Guest Post by Alice Contopoulos, Brand & Content Manager, Stok
At the CoreNet Global VIP Partner Experience at Salesforce last month, corporate real estate leaders and ESG and sustainability subject matter experts gathered to discuss how to achieve climate goals.
Hosted by Salesforce and Stok, winners of CoreNet Global’s 2021 Sustainable Leadership in Corporate Real Estate Award and the H. Bruce Russell Global Innovator’s Award, attendees dove into core questions to the work:
- What is your company’s climate action plan and/or carbon commitment? Why did you create one, and why did you craft it the way you did?
- What have you done to date?
- What enablers and blockers exist in achieving your climate goals?
Here we highlight five key themes that arose from the discussion, providing inspirational insights for corporate real estate professionals to turn their climate and carbon goals into reality.
#1: Set and align with Science Based Targets
Many organizations—corporate occupiers, real estate services firms, and landlords alike—have set Science Based Targets (SBTs) or are aligning with the SBT approach without an approved target by the Science Based Targets initiative (SBTi), and equal numbers are also publicly committing to net zero targets. These new commitments demonstrate immense progress in aligning corporate climate action with the latest climate science.
That said, while there’s an increase in the number of companies setting targets, few are clear on how they will achieve them. Three core blockers rose to the top:
Lack of dedicated staff
Internal investment and resourcing is needed to push the sustainability agenda forward at organizations of all sizes. Not having staff dedicated to achieving climate goals, as with any initiative, often leads to slow progress, lack of prioritization, and little success. The sustainability team, or individual(s), also need to be integrated with all parts of the organization that play a role in achieving the commitments. This requires dedicating time from other teams, which means sustainability must be a priority at the organizational level for these efforts to gain traction. One large technology company with a dedicated sustainability and ESG team urged that dedicating at least one employee to drive sustainability efforts forward is essential for achieving climate goals, which can then be heavily supported by external partners.
Limited internal expertise
Even with dedicated staff, internal teams will likely have limited experience with developing and implementing climate action plans. Organizations found success bringing in focused external consultants to build out their team’s expertise and keep them abreast of industry best practices, which are fast evolving in this field. These sustainability and ESG consultants can provide best practices and a tailored approach to an organization’s climate commitments, as well as help guide ambitious yet achievable target setting from the outset.
The challenge of leadership buy-in
Many organizations have struggled to bring their leadership teams along on the journey. Demonstrating the business value of climate action and working sustainability into the decision-making, budgeting, and planning processes is imperative for long-term climate progress. Leadership buy-in is not a one-time achievement, but rather an ongoing evolution. As climate goals and approaches change, one technology company stressed the need for the executive team to be regularly updated on efforts, so they are equipped to speak to them and ensure all business units are aligned on sustainability. Even before this, another technology company pointed to the need for the executive team to all align on the same definition of sustainability, which can also evolve over time.
#2: Engage tenants and suppliers to reduce scope 3 emissions
Corporate occupiers, real estate services firms, and landlords alike are putting major emphasis on scope 3 emissions. While scope 3 has yet to be widely adopted for inclusion in accounting or public disclosures, a notable shift is underway as leaders are homing in on its material impact. One global real estate services firm shared that scope 3 makes up 96% of its corporate emissions due to the volume of buildings it operates, while a technology company echoed the sentiment, with 99% of its emissions coming from scope 3 because of the carbon impact of its supply chain.
The solution for corporate occupiers? Engaging with suppliers. Supplier engagement initiatives are the way forward for corporate occupiers to reduce scope 3 emissions. While involving the supply chain in an organization’s climate journey can add complexity to the pursuit of its climate targets, it is necessary, and this type of collaboration at scale can lead to market transformation.
One global technology company is requiring suppliers, representing 60% of its scope 3 emissions, to set SBTs by 2025, which is being enforced contractually. Another global technology company shared that 44% of its suppliers (based on spend) already have approved SBTs. While supplier costs can in some cases increase in the short term as a result of this supplier engagement initiative, firms view it as a long-term investment knowing it brings in suppliers that deliver the greatest value by way of their talent and sustainability achievements. It also encourages market transformation at scale, reducing emissions throughout the supply chain.
One key enabler for engaging suppliers? Education. Rather than solely setting new expectations for suppliers, guiding and supporting their efforts by providing tools and resources for setting and meeting SBTs is key.
Another? Show you’re walking the talk. One global real estate services firm reminded the group that even if your emissions reduction efforts are focused on scope 3, organizations have to show they are doing the emissions reduction work themselves before trying to successfully engage suppliers or tenants on the same journey.
#3: Leverage buying power with landlords
Not getting the cooperation you want from your landlord? More organizations are using their buying power to push their sustainability priorities forward with landlords. And if the landlord won’t budge, some are stepping away from deals that aren’t values-aligned. One real estate developer that wants to work with like-minded partners is developing a green lease library for its internal leasing team, including clauses with “must-haves” and “nice-to-haves”, as well as green lease clauses across different regions. A global technology company has done the same.
Green leases enable companies to select and occupy properties that support the company’s climate commitments. Better access to energy, water, and waste data, as well as shared sustainability incentives between tenants and landlords are examples of beneficial green lease provisions that can enable future tenant improvement sustainability initiatives.
#4: Invest in quality data
Across all occupiers, access to quality energy, water, and waste data is a blocker for preparing third-party verification. Investing in quality data as early as possible to baseline and measure emissions across your portfolio is key to success. It’s also fundamental for tracking actual progress against targets. The quality of data disclosed for greenhouse gas inventories may especially come into play with new SEC regulations, which would require additional climate-related financial disclosures and greenhouse gas assurance. And while this may sound difficult, one global real estate services firm noted it has been done in the European Union for years and will be achievable in the United States, too.
#5: Be transparent to speed up progress
By nature of this event, conversations were candid as attendees transparently shared their goals, how they’re trying to achieve them, and what challenges they’ve run into. Transparency is key for climate progress—something that Salesforce has prioritized by creating many open-source resources and templates that are applicable to many and accessible for all. The real estate industry can act quickly on climate when working together, which was clear in these conversations.
Bonus! Remember, it’s a journey
Even when sharing successes and best practices from global leaders, one message still rang true: we’re all still figuring this out. Companies of all sizes at different stages in their climate journeys are faced with similar and new challenges every day, even those who are further ahead of the curve. One challenge that was of special interest with some fear of uncertainty was the upcoming SEC regulations requiring GHG emissions disclosure by public companies. The more we facilitate transparent conversations like these and continue to share insights and tools for climate action, the faster we can move past uncertainty and toward achieving these necessary goals in this critical moment.
So, let’s continue to build momentum together. Reach out to share your company’s climate journey and questions.
Alice Contopoulos is Brand & Content Manager at Stok