Background

The 196 signatory countries of the Paris Agreement have agreed to a common goal of maintaining the global temperature increase to well below 2 degrees, and preferably no more than 1.5 degrees, by the end of the century. According to the 2019 UNEP Emissions Gap report, to be on track for the 1.5 degree goal, the world needs to reduce global emissions by over 50% by 2030 and work towards carbon neutrality by 2050. As the buildings and construction sector accounted for 35% of final energy use and 38% of energy and process-related carbon dioxide (CO2) emissions, globally, in 2018, the Retail Real Estate (RRE) sector will have to play a major part in achieving this vision.

The vision for the sector is clear: to be carbon neutral by 2050. Achieving this outcome requires a substantial shift towards an efficient and resilient building stock with zero-carbon emissions. Reaching net-zero carbon emissions by 2050, including both embodied and operational carbon emissions, will require an integrated value chain approach, effective policies and greater collaboration within the sector.  A carbon trajectory with intermediate milestones and clear strategies need to be developed to guide the significant reduction of GHG emissions by 2030 and 2050.

The building sector, and implicitly the retail real estate sector, are not on track to meet these goals. The GABC 2020 Global Status Report shows that decarbonisation efforts and energy efficiency improvements are being outpaced by the increase of extreme weather conditions, rapidly expanding floor area and growth in demand for energy consuming services. Delivering the vision is only achieved if the whole building stock, including retail portfolios, is thoroughly renovated and smart design of new buildings is adopted. The real estate industry is interested in increasing the sustainability of retail buildings and with a renovation rate of about 4.4%/year the opportunities abound: more than 60% of the retail stock will be upgraded by 2030, a unique trigger point to introduce sustainable solutions and the application of best available clean technology and low carbon materials.

However, the current rate of decarbonisation of retail buildings is not happening fast enough to meet climate goals and many developers and owners of large retail parks are still unsure of how to prepare for a zero carbon journey.

Paris-Proof Retail Real Estate looks to tackle this challenge head on, aiming at putting the retail real estate sector on a clear trajectory towards achieving climate-neutral building portfolios by 2050, in line with the ambition of the Paris Agreement. The initiative provides a platform for industry experts to jointly develop and promote a common vision and strategy to align market enablers with policy solutions, and unlock investment in long-term sustainability measures at scale.

Specifically, the Paris-Proof Retail Real Estate will:

1) Identify which legislation at EU and national level needs to be adapted to move towards a climate-neutral retail real estate building stock and communicate this with the relevant policymakers;

2) Demonstrate the business case and best practice for investing in improving a building portfolio’s carbon profile, even amidst economic uncertainty and transitioning business models that 2020 has brought to the retail sector;

3) Foster a dialogue between the wider Retail Real Estate industry and policymakers in order to increase cooperation and improve mutual understanding between the two groups, all while ensuring a common vision and action points are identified, communicated, and implemented in the long-term.