As the end of 2023 approaches and the beginning of 2024 nears, we are taking some time to look at some of the most ambitious predictions to have a better idea of where we are headed in the years ahead.
Let’s look at one specific report, as it relates to sustainability in many vertical markets including the construction and real estate sector, which comes on the heels of the U.S. Inflation Reduction Act passage roughly a year ago, which was meant to kickstart the economy with investments in critical infrastructure, with a special focus on initiatives that will help meet sustainability goals for addressing climate change.
Veolia North America recently conducted a study of 245 large U.S. companies to learn more about goals related to net-zero carbon, zero-waste to landfill, zero liquid discharge, and targeted increases in water efficiency, reuse, and waste recycling by 2025.
One of the biggest takeaways is a reduction in greenhouse gas emissions is one of the top priorities for most firms as it relates to sustainability, although water and waste reductions are catching up in terms of priorities.
The reasons for this are vast. The survey found a majority of companies are committing to sustainability goals primarily because of reporting requirements, regulatory compliance, cost savings, and brand reputation.
In fact, the survey suggests many respondents are prioritizing sustainability initiatives because of the incentives and opportunities available in the U.S. Inflation Reduction Act legislation and other factors such as regulatory requirements and investor focus on climate disclosures. Of the firms surveyed, roughly one-third said the environmental risks to their operations were not a very important driver.
One of the big challenges highlighted in this report—which is something we have talked about many times here on this blog before—is that while many companies have made commitments to being more sustainable, the majority have yet to identify specifically what that next step will be to achieve these commitments.
In fact, the report suggests only 60% of firms identified specific projects and initiatives to achieve their short-term sustainability goals of less than five years, while 37% did not. What’s more, 40% of firms reported reducing operational costs is a very important driver for pursuing sustainability goals.
The report suggests while investments included in the U.S. Inflation Reduction Act have gone far in providing firms with the financial support, they need to convert to sustainable practices it will not be enough to meet all their needs. Based on an analysis by the Intl. Energy Agency and Boston Consulting Group, the overall transition to sustainable energy across U.S. industries will require at least $18 trillion in additional capital by 2030.
With all this in mind, the future as it relates to sustainability in construction and real estate is a bit murky. We see companies want to make a change, but many have yet to identify what step to take next. As we move into 2024, will the desire to be more sustainable be enough to catapult us into the next era of innovation, or does more work still need to be done?
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