Buildings consume roughly 40 percent of the world’s materials and energy, making the Real Estate industry a critical contributor to climate change. Some of the companies with the largest property portfolios—and thus the largest environmental impact—have committed to reducing their greenhouse-gas emissions by established portfolio-wide programs with reduction targets and deadlines. Strong reduction programs will incorporate formal green-building initiatives, backed by reputable certifications such as the well-recognized Leadership in Energy and Environmental Design (LEED) certification, or the Building Research Establishment Environmental Assessment Method (BREEAM) for all-new construction and major refurbishments. Leading companies in this space, such as Vornado, have already committed more than 5 percent of their total portfolio to green buildings. Yet despite evidence linking green-building investments with increased environmental and financial returns, formal company-wide initiatives still remain notably absent from the majority of Real Estate companies.
Key Industry Impacts
• Water use, greenhouse-gas emissions, and general-waste generation and disposal combined account for more than 80 percent of the total environmental footprint of Real Estate companies.
Critical Issue Profile: Green Building
According to the U.S. Green Building Council, the Real Estate industry accounts for up to half of energy use in the United States. The potential for emission reductions within the industry is increasingly viewed by politicians and regulators as an efficient, straightforward approach to their cities’ efforts to reduce carbon emissions. Green buildings, which offer approximately 26 percent less energy usage and 33 percent lower carbon-dioxide emissions, are a key element in reducing the industry’s environmental impact. However, 57 percent of companies within the Real Estate industry have not implemented a formal green-building program. This presents a significant challenge for the industry moving forward, but also an important opportunity for leaders to differentiate themselves and capitalize on reduced energy costs, resource efficiencies, and market gains.
Industry Ranking: How U.S. Real Estate Companies Stack Up
|Industry Rank||Company||Overall Rank||Industry Sector||Impact||Management||Disclosure||Green Score||2011 Green Score||1||Vornado Realty Trust||87||Real Estate||69.3||70.0||4.2||63.1||55.1||2||CB Richard Ellis Group||96||Real Estate||69.3||62.8||29.2||62.4||57.4||3||Simon Property Group||202||Real Estate||65.0||49.4||40.4||55.6||55.3||4||Weyerhaeuser||231||Real Estate||34.4||70.4||65.8||53.8||55.7||5||Public Storage||435||Real Estate||61.5||33.1||0.0||42.6||42.3|