Towards net zero emissions

Towards net-zero emissions real estate in Asia

The following article first appeared on GRESB Insights

by Song Lin.

Massive wildfires in California, the worst flooding in China since the beginning of this new millennium, and the second most active Atlantic hurricane season on record – this is a snapshot of what a 1 °C warmer world looks like. Such extreme weather events have become more unpredictable in intensity and frequency year after year, and they are expected to become more devastating as the world gets warmer if we do not take immediate actions to drastically reduce greenhouse gas (GHG) emissions.

IPCC’s Special Report on Global Warming of 1.5 °C (SR15) makes it clear that it’s not too late to prevent the worst impacts of climate change, but there is no time to waste. To have a fair chance of limiting global warming to 1.5 °C, we need to halve global by 2030, achieve net zero CO2 emission by 2050, and achieve net zero on all GHG emissions by mid-2060s.

In addition to rapid and deep reductions in gross CO2 emissions (i.e. decarbonisation), pathways outlined in the IPCC Special Report also require ramping up of CO2 removals from the atmosphere. Some GHG emissions are difficult or impossible to be eliminated. For example, despite the impact of the COVID-19 pandemic, aviation and shipping are still expected to be major contributors of CO2 emissions in near future. Meanwhile, non-CO2 GHG emissions, such as refrigerant gases from buildings and methane from agriculture, will continue to contribute to climate change. Removal of these non-CO2 gases is not technologically feasible at the moment. In order to achieve a net zero emissions of all GHGs, the rate of CO2 removals has to exceed the rate of CO2 emissions past 2050 to offset residual non-CO2 emissions.

From a real estate industry perspective, achieving a net zero global target requires drastic transformations in how we design, construct and operate buildings. Currently, buildings consume 32% of global energy supply. With relatively longer life cycles measured in decades, developing zero energy and zero emission new buildings is especially important. Studies show that in order to achieve 80-90% reduction in building energy consumption by 2050, new constructions need to be near-zero energy by 2020. Further investments are also needed to retrofit existing buildings to the same level of energy efficiency.

Since the publication of the Special Report, more than 20 countries have adopted net zero targets. Some of these targets are published in policy documents, while others have been written into laws. With Europe leading the charge towards net zero targets, three Asian countries have made it to the list. Bhutan, which has been carbon neutral since early 1990s, pledged to maintain net zero emissions. Perhaps more meaningful examples come from Singapore and Japan. With much larger economies than Bhutan, both countries aim to reach net zero GHG emissions in the second half of this century. Collectively, however, these net zero targets only cover about 10% of current global GHG emissions. Corporate commitments to net zero emissions to support and supplement governmental actions are critically important.

Initiatives launched by industry associations, such as World Green Building Council’s Net Zero Carbon Buildings Commitments, have garnered meaningful support among developers and real estate investors. Adoption in Asia, however, has been relatively slow, especially in the rapidly growing markets of China, India and Indonesia. To date, there is only one Asian developer signatory from the Philippines.

In Singapore, efforts towards decarbonising real estate industry are mostly led by the public sector. As the national regulator, the Building and Construction Authority (BCA) piloted Southeast Asia’s first Zero Energy Building (ZEB) in 2009, and subsequently introduced Super Low Energy (SLE) and Zero Energy categories for the national Green Mark building certification scheme. Since then, the number of net-zero energy buildings in Singapore have grown to include the newly constructed SDE4 at National University of Singapore and seven retrofitted buildings on Nanyang Technological University’s (NTU) campus. In October 2019, Singaporean utility provider SP Group launched the first net zero emission building in Southeast Asia. Powered entirely by a solar and hydrogen energy system, the zero emission building is disconnected from the national electricity grid and generates zero GHG emissions during its operations.

SDE4 building on NUS Kent Ridge campus

SDE4 building on NUS Kent Ridge campus. Photo: NUS Office of Estate Development

So far, most net zero energy and carbon building programmes, including World Green Building Council’s Net Zero Carbon Buildings Commitments, focus on eliminating Scope 1 and 2 GHG emissions from the operations. In the construction industry, GHG emissions embodied in the construction materials are important emission sources as well, especially in fast growing Asia markets. The production of many construction materials, such as cement, steel and glass, have traditionally been a carbon intensive process, but some manufacturers are committed to change this.


Cement producer Heidelberg Cement and steel producer ThyssenKrupp have both committed to achieve net zero emission in their production by 2050, partially through carbon capture, utilisation and storage (CCUS). Beyond the production of building materials, world’s fifth largest construction company Skanska also committed to net zero emission target throughout its value chain by 2045. Other alternative solutions, such as use of bio-materials, have been piloted in Singapore. In 2017, NTU launched the first large-scale building in Southeast Asia constructed primarily with mass engineered timber.

The Wave at NTU is the first large-scale building in Southeast Asia constructed primarily with mass engineered timber

Image 3 The Wave at NTU is the first large-scale building in Southeast Asia constructed primarily with mass engineered timber. Photo: Wee Teck Hian/TODAY

As a natural extension of setting science-based emission reduction targets, the Science-Based Targets Initiative (SBTi) published a set of recommendations earlier this year to guide corporates in setting meaningful and effective net zero targets. Among other things, SBTi emphasises that corporate net zero targets should include all value chain emissions (Scope 1, 2 and 3). Reductions and eliminations of GHG emission sources within corporate value chain (abatements) should be prioritised over offset measures that either reduce emissions outside corporate value chain (compensation measures) or remove CO2 from atmosphere through bio-sequestration and carbon capture, utilisation and storage technologies (neutralisation measures). Corporate net zero targets should also include separate strategies and targets for abatements, compensations and neutralisations.

With pilot projects proving feasibility of new technologies and clearer guidance from SBTi on corporate net zero target setting, we can expect growing interest in net zero targets among real estate developers and investors. These efforts could be further supported by the growing market of green financing. In Singapore market, green financing in the real estate sector has grown more than seven-fold in the past 3 years. Combined with effective net zero targets, targeted green financing schemes could catalyse a transformation in Asia’s real estate and building markets.



  1. IPCC, 2018: Summary for Policymakers. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield (eds.)]. In Press.
  2. Kuramochi, T., Höhne, N., Schaeffer, M., Cantzler, J., Hare, B., Deng, Y., Sterl, S., Hagemann, M., Rocha, M., Yanguas-Parra, P. A., Mir, G.-U.-R., Wong, L., El-Laboudy, T., Wouters, K., Deryng, D., & Blok, K. (2018). Ten key short-term sectoral benchmarks to limit warming to 1.5°C. Climate Policy, 18(3), 287–305.
  3. Pineda, A. C., Chang, A., & Faria, P. (n.d.). Foundations for Science-Based Net-Zero Target Setting in the Corporate Sector. Retrieved 18 September 2020, from
carbon management step by step guide

Carbon management: a step by step guide

Using Apple Inc. as a case study

By Junying Lou


The world has witnessed a string of climate disasters in recent years. In the United States alone, there have already been 10 extreme weather events with losses more than $1 billion each in 2020 (NOAA, n.d). China is currently dealing with the worst flooding in more than 20 years that affected about 55 million people (He, 2020). Australia’s 2019-2020 bushfires have destroyed 2,000 homes and 11.2 million hectares, equivalent to nearly half the area of the United Kingdom (Green, 2020). The list could go on, there is no doubt that climate change has become more palpable for people around the world.

Climate scientists have confirmed that “human influence on the climate system is clear” and “warming of the climate system is unequivocal” (IPCC, 2014, p. 2). The urgency of climate actions has called for more effective carbon management from the public and private sectors.

Carbon management is about taking steps to measure and manage greenhouse gas (GHG) emissions within your organisation and extend the reduction of emissions across your supply chain (FDF, 2008, p.8).

What is in it for me as a business?

Saving the planet alone may not be a compelling enough reason for organisations to commit to carbon management. That is why it is important to highlight that carbon management does make a good business case in the following areas (Zhou, 2020, pp. 91-96):

  1. Cutting cost: carbon management will open up opportunities for organisations to identify cost-saving areas within and beyond its direct operations through improved energy and resource efficiency.
  2. Reducing regulatory risks: more and more countries are adopting ambitious climate targets which will translate to more stringent regulatory requirements for carbon emissions.
  3. Responding to stakeholders’ interest: increasingly stakeholders are showing interest in corporations’ effort to combat climate change.
  4. Improving competitiveness and promoting innovation: through the process to achieve ambitious carbon reduction targets, corporations will catalyse the transformation of operational practices and adoption of new technologies.

Getting started: setting up a management system

Setting up a management system for carbon management, which includes policies, processes, and frameworks will ensure the credibility of recorded data and results.

Just like any other strategic initiatives, it is imperative to obtain buy-in from the board and senior management. The leadership and oversight at the top level can help secure necessary financial and human resource for the effective implementation, evaluation, and continuous improvement of the organisation’s carbon management plan.

Cross-functional working teams from all levels of the organisation shall be formed with responsibilities clearly defined and allocated. Some common roles include collection, compilation, and reporting of emission data; management and monitoring of carbon reduction initiatives; and staff awareness and education. Other key internal processes, such as procedures to govern data quality, need to be put into place.

What are the key steps?

With support from a well-designed management system, an effective carbon management plan normally involves “measure- reduce- extend” (Cambridge Programme for Sustainability Leadership/Business in the Community, 2009, p. 4)

Step 1: Measurement

When it comes to management, we all heard about “what gets measured get managed”, and this is particularly true for carbon management. To develop an accurate baseline GHG inventory requires identification of emission sources and collection of activity data for conversion to emission data.

Before starting the actual measurement, organisations need to decide on a few things:

Standards to follow for the emission measuring purpose: the most commonly known standards to corporations are ISO 14064-1 and The GHG Protocol Corporate Accounting and Reporting Standard, but there are also other industry-specific standards available.

Organisational boundary: A corporation with a complex organisational structure, such as having multiple subsidiaries, joint ventures, associated companies, etc. needs to determine which parts of the businesses to be included. This largely depends on the approach it selects to consolidate GHG emissions: the equity share approach or the control approach (WBCSD/WRI, 2004, pp. 17-19).

  • Under the equity share approach, a corporation accounts for the share of GHG emissions from the operations according to its share of equity owned. This approach best reflects the risks and rewards a corporation is exposed to from a certain operation, but performance tracking of operations that it does not have control over can present challenges.
  • Under the control approach, a corporation accounts for 100% of the GHG emissions from the operations it has control over. The corporation needs to choose between either the operational control or financial control. While operational control is more compatible with government compliance programmes and more appropriate for performance tracking, this approach may not fully reflect the commercial reality of the reporting corporation.

Operational boundary:  The operational boundary (Scope 1, 2 and 3) is defined at the corporate level after the organisational boundary is decided, this step determines the scope of emissions to cover.

  • Scope 1 direct emissions are emissions from sources that owned or controlled by your corporation, including emissions from company-owned vehicles, boilers and furnaces, and emissions from chemical processes, etc.
  • Scope 2 indirect emissions are a special category of indirect emissions that are associated with the generation of electricity, heat, or steam that is purchased and used by the corporation.
  • Scope 3 indirect emissions are everything else, emissions that are a result of the activities of the corporation, including both upstream and downstream. Scope 3 is an optional reporting category, however, more companies are increasingly interested in measuring and managing their Scope 3 emissions. For example, Apple has been publishing its Scope 1, Scope 2, and Scope 3 carbon footprint in its environmental progress report.

Source: Apple’s Environmental Progress Report 2020

If it is your corporation’s first year in this journey, it means a lot of hard work that can be separated into the following oversimplified and broad categories:

  • identification of emission sources
  • collection of primary and secondary data including activity data and conversion factors
  • conversion to emission data
  • and compilation of all data to be reported at the corporate level

Step 2: Reduction

Once the baseline GHG inventory is set, it can be used to guide future actions. Organisations may also find it a golden opportunity to uncover emission hotspots during the measurement phase they wish to concentrate their reduction effort on.

The corporation may consider setting a carbon reduction target to demonstrate its commitment. The carbon reduction target can be absolute or intensity target. The latest development with target setting is the adoption of science-based target among leading companies. According to Science Based Targets initiative (SBTi), a science-based target is defined as targets “in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement – to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.” (SBTi, n.d.)

It is also important to decide the boundary of your target. As a minimum, the target should be set for Scope 1 and Scope 2 emissions, but since for the majority of sectors, the largest portion of a company’s emissions is Scope 3 emissions (Labutong, 2018), many companies are looking beyond their core operations to set Scope 3 targets. Apple, for an instant, recently announced that it will be 100% carbon neutral for its supply chain and products by 2030. (Apple, 2020)

To achieve carbon reduction targets, a series of carbon reduction programmes shall be devised and implemented. It is worth noting that carbon reduction activities can range from free to very low costs, such as simple user behaviour change like switching off when not in use, to high costs, such as investment in energy efficiency equipment.

We use Apple as an example to explore the wide range of projects and programmes a corporation can consider for emission reduction purpose. The selective projects Apple implemented are discussed in the hierarchical order of carbon management, which is first to avoid or reduce emissions through conservation and efficiency, then to eliminate emissions by switching to renewable sources of energy, and lastly to sequester or offset any residual emissions. (Second Nature, n.d.)

RMIT Carbon Management Hierarchy

Source: RMIT University Carbon Management Plan

  • Avoid and Reduce

With an understanding of where the company’s biggest climate impact occurs, Apple prioritises low-carbon design of its products, at both manufacturing and product-use stages. The improved manufacturing processes that led to higher material efficiency, combined with the use of low-carbon materials like recycled materials, have reduced carbon emissions associated with Apple’s products, for example, it is reported that a 63% decrease in Apple’s aluminium carbon footprint is achieved compared to 2015.

Energy efficiency in Apple’s buildings is another focus area. It is reported that energy efficiency audits of buildings were conducted to identify system improvement opportunities, followed by energy efficiency measures. Apple estimates that its energy efficiency programme along with new building design can save about 7,500 metric tons of CO2e per year.

Apple’s At Home Advisor programme allows AppleCare customer service employees to work from their homes, and this single programme avoided nearly 22,000 metric tons of CO2e emissions in the fiscal year 2019. For other employees, Apple introduced a bus commute programme to reduce the use of single-occupancy vehicles and offer campus bicycles which resulted in an over 6,000 metric tons reduction in the fiscal year 2019.

  • Substitute

According to Apple’s report, it has generated or sourced 100% renewable electricity for its global facilities since 2018. The was achieved through Apple’s renewable energy programme, which took a blended approach that involves owning or investment in onsite and offsite renewable projects, entering into power purchase agreements, and purchasing market RECs. Since renewable energy has been the sole source of Apple’s electricity, its Scope 2 emissions were reduced to zero.

  • Offset

Apple reported that starting from April 2020, it has realised carbon neutrality for corporate emissions, which include not only Scope 1 and Scope 2 emissions, but also part of Scope 3 emissions, such as business travel and employee commute. In the same report, Apple reported a total of 50,540 metric tons of CO2e for Scope 1 emissions and another 520,160 metric tons for business travel and employee commute, so how could Apple claim carbon neutrality while still generating emissions from these sources?

apple greenhouse gas emissionsSource: Apple’s Environmental Progress Report 2020

The reality is that some emissions are difficult to avoid or reduce, so the last resort is to sequester or offset any remaining emissions through sequestration opportunities, Apple, for example, has been investing in projects that protect and restore forests, wetlands and grasslands that have removed enough carbon dioxide to offset the residual corporate emissions. For most organisations, it may be challenging to be directly involved in these types of projects, however, companies can still take advantage of high-quality and robust carbon credits to offset emissions.

Step 3: Extension

The last step and probably the most difficult one is to extend carbon management across its supply chain, but it is also a critical step if a corporation wishes to manage its Scope 3 emissions. To successfully cascade the strategy down to your suppliers, you need to work with your suppliers by prioritising suppliers to engage with and craft a communication plan to initiate and follow up with them, and ultimately it is about incorporating the carbon management criteria into the procurement process (Cambridge Programme for Sustainability Leadership/Business in the Community, 2009, pp. 41-44)

In Apple’s case, as 76% of its overall emissions come from product manufacturing which usually takes place in its suppliers’ facilities, Apple has been working with its suppliers through Supplier Energy Efficiency Program that aims to educate suppliers and help identify initiatives to reduce energy use and manage the implementation of the projects. Apple also supported suppliers’ reduction effort by providing funding for supplier projects, a special fund of $100 million was created for this purpose in 2019. Through Supplier Clean Energy Program, which aims to catalyse the adoption of 100% renewable electricity by its suppliers, Apple has been advocating its renewable energy policy and assisted the transition of its supplier through funding, training and other opportunities. So far, 71 manufacturing partners in 17 countries have committed to 100% renewable energy for Apple production.


National Oceanic and Atmospheric Administration (NOAA). (n.d.). Billion-Dollar Weather and Climate Disasters: Overview. Retrieved August 13, 2020, from

He, L. (2020, August 9). ‘Everything is gone.’ Flooding in China ruins farmers and risks rising food prices. CNN Business.

Green, M. (2020, January 14). Australia’s massive fires could become routine, climate scientists warn. Reuters.

Intergovernmental Panel on Climate Change (IPCC). (2014). Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change.

Science Based Targets initiative (SBTi). (n.d.). What is a science based target? Retrieved August 14, 2020, from

Labutong, N. (2018, July 13). How can companies address their scope 3 greenhouse gas emissions? CDP.

Apple commits to be 100 percent carbon neutral for its supply chain and products by 2030. (2020, July 21). Apple Newsroom.

Carbon Management & Greenhouse Gas Mitigation. (n.d.). Second Nature. Retrieved August 14, 2020, from

WBCSD/WRI. (2004). The GHG Protocol Corporate Accounting and Reporting Standard, revised edition.

Zhou, S. W.W. (2020). Carbon Management for­ a Sustainable Environment. Springer.

Cambridge Programme for Sustainability Leadership/Business in the Community. (2009). Carbon management: A practical guide for suppliers.

Environmental Progress Report. (2020). Apple.

Food and Drink Federation (FDF). (2008). Carbon Management Best Practice in Food and Drink Manufacturing.


AirCarbon – A New Carbon Trading Frontier

AirCarbon – A New Carbon Trading Frontier

By Ho Ning Li and Adrian Pang

Paia Consulting’s partner, AirCarbon Exchange (AirCarbon) hosted their inaugural International Chamber of Commerce (ICC) – AirCarbon trading day on 10th June 2020, a virtual carbon trading simulation amidst the budding sphere of carbon trading.

Incorporated in Singapore in late 2019, AirCarbon is the world’s first digital exchange platform for airlines to trade carbon credits. Their launch is timely, with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) initial programs approved by International Civil Aviation Organization (ICAO) in March 2020. Even with global air travel down due to COVID-19, CORSIA timelines are expected remain in place, with climate action a key focus as economies recover from the pandemic.

Carbon: an asset class for responsible investment

Carbon has been traded in several regions and countries for a decade or so, such as European Union, Japan, South Korea and China, each with their own mechanisms and regulations. With ICAO’s approval of CORSIA programs, we expect a more global, industry-wide and hopefully more mainstream trading of carbon.

Carbon (or emissions) trading is premised on the cap-and-trade concept, where only a certain amount of carbon dioxide emissions is allowed for the region or industry in order to limit global temperature increase. Carbon trading is therefore one of the policy tools that is used by economies to mitigate climate change.

Singapore, as a regional and global hub for tourism, trade and finance, is primed to propel carbon trading as a new form of commodity trading that also carries environmental significance through carbon emissions reductions.

Read more about AirCarbon’s carbon trading mechanism below or speak to us if you are interested to incorporate carbon trading in your sustainability strategy.

Trading carbon using the AirCarbon platform

AirCarbon provides a platform that uses conventional commodities trading infrastructure and architecture while leveraging more recent and popular blockchain technology to create securitized carbon credit on Ethereum (second largest cryptocurrency platform by market capitalization). Moreover, AirCarbon seeks to securitize carbon credits around market demand that allows traders to gain exposure to an asset class as opposed to the conventional carbon market’s organisation around individual projects (see UN’s Clean Development Mechanism). AirCarbon also designed their platform to be in the same nature as other financial market platforms and maintains their independence from carbon market participants by operating solely as a trading platform.

AirCarbon seeks to streamline carbon trading based on market demands by securitizing carbon credits into three tradable carbon asset classes. Each credit class is organised and regulated around the market they serve. Traders who deposit carbon credits into a Trust managed by the platform will acquire a one-ton Token of any of the three carbon asset classes they prefer in return. The rate of each Token is subject to an Exchange like any other traditional asset trading. The platform’s Token is currently the easiest and most streamlined instrument for carbon credits trading.

AirCarbon’s three carbon assets are as follows:

  1. AirCarbon CORSIA Token (ACCT): Every ACCT is backed by a corresponding carbon credit eligible under International Civil Aviation Association’s (ICAO) Carbon Reduction Offset & Reductions Scheme for International Aviation (“CORSIA”).
  2. AirCarbon Nature Token (ACNT): Every ACNT is supported by a corresponding carbon credit registered under Verified Carbon Standard (VCS) covering activities in wetlands, grasslands, forestry and agriculture
  3. AirCarbon Premium Token (ACPT): All carbon credits supporting the ACPT satisfy stringent additional criteria and at least 4 UN Sustainable Development Goals.

Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) 

ICAO Approves Initial Carbon Offset Programs for CORSIA

Carbon trading: How does it work?

Institutional investors call governments for effective carbon pricing

Institutional Investors Call Governments for Effective Carbon Pricing

Nearly 350 global institutional investors released a statement for government provision of stable, reliable, and economically meaningful carbon pricing just days before the Climate Summit at the United Nations headquarters in New York. The four investor groups on climate change – Ceres’ Investor Network on Climate Risk (INCR), the European Institutional Investor Group on Climate Change (IIGCC), the Investors Group on Climate Change (IGCC), and the Asia Investor Group on Climate Change (AIGCC) – were responsible for coordinating the Global Investor Statement on Climate Change, alongside the United Nations Environment Programme Finance Initiative (UNEP FI) and Principles for Responsible Investment (PRI).

The statement acknowledges the role that investors play in financing clean energy and outlines the steps they are committed to take; however, the group of global investors, collectively representing more than $24 trillion in assets, declare that stronger political leadership and policies are needed for them to scale up investments. In 2013, global investment in clean energy amounted to $254 billion, falling very much short of the $1 trillion a year investment necessary to limit the effects of global warming to 2 degrees Celsius, as estimated by the International Energy Agency (IEA).

The statement demands government turn climate-related policies into mainstream action. The international investor community has already begun addressing climate change issues; alongside the statement, the group of institutional investors also published both an online database and a report that describe how they have begun to act on climate change, including direct low carbon investments, the creation of low carbon funds, company engagement, and reduced exposure to fossil fuel and carbon-intensive companies. Specific examples included in the report include the following:

  • ŸŸŸA Swedish pension fund, AP4, has committed to decarbonising its entire equities portfolio
  • ŸŸŸThe Zurich Insurance Group plans to invest up to $2 billion in green bonds; this is only one of the group’s many commitments that led to a 20-fold growth in the green bond market since 2012ŸŸŸ
  • Global bank ING has reduced its energy project loan allocation to coal power from 63% to 13% in 7 years; it has also increased its allocation to renewable energies from 5% to 39%ŸŸŸ
  • The China Utility-Based Energy Efficiency Finance Programme has provided loans worth $790 million to finance 226 projects, which has led to a reduction in emissions of 19 million metric tons of Carbon

The public online database – the Low Carbon Investment Registry – serves to encourage international asset owners to add examples to the Registry before the climate negotiations in Paris begin in 2015, which will provide policymakers a clearer understanding of how private capital is already flowing into low carbon investments.