Here’s why reducing carbon emissions for the built environment might take a “carrot, a stick, and a tambourine”. 

Dear property industry, the planet “can’t do this without you”.  

This was the impassioned cry to industry at the Property Council of Australia Sustainability Breakfast this morning, held at the sparkling and exclusive Four Seasons Hotel in the Rocks, Sydney. What an irony to hold an event about circularity and ethical consumption inside such a high value asset. But that was the point of the event: to cry out that the top end of town – those leaders of industry and decision makers that hold the future of not just the planet but also the economy in their hands. And that failure to act will result not only in a high cost on the environment, but a high cost on companies as well. 

Speaking at the event was environmental scientist, author, conservationist and adventurer (wow – imagine having that job title!) Tim Jarvis. He was joined by Green Building Council of Australia chief executive officer Davina Rooney, Stocklands head of sustainability Amy Hogan, and the Property Council of Australia’s acting national policy manager of sustainability Tim Wheeler. 

A voyage to Antarctica

Mr Jarvis has recently gone on an expedition that retraced the footsteps of two of the harshest and most extreme Antarctic adventures: Douglas Mawson and Ernest Shackleton’s survival journeys. He chose to do so in the same clothing, and with the same gear, used by the explorers a century ago. Just for fun, I hear you ask? The point was to raise awareness of the plight of humanity in the face of the climate crisis, and also confront us with the impact that humanity has had since that expedition a century ago.

He said there’s a big difference between that original expedition and the present day. While back then the journey was an act of human survival against nature, now the script is flipped and it is now nature that is struggling to survive the brutal impact of humanity.

“The difference is that Shackleton was trying to save all his men from Antarctica. Our goal now is to save Antarctica from man.” 

Just a few weeks ago, an ice shelf the size of New York City collapsed in east Antarctica within days of record high temperatures, according to satellite data.

A common thread ties the metaphor back to the issue at hand for the property industry. It’s the responsibility to reduce and mitigate – if not adapt and survive – in the face of that Frankenstein’s monster, the climate crisis that we have created. 

We can’t do this without you

A quarter of Australia’s carbon emissions come from the built environment and property sectors. Roughly 28 per cent of that comes from the operational side of businesses. The rest comes from embodied carbon in cement, steel, wood, and other materials used in construction. 

Speaking to the property sector, Mr Jarvis said: “We can’t do this without you.”

Public sentiment is changing. Client demand is calling out for sustainable real estate. Three quarters of Australians don’t want to occupy a building unless it is green. 

The green wave is coming through on all sides – from regulatory pressure to insurability.

The risk is not just to the planet, but to the asset owners themselves. The property industry needs to prioritise the protection of assets from climate risk. In other words, how much is your building worth once it has slid into the sea?

“We cannot do this without the property sector,” Mr Jarvis repeats. 

Leading the journey to sustainability

So, what is the property sector doing to lead this charge? 

The GBC’s Green Star puts market pressure on developers to deliver sustainable projects that minimise their impact on the environment. The goal is to take global trends around sustainability, look at how they relate to property, and put them in action today, Ms Rooney said. 

Mr Jarvis worked on 39 Hunter Street during his time at Arup – Australia’s first heritage-listed building to achieve a six star Green Star certified rating, with a complete retrofit of the 1916 seven level office building. Even with an ageing asset stock like in Australia, it can be done. “When you have a blank canvas… what an opportunity that represents,” Mr Jarvis said. 

It is not mandatory, but rather an incentive. 

“There are things we know how to deal with, like net zero, that we write into guidelines and tools. Things like the circular economy, complex materials… we don’t know all the answers yet… but we absolutely know what the answers are on the efficiency side. Highly efficient buildings, fossil-fuel free, powered by renewables, with low embodied carbon.” 

It’s that simple, really. 

“There’s no excuse not to do it now,” Ms Rooney said.

“And then we can move to the really critical part, natural systems. We really need to have nature-based offsets.” The complexity around offsetting and biodiversity isn’t easy, “but that just means that we need to get better… we need simple and practical solutions to put into projects”.

“We need to regenerate the systems that have been damaged… we can’t sleepwalk into that future.”

Stocklands shows leadership

One company that is trying to champion circularity and utilise offsetting is Stocklands. The property development company launched a 2030 sustainability strategy last year to establish a foundation to address complex and interdependent global problems. One of the pillars is regenerative and circular living. 

“It’s about living, working, and playing in communities that are healthy and connected, inclusive and accessible, and regenerative and circular,” Ms Hogan said. “That’s the community that I would like to live in.”

That sounds like a dream, but in action regenerative and circular living means carbon action, circular economy, and replenishing nature and biodiversity loss through strategy, innovation and partnerships. 

Biodiversity is being referred to as the new climate and “we can’t deal with one issue without dealing with the other”, and “to be really blunt, our livelihoods depend on nature, our economy depends on nature,” Ms Hogan said. 

“The investment community and the financial sector are already ahead of the game. There’s a gap in terms of government action… we as the property industry have always been regarded as a leader in sustainability, and it’s our responsibility.”

In practical terms, how? Stocklands has a net zero 2028 commitment which includes scope one and two emissions. It has signed up to the UN’s Race to Zero, has been assessed by the Task Force for Climate-Related Financial Disclosures, is preparing for an assessment by the Task Force for Nature-Related Financial Disclosures and has a partnership with Clean Energy Finance Corporation. The company is also strengthening its data, monitoring its supply chain and is offsetting its carbon emissions using solar panels. 

But, isn’t there a debate around carbon offsetting? 

Recently, the government carbon-reduction mechanism Emissions Reductions Fund has come under fire in desperation from one of their own architects, Andrew MacIntosh, for not delivering on the emissions reductions that it promises to. 

“The average business owner or farmer doesn’t really know how to interpret the system,” Mr Jarvis said. “The system is too complicated and it’s too easy for it to be rorted. There are 38 different criteria… you need a PhD to work through it all.”

The aim of offsetting is in the name – the aim is to balance out carbon which has been put into the atmosphere. So by its very own name shows that it does not take any more carbon out of the atmosphere than would have already been there. Something which is vital at this stage. 

A carrot, a stick and a tambourine

So, what is needed? In not-so-shocking news, the answer is a combination of different strategies, regulations and incentives. 

While Australia’s answer to green building has been incentives in the past, over in Europe they look at fines and regulations to enforce the green credentials of buildings. 

Which system is better? 

As Ms Rooney aptly stated: “If we had forever, we’d pick one pathway… but we’re in a race against time, so we’re going to do all of them.”

To yield the best result Australia needs a carrot, a stick, and a tambourine.

Something like Green Star is a carrot – it lifts the valuation of a building. Fines and regulations are a stick. The UN’s Race to Zero campaign, or a TV show, is a tambourine.

“There’s a lot to be done in this space but to get to where we need to go we need the carrot, the stick and the tambourine. And we need to work with industry to get on that trajectory.”

But while Green Star creates a business incentive for manufacturers and industry means that they are world leaders on the commercial side, there is a lot to be done on the residential side. 

But leading the charge means that a clear example is set for others to follow. And to bring it back to our opening metaphor, it’s much easier to follow in the footsteps of an extreme Antarctic expedition than to forge a path that has never been tread before. 

And what is the cost of failing to tread this path?

Asset damage, reputation damage, and uninsurability. 

It used to be that “the director of a company had the fiduciary responsibility to maximise profits,” Mr Jarvis said. “Now they also have the fiduciary responsibility to understand what climate impacts there might be on your business – not what your business does to the climate but what the climate will do to your business.”

Investors are asking more sophisticated questions about sustainability, customers, employees and society are expecting sustainability. The property industry needs to “step up and make sure we’re ready… to address these really wicked and complex problems,” Ms Hogan said.

But even in the face of this mounting pressure, the property industry is now supporting the destruction of the Design and Place Environmental Planning Policy (D&P SEPP). 

Even with all this pressure, how can you explain that?

“The difficulty with humans is that we are cognitively dissonant creatures. In other words, we have the capacity to hold two completely different states of mind… [but] we are tremendous at managing change. We can adapt to more or less any set of circumstances. So I hope that we heed the warnings we are seeing… and do something about it,” Mr Jarvis said. 

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  1. …A quarter of Australia’s carbon emissions come from the built environment and property sectors. Roughly 28 per cent of that comes from the operational side of businesses. The rest comes from embodied carbon in cement, steel, wood, and other materials used in construction. …..and we build how many houses every year? Well it was 88,445 in the June quarter 2021 — the biggest peak of all time so perhaps we should stop this mad growth?.