In 2015, 194 countries signed the Paris Agreement with a unified goal to reduce the mean increase in global temperature to below 2% and cut carbon emissions to net zero by 2050.

Reaching such an agreement with a historic consensus was a great success. However, that success would mean nothing if turned into a reality.

City governments across the globe are responding to the climate emergency by setting bold commitments to move to a net zero economy over the coming decades, often well ahead of national targets.

But, put simply, ambitious city environmental sustainability targets won’t be achieved and will remain aspirational without a proactive program to significantly reduce emissions from buildings. As city governments set more and more ambitious emissions targets, real estate landlords, investors, developers, and occupiers will have a key role to play in delivering these targets. It is a group effort. The real estate industry is under intense pressure to deliver a net zero built environment.

Decarbonization in Major Cities

Equally, expectations are high among real estate investors and occupiers about the role that city governments should be playing to drive the decarbonization agenda. City governments need to create the infrastructure, frameworks, laws, and incentives for all stakeholders to be successful.

Around 32 major cities worldwide, including Boston, Berlin, Dubai, Hong Kong, London, and Paris, are taking serious steps toward decarbonization and resilience.

To that end, major cities across the globe work towards decarbonization of the real estate sector, as buildings contribute 60% of global carbon emissions.

Looking forwards to 2050 climate goals, decarbonization of the real estate sector will face a main challenge. 80% of the building stock in 30 cities considered in a study by JLL will survive post-2050, which will undermine climate-aware efforts in those cities.

As a way around that challenge, retrofitting seems like a very reasonable solution.

Retrofitting to Reduce the Harm

Retrofitting is the process of upgrading or modifying an existing building, structure, or system to improve its functionality, safety, and energy efficiency, or to meet new requirements.

In real estate, retrofitting involves a range of improvements such as replacing or upgrading mechanical, electrical, or plumbing systems, adding insulation, or strengthening the structure to better withstand natural disasters or other hazards.

Retrofitting can be a powerful tool in the effort to decarbonize buildings, which are responsible for a significant portion of greenhouse gas emissions.

The concept has great potential in boosting energy efficiency through upgrading insulation, replacing windows and doors, installing energy-efficient lighting and appliances, and improving heating, ventilation, and air conditioning (HVAC) systems.

Retrofitting buildings can also include installing technologies that capture and store carbon emissions of buildings to offset emissions.

Furthermore, using eco-friendly buildings materials like recycled steel, sustainably harvested wood, or low-carbon concrete in the construction or renovation of properties.

As per JLL’s data, in order for retrofitting to succeed in cutting buildings’ carbon emissions, it should exceed 3% every year.

Currently, most major cities have retrofit rates that range between 1% and 2%.

Plans in Developed Cities

If we look at three major cities like London, Paris, Boston, Manchester, and Toronto, we will find that a huge amount of work must be done to achieve the goals of decarbonization in real estate.

In London, some 100,000 homes and 15,000 workplaces need to be retrofitted per year until 2050, as 80% of existing buildings in the city are likely to still be standing in 2050.

In addition, Paris plans to retrofit all homes by 2050 at a rate of 40,000 private homes annually. The city is taking climate concerns more seriously, as it requires developers to integrate adaptability and versatility in the construction of new buildings.

By 2030, around 30% of office space in Paris is expected to be adaptable, rising to 50% by 2050.  The Paris Climate Action Plan stipulates that all new urban projects launched from 2030 onwards shall be carbon neutral throughout their entire life cycle.

As for Boston’s climate plan, 85% of buildings that will survive until 2050 have already been built and, therefore, major energy retrofitting and electrification should be applied to 80% of buildings in the city by 2050 to achieve carbon neutrality.

When it comes to Manchester, the city’s retrofitting task force plans to execute 61,000 domestic retrofits annually by 2030.

Further, Toronto adopted a climate plan that aims to retrofit 100% of buildings by 2050.

Egypt and Decarbonization

Egypt is following the steps of other global economies in efforts to reduce the sector’s impact on climate change. There are currently 23 LEED (Leadership in Energy and Environmental Design) certified buildings in Egypt. Research, development and property technologies will be crucial in helping to reduce emissions from the built environment as cities set their sights on net zero.

Co-living as Solution 

Among the effective solutions for decarbonization of the real estate sector is co-living. The concept was introduced in the early thirties in London.

According to a study by Penny Clark from the University of Westminister, co-living has the potential to lower greenhouse gas emissions in the UK.

Co-living ensures a steady reduction in energy consumption and carbon footprint, as co-living spaces typically have shared living spaces, kitchens, and common areas.

Co-living spaces are often located in urban areas, which makes it easier for residents to use alternative transportation options such as walking, biking, or public transportation. This can reduce the carbon footprint associated with transportation.

In the era of digitalization and freelance nomads, co-living has become trendier and appealing especially to millennials.

A report by Knight Frank India, around 72% of millennials (aged between 18 and 23 years) are willing to consider co-living spaces as an option for their accommodation.

Legislation

27 countries across the globe have enacted laws passed by the legislative branch of government that contain net zero targets or equivalent, a report by The Grantham Research Institute on Climate Change and the Environment showed.

However, the application of such laws faces many limitations, including lack of definition and executive regulations.

For instance, Nigeria passed a law to achieve a net-zero emissions between 2050 and 2070, but the law doesn’t stipulate any requirement for companies to achieve that goal.

In the EU, climate legislation doesn’t require companies to reduce their emissions. However, there is a proposal before the European Parliament that would require companies to adopt plans to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5°C.

In Spain, the climate change law mandates companies to report on climate risks, but the word ‘company’ here is defined to just mention companies that are traded on regulated markets.

Meanwhile, Portugal’s law has better and more inclusive definition of companies.

As per data released by Climate Watch, world carbon emissions are skyrocketing in many countries, including China, or at best reaching a plateau in other countries. That means that the climate crisis has not been taken seriously yet.

There are many trends and positive attempts by many countries and institutions in the world, but good intentions are in no way enough to create a real impact and save our beloved planet.