When it comes to cutting carbon emissions at commercial buildings, timing may not be everything, but it means a great deal. The Carbon Risk Real Estate Monitor joined forces with The Science Based Targets initiative to provide fully aligned decarbonization pathways, with the goal of reaching net zero by 2050, in line with the Paris Agreement. 

Some real estate industry players quickly embraced the decarbonization pathways and began their journey to net zero. Others deferred taking any actions to reduce emissions. The consequences are significant. 

A key concept is the carbon budget. This is the cumulative amount of carbon that will be emitted over time while limiting the temperature rise to 1.5 degrees Celsius, as required by the decarbonization pathway. Importantly, climate change is driven by cumulative emissions. Therefore, the longer a property owner waits to begin lowering emissions, the higher an asset’s carbon budget will be. 

Figure 1 highlights the significant difference in carbon budgets between early and late adopters of emission-lowering protocols. In short: if an asset has been on the decarbonization pathway since 2020, it is a 1.5 degree Celsius, Paris-aligned asset. Conversely, an asset that starts the process much later is unlikely to be a ‘true’ 1.5 degrees Celsius-aligned asset due to the effects of the cumulative carbon budget.