduce their risk exposure and drive economic growth. Jones Lang LaSalle is fully committed to helping CDP take its cities program to the next level.”
Lauralee Martin, Chief Operating and Financial Officer of Jones Lang LaSalle
The first findings were released in the CDP Cities Report 2011 at the C40 Cities Mayors Summit in São Paulo, Brazil in June. Fabio Maceira, Head of Jones Lang LaSalle Brazil, attended the conference and you can hear his thoughts on the event in our Green Room.
The overall impression from the CDP Cities 2011 report is that many cities are already embracing the carbon disclosure and management challenge. Over ninety per cent of responding cities reported that responsibility for climate change sits at the highest level within the city structure (mayor or other chief executive). In addition, nearly two-thirds of the responding cities already report on city-wide community GHG emissions and 45% report on their GHG emissions from municipal activities. This trend is likely to intensify both among respondents and amongst other cities, as they try to emulate C40 cities. A number of respondents have adopted stringent GHG reduction targets - two cities have even set a 100% reduction target! The city-wide community targets they have adopted are generally long term (over 20 years) and aim, on average, for a 30% reduction in GHG emissions.
What are the implications for real estate players?
Interestingly, the most cited measures for community-wide actions are subsidies and fiscal incentives, building standards, awareness-raising and consultation.
Main measures to reduce community city-wide emissions
Source: CDP Cities 2011: Global Report on C40 Cities
With building standards emerging as such a priority, we can safely assume that the property sector can expect more regulations linked to a building’s energy performance. This will be the case for both the renovation of existing buildings and the construction of new buildings. Building standards may also be enforced as a pre-requisite to transactions, where cities have the power to do so. Where they don’t, cities will seek to strictly enforce national building regulations.
The two other most cited measures are likely to bear no cost to businesses. On the contrary, the subsidies and fiscal incentives could help businesses make the necessary investment in carbon saving measures. They can help reduce the payback period through direct funding or through a tax rebate, for instance. The awareness raising and consultation measures are likely to target behavioural change and can be on a voluntary basis. They could present an opportunity for businesses to contribute to public policies and to raise staff awareness on climate change issues.
Nearly every city government stated that climate change could affect the ability of businesses to operate successfully in their city, and over 50% noted that they were already experiencing the effects of climate change or expected them to in the near future. As we have seen from recent flooding events in cities like Brisbane, Australia, the impacts of these events on business continuity can be very significant. We think that both occupiers and landlords will increasingly consider a city’s resilience to climate change in their location and investment decisions. CDP Cities makes this information more transparent and available for the first time.
The table below presents a snapshot of anticipated implications of the CDP Cities programme for real estate players.
|
Snapshot: Implications for real estate players |
|
Owners/ investors |
· Improved transparency of local climate change risks and related public initiatives. This information can be used to inform investment and new development decisions.
· National or local building regulations are likely to become more stringent – covering both renovations of existing assets and construction of new assets.
· There will be opportunities to access government funding and/or subsidies for carbon emission reductions, including energy efficiency and renewable energy.
· Increased public scrutiny about investors’ own emissions and related reduction initiatives.
|
|
Occupiers |
· Improved transparency of local climate change risks and related local public policies and initiatives. This information can be used to inform location decisions.
· Opportunities for sharing in the benefits of carbon reduction measures carried out by the landlord. |
|
City institutions |
· Increasing emphasis on measurement and disclosure of city-wide and local council emissions. Systems and people will need to be put in place to make this happen.
· Greater enforcement needed for building and planning regulations – both national and local.
· Creative consideration about how to regenerate and develop city areas whilst responding to the challenges of climate change and resource scarcity. |
And finally, what are the city institutions doing to improve their own performance?
Main measures to reduce city government operational emissions
Source: CDP Cities 2011: Global Report on C40 Cities
When asked about the most common GHG reduction measures that cities were undertaking, retrofitting public buildings came top of the list. Renewable energy strategies were the second priority. For instance, the city of Seattle in the United States stated that it has undertaken 30 municipal energy audits and is planning to retrofit 14 municipal buildings to improve their energy efficiency.
Some of the cities provided further detail on these retrofitting programmes but interestingly, only a small proportion of responding cities had estimated the level of investment required to meet their targets, with investment estimates ranging widely between different cities. This would suggest that much thought is needed to channel tight public finances to achieve maximum carbon abatement with the best return on investment.
References
CDP and Accenture (2010), “Carbon Disclosure Project: The Case for City Disclosure”
CDP and KPMG Advisory (2011), “CDP Cities 2011: Global Report on C40 Cities”
Hoornweg, D. et Al (2010), “Cities and Climate Change: An Urgent Agenda”, The International Bank for Reconstruction and Development / The World Bank,
Kamal-Chaoui, L. and A. Robert (2009),“Competitive Cities and Climate Change”, OECD Regional Development Working Papers n.2, 2009, OECD publishing,
________________________________________
Global Sustainability Health Monitor
In our Sustainability Health Monitor shown below, we are tracking a number of indicators that tell us about the status of selected countries with regard to their Sustainability performance. Greenhouse gas emissions, energy efficiency and renewable energy are some of the key issues. We also track the number of certified buildings as a measure of a market's response to sustainability in real estate. Many of these indicators are macroeconomic in nature and are updated as and when national economic institutions release information. Data in this table is the most recent available. |
|