Businesses in Africa are waking up to the need to urgently cut carbon emissions across commercial real estate and these increasingly changing attitudes are reflected in the financial value of the buildings around us.

Attention is now turning to the preservation of the value of buildings to avoid the risks associated with doing nothing at all. In the same vein, the focus is shifting from being in a prime location with sweeping views from the top floors to championing net-zero carbon, promoting health and wellbeing, and being resilient to climate change.

While such buildings are gradually increasing in number, they’re still very much in a minority. Around 70% of the building stock currently in many big global cities will still be around in 2050. It’s a big, expensive problem.

To be in line with the Paris Agreement and maximize our chances of limiting rising temperatures to 1.5 degrees Celsius, the built environment must aim to cut emissions by 50% by 2030 and be net-zero carbon by 2050 at the latest.

That means corporates, investors, and developers need to take action sooner rather than later – and preferably now.

Those waiting to lean into these structural changes will be too late and could well have to play significant catch-up in years to come. In some cases, the decisions to act could be taken out of their hands with access to lending increasingly depending on a net-zero plan.

What can be done

The reasons to take action to cut carbon emissions from real estate are now overwhelmingly greater than the reasons to do nothing. The benefits of transitioning our buildings to low- and no-carbon versions of themselves are significant.

Retrofitting real estate will be critical to meeting the demand for net-zero carbon space and incoming regulations.

Like in many other cities, a substantial number of buildings will need to undergo a deep energy retrofit as part of wider net-zero plans across entire real estate portfolios. However, the current pace of retrofitting is nowhere near fast enough.

There’s no denying it’s a complex, timely, and expensive process that requires significant expertise but ensuring a more sustainable built environment – which accounts for up to 70% of total carbon emissions in cities – can bring meaningful improvements to air quality, reducing chronic disease and improving the health of people living nearby.

While we’re a long way off quantifying the true impact of healthy spaces, carbon emissions, and climate change on building value, what’s clear is that asset stranding and brown discounts will become meaningful if owners do not manage the risks.

Companies that step up to the challenge can help to rebuild the trust of the communities and wider society who feel that businesses only act in their own interest.

The next decade will be critical if real estate is to truly play its part in a more sustainable, just, and equitable future – a net-zero future. The conversation around green real estate is moving on – and real estate that fails to keep pace will become irrelevant.