The role of corporate strategy in the decarbonisation of the Hong Kong real estate sector
The decarbonisation progress of the real estate sector in Hong Kong is crucial for the overall success of the net zero goal of Hong Kong by 2050. However, a slow emission reduction rate in the city has been witnessed until now. The industry needs to revamp its decarbonisation strategy framework, which has been identified as one of the most impactful levers for initiating change. While a generic carbon reduction strategy roadmap could be identified from a literature review, its structure is high-level, creating a need to contextualise it for the Hong Kong real estate sector. This is done through understanding the sectoral hurdles of net-zero transformation and shortcomings of the current practice through desktop research and semi-structured interviews.
The research revealed two main insights. The first one is the main barriers are a concentrated electricity market, value conflict, huge stocks of ageing buildings, the long-term implication of design, uncollaborative partners in the supply chain and split incentives. The second one is that numerous sustainability malpractices, such as bypassing corporate culture assessment and lack of team empowerment and accountability, are yielded from the weaknesses of the generic framework. Therefore, a localised framework targeting these areas is proposed and validated by applying it to the top 11 property developers in Hong Kong, selected from the Bloomberg Terminal database. Alongside the framework improvement, co-developments for facilitating the decarbonisation process of the sector, identified from the interviews, are standardisation of practical guidance, creating an open data repository and joining a sizeable carbon trading market. These findings can be used to reinforce the current corporate emission management strategy and develop sectoral guidance for the transition.
The framework localisation and sector specification from the study also exemplify how other cities and industries could implement their framework contextualisation, especially for cities with similar archetypes and adjacent industries.