The building industry is responsible for a huge amount of the carbon emitted into the atmosphere. One of the world’s biggest development companies now has a top-level official charged with figuring out how to bring those emissions down.
Hines, the international real estate company with more than $80 billion in assets under management, has created a new role that could soon become common in the industry: chief carbon officer.
“My sole focus, 100%, is carbon emissions,” says Michael Izzo, who was recently appointed to inaugurate the role, officially known as Hines’s vice president of carbon strategy. Formerly a vice president of construction for Hines, Izzo is now creating a company-wide strategy for reducing carbon emissions in its new construction and renovation projects around the world, including towers in New York and Shanghai, and in Bangalore, India.
It’s a notable move for a company like Hines and for the real estate development industry in general, which is increasingly coming to terms with the climate impacts of both the operation of its buildings and the resources required to build them, known as embodied carbon.
“Real estate accounts for about 30% of global greenhouse gas emissions,” Izzo says. “And if you look at central business districts like New York City, where I’ve done most of my work over the last couple decades, the emissions from buildings are closer to 70%, both embodied and operational.” Bringing those emissions down, especially on the operations side, makes business sense for a developer like Hines. More efficient buildings are cheaper for owners and more marketable to tenants.
Izzo’s job—likely the first such dedicated position in the real estate industry—is to find ways to improve building operations and energy efficiency and also to find less resource-intensive materials and construction processes to get those buildings built. He’s already begun working with an internal team to identify projects that can use lower-carbon materials like mass timber and concrete made with cement replacement. Projects now include an embodied carbon guidebook that helps explain how the project measures up and how it did (or couldn’t) reduce its carbon impact.
He’s also targeting the massive amount of energy buildings require, and finding ways to reduce the emissions that come from their heating, cooling, and power demands. “We should really start with tangible, simple things that we can do within the built environment, like ridding our buildings of fossil fuels to the extent we can,” he says.
One project exemplifying these goals is Hines’s 270,000-square-foot, 16-story office tower south of New York’s Greenwich Village. The building, which will complete construction next year, was designed to run fully on electricity, eliminating higher-emitting gas from its heating system. The structure is expected to meet New York City’s 2050 carbon neutral building goal and exceed its carbon reduction requirements by more than 50%.
Izzo says this kind of project shows what a company like Hines can do to address climate change issues while also creating marketable products.
“We’re not looking for the perfect carbon efficiency or the perfect financial efficiency,” he says. “It’s how do we marry the two and adopt these two different, sometimes competing metrics in order to make better investment decisions.”
Izzo acknowledges that the carbon issue is a huge one for the real estate and construction industry, and his work is just getting started. He’s hoping to establish a clear carbon strategy for Hines, and then drill down into how that can be applied to the hundreds of developments the company has in the works.
“Real estate tends to be a long game,” Izzo says. “That’s why it’s imperative that we move even more quickly. Because the buildings we’re building today, they’re going to be around for a very long time.”