Environmentalism and sustainability has slowly made its way to center stage over the past few years. Major initiatives from the Biden administration, in addition to increased consumer interest in the green movement, mean more people are paying attention to who and what is impacting our earth, starting with major corporations.
Net zero by 2050
Environmental, social, and governance issues (ESG) have become hot topics in the corporate world. Companies are racing to assess and address their role in the climate crisis. According to a major report published by the Data-Driven EnviroLab and the NewClimate Institute today, the number of commitments to reach net zero by municipalities and businesses has doubled in less than a year. Nearly 100 companies across the globe, including major Fortune 500 companies like Microsoft, BP, Facebook, and Virgin Airways, among many others, have recently made public pledges to be net zero as soon as 2030 and beyond.
But they aren't the only ones dedicated to reaching the goal of decarbonization. Several commercial real estate (CRE) companies, including real estate investment trusts (REITs), are doing their part to address their carbon footprints. Here are the top CRE companies leading the "green way."
CRE's biggest 'green' players
Data center REIT Equinix (NASDAQ: EQIX) has been a green leader long before the green movement was even a thing. The company achieved net zero operations back in 2019, with 92% of all energy used in its centers coming from renewable sources. The company uses innovative, environmentally friendly building designs to heat, cool, and power its facilities.
Digital Realty Trust
Digital Realty Trust (NYSE: DLR) is another data center REIT that has been well recognized for its green efforts over the years. Falling 27th on the Environmental Protection Agency (EPA) Top 100 Green Power Partners list, the company achieved carbon neutrality in 2020, and 72% of its buildings operate on green leases.
Kilroy Realty Trust
Office REIT Kilroy Realty Trust (NYSE: KRC) achieved carbon-neutral or net zero operations in 2020 and has 69% of its portfolio rated by EnergyStar and 68% LEED-certified. It has installed a number of electric charging stations at its properties.
CBRE Group (NYSE: CBRE), which manages roughly 2.7 billion square feet of commercial space across the globe, also takes on the job of managing its clients' utility spend through its Energy and Sustainability programs, which equates to around $1.4 billion in utility spend across 8,000-plus locations. This process results in significant emissions reduction and energy savings.
At the start of 2021, BlackRock (NYSE: BLK), one of the world's largest investment firms, joined the Net Zero Asset Managers Initiative and Climate Action 100+ to reach net zero by 2050 or sooner. BlackRock announced a partnership with Temasek and its plan to raise $600 million for investing in green offerings, which will include renewable power to sustainable ETFs.
Marriott International (NYSE: MAR) is one of the latest to join this list. It's published some incredible new initiatives to help reach net zero by 2050, including eliminating single-use plastics from its rooms. This will help save as many as 500 million tiny plastic bottles from being thrown into landfills. The company also plans to tackle food waste, clean energy sources, and will offset some of their carbon emissions through tree planting programs.
The Millionacres bottom line
Considering real estate is responsible for roughly 30% of greenhouse gas emissions and 40% of global energy use, ignoring the role real estate from development to operation plays in the climate crisis is no longer an option. The SEC is proposing to mandate public companies disclose information related to climate risks and other environmental, social, and governance criteria.
States including California and cities like Boston and New York have passed laws that will tax buildings that exceed certain square footage for carbon emissions that exceed carbon-intensity limits defined by the law. There's a good chance policies like this will continue to be enacted on a local or even federal level.
Thankfully, there are more resources, tools, and technology to help reach this goal in CRE. This should hopefully make those who haven't jumped on board join the "green way."