Building mostly on the TCFD framework but also other sources, we classify five categories of opportunities for Canada’s commercial real estate sector: resource efficiency, incentives, investment, resilience, and others.

Taking advantage of these opportunities will help commercial real estate companies cut costs, become more competitive, and be positioned to make money while contributing to Canada’s net-zero targets and enhancing their reputation.

Resource efficiency

• Greater innovation will lead to cheaper clean technologies providing opportunities to reduce costs whilst meeting climate emission goals.
• Most important resource efficiency opportunity for the real estate sector in Canada is moving away from fossil-based heating to renewable energy possibilities such as heat pumps and direct resistance heating.

Incentives

• Opportunities will arise as there is more investment in the transition to a low-carbon economy.
• The Canadian government has allocated $10 billion to support the decarbonization of buildings and homes through retrofits.
• Natural Resources Canada will receive $150 million over five years to promote the use of low-carbon construction materials and enhance climate resilience in existing buildings.
• Natural Resources Canada will also receive $200 million to support deep retrofits in Canada.
• The Greener Neighborhood Pilot Programme will have $33.2 million to decarbonize several buildings at once.

Investment

• There are many opportunities to invest in established technology or in new climate-related businesses.
• Commercial real estate companies can invest in new buildings or the decarbonization of old buildings using the incentives detailed above.
• Commercial real estate companies could also branch into new services and revenue generation streams such as providing vehicle charging stations and smart sensors in their rented buildings.

Resilience

• Companies have the opportunity to create or invest in resilient real estate.
• The younger, more climate-conscious, generations are making real estate decisions based on the climate impact on buildings and the future risks. If a building fails to address these concerns, then buyers and renters are likely to overlook them as a viable possibility in the future.

Other benefits

• Retrofits or the construction of new green buildings creates new jobs, improves the physical and economic health of the country, and contributes to Canada’s net-zero transition.
• Better human capital.
• Increased reputation.
• Better relationship with the local communities and governments.

This post is an excerpt from A guide to effective climate governance in the Canadian real estate sector: Building for the net-zero future (Table 8) by Temitope Onifade and Helen Tooze.

The guide provides information to help boards, management, and professionals in the Canadian commercial real estate sector understand and deal with the increasing implications of climate change and the net-zero transition, including the risks, legal duties of those that should manage them, effective governance practices they should embrace, and where and how to leverage the emerging opportunities.