£95 per tonne carbon levy will focus GPE on path to net zero

Great Portland Estates has set itself an aggressive internal carbon price to focus its efforts as it moves to become a carbon net zero business by 2030. The firm has set a price of £95 per tonne of carbon, some 16% higher than Landsec’s £80 per tonne and 37% higher than British Land’s £60 per tonne price. The cost will be applied to embodied carbon from GPE’s development schemes, calculated at practical completion, and on operational emissions from its investment portfolio, starting from its 2022 financial year. It will be the first time a real estate business has applied the cost to operational emissions. Janine Cole, director of sustainability and community at GPE, said setting the price at a “meaningful” level would force the business to consider carbon cost in all of its development appraisals and throughout the design process. Funds raised from the carbon pricing will be fed into a decarbonisation fund that will be used to finance the retrofitting required to reduce emissions across the business’s portfolio, support investment in on-site renewable energy supplies and fund research into low carbon solutions. “Climate change is the biggest long-term challenge that we face,” said Cole, “and with the urgency growing to respond to the climate crisis, we have created a decarbonisation fund which will finance our ambitious targets, drive innovation and behavioural change and ultimately help us to decarbonise our business faster.” GPE’s carbon footprint currently stands at 42,000 tonnes a year, around 41% of which can be attributed to its developments. In a bid to reach its net zero goal, the REIT has set itself a target to ensure that all new-build developments are net zero carbon from 2030, reduce embodied carbon from both the development and refurbishment process by 40% by 2030 and increase the energy efficiency of its portfolio so that it is 40% more efficient than it was in 2016. The group also plans to increase its direct investment in renewable energy, setting itself a target to generate 600MWh from installations across its portfolio by 2030. However, all those actions will only enable the business to reduce its carbon footprint to 18,000 tonnes of carbon by 2030, meaning it will need to offset 50% of emissions to get to net zero – a percentage that Cole said GPE just wasn’t happy with. She said the decarbonisation fund would enable the REIT to drive efficiencies within the portfolio and reduce the need to offset over time. Where GPE will need to offset, Cole said it planned to focus its activities on its local communities, enabling better use of renewable energy, helping end fuel poverty and creating bio-diverse environments among other offsets. GPE chief executive Toby Courtauld, said setting out a pathway of how to decarbonise GPE’s portfolio was the first pillar of its sustainability statement of intent, laid out in March this year. “The key message is that this is not just a moral objective,” said Courtauld, “it is an economic one too.” GPE was one of more than 20 real estate businesses that signed up to the Better Buildings Partnership Climate Commitment in September last year. As part of that commitment the signatories agreed to publish their pathways to net zero before the end of 2020. Read GPE’s net zero carbon report here To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette