At the 26th United Nations Climate Change Conference (COP26), many member nations pledged to reduce net emissions to zero by 2050. Leading the race are Europe and North America, with 38% of their cities committing. Only 18% of cities in Latin America, 17% in Sub-Saharan Africa, 14% in the Asia Pacific and 4% of cities in the Middle East and North Africa have pledged to this plan.

Real estate and how it tackles the green agenda will play a vital role in nations achieving net zero goals. The industry accounts for 40% of global carbon emissions. In Africa, India and the Middle East, emission reduction is a priority for new projects, with a push to use environmentally friendly building materials. In Europe, green policies focus on upgrading old buildings and utilising technology to optimise operations.

Savills Impacts 2022  highlighted that only 22% of office buildings worldwide have recognised green certificates like LEED, BREEAM or WELL. In some cities like Warsaw, San Francisco, and New York, over 40% of the office buildings are green certificated, this number in Los Angeles is 15%.  

‘’For the office market, corporate tenants are now prioritising buildings with sustainability ratings with the target to reach net zero. Businesses must take action to show employees that they take their green commitments seriously. This is no longer an optional part of business, especially real estate,’’ Mark Ridley, Savills Global CEO added.

Green Buildings in Viet Nam

At COP26, Viet Nam committed to net zero by 2050. To fulfil this goal, the government has started drafting and implementing policies. However, there are still not enough green properties.

At the Viet Nam Green Building Week 2022, the Ministry of Construction reported that the construction industry has experienced growth of 9% per year recently. At the end of 2021, urbanisation reached 40.5%, which correlates with increased energy demand. With less than 250 green buildings spanning 6 million m2, Viet Nam’s green building supply is modest when compared to its regional peers like Singapore.

Investors are starting to take steps to develop green projects. According to Hoang Nguyet Minh, Senior Director of Commercial Leasing,  by 2024 Ha Noi expects six more green office buildings. They will use innovative and environmentally friendly materials and technology that will assist efficient operations.

Mark Ridley assessed: ‘’Green certified office buildings in Ha Noi and HCMC are currently rated higher than older, more traditional buildings. From the start of 2023, listed businesses will need to start submitting ESG reviews in their annual reports. Their offices can play a role in meeting ESG and environmental requirements. Projects that are not carbon efficient or consume a large amount of energy will be costly because corporate CO2 surcharges will rise.”

Proptech, smart building management systems or renewable energy mechanisms in new and existing projects will improve environmental performance and will reduce operating costs.