One of the quickest and most cost-effective ways to decarbonise the built environment is by retrofitting buildings, says a new JLL report, but the company warns that retrofitting rates need to triple if the world is to meet the goals outlined in the Paris Agreement.
Retrofitting Buildings to be Future-Fit, the title of JLL’s research, reveals that failing to decarbonise carries a “significant financial risk” to businesses and building owners and “net zero carbon (NZC) intervention measures directly impact a building’s bottom line”.
To meet the 2050 decarbonisation targets in the Paris Climate Agreement, existing buildings need to be retrofitted, which would “garner higher rents, reduce financial risk and generate higher occupancy rates and tenant satisfaction”, the report states.
The report reveals that for the global north to meet its decarbonisation targets, the current retrofit rate of 1% needs to climb to 3% of existing buildings a year. Achieving this would cost around US $3 trillion in the office sector alone.
In economically developing nations, new commercial and residential real estate needs to be as carbon and energy efficient as possible to slow climate change. “Addressing the knowledge gap, upskilling the workforce and scaling technology will be critical to accelerating the pace of retrofitting,” the report states.
“Retrofitting existing buildings is the quickest and most cost-effective way to accelerate decarbonisation in the built environment,” said Guy Grainger, JLL global head of sustainability services and ESG. “Whether it is lenders on real estate or occupiers of buildings, requirements are changing and real assets will become illiquid unless there is a plan to transition them.”
“Retrofitting does not need to be an all at once endeavour. But, reporting and disclosure is not enough - this requires intentional investment and a strategic approach,” said Grainger. “Retrofits are both more viable and responsible when considered in tandem with broader asset repositioning that responds to changing workplace dynamics and climate resilience. We have enough proof points that show we have been underestimating the return upside of intervention and underestimating the value downside of inaction.”