JLL study finds modernization rates need to triple to meet Paris Agreement goals
CHICAGO, November 10, 2022 /PRNewswire/ — As businesses grapple with the current energy crisis and prepare for its worsening, new research from JLL (NYSE: JLL) finds that these rising energy costs are accelerating the transition to more efficient buildings.
JLL’s Renovating buildings to be fit for the future research finds that net zero carbon (NZC) intervention measures have a direct impact on a building’s bottom line and that failure to decarbonize carries significant financial risk. For many buildings, meeting the 2050 decarbonization targets proposed in the Paris Climate Agreement relies on renovating current spaces, which can also generate higher rents, reduce financial risk and generate higher rates of return. higher occupancy and tenant satisfaction.
“Renovating existing buildings is the fastest and most cost-effective way to accelerate the decarbonization of the built environment,” said Guy Grainger, global head of sustainability and ESG services at JLL. “Whether it’s real estate lenders or building occupiers, requirements are changing and real estate assets will become illiquid unless there is a plan to transfer them.”
JLL research reveals that in Northern countries, renovation rates need to triple, from just 1% today to at least 3% of existing buildings per year to meet decarbonization targets. It is estimated that US$3 trillion will be needed in the office sector alone to achieve these goals. In developing countries, new commercial and residential real estate will need new approaches that prioritize carbon and energy efficiency to improve resilience to climate change and contribute to a more sustainable future. Closing the knowledge gap, upskilling the workforce, and scaling technology will be key to accelerating the pace of modernization.
“Modernization doesn’t have to be a one-shot undertaking. But, reporting and disclosure aren’t enough — it takes intentional investment and a strategic approach,” Grainger said. “Renovations are both more viable and responsible when considered in tandem with broader asset repositioning that responds to changing workplace dynamics and climate resilience. We have enough evidence that show that we underestimated the positive return of intervention and underestimated the negative value of inaction.”
Retrofitting buildings to be more energy efficient will also require owners and occupiers to deepen their relationships and form new business models to realize the significant value they both get when investing in sustainability. Stakeholder alignment goes beyond landlord and tenant, as suppliers, building operators, management teams, on-site teams and even local governments must work together to transition to a low-energy economy. carbon emission.
The Retrofitting to be Future-Fit report with expert insights on how companies and individuals invested in the global real estate economy can successfully decarbonize their real estate will be discussed during the Modernization and Resilience Webinar on November 10, 2022, at 15:00 GMT/9:00 a.m./10 a.m. ET as part of COP27.
JLL (NYSE: JLL) is a leading professional services firm specializing in real estate and investment management. JLL is shaping the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, incredible spaces, and sustainable real estate solutions for our clients, associates, and communities. JLL is a Fortune 500 company with annual revenue of $19.4 billionoperations in over 80 countries and a global workforce of over 102,000 people September 30, 2022. JLL is the brand name and a registered trademark of Jones Lang LaSalle Incorporated. For more information, visit jll.com.
Contact: Gayle Kantro
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