JLL and a greener tomorrow
JLL is changing the face of real estate with its powerful vision of 2040. Emma Hoskyn, Director of Upstream Sustainability Services, explains how.
It's no secret that the world is barrelling towards a technologically advanced future at an incredible rate, and while the innovators of the world fight to set the tone for that future, it's up to real estate developers to ensure they're creating the appropriate physical infrastructure to support that.
This is where JLL comes in. Already at the forefront of real estate expertise, the company recently published a report – The Transformation Framework – outlining what the ideal city will look like in 2040 and how developers, builders and investors can ensure they are doing all they can to be a part of this evolution.
The way JLL gauged what the future cityscape would look like was simple: around 30 of its key clients were brought together for a workshop whereupon they were handed a piece of paper with a basic city outline on it, and asked to annotate it with the key elements that the city of the future is likely to contain. JLL then aggregated those ideas and focussed on the seven most common: tech innovation, urbanisation, land and resource scarcity, the low carbon economy, demographic and workplace change, health and wellness and transparency and social value. It is on these seven key elements that JLL then based its framework. Emma Hoskyn, Director of Upstream Sustainability Services at JLL, explains how it all began.
“18 months ago we were looking towards 2017, because that was the year in which we celebrated 20 years’ experience in helping real estate businesses transform,” she says. “We reflected on what has happened over the last 20 years of sustainability within real estate and what the future might hold. Back in 2015 we'd done some research on real estate trends that looked out to 2030, so we revisited that and went a little further on our time horizon since things move and change at such a pace.
“In order to really reflect on trends that were coming around the corner, we had to discuss it with our clients, but they are used to looking at physical buildings which are practical and tangible, so we thought 'how can we make this idea tangible to people?' Hence last May, to kick off the campaign and launch the microsite, we held a workshop and had people put pen to paper.”
Hoskyn has been with JLL for just over a decade and runs Upstream, the client advisory team that works with property owners, occupiers and developers to advise on all aspects of sustainability. She is, therefore, realistic about the fact that many of the seven trends JLL has identified are not exactly new, but they are goals to work towards which continue to shift and evolve. Hoskyn makes no claims that the elements outlined in The Transformation Framework paint a picture of exactly what 2040 will look like or that they will only come about at that point in time – rather, they build a bridge defining the direction of travel and encourage discussion around those themes.
“Things like using space more flexibly – with healthier buildings, co-working hubs, multi-generational housing and co-living spaces – they're really interesting perspectives for the future,” she explains. “Then there are eco elements like green walls, electric car charge points and wind turbines – these are obviously things that are happening now. The circular economy, however, is a really new concept to a lot of people and is really gaining momentum as we think harder about how to use resources properly, considering that buildings are enormous consumers of resources.”
What JLL aims to really drive home is that it's not simply one or two of the seven trends (and the hundreds of more specific ones beneath the seven umbrellas) that are moving on apace at the moment – the speed of change within the entire real estate sector is being challenged at the same rate at a fundamental level. What the company is communicating outwards is that these changes can be broken more comfortably into seven generalised chunks and they should be given equal focus.
“Really what you need to do is make sure that you can manage all of this at once and deal with it in a way that means you are, in 2040, still relevant and thriving as an organisation rather than merely surviving,” says Hoskyn. “If you want to thrive, you have to think about things in a slightly different way. That's why we created The Transformation Framework because historically, while we're in a position where we've spoken about the trends hitting real estate with clients for many years, we'd never before done a paper to say 'okay, how do you deal with these challenges at an organisational level?' Businesses need to think about their sense of social purpose and create a vision based around that, at which point JLL can step in and support them on their journey.”
Of course, not all organisations are as willing to evolve as others or will take on board the advice that JLL has to give, but Hoskyn believes that even those lagging in their sustainability initiatives and processes can keep up if given the correct tools. She is conscious that JLL's vision of the future is an idealistic one, but with good reason – the company hopes that 2040 will see all businesses have a defined social purpose that creates only benefits, cuts down on its use of limited natural resources and values humans and the environment.
“The Crown Estate is a good example of an organisation which is doing some of this; it published its second Total Contribution report in 2017 which presents its actual impact across six capitals and not just financial capital,” says Hoskyn. “It calculated total contribution through the impact it has on nature and communities, amongst other aspects, and put a value to that. It's a completely different way of thinking and it's possible that in 10 or 20 years’ time, that approach could develop further to be part of a normal accounting process.”
JLL's aim is to increase knowledge across real estate and the wider world. While the business communicates a lot with sustainability experts, it also deals with heads of real estate, fund and asset managers who are beginning to understand the opportunities available to them and are being pushed by investors to respond to the future's call. Hoskyn believes there need to be short-term drivers as well as long-term drivers in order to get the more resistant to respond, since it's so difficult to articulate something that might happen in the future to reach a decision today, but a savvy investor who knows exactly what they want can make all the difference.
“Our strapline for this project is 'change today for a sustainable tomorrow', which may sound a bit cheesy but it's to encourage people to think about those everyday decisions they make today,” says Hoskyn. “Those decisions will ultimately accumulate and will have a significant impact on their future.”
Carbon dioxide removal revenues worth £2bn a year by 2030
Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission.
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.
The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.
The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture.
It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.
The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020.
Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.
The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.
While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.
Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.
Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse.
"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.
“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.”
The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets.
Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.
Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."
McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:
- Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
- Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
- Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
- Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
- The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere