Portfolio decarbonization – from roadmap to reality

Successfully decarbonizing an entire portfolio is a challenge for many organizations, often creating a significant gap between ambition and action. Our Net Zero Lead, Europe & India, Helena Rivers, and US Energy Planning Lead, Calum Thompson, explore ways to close it. 

Organizations are undoubtedly attuned to the need to decarbonize, but readiness and maturity to deliver on their ambitions sit on a very broad spectrum. 

The survey results from our Future of Infrastructure global research report — Lost in Transition? reveal that less than one-fifth of organizations worldwide have reached an advanced stage of decarbonization. 

The issues and opportunities presented by portfolio decarbonization are different for every company, country and industry. But, some common challenges and themes emerge when it comes to implementation. 

The need for data

One of the first tasks for an organization is understanding its true carbon footprint. The lack of data — particularly standardized data — is a widely acknowledged stumbling block, while hesitancy to share what data there is can increase the challenge. But while this can make it difficult to establish a global “norm” for some measures, it shouldn’t stop organizations from acting.  

Successful portfolio decarbonization begins with prioritizing investments based on what can be measured and understood, rather than striving for a visible pathway to achieving net zero across the full portfolio. Measuring and metering wherever possible will help organizations make smarter decisions about future actions — certainly compared to the alternative of estimating energy split between different systems which inevitably results in overengineering of replacement systems.  

Projects and regulations coming down the line — such as the updated Science Based Targets buildings guidance, the Task Force on Climate-Related Financial Disclosure and Multilateral Environmental Agreements, such as the Buildings Breakthrough launched at COP28 — will increasingly become catalysts for standardizing and improving reporting and understanding. However, organizations need to start collecting data now rather than waiting for further regulations to be implemented.  

Successful portfolio decarbonization leans on ongoing data collection to measure the impact of actions taken. Long-term ambitions backed up with short-term, continually monitored targets will help keep plans on track. This also allows organizations to adjust course as the situation evolves or more information comes to light. 

Getting to implementation

For portfolio decarbonization plans to be practically applicable, they must consider which areas an organization has under their control and which they can only influence, such as tenant activities. Organizations can then determine and prioritize activities, balancing what they can influence with cost and return on investment.  

In the commercial real estate sector, existing leases can be challenging to navigate in terms of the phasing of works, the split between responsibility for installation and the associated operational cost and carbon savings. The integration of systems across multi-tenant buildings can be another hurdle. However, the use of green leases — where landlords and tenants share responsibility for reducing the environmental impact of the property — is a good option to consider. 

Availability of finance is also a major consideration when determining the feasibility of a plan. Breaking projects into short-term targets can help secure ongoing investment — it is much easier to protect a smaller, in-year investment that enables a year-on-year reduction. Meanwhile, identifying funding and grant opportunities can also contribute to a more affordable transition. 

Our work with the Port Authority of New York & New Jersey demonstrates how the differing needs and priorities of stakeholders can be navigated. An early-stage materiality assessment including multiple stakeholder interviews established clear consensus around priorities and barriers.  

This clarity, and the subsequent development of shared guiding principles, provided the necessary framework for the identification and prioritization of actions. The deployment of our digital tools for greenhouse gas scenario planning and funding identification enabled the development of a bespoke roadmap that clearly defines both what needs to be done and how it will be realized. 

Addressing cultural and organizational roadblocks

A roadmap should assess an organization’s ability to implement a decarbonization program from technical, financial and cultural perspectives. But organizational and cultural roadblocks can slow progress at a fundamental level. Collaboration between parties and a clear allocation of tasks and control plans are essential.  

The University of Colorado Boulder in the United States is implementing a sizable decarbonization program alongside several significant changes to its campus, including their use of space and technology. Amid this transformation, we partnered with CU Boulder to spearhead the development of their first campus-wide planning effort devoted to energy efficiency and decarbonization. The resultant Energy Master Plan (EMP) details the campus’s energy vision and establishes an implementable roadmap to accomplish net-zero goals over the next 20 years.  

An EMP can be difficult to execute because it is typically a siloed, facilities-led effort. However, our strategic approach solicits input and fosters engagement from across the campus ecosystem, recognizing the importance of each stakeholder’s role in the achievement of campus-wide goals. It also includes our web-based analytics tool Rosetta to quantify energy projects and evaluate alternative pathways for implementation.  

Essential to the EMP’s long-term success, the Energy Action Group was established to manage and embed the plan. This group of leaders is now organized, empowered and realizing rapid progress in CU Boulder’s campus energy and decarbonization goals.

Closing the gap between intention and implementation

Embracing the need for standardized data and metrics, and creating practical, affordable roadmaps for implementation is the first step in decarbonizing your portfolio. Understanding your carbon footprint through better data, mapping out a phased implementation approach within your control and ensuring buy-in across stakeholders can successfully turn your net-zero ambitions into reality.