If we are not careful the pursuit of net zero can lead to a counterproductive side effect of creating monocultures.
There’s a lot happening in the sustainability space, and a growing realisation that real estate can have a positive ESG impact when focusing on resilience. Diverse, interconnected, decentralised and self-sufficient are the four essential characteristics of resilience. When these are all present we find people, the planet and economies thriving in the long term and able to withstand the one constant in life: change.
To give an example, diversity and interconnectedness are all about breaking down barriers, recognising relationships and seeing the bigger picture. They are missing in some instances of tree planting for the carbon offsetting market, which has become more of a numbers game. Offsetting residual emissions is important to avoid the worst of climate change, but the drive to net zero is leading to the pursuit of monoculture, as a single tree species with the largest carbon sequester rate/yield is chosen to meet the numbers.
Risk to Biodiversity
Huge plantations of sitka spruce are springing up everywhere, resulting in a risk of decline of our biodiversity and its resilience. When the primary focus is on measurement, there is a risk of failing to see the big picture and the interconnected environment. We might hit the target, but we miss the point.
The other two characteristics of resilience – decentralisation and self-sufficiency – are present in real estate when it has social value. It’s all about being local and collaborative, engaging with the community, identifying needs and meeting them to ultimately improve the quality of life of everyone.
For example, recently we’ve all seen the problems linked to having a centralised energy grid and being addicted to importing gas. A remote village in Slovenia provides inspiration and a possible solution. The village of Luče had a weak connection to the grid, so with EU funding they raised money to create a micro-grid using solar panels and batteries to share and store energy in the community.
In so doing, they have met their energy needs themselves to become self-sufficient, and decentralised by removing their dependence on a national energy grid. Social impact was created for and by the community, present in strengthening their energy security, stability and affordability, all while reducing emissions and using local contractors.
This was done by the EU’s COMPILE project (part of Horizon) which aims to activate and use local energy systems to support the fast growth of energy production from renewable energy sources in constrained networks, and foster the transition from a centralised system with passive users into a flexible network of active users forming ‘energy communities’.
Something similar was tried in the Scottish village of Fetterangus. The residents built a community wind turbine and are selling energy back to the grid, earning some £75,000 a year. The money is used to fund local projects, regenerate the local community and encourage young people to stay in the area.
In real estate there is huge opportunity for all these characteristics to come together. One notable example is Métal 57, the new Paris headquarters of BNP Paribas Real Estate. The facade of the original Rénault workshop has been retained, to preserve the heritage of the original industrial building. Building materials have been reused and the structure is operationally sustainable.
There’s a large rooftop garden creating an ecosystem and a habitat for birds and insects, as well as a vegetable garden to boost self-sufficiency. Inside the building there are collaborative, flexible working spaces. Most importantly, the building is rooted in the local community, and is open to children from nearby schools and residents of local care home at workshops to promote social integration.
Thinking local, breaking down barriers and seeing the bigger picture is the only way to collectively create a more resilient future. This is how to hit the target without missing the point.
This article first appeared in the 10th March 2023 issue of Real Asset Impact.
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