Food for Thought: Impactful Sustainable Solutions
In this month’s Food for Thought, TFX covers the basics of emission reduction measurement and explores how office asset management strategies rooted in circular economy principles can drive impactful sustainable solutions.
Climate change and the sustainability crisis pose significant challenges for real estate stakeholders responsible for defining and achieving ESG goals. Managing and measuring real estate ESG initiatives involves navigating a web of complex, rapidly evolving factors—and for good reason.
As the planet warms, and greenhouse gas emissions are leading to more and more climate related risks, there is an increasingly urgent focus on how all stakeholders can mitigate the impact of climate change through effective real estate management initiatives. Why real estate? It is estimated that buildings account for as much as 40% of global greenhouse emissions, significantly hindering the efforts to reach net zero and decarbonization goals in the foreseeable future.
This has manifested in things like the SEC’s pending regulation for ESG reporting for climate related risk for institutional investment evaluation. While the SEC’s rules have currently come into scrutiny and are being challenged by special interests, many corporate entities are seeing sustainability as both a smart business move and beneficial for the planet. Independent of these mandates becoming law, corporations are prioritizing decarbonization—provided there are reliable, measurable standards that can be widely adopted.
What exactly is Scope 1-2-3?
There are goals being set out by governing bodies across the globe based on the premise that it is essential for the planet to be “net-zero” by some point in the not-too-distant future – for some that date is 2050, some say it must be even sooner.
It probably pays to define exactly what “net zero” means so we can put it in the context of maintaining sustainable practices in real estate.
According to National Grid, an energy company based in the Northeast of the US:
“Put simply, net zero refers to the balance between the amount of greenhouse gas (GHG) that's produced and the amount that's removed from the atmosphere. It can be achieved through a combination of emission reduction and emission removal.”
Among the most recent standards that are being adopted for emissions reduction measurement is a process for categorizing contributions to greenhouse emissions, referred to as Scope reporting.
Think of it as a way for stakeholders to evaluate the factors in their direct control, indirect control and outside their control but in the hands of partners.
A simple definition we like a lot comes from Workiva, a comprehensive emissions measurement technology company. In a recent report they published, they describe scope reporting like this:
“The Greenhouse Gas Protocol (GHG Protocol) divides emissions into three scopes:
Scope 1 emissions – direct emissions from sources owned or controlled by a company
Scope 2 emissions – indirect emissions from purchased electricity, steam, heat, and cooling
Scope 3 emissions – all other emissions associated with a company’s activities
If this is hard to grasp at first, we have a good shorthand to remember what each scope includes: Burn, Buy, Beyond. Scope 1 is what you burn; scope 2 is energy you buy; and scope 3 is everything beyond that.”
There are many sources that follow emission reduction and decarbonization that have concluded that Scope 3 emissions are, in fact, the greatest offenders; (in the same Workiva report cited above, they estimate that Scope 3 accounts for 80-90% of the emissions a company is responsible for!)
What makes Scope 3 even harder is that these contributors to emissions often hide in the supply chains that a company relies on but has the least ability to control. For facilities professionals getting a handle on where your partners are in their ability to help you reduce Scope 3 emissions can result in significant impact in achieving what you set out (and need to report on) within your ESG goals.
We recognize that concepts like “net-Zero”, science-based targeting and the implementation of Scope 1-2-3 measurement for carbon footprint reduction can feel foreign to our clients in the real estate and facilities sector. Wherever you are in the journey to embrace adoption of these ESG principles, we are committed to developing some pragmatic guidelines and resources to help.
And we are not alone. CRE companies like Cushman & Wakefield and JLL are actively publishing resources that demonstrate the power and possibilities of sustainable real estate practices.
We know first-hand how a circular approach to office asset management, at its simplest levels, can contribute to an ESG framework that delivers positive results without sacrificing economies or efficiency. In a circular system, waste is avoided at all costs, through reuse and remanufacture of office furniture and clean decommissioning protocols for managing workplace properties that absolutely limit the amount of materials disposed of in landfills.
In the coming months we will publish more in-depth yet pragmatic guides for embedding circular principles in your approach to sustainable facilities management. In the meantime, if you have questions about how scope 3 impacts your office asset management, reach out to inquiry@TFXfurniture.com and let’s arrange a chat.