Q&A with Steffen Walvius part 2

3.  Are you facing greenwashing in real estate?

All too often, unfortunately. But since people get more familiar with the topics, there is less room for companies to get away with it. The reputational risk is long-lasting (think about VW’s diesel scandal) and there are a lot of efforts to combat greenwashing.

4.  What changed globally since you started dealing with a sustainability solutions? Did you notice a positive change?

I see more companies jump on the sustainability bandwagon. When I started, it was just the top performers that had an environmental strategy and reporting systems in place. Now, many other companies are beginning to realize it is not a trend, but critical to address environmental and social issues. However, marketing and brand reputation still continues to be the strongest driver for action, but with companies realizing regulations and investor's demand are growing fast, they too want to have robust systems in place to address ESG issues.

5.  Do you see an active involvement led by government? Who is the statuary organ to oversee the compliance? Are the goals clear?

At the moment, the market is moving faster than the regulations. However, government institutions are slowly catching up and increase pressure from their side. In particular, the European Union (EU) is implementing regulations and directives that ensure all countries and companies, also the slower moving ones, will contribute to sustainable development. With the EU Taxonomy coming into place, we have a better idea what is considered sustainable from the union point of view. Investors want to align with the EU Taxonomy which affects the assets they invest in. This helps set goals and targets for companies to work with.

6.  What can one do to actively contribute to sustainable development?

That is a question I cannot answer for everyone. After understanding the 17 UN Sustainable Development Goals, everyone should ask themselves how they can actively contribute to at least one of them in their work or daily lives. Then start doing it and make yourself actually useful.

7.  Are companies itself interested in solving sustainability?

I believe they are. The nice thing about sustainability is that everyone wants to achieve the same goal – to sustain a livable and healthy planet. However, climate change is a slowly worsening crisis and not every company realizes the severity of it for their business at the same time. The herd is moving in the right direction, but some participants simply wait a bit longer than others where the leaders are going.

8.  How do you see the future of sustainable real estate?

If I base my expectations on what happens to the energy and transportation sector, we're awaiting significant changes in the real estate sector as well. Real estate is the next in line with tightening regulations as it is also a big polluter. We should expect similar developments in the build environment. A warehouse that is built today, will not even be 20 years old by the year 2040, so the sector has a big responsibility. With the EU aiming to be a carbon-neutral economy by 2050, the pressure to comply with this target will be immense. If you want your asset to have a useful lifetime of 30 years, you should anticipate now by building eco-ready buildings and having a long-term refurbishment strategy in place for existing buildings.

9.  How can we measure if a building is sustainable?

There are many topics under sustainability. With a lot of topics, performance indicators and strive are defined and we can thus measure. Carbon emissions is a very dominant topic and we use the widely used CRREM decarbonisation targets to set asset-level targets for carbon emissions. For many of the other topics we have target values or best practices.

10.  Why should buildings strive for energy self-sufficiency?

We treat the planet too much like a toilet, where we can flush the problems away, expecting there is sufficient water and someone to solve the issue. When we have to supply our own demand, we ensure that the supply is efficient, renewable, resilient and we try to reduce demand.

11.  How is turning buildings to more sustainable affecting their value?

Is there a green premium for sustainable assets or a brown discount for non-sustainable assets? JLL is concentrating a lot of knowledge and resources to find answers. Empirical evidence is, however, hard to get at this stage. We do see all the signals that suggest a sustainable building commercially outperforms a non-sustainable building, but we simply cannot put a hard number on it yet.