Real estate accounts for a significant portion of global end-use carbon emissions, making it essential to take measures towards achieving net-zero emission goals. The Science Based Target Initiative (SBTi) is an effective tool in this effort, created by a partnership between CDP , the United Nations Global Compact , World Resources Institute and the World Wide Fund for Nature . SBTi focuses on setting specific targets based on criteria and reporting progress annually.
Data from CenterSquare Investments suggests that commercial real estate is responding positively to these initiatives. In its “REIT on the Money” newsletter, CenterSquare reported that as of Q2 2023 nearly 75 REITs have published science-based targets with most aiming at keeping global temperature rise below 1.5 degrees Centigrade rather than 2 degrees Centigrade as initially planned. Analysis shows that REITs with published science-based targets outperformed the global index over one year following publication; lower operating costs directly impacting their bottom line while also leading to more leases, higher rents and lower occupancy rates being achieved due to sustainability efforts made by buildings involved in this initiative..
Though there are some limitations such as not all REITS being included in data analysis or lack of long term results due to SBTI’s recent introduction into commercial real estate sector – it can be concluded from current evidence available that decarbonization has both environmental benefits along with good business prospects associated with it
