Guy Grainger’s (Head of Sustainability Services and ESG at JLL) unequivocal statement at CREtech last week may seem alarmist but with US$130 trillion of global financial assets now managed by financial institutions which have signed up to net zero goals by 2050, it is no wonder that banks are increasingly asking questions about sustainability when deciding whether to finance a project or not.

Supply chain sustainability is a hot topic at the moment and although the phrase tends to conjure up an image of raw materials, conveyor belts and container ships, it is not only the manufacturing industry that is affected. Financial institutions that have agreed to drastically reduce their carbon emissions can only do so much without taking into account their clients’ and investors’ sustainability initiatives and financing a project with no green credentials would make a mockery of their net zero objectives.

That said, it is not the banks’ responsibility to single-handedly transform real estate into a net zero industry and it is clear that the property sector is well aware of that. It would be easy for the property industry to rest on its laurels and do the bare minimum required from a sustainability perspective, but instead the sector is taking steps, and in some cases giant strides, in the right direction. As Grainger pointed out, the technology is already available to enable the property industry to significantly reduce its carbon footprint and developers are now obviously seeking the green option in many cases, for example by utilising solar panels, electric vehicle charging points and eco-friendly building materials. Landlords too are increasingly requiring environmentally-friendly lease clauses while portfolios are being reviewed to determine how carbon emissions can be reduced, with some investors looking beyond carbon-neutrality and aiming for carbon-negative assets.

So, rather than turning the financial carrot into an unnecessary stick, I, for one, am looking forward to seeing how banks and property work in parallel to achieve sustainability targets which suits both industries and the environment.