Sustainability challenges also apply to the logistics industry

Real estate accounts for a substantial share of atmospheric greenhouse gas emissions - totaling 37% of global emissions, of which 28% is due to the operational cycle of buildings, and 9% to emissions related to the construction process. 

·       According to a report prepared by Reuters Events Supply Chain in cooperation with JLL, 72% of respondents are optimizing their transportation networks and 51% are moving warehouses closer to transportation hubs and end markets.

·       The war in Ukraine is one of the most important factors affecting supply chains in Europe in 2023, and the resulting disruptions and inflation have major implications for decision-making processes.

·       Optimizing transportation networks is all about finding new convenient locations for warehouses throughout the supply chain.

·       Optimizing energy consumption in real estate properties used for logistics and investing in renewable energy sources are the first steps being taken by companies in the industry

Climate change is driving the need for change in the real estate market as well

Climate change is increasingly affecting our daily lives, which increases public awareness and the need to counteract its negative effects.

„Growing climate risks associated with the increased frequency and intensity of previously unusual weather events are increasingly beginning to affect all sectors. According to climate scenarios, by 2050 Warsaw will see an average temperature increase of 2.4°C, and the highest temperatures could be as much as 6.6°C higher than those observed today. It is therefore necessary to take definite measures to adapt our infrastructure to the changing environment and reduce greenhouse gas emissions accordingly.” – says Jakub Frejlich, Director, Strategic Consulting - ESG

One of the tools for implementing change is regulation. An important element within the green reporting structure is the CSRD (Corporate Sustainability Reporting Directive). It will introduce changes to the European corporate reporting system, establishing mandatory European Sustainability Reporting Standards. Companies will have to determine both the impact of their operations on the environment and surroundings, and their own exposure to climate change risks.  This is also important from the point of view of real estate owners, as it is real estate that will be directly exposed to the physical risks of climate change and the resulting changes in the competitive environment.

Attractiveness of a building determined by its carbon footprint

„The value of investments in the warehousing sector reached about €2.0 billion in 2022, the third best result ever. ESG-compliant buildings are becoming more and more attractive in the market from the point of view of the investor or owner, but also the tenant of the property. One of the most important criteria for assessing quality and value can be the building's carbon emissions.” – says Sławomir Jędrzejewski, Head of Industrial Investment

„It should also be noted, however, that the Polish warehouse market is distinctive compared to Europe for its relatively young age - more than half of the existing assets are buildings less than 5 years old.” – adds Sławomir Jędrzejewski. This is a huge resource and differentiator for the Polish market. Furthermore, Poland continues to offer attractive land for logistics and industrial development near major transportation hubs.

Improving supply chains key to sustainable development

While inflationary pressures affecting supply chains will not cease in the first half of 2023, the situation should begin to improve in its second half, mainly due to a global drop in demand for goods, cheaper transportation and stabilization in the real estate market. Rising costs are forcing initiatives to make more efficient use of assets and reduce energy consumption.

„By choosing the most attractive location that meets all of a company's transportation requirements, transportation costs, which account for the largest share of total supply chain costs, can be clearly reduced, which at the same time reduces carbon consumption. A good initiative to reduce energy consumption is to optimize transportation networks and move warehouses closer to transportation hubs and end markets. Fragmenting networks and setting up new distribution centers can also significantly reduce transportation costs and emissions, in some cases by as much as 20-30%. Sustainable construction, both in terms of design and functionality, is crucial for tenants today.” – says Maciej Kotowski, Director Research & Consultancy.