The US Real Estate sector is hardly known for its sustainability zeal and is lagging its European peers. The whole sector therefore needs to get moving: when we want to reach the Paris agreement and limit global warming to 1.5 degrees Celsius, there is USD 65,000 billion worth of global real estate that needs to decarbonize – including thousands of billions in the US.
This is where individual and sector-wide engagement comes in. Can the active engagers of the Global Real Estate team push the sector forward?
The green outpost – the case of DiamondRock
The US hotel sector is one of the biggest laggards when it comes to its willingness to decarbonise and setting sustainability targets. Here, the DiamondRock group is an exception. The company has been pursuing sustainability initiatives voluntarily and has asked us for advice. Our engagement started by discussing our Environmental Pathway Framework with them, providing the management with concrete and relevant steps to set their sustainability goals, works towards these goals, and demonstrate commitment and accountability.
The effort paid off: DiamondRock is now committed to reducing scope 1, 2 and 3 carbon emissions by 50% by 2030, compared to the base year of 2019(1). This will be verified externally. Not a small feat, since scope 3 involves indirect emissions in the value chain of the company and thus would involve, for example, sourcing sustainable products, as well as material for construction projects, steel procurement and more.
In addition, DiamondRock now has ESG-targets set into the remuneration schemes of the management and is discussing ambitious targets which would align with the goal of limiting global warming to 1.5 degrees Celsius. The company has also set targets for improving biodiversity on the hotel grounds, targets for lower energy and water usage, and plans to identify more opportunities for savings, such as optimising air conditioning systems, procuring more green energy and improving light options.
1. Scope 1 emissions are direct emissions from owned or controlled sources of company. Scope 2 are indirect emissions for the generation of purchased energy. Scope 3 emissions are all indirect emissions that occur in the value chain of the reporting company