Hines' ambitious net zero carbon goals could impact real estate

Hines' ambitious net zero carbon goals could impact real estate

Roger Pettingell Sarasota Real Estate

Hines, one Houston’s biggest landlords and developers, is committing to cutting its operational carbon emissions to net-zero across its global portfolio, affecting millions of square feet of real estate in Houston.

The global real estate powerhouse said it will aim to cut carbon dioxide emissions from operating its 1,530 buildings to net-zero by 2040. The initiative would apply to the buildings it has operational control of across 285 cities and 28 countries, the company said.

Buildings accounted for 31 percent of global carbon dioxide emissions in 2019, so reducing their emissions could help significantly slow climate change, according to a recent U.N. Climate Study. Operational carbon emission come from heating, cooling, ventilating, lighting and powering the building.

In Houston, Hines owns and manages 27.7 million square feet of real estate, including 10.9 million square feet it owns and 16.8 million square feet it manages, said Peter Epping, global head of ESG (environmental, social and governance) at Hines.

The firm will begin assessing each building in Houston and across its portfolio to establish a baseline for how much carbon the facilities typically emit, Epping said, that will be compared to similar buildings and national benchmarks. Hines would develop ways to reduce waste and energy consumption at each property.

Although Hines hasn’t released many specifics on what changes it would need to make, generally owners can take a variety of steps to reduce carbon emissions, including installing new lighting, adding water saving technologies, replacing wasteful HVAC systems, and implementing design changes to reduce the energy needed to heat and cool the building.

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Epping said Hines will also explore the possibility of adding on-site renewable energy and purchasing more off-site renewables to power its buildings in Houston. The firm is also working on forming agreements with third-party companies to assess carbon emissions in its buildings on an ongoing basis.

Beyond looking at operational carbon, Hines also has started examining embodied carbon, or the carbon emissions involved in constructing the building, including the emissions tied to producing materials such steel, cement, concrete and insulation. The company is evaluating its new developments, including projects in Houston such as the 53-acre life sciences complex Levit Green, to track and reduce the embodied carbon in its construction processes, Epping said.

Hines joins other major real estate firms in evaluating embodied carbon, including Kilroy Realty of Los Angeles, Brookfield Properties of New York, and Lendlease of Sydney and Skanska USA of New York. Skanksa is evaluating embodied carbon at its new downtown Houston skyscraper, 1550 on the Green.

Hines is the latest commercial real estate firm to announce a net-zero carbon goal after real estate brokerages CBRE, Colliers, JLL and Cushman & Wakefield and several other firms last year also pledged to achieve net-zero emissions across their operations.

The net zero goals come as more office tenants are favoring buildings that help them reach their internal environmental goals, real estate experts say. The sustainable design at Texas Tower, Hines’ new 47-story tower in downtown Houston, was a key reason why Cheniere Energy opted recently to sign a major lease in the building, the company said.

Investors are also favoring sustainable buildings. In 2020, mutual funds and exchange traded funds invested more than $288 billion globally in sustainable buildings, nearly double what they invested in 2019, according to the New York investment firm BlackRock.

Although Hines already employs sustainability practices at many of its new developments, Hines’ goal for net zero emissions from building operations ups the ante on its commitment to fighting climate change.

“As the impact of climate change is becoming increasingly integrated into our lives every day, the real estate industry has a responsibility to acknowledge this growing problem and take meaningful action,” said Jeff Hines, co-chief executive officer of Hines in a statement.

marissa.luck@chron.com, twitter.com/marissaluck7

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