Digital solutions towards net zero in the built environment

The rise in global temperatures is resulting in catastrophic events around the world, including wildfires, flooding and the hottest temperatures ever recorded, underscoring the urgency for industry to mitigate the effects of climate change.

A sector that could make a big difference is the built environment, which is responsible for 42 per cent of the world’s annual global carbon emissions. With this in mind, industry leaders are generating innovative solutions to propel the sector towards a sustainable future.

Digital platforms to advance sustainability

Lendlease, a globally integrated real estate group with its Asia headquarters in Singapore, has established a digital property life cycle platform called Podium, which it says can help the industry make more sustainable decisions across building development, construction and operations - dramatically reducing costs.

Podium takes a data-centric approach to the entire real estate delivery and management value chain, which can help direct the built environment towards more sustainable building practices.

Podium for Development is a digital platform connecting developers, designers and supply chain stakeholders to help the industry deliver high construction productivity and more sustainable buildings. This enables the industry to put emphasis on efficiency and cost, thereby becoming more productive and sustainable than traditional methods of construction.

By harnessing algorithms and artificial intelligence, the platform automatically integrates design workflows with prefabricated components from manufacturers. This integration of conventional design with engineering solutions ensures the construction process is embedded in the design process, resulting in buildable, cost-effective projects, Lendlease says.

The challenges of decarbonisation

Reaching net zero in the built environment comes with many challenges. Accurately measuring emissions from real estate – particularly indirect emissions that occur in an organisation’s value chain – can be complex. Decarbonising energy grids that power these developments will require action from multiple stakeholders such as governments and corporations.

Stakeholders must look beyond the immediate costs of decarbonisation and take a long-term view that considers the benefits of reduced emissions and improved energy efficiency, as well as the potential economic advantages.

Forming partnerships to achieve net zero

With this in mind, Lendlease is collaborating with industry peers to help them overcome the barriers to decarbonisation and support the net-zero carbon commitments of its clients, partners and investors.

The company has partnered with the World Green Building Council to tackle the climate emergency in two ways: by extending its collective impact beyond operational carbon to include embodied carbon, and by outlining the necessary actions and policies to drive systemic change across the sector.

Lendlease has also entered into partnerships with industry leaders including SteelZero, an organisation that aims to speed up the steel industry’s transition to net zero; Stora Enso, a renewable product provider of packaging, bio-based materials and timber; and PanUnited, a provider of low-carbon concrete. These partnerships will drive low-carbon practices in the built sector.

Sustainable funding through green bonds

Green finance products are gaining momentum as a more sustainable way to finance operational goals, and Singapore is proactively supporting the sector. Lendlease Global Commercial Reit (LREIT) has obtained sustainable financing among Singapore Real Estate Investment Trusts (S-Reits), with almost 70 per cent of its loans taken from sustainability-linked sources this year.

The city state announced its first sovereign green bonds, amounting to S$2.4 billion (US$1.8 billion) last year. Green bonds are financial instruments issued by governments or corporations to fund environmentally friendly projects such as green buildings.

Last year, LREIT established an S$860 million (US$626 million) sustainability-linked loan (SLL), the largest SLL among S-Reits at the time. As a result, LREIT won the Best Sustainability-linked Loan Award (Singapore) at The Asset Triple A Sustainable Capital Markets Awards 2022 - an award that recognises excellence in sustainable finance and investment. The SLL incorporates interest rate savings linked to predetermined sustainability performance targets, allowing LREIT to benefit from interest savings as it achieves these targets through its portfolio in Singapore.

Pushing forward with ambitious sustainability goals

Lendlease has set itself a target to reach “absolute zero” by 2040, which goes well beyond offsetting emissions to eliminate those directly produced by the company and indirectly generated by its value chain from suppliers to end users.

The company says it has embarked on a five-step journey towards net zero, including creating a decarbonisation investment strategy in 2021, phasing out diesel and gas in its operations, and committing to using 100 per cent renewable electricity by 2030.

Lendlease is also collaborating with its supply chain partners to achieve its 2040 goal, and is working with its tenants and residents to help them transition to renewable electricity.

In 2022 LREIT became the first S-Reit to achieve net-zero carbon - three years ahead of its 2025 target. This year, LREIT adopted target-based best practices, using international benchmarking to reset the baseline for its environmental targets.

Source: South China Morning Post © South China Morning Post Publishers Ltd. Permission required for reproduction.