ULI makes case for introducing carbon pricing

Accelerating Accountability: The Case for Carbon Pricing underscores the business case and wider benefits of internal carbon pricing, and highlights best practice through case studies, to demonstrate the potential in taking early action to reduce emissions across the value chain and capitalise on emerging opportunities in the transition to a low-carbon economy.
 
Meanwhile, Universal Principles for Carbon Pricing in the Real Estate Sector has been published jointly by seven leading industry associations including EPRA, GREEN, IIGCC, INREV, RICS, ULI and WBCSD who have come together to mobilise their expert members from across the value chain to co-create a comprehensive carbon pricing strategy for the real estate sector, which sets out principles that any built environment organisation can use to implement a voluntary carbon price.
 
'It is time for real action,' said Lisette van Doorn, CEO, ULI Europe. 'All initiatives so far, not only from the real estate industry have been insufficient to lower the fossil fuel demand and carbon emissions to help improve the state of the planet, as demonstrated by the 2024 state of the climate report: Perilous times on planet Earth published last week. We need to seriously level up our action as an industry, and carbon pricing plays an important role to make that happen. To prevent fragmentation on such an important topic, I am very pleased that we’ve been able to partner with six other leading real estate industry organisations and their members from across the value chain to co-create these important principles.'
 
Accelerating Accountability explores how taking immediate action now to incorporate internal carbon pricing can provide the industry with better long-term planning and the opportunity to address stranding risk on buildings ahead of the 55% carbon emissions reduction required by 2030 in the Paris Agreement. Defining a carbon pricing strategy from within the industry also provides a strong opportunity to take proactive steps ahead of the risk of imposed regulation, such as an emissions trading system (ETS) which is being considered for buildings by the EU and could be operational by 2027.
 
Implementing carbon pricing provides the industry with the opportunity to mobilise private sector capital by closely aligning climate goals with financial and strategic interests, where funds raised can drive innovation such as exploring new technical solutions or sustainable materials. Carbon pricing can also drive organisational/cultural change, with company decision making viewed through a financial lens on emissions right across the whole organisation and not limited to specialist ESG teams.

Finally, implementing an internal carbon price ahead of potential regulation can also retain the capital allocated within the company/industry for initiatives that accelerate decarbonisation measures.  Organisations may mitigate future compliance costs and penalties while addressing their environmental obligations and demonstrate to stakeholders that companies hold themselves accountable for their emissions considering a rise in activism and actions brought against organisations to reduce climate change.
 
The full report explores how internal carbon pricing works as an accepted tool to tackle emissions and examines the barriers to large scale adoption such as a lack of consensus or price consistency, and the need for the built environment to incorporate embodied carbon, which represents almost one third of emissions from the built environment, into pricing mechanisms. It also includes several case studies demonstrating how some companies have dealt with many of these challenges.
 
To facilitate the implementation and adoption of a voluntary carbon price, the companion report Universal Principles for Carbon Pricing in the Real Estate Sector which has been published jointly by the seven professional membership associations, provides seven high-level principles encompassing consistent definitions and guidance to measure carbon emissions across the industry, and is based on input from subject matter experts from across the real estate value chain, some of who have already implemented carbon pricing in their own organisations.
 
The defining characteristics of the principles are that they are voluntary, and are not intended to be a new sustainability related standard/certification or replace external carbon taxes or policies but rather build on or link to existing initiatives; are high-level and indicative, where it is the decision of each individual organisation to determine how each principle applies (or does not apply) based on their business model; they are a first step exploring internal carbon pricing, with the opportunity for more detailed next steps/work based on the initial recommendations; and are provided for educational purposes in order to support greater industry adoption and accelerate decarbonisation efforts.