Hines, one of the world’s leading developers, creates a role to assess the company’s global carbon emissions. Micheal Izzo, the company’s former vice president of construction in the eastern US region, has been appointed senior vice president of the company’s carbon strategy. Hines’ commitment to decarbonizing the built environment is the latest in a growing wave of real estate companies accelerating environmental, social and governance (ESG) goals.
Built with carbon-intensive materials and machinery, housing energy-intensive business operations, the built environment is responsible for around 40% of global carbon emissions. The fight against climate change will require voluntary partners in the real estate sector committed to reducing emissions. As the first and only global developer to create a dedicated carbon leadership role, Hines hopes to use their much-vaunted position in the industry to usher in an era of change.
“Based on his deep technical expertise and the successful implementation of decarbonization strategies with some of our new projects, we are delighted that Mike has accepted to lead our company’s carbon strategy as we embark on the creation of carbon standards for the built environment, ”Peter Epping, said Hines Global Head of ESG.
Hines’ carbon reduction efforts are part of its broader ESG strategy led by Epping. Sensitive to the growing number of investors, tenants and communities demanding better from the commercial real estate industry, Hines seeks to use its integrated model to shape the next generation of the built environment. A CBRE report looked specifically at how corporate ESG goals, which are growing in popularity across virtually every industry, are changing the conversation in commercial real estate. The report found that 83% of industry executives expect growing demand for sustainable buildings from tenants, while 54% said they would change their portfolio strategy in favor of ESG.
The biggest players in the real estate sector are following suit by aligning ESG commitments. The World Green Building Council now has 122 signatories with offices in 28 cities, each promising to occupy only net carbon operations offices by 2030. JLL has signed the pledge, pledging to achieve net zero emissions by 2040, in collaboration with each of the companies. ‘customers to embark on the path of decarbonization. Business brokerage and property manager Cushman & Wakefield aims to reduce emissions from its offices and corporate operations by 50% by 2030 and is actively engaging the world’s largest real estate owners and occupants to reduce their emissions in properties managed by the company. Brokerages, developers, builders, occupiers, and investors all publish ESG policies with slight variations in commitments and targets.
“Ten years ago, sustainable development was about corporate social responsibility. Over the past five years, it has been a question of how to integrate sustainability into core business strategies. The next five years will be devoted to how we fit it into capitalism, ”said Ronald Berger, a Munich-based international management consultancy, Peter Bakker, president and CEO of the World Business Council for Sustainable Development, told Ronald Berger, a Munich-based international management consultancy.
We have the technology and the expertise to make the global building stock allies in the fight for a sustainable climate. Commitment is built. Net zero buildings are still rare, but one day they could become the norm. Hines’ 555 Greenwich Square is an example of what the next generation of net zero buildings will look like. The 270,000 square foot, 16 story office designed by COOKFOX Architects will exceed New York City’s strict climate targets for 2030 by almost 50% for office buildings and is already aligned with the 2050 carbon neutral targets of the city. The building is the first new office to use its concrete superstructure for thermal energy storage. With sustainable mechanical, engineering and plumbing systems, including geothermal piles that use concrete for heat exchange, the building is expected to reduce carbon emissions by 46% with a 29% reduction in electrical consumption. AECOM Tishman is expected to deliver the building in the fourth quarter of 2022. CBRE serves as the exclusive listing agent.
“The intense planning and preparation to launch this project has progressed even through the historic disruption caused by the Covid-19 pandemic. 555 Greenwich will raise the bar for sustainability in the city and on the global stage as the world watches our city break the mold of environmentally responsible development. It will be a gift that will continue to be given into the future, ”said Gale Brewer, president of the Manhattan borough.
Hines’ new vice president of carbon strategy, Michael Izzo, worked closely on the 55 Greenwich project. He is now responsible for implementing these lessons across Hines’ global portfolio. To date, Hines has developed, redeveloped or acquired 1,393 properties, totaling over 459 million square feet. Behind some of the most iconic horizons on five different continents, the company has defined many aspects of quality and now hopes to add a new one: sustainability.
“We believe that over time this approach will become the industry standard, pushing material suppliers to do better and rewarding those who do. By focusing on significantly reducing embodied carbon, while continuing to reduce operational carbon, we intend to address the global impact of buildings on increasing global temperatures and participate in the transition to net zero, ”Izzo said. “We encourage all players in the real estate sector to join this commitment to create a low-carbon built environment, because it is imperative for all of us to work together to achieve this crucial goal. “
Commitments are only valid through follow-up. It is promising to see the wave of ESG commitments turn into a tsunami, but all those press releases will be wasted words if every company does not commit to meeting those commitments. ESG goals are not just about business reform but about capitalism itself. Investors with more than $ 100,000 billion in assets adhere to the United Nations Principles of Responsible Investment. The problem is, research shows that $ 100,000 billion hasn’t done much to improve anything. The researchers said investors “are using the status to attract capital without making noticeable ESG changes.” That’s not to say that the efforts of Hines and others won’t have an impact, but to highlight how often engagements fail.
One way to force companies to meet their commitments would be to publish regular public reports on the progress of ESG initiatives. As a private company, Hines decides most of what is disclosed, it is not easy to publicly report on ESG progress. Public and ESG financial reports must be transparent, standardized and audited. The world’s largest accounting firms have a common set of ESG metrics in place that any business can use in their financial reports, to which nearly 70 companies, including Unilever and Sony, have committed. ESG goals are not for charity, they are at the heart of the evolution of business models in the 21st century.
“It’s not about philanthropy,” wrote Claudia Allen, senior advisor at the KPMG Board Leadership Center, in The Atlantic. “This is not a theoretical question. ESG is all about risk, opportunity and long-term value creation. “
Time will tell if Hines and other major players in the commercial real estate industry will follow through on their ESG ambitions. The scale of the challenge and the scale of the change required should not be taken lightly. Fear of empty words and broken promises will backlash against ESG reforms, turning a movement for the public good into the last marketing buzzwords. Hines wouldn’t be the company it is today without the trust. Now, investors and occupiers must trust Hines and other companies to keep their word.