Enough Talk: Financing, Data, and Incentivization the Keys to a Decarbonized Future

15 Dec 2021

Lendlease Americas Head of Sustainability, Sara Neff, recently joined a panel of experts at the New York Stock Exchange to discuss ‘Financing the Green Transition’, detailing how different industry sectors are committing to a decarbonized future.

For years, the U.S. has lagged behind its European counterparts when it comes to investing in a greener future – but times are changing. As new technologies develop across industries, there is an increased awareness of ESG financing, as industry leaders look to move market ready technologies from the ‘demonstration’ phase to that of commercialization. 

Last week, Dynamo Energy Hub in partnership with the New York Stock Exchange (NYSE) held an event focused on ‘Financing the Green Transition’. The event featured a panel of experts representing industry sectors that are central to the energy transition, from real estate to battery production. Discussions ranged from the prevention of corporate ‘greenwashing’ to that of governmental support, but one theme remained largely consistent throughout: no more goal setting, now is the time for businesses to make tangible investments in a greener future. 

As sustainability and governance has transitioned from being a non-factor to one of the key pillars in financial investing, businesses have scrambled to incorporate ESG principles in order to appeal to investors. While a positive sentiment, acts of ‘greenwashing’ have become commonplace across multiple industries, particularly in real estate. 

Lendlease Americas Head of Sustainability, Sara Neff, stressed the importance of reliable data to measure the actual impact of a business’s ESG efforts: “To prevent greenwashing in real estate, what you need is data - great data that you audit with the same level of precision and rigor that you do your financial data. We need to treat sustainability with the same level of importance as anything else on the books.” 

The utilization of data is not merely confined to identifying greenwashing but is central in the implementation of decarbonization technologies being rolled out across the real estate sector. Technologies that allow for a 30% reduction of carbon in concrete, or even the production of zero-carbon steel, are entirely possible - how do document the use of such technologies? Through data, of course: “As of now, when building, you can conduct what’s called a ‘life cycle cost assessment’, where you know exactly how much carbon went into all the materials in the building...then you can figure out how to reduce.” With the real estate sector contributing roughly 40% of global carbon emissions, Neff explains that without the active implementation of such technologies, the decarbonization goals being set will remain largely unattainable. 

As fossil fuels continue to be phased out in accordance with the green energy transition, adequately incentivizing businesses and investors to commit to cleaner energy sources will remain a key barometer of success. European countries such as Norway serve as a blueprint for success, as Casey Clark, Managing Director of ESG Investments at Rockefeller Asset Management explains, sustainable investing has been commonplace for a number of years: “Europe is magnitudes ahead of the United States when it comes to sustainable investing. Approximately 80% of all sustainable assets under management are coming from Europe, according to Morningstar.” Government has a role to play here, whether it is through the deep incentivization of low carbon building materials, the implementation of a carbon tax, or simply through the Government’s own purchasing of greener technologies, which would in turn create markets for such products and accelerate the overall adoption of said technologies. President Biden’s two trillion dollar ‘Build Back Better’ plan serves as an opportunity to push the green transition further, as Neff explained how new housing and development is supported by investment in the grid, through both interconnection and renewables: “We are seeing a lot of great ideas coming out, and policy to back it up – so we’re excited.”

In a moment that encapsulated the panel’s collective message, Tom Einar Jensen (CEO of FREYR Battery) said: “It’s not about technology, it’s not about finance, it’s about getting it done.” As the U.S. continues its transition to a cleaner, decarbonized future, the importance of collaboration between industries is strikingly apparent. With implementation and accountability, only time will tell whether the U.S. can catch up to our friends across the pond. 

To learn more about Mission Zero and Lendlease’s sustainability efforts, click here