Avison Young's commercial real estate blog
Nature-based solutions help our cities drive critical nature-led green recovery, with some of our world’s finest already leading the wayJune 7, 2021
Environmental, social, and governance practices, also known as ESG, are no longer an emerging trend in commercial real estate. Rather, ESG is now a critical component to success in our industry, impacting all stages of real estate’s lifecycle, including finance, development, operations, and capital markets.
Consider one reason why: negative impacts of climate change are not slowing down or going away any time soon.
Adverse weather events, such as increases in flooding, forest fires and the like, are happening globally. We must recognize these occurrences are not normal and can be directly tied to the planet’s rising CO2 levels and negative climate outputs.
40% of these human-contributed carbon emissions in the United States can be tied back to residential and commercial buildings -- from systems that use energy to provide services such as heating, cooling, lighting, and appliance use. This creates a tremendous opportunity for our industry to lead the charge in decreasing our outputs for the benefit of our environment.
The work we are doing each day at Avison Young is a living, breathing example of our purpose to create this real economic, social, and environmental value for our clients and the communities we serve, powered by our people.
In line with this mission and our understanding of the critical importance of ESG as a force in commercial real estate now and well into the future, we recently invited Rob Wilson from the Nature Conservancy of Canada (NCC) to keynote and participate in a panel discussion with Avison Young ESG leaders Amy Erixon (Principal and President, Global Investment Management), Jon Gibson (Director, Sustainability, Energy, Environmental), and Gareth Condy (Director, Energy & Natural Resources) on a key driving force to improve ESG performance: nature-based solutions.
The group addressed how the built environment needs to deliver a green economy that places nature conservation into the corporate decision-making processes, including how businesses can protect ecosystems, reserve nature loss, and enhance biodiversity through nature-based solution opportunities, which can include:
- watershed protection projects
- urban tree canopy development
- ecosystem and species protection
- land restoration
- storm water management
- green building development
- carbon storage and sequestration efforts
- forest fire and flood risk management
Efforts like these can create big change for systems, transforming our cities and surrounding areas and providing infrastructure that provides protection and conservation needed to offset the negative impacts of climate change.
Cities that have implemented efforts like these, such as Toronto’s green canopy, Singapore’s green project standards, London’s National Park City efforts, and New York City’s watershed developments, have seen negative impacts of climate change offset by net gains and climate recovery:
- Toronto’s green canopy, covering 30% of the city, provides the city with $7 billion in value estimated by a TD Bank study, storm water management, and green building opportunities.
- While Singapore is the third most densely populated city in the world, it ranks in the top of green space cities with 40% of the city leveraging green solutions and requiring all new city projects have a green component.
- London aims to improve air and water conversation, biodiversity, local food, outdoor recreation education, physical and mental health through a greener, healthier and wilder London that puts a focus on reshaping landscapes and building toward London as the world’s first National Park City.
- New York City provided one of the earliest and most iconic examples of a nature-based solution with its watershed protection efforts that resulted in an estimated $8-10 billion in construction costs and $100 million in annual operating costs, avoided filtration of drinking water for 9.5 million people, and conservation of critical lands, Rob Wilson shared in his presentation.
The path to offset as a part of climate risk mitigation strategy considers the benefit of implementing projects like these against a set of principals to determine the best path forward for each unique project and commercial asset. A few questions to consider ahead of your next CRE project to determine how your work can be a part of a big green solution:
- What physical risks are specific to your asset’s location? If a physical risk exists, is there a way to avoid the potential impacts by choosing another, more climate-resilient location?
- If you can’t avoid a climate-prone location how you can responsibly develop, operate, and occupy the space? What strategies can you implement on site and in the building?
- Is there an opportunity to restore a portion of the site to maintain or renew environmental factors, creating future-proof infrastructure
- For what can’t be avoided, how can you offset negative impacts to reach a net zero impact on climate and environmental impact?
- Is there any opportunity to provide the ultimate ESG success --- a natural net gain for nature?
The rate of biodiversity loss is outpacing the rate of conservation, and we are on track for continued habitat and invasive species loss unless we all do more to build and manage better. There’s no time to waste and tremendous opportunity ahead if we look for ways to be responsible global citizens and put our planet first – for the benefit of our cities and our people.
Michaelyn Miyagishima is earning her masters at the University of California – Berkeley in Real Estate Development + Design, where she hopes to further understand the important societal, environmental, and economic impacts that design has on the built environment. She served as an Operations Manager at Avison Young and is a member of Avison Young’s Global Citizenship Affinity Group.
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