_Tenants to shift into action on ESG.
With the built environment making a substantial contribution to global carbon emissions, it seems only natural that corporate strategies to implement and adapt to net zero targets would include a clear focus on real estate utilisation allied to an analysis of how to drive down emissions at an operational level.
However, the (Y)our Space survey of over 400 global corporates observed a clear gap between ambition and action when it comes to the interplay between corporate targets and real estate decisions.
Of those corporates surveyed, 40% had a net-zero carbon target in place and 77% of that had set an ambitious target date of 2030 – less than eight years from now.
Only 16% of those surveyed believed their commitment to net zero fundamentally changed the way they make real estate decisions, while close to 60% had less than 10% of their global portfolios in accredited buildings.
The disconnect between wider corporate sustainability concerns and future real estate strategy highlights how occupiers lag behind investors in their appreciation of the importance of the ESG challenge.
Amidst rising energy costs and the growing focus on sustainability, we expect the gap between ambition and action to start to close in 2023.
There is emerging evidence that occupiers are now bringing requirements to market with minimum sustainability requirements, and we expect that those headquartered in Europe or the UK will lead the way in putting greater much weight on these issues when making their next lease commitment.
Keen to learn more? You can check out the Top Ten Insights from our Outlook Report 2023 or read the report in full via the links below:
For more information, please reach out to the team:
Ben Burston
Chief Economist
+61 2 9036 6756
ben.burston@au.knightfrank.com
Michelle Ciesielski
Partner, Head of Residential Research
+61 2 9036 6659
michelle.ciesielski@au.knightfrank.com
Jennelle Wilson
Partner, Research
+61 7 3246 8830
jennelle.wilson@au.knightfrank.com
Lawson Katiza