Climate action as good business practice: How real estate companies are applying SDG 13

The United Nations Sustainable Development Goals (SDGs), adopted in 2015, include 17 interrelated goals that provide a globally recognized framework for public policies that support economic prosperity alongside environmental and social protection. Since adoption, many companies have taken voluntary steps to embed the SDGs into their own sustainability strategies and public disclosures, reflecting both global expectations and stakeholder demand.

According to G&A Institute research, in 2023 real estate was the sector of Russell 1000® index companies with the highest alignment with the SDGs, and SDG 13: Climate Action was the specific goal this sector referenced the most. SDG 13 calls for urgent and transformative measures to address climate change and mitigate its effects.

Globally, the built environment is responsible for about 40% of all greenhouse gas emissions. These emissions result from building operations, construction activities, and the use of carbon-intensive materials like cement and steel. The real estate sector can play a role in reducing emissions from many of these activities.

Given the real estate sector’s interest in climate, how have companies translated the global policy framework of SDG 13 into business action?

Extreme Weather Events: A Direct Threat to Real Estate Assets

Since 1980, the U.S. has experienced over 400 weather and climate disasters in which costs and damages reached or exceeded $1 billion for each event, with an overall cost of all of the 400 events greater than $2.9 trillion.

Climate change is causing an increase in extreme weather events, such as hurricanes, floods, wildfires, and heatwaves.

Among the negative impacts are declining air quality, which arises both from effects following weather events such as wildfires as well as increases in air pollutants being released. Physical climate risks pose significant material risks to companies’ assets, business operations, and supply chains.

Real estate businesses face some of the most direct threats from climate-driven physical risks. Physical impacts from climate-related events can include direct damages to buildings and properties, asset devaluation due to heightened risk perception, and higher insurance costs driven by increased exposure to risk. In some cases, insurance companies may exit the insurance market if risks are too high.

For example, in coastal regions such as South Florida, the ongoing risk of flooding and hurricanes has contributed to damage, declining property values and heightened insurance premiums. Wildfire-prone areas in California have experienced similar volatility, further demonstrating the direct financial implications of environmental hazards.

Working to mitigate and adapt to climate risks can increase the overall resilience of properties and thus reduce financial risks.

Relevance of SDG 13

Given the growing urgency of climate-related risks, alignment with SDG 13 offers real estate companies a structured pathway to integrate sustainability into core business operations, while protecting assets and promoting long-term business resilience.

Progress towards the goal is defined through its five targets:

• SDG 13.1: Strengthen resilience to climate-related hazards and natural disasters
• SDG 13.2: Integrate climate change measures into national policies and planning
• SDG 13.3: Improve education, awareness, and institutional capacity on climate mitigation and adaptation
• SDG 13.a: Implement the UN Framework Convention on Climate Change (UNFCCC) goal of mobilizing funding for developing countries
• SDG 13.b: Build institutional capacity, particularly in vulnerable areas

Although governments collectively designed these targets with public action in mind, private companies can adopt them as ways to bolster their own climate efforts and promote the same approaches by others. The UN Global Compact has provided a suggested framework for applying the SDG targets to corporate strategy and disclosures. Many of these applications can be seen in the efforts of real estate companies discussed below.

Sector Leadership in Practice: Corporate Alignment with SDG 13

A number of Russell 1000® real estate firms are translating SDG 13 commitments into measurable practices. Companies are incorporating these targets in different ways, particularly through climate mitigation efforts (SDG 13.3), resilience-building (13.1), emissions reductions (13.2 and 13.3), and emissions reporting (SDG 13.4). Leaders in the sector are demonstrating a measurable and growing commitment to climate action, by setting ambitious goals and achieving important steps forward, such as:

• Achieving LEED certification across the in-service portfolio
• Increasing renewables in the company’s energy mix, up to 100% renewable energy already or by an upcoming target date
• Issuing green bonds to fund energy efficiency projects, green building projects, and power purchase agreement (PPA) projects
• Reducing Scopes 1-2 emissions per square foot to a specific target (additional target for Scope 3)
• Building PV power plant
• Installing solar capacity for operations and contributing solar to local power grid

Advancing Impact: Strategic Opportunities in the Sector

While progress has been made on reducing GHG emissions, broader engagement is needed to meet the scale of increasing climate challenges. Major opportunities for increased engagement in the sector include these suggested best practices:

1. When using cement and steel, integrate the best available techniques for these materials, along with reporting their emissions intensities (SDG 13.2). Traditional steel and cement production account for around 16% of global GHG emissions. Transitioning to the use of alternative materials or less carbon-intensive produced steel and cement can decrease a project’s overall GHG emissions.
2. Expand nature-based solutions and biophilic design. This includes creating green roofs and green walls, permeable pavements, expansion of urban tree canopy, restored and preserved wetlands, coastal buffers and dune restoration, along with native landscaping and pollinator gardens. These solutions help to mitigate flooding, sequester carbon emissions, and promote biodiversity, and would support SDG 13.1 on climate resilience.
3. Enhance resilience in island regions or underserved coastal communities. These areas face growing threats from sea-level rise, extreme weather events, and economic instability. An example of an action that enhances climate resilience is investing in mangrove conservation. Mangroves stabilize coasts, which protects structures near the coastline. They also mitigate flooding, sequester carbon, and support local economies. Expanding efforts to support these vulnerable regions would not only address an urgent need but advance SDG 13.5 on building institutional capacity.

Finally, real estate companies could share their climate strategies and collaborate on the best ways to combat climate change. The UN Global Compact provides a resource for business reporting on the SDGs. Increased knowledge sharing and transparency among companies within the real estate sector can accelerate progress in reducing emissions, developing climate risk protection strategies, and building climate-resilient portfolios.

If more real estate companies report on their climate mitigation and adaptation strategies, it could lead to a more transparent, accountable, and ultimately more effective global effort to address climate change by driving better risk management, strategic planning, market transformation, and stakeholder engagement.

The real estate sector is at a strategic crossroads. With assets highly exposed to risks from increasingly extreme weather events related to climate change, companies that proactively invest in climate mitigation, resilience, and adaptation can position themselves for long-term resilience and stakeholder trust. SDG 13 would seem to be not just a global ambition but guidance for essential present-day action.

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Founded in 2006, Governance & Accountability Institute (G&A) is a New York–based sustainability consulting and research firm advising corporate leaders and investors at the intersection of strategy, governance, and regulation. For two decades, we have partnered with executive teams and boards to translate sustainability strategy into durable enterprise value — helping organizations navigate shifting market expectations, evolving policy landscapes, and increasing capital markets scrutiny. Set up a call to learn more about how we can help your company.

Amelia Veleber

Analyst-Intern, G&A Institute

Amelia Veleber, based in New Jersey, is a recent graduate of the University of Vermont's Rubenstein School with a B.S. in Environmental Sciences and Sustainability, Ecology & Policy. She is interested in long-term business strategy, particularly in areas like impact investing and climate-related financial risk. She enjoys working with data to support decision-making and deepen her global perspective on responsible business.