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An international alliance of green building rating organisations has unveiled what it calls the industry's first comprehensive global guide to financing the transition to sustainable buildings. This guide addresses the estimated $35 trillion investment needed by 2030 to limit global temperature increases to below 1.5°C.
Buildings contribute over 30 per cent of global energy use and over a quarter of emissions. The International Energy Agency (IEA) has emphasised that significant changes in the built environment are essential to meeting global climate goals. Given that most existing buildings will still be in use by 2050, substantial investments are necessary for both new construction and retrofitting existing structures to meet climate targets.
The new report, "Financing Transformation: A Guide to Green Building for Green Bonds and Green Loans," aims to provide a practical framework for increasing finance in the construction and real estate sectors. This ensures that scientifically rigorous and reliable methodologies support the progress towards a sustainable built environment.
The guide is a collaborative effort by the UK-based Building Research Establishment (BRE), the Green Building Council of Australia (GBCA), the Singapore Green Building Council (SGBC), the US Green Building Council (USGBC), and the newly joined Alliance HQE-GBC France. It incorporates established green building certification systems like BREEAM, Green Mark, Green Star, HQE, LEED, and NABERS.
It offers a holistic approach by integrating health and social outcomes as critical investment metrics, urging a transformation in traditional financing practices. It encourages investors to embrace the risks associated with new, clean technologies, support scaling existing solutions, and prioritise social impacts.
Gillian Charlesworth, CEO of BRE, stated that the guide exemplifies the unified international commitment to combating climate change within the building industry.
"By unlocking significant capital, we can drive the essential decarbonisation of our built environment despite the inherent challenges," she said. "This guide represents a monumental first step in coordinating a worldwide movement for green buildings, and we eagerly anticipate further collaboration to meet the challenge of climate change in the sector."
Davina Rooney, CEO of the GBCA, said the alliance hopes to strengthen global cooperation between the finance and real estate sectors, which will be essential if the tens of trillions of dollars' of investment the IEA claims is needed by 2030 is to be delivered.
"The $35tr investment needed to meet global energy transition goals represents almost 10 per cent of the value of global real estate - so we're talking about investments on a gigantic scale," she said. "The good news is that this guide demonstrates how working with any of the leading rating tools, whether it's Green Star, LEED, BREEAM, Green Mark, HQE or NABERS, will ensure a better outcome for people, the planet, and your balance sheet."
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