By Elisabeth Jeffries — When real estate company Landsec realised it could be contributing to a potential global temperature increase of more than 2 degrees C, it restructured its approach to carbon emissions. The shift was driven by the company’s adoption of techniques from the Science-Based Targets Initiative (SBTI), a collaboration between environmental non-profit organisations.
“In 2015, Landsec was reporting on reducing emissions every year. We monitored five buildings that were consuming the most energy and wanted to achieve emissions reductions of 20% by 2020, which we achieved in 2016”, says Caroline Hill, Landsec Head of Sustainability. The new [SBTI] target is more challenging, aiming to cut carbon intensity (carbon dioxide emitted per m²) by 40% by 2030 compared to a 2013/2014 baseline for properties managed since 2015. “Although our target would have altered whether or not SBTI had existed, this was a big change,” she says. As a result of its efforts, however, the company in 2017 became the first in the property sector globally to have its carbon emissions target approved by the SBTI.
Landsec’s approach makes radically different assumptions from previous approaches to reducing emissions in commerce and industry. The SBTI, founded by the CDP, World Resources Institute, World Wide Fund for Nature, UN Global Compact and the We Mean Business coalition, aligns itself with the 2015 UN Paris Agreement on climate change. This was based on climate scientist estimates that minimising the concentration of greenhouse gases in the atmosphere to 450 parts per million of carbon dioxide would limit the global increase in temperature to 2°C.
“The key thing is trying to define a level of carbon reduction acceptable for a company to be aligned with the 2 degree target. This means creating an overall carbon budget and working out what that means for the company annually now and to 2050. It breaks down the individual company entitlement to carbon emissions,” explains Guy Rickard, senior consultant at the UK Carbon Trust, an advisor to SBTI (pictured).
Previously, Landsec’s targets had been based on internal policy or data, or peer group activity providing a ‘bottom-up’ estimate of goals. Now it is in line with the company’s contribution to global warming. According to Caroline Hill, this has already contributed to a number of achievements. By June 2017, the company had reduced carbon intensity by 18.5% and energy intensity by 13.2% mainly through savings in energy consumption.
All the electricity used in the sites the company manages is renewable, and 15% of gas comes from green sources. The company’s largest installation to date, a 785 kWp solar PV system in its White Rose retail centre in Leeds, Yorkshire, England, will provide 20% of the centre’s electricity needs. Meanwhile, the company has calculated that its new retail centre in Oxford, known as Westgate, will produce fewer carbon dioxide emissions than any other retail centre in Europe.
As Rickard explains, companies in a particular sector are performing differently and contributing individually to global temperature increases. Typically, the company sets a target initially and then agrees to this goal through an iterative process with an external organisation such as the Carbon Trust. This then helps them identify how and where to start, because each company may be at a different stage.
“One wants to recognise where the carbon intensity of a company is higher than average in the sector. We need every company to achieve a particular carbon intensity by 2050 but if their baseline is higher, they need to achieve more,” he says. Clearly, companies in the real estate sector vary in terms of types of buildings they invest in, while the carbon intensity of particular types of buildings differs. For instance, shopping malls emit less than offices.
The Carbon Trust also offers a range of methodologies to attain targets. One, known as the Sectoral Decarbonisation Approach (SDA), takes into account the whole sector’s performance across the planet and considers each sector separately. “The sectoral decarbonisation approach aims to recognise two things: different sectors grow more and they decarbonise at different rates. The sectoral approach is a global carbon budget broken down into key sectors in the economy such as buildings,” says Rickard. The SDA takes probable growth into account too, such as the number of buildings surface area likely to be found on the planet in 2050.
There are major differences between sectors. For example, aviation may be a harder sector to decarbonise because the technological solutions so far are limited. Cement production is another challenge. “Emissions per tonne of cement needs to be reduced by 40%. But it’s harder to decarbonise the cement production process” he says. On the other hand, he indicates buildings are a good opportunity. “Some sectors do more than others because they are able to. Others are less able to or grow more”.
According to Caroline Hill, setting the science-based target made a profound difference to the company. “It has been powerful and successful because it has lifted carbon emissions reduction issues in the company out of the energy and engineering team and the operational sphere to more strategic areas. It now includes low-carbon design and covers new buildings in the portfolio. This ambitious target wouldn’t be achieved if we only focused on operational improvements,” she says.
The short-term tenure of both governments and companies means they often lose track of their progress towards long-term targets. However, the SDA technique seeks to address this. “It includes a medium-term pathway for the next 5-15 years so that it is on the agenda of current boards – a very significant feature,” says Guy Rickard.
Embarking on an emissions reduction pathway is challenging, especially if it involves scrapping previous targets. Clearly, the scientific basis for the targets provides credibility and firm boundaries for the process to unfold. Undoubtedly, though, this activity is part of a campaign to encourage industries to exert further peer group pressure on each other in the absence of international regulation. “It will get to the point where if a company is not setting a science-based target, there will be a question of why not? SBTI is rapidly becoming the new norm”, claims Rickard.