Why Australian property leaders can no longer afford to treat sustainability as a separate initiative

For many organisations, sustainability was once viewed as an environmental objective sitting on a priority scale below the core priorities of cost, service delivery and workplace outcomes. That is no longer the case.

Across all sectors in Australia, but in particular government, higher education and healthcare, sustainability has become a strategic property and asset management issue. Increasingly, organisations are being asked not only to reduce emissions in the medium term (5–10 years), but in the short term to demonstrate a clear and measurable pathway towards doing so.

The pressure is coming from multiple directions.

At the Commonwealth level, the Australian Government’s Net Zero in Government Operations Strategy requires non-corporate Commonwealth entities to develop Emissions Reduction Plans (ERPs) that set out how they will contribute to achieving the Australian Public Service Net Zero 2030 target. These plans must be endorsed by each entity’s accountable authority and supported by ongoing annual progress reporting.

State governments are moving just as aggressively.

Victoria, for example, has established some of the most ambitious emissions reduction targets in Australia, requiring emissions reductions of 75-80% below 2005 levels by 2035, on the pathway to net zero emissions by 2045.

At the same time, climate-related disclosure requirements are expanding across Australia with the introduction of the Australian Accounting Standards Board (AASB) S2 on 01 January 2025. Large and medium-sized organisations are increasingly required to understand, measure and report climate-related risks, opportunities and emissions. What was once voluntary is rapidly becoming embedded in governance, reporting and investment decision-making.

Why Property Matters

While sustainable practices should be designed to intersect with every part of an organisation, the buildings and construction sectors are the largest emitters of greenhouse gases, accounting for 42% of global emissions annually. Some of these emissions come from the embodied carbon in the production and use of building materials such as cement, steel and aluminium. However, building operations alone are estimated to be responsible for 27% of the total global emissions annually, including the use of lighting, heating, cooling and fossil fuels.

For property leaders, and those who manage large property portfolios, this creates both a challenge and an opportunity. This article will focus on the challenges and opportunities in relation to building operations.

 

 

 

 

 

 

 

 

 

 

 

In short, the challenge is that emissions reduction targets can appear overwhelming when viewed at an organisational level, while the opportunity is that a large proportion of those emissions sit within assets and facilities that can be measured, managed and improved.

The question is no longer whether sustainability should be considered within the property function. The question is where to start.

In many organisations, property teams control some of the most powerful levers available to reduce emissions, including:

 

The Biggest Mistake Organisations Make

However, many organisations may look at the above levers and choose one which they think best fits their budget or annual targets or may choose an initiative based on what they have seen implemented by other organisations. Some of the common examples we have seen are:

·        Solar PV installations

·        Battery storage solutions

·        Electrification projects

·        Building management system upgrades

·        Green leases

·        Pursuit of high NABERS ratings

While all of these initiatives can be valuable, they often start with a solution rather than an understanding of the problem.

Without a baseline or understanding of data, organisations struggle to answer some fundamental questions:

Which buildings are performing well?
Which buildings are underperforming?
Where is energy actually being consumed?
Which assets should be prioritised?
Which investments will deliver the greatest impact?

As the old management saying goes, “you can’t improve what you don’t measure”.

The organisations making the greatest leaps towards emissions reductions to achieve net zero are not necessarily those spending the most money. They are the ones using data to target investment where it will achieve the greatest outcome. That starts with understanding energy performance across the portfolio.

In From Measurement to Action: Reducing Energy Intensity Across Your Property Portfolio, we’ll explore how organisations can measure energy intensity across their property portfolios and the practical strategies available to reduce both energy consumption and emissions.