Source page: McKinsey & Company
Commentary
Greener buildings, better profits
Real estate | Decarbonization
January 8, 2024 – Decarbonizing buildings is no small feat, but there are emerging ways real estate leaders can lower emissions—and do it economically. According to senior partner Alastair Green and coauthors, a US real estate investor with roughly $20 billion in assets under management recently developed net-zero plans that are projected to cost roughly $85 million less than a traditional approach would have cost. In creating their plans, the investors avoided stranded capital and regulatory penalties, coordinated major investments such as renovations and equipment upgrades, and optimized power procurement, among other tactics. Click through the interactive to see more.
Interactive
To read the article, see “A new way to decarbonize buildings can lower emissions—profitably,” November 29, 2023.
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Visual form
Proportional-rectangle NPV chart.
Layout / body structure
The chart pairs explanatory text on the left with a treemap-like block chart on the right. Prev and Next move through the nine-view sequence, while the visible panel shows the combined contribution of eight levers.
What is being compared
It compares the estimated net present value improvement from different actions in a net-zero building strategy for a large real estate owner-investor.
Measurement system
The unit is US dollars, millions. Each rectangle is labeled with a lever and a dollar value, and larger rectangles represent larger contributions to the total 85 million improvement.
Visible structure inside the graphic
The visible chart shows Captured incentives as the largest rectangle at 25, followed by Optimized sequencing and Coordinated major investments at 17 each, Updated lease agreements at 16, Avoided stranded capital at 15, Avoided regulatory penalties at 12, and two procurement levers at 10 each.
Main takeaway from the visual
The chart shows that the path to net zero can improve financial value through several levers at once, with incentives and coordinated sequencing producing the largest visible contributions.
Key standout values or extremes
Captured incentives is the largest contribution at 25 million. Leveraged bulk procurement and optimized power procurement are the smallest visible blocks at 10 million each.
Controls / sequence, when applicable
Prev and Next step through the nine-view sequence.
Companion media, when applicable
The chart is the full visual on this page. There is no separate companion audio or video outside the visual.