The New York City real estate industry’s biggest lobbyist recently met with members of a group that is part of the world’s biggest intergovernmental organization with one big topic in mind: sustainability.
In construction and real estate nationwide, sustainability has become a high priority, especially in the wake of a string of natural disasters around the world that have forced many to reevaluate the resiliency of their properties.
United Nations Environment Program – Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector created in the context of the 1992 Earth Summit, with a mission to promote sustainable finance.
Over 200 financial institutions, including banks, insurers and investors, work with UNEP to understand today’s environmental challenges, why they matter to finance, and how to actively participate in addressing them. The group’s work also has a strong focus on policy.
The membership of UNEP FI is largely European, but executives with the organization want to change that. Started 25 years ago, generally it tries to bring climate change, biodiversity, financial services sector into those discussions and start to close the gap between what is agreed to a policy and what needs to happen in terms of mobilizing financial resources to meet those objectives.
“Coming out of the climate accords, the Paris 2015 climate accords, we tried to put something together to help connect the dots to say that these carbon emission reductions that have been agreed to on the international level, what does that mean for the property sector?” said Matthew Ulterino at the meeting between UNEP FI and the REBNY Sustainability Committee last week at the Javits Center.
To meet commitments made in Paris, the property sector and buildings need to reduce carbon emissions by 77 percent, said Ulterino.
Two weeks ago, Mayor Bill de Blasio announced new mandates that require building owners to make sharp reductions in greenhouse gas emissions.
The new rules will compel owners to meet fossil fuel caps – requiring deeper upgrades to boilers, water heaters, roofs and windows on an accelerated 2030 timeframe – with sharp penalties for failure to comply.
“Time is not on our side,” said Mayor de Blasio announcing the mandates. “New York will continue to step up and make critical changes to help protect our city and prevent the worst effects of climate change. We must shed our buildings’ reliance on fossil fuels here and now. To do this, we are mandating upgrades to increase the energy efficiency of our buildings, helping us continue to honor the goals of the Paris Agreement. No matter what happens in Washington, we will not shirk our responsibility to act on climate in our own backyard.”
When President Trump announced the US would abandon the Paris Climate Agreement earlier this year, Mayor de Blasio pledged New York City would adhere to the treaty and accelerate its own actions to reach the 80 percent reduction in emissions by the 2050 target. Fossil fuels used for heat and hot water in buildings are the city’s single largest source of greenhouse gas emissions.
Jonathan Flaherty, senior director of sustainability and utilities for Tishman Speyer and member of REBNY’s Sustainability Committee, said the biggest challenge for the real estate industry isn’t ensuring new buildings are sustainable, it’s ensuring that old buildings are.
“The City has some ambitious goals and I’d say broadly we’re supportive,” said Flaherty. “I think the new construction challenge is well understood … but it’s the existing building sector where it’s much more complicated. How do you drive that existing building conversation in a realistic fashion is the main challenge for us and the City over the next couple years.
“As the mayor and other actors in the City and the State get more ambitious, our goal is to sort of be a referee between the two. We sit in the middle and try to figure out how to make those things join in the middle in a realistic way.”
The REBNY committee released a “REBNY Sustainability Statement” coinciding with Climate Week 2017 this month, which they presented at the meeting with UNEP FI.
The statement consists of six commitments to the creation and promulgation of principles regarding fiscally, socially, and environmentally responsible business practices among real estate management firms in NYC. The REBNY Sustainability Committee will allow any firm that provides real estate management services to adopt the statement.
Companies so far that have adopted the statement include ATCO, LaSalle, TF Cornerstone, RFR, Time Equities, the Durst Organization, SL Green, Vornado, Rudin Management Company, and Tishman Speyer.
“We see it globally, ESG (environmental, social and governance factors) is the conversation that needs to be happening, said Maya Jaber, director of sustainability at Time Equities, who led the effort to draft the REBNY Sustainability Statement.
“As we commit together to this, we can start having those conversations of how do we implement, how can we do this, what are the regulations, what are incentives, what are the things that are needed, but let us all come to the table and talk together about these issues in order to move forward.”