This is a significant concern because it highlights the need for increased awareness and education about the benefits of green building practices.
The Problem: A Growing Concern
The report emphasizes that the adoption of green building practices is crucial for reducing energy consumption, conserving water, and mitigating the environmental impact of buildings.
Closing the gap in green building performance requires a collaborative effort to set standards and promote best practices.
The Problem: Closing the Gap in Green Building
The green building industry has made significant strides in recent years, with many countries and cities setting ambitious targets for reducing carbon emissions and promoting sustainable development. However, despite this progress, there remains a significant gap between top-performing green buildings and the rest of the market. This gap is not just a matter of degree, but also of kind – it refers to the difference in the way that green buildings are designed, constructed, and operated. Key statistics: + Only 1% of buildings in the UK are considered “exemplary” green buildings + In Australia, only 2% of buildings are certified under the Green Star rating system + In Singapore, only 5% of buildings are certified under the Green Mark rating system
The Solution: The Green Building Initiative
The Green Building Initiative is a collaborative effort led by the UK’s Building Research Establishment (BRE), the Green Building Council of Australia (GBCA), the Singapore Green Building council (SGBC), and Alliance HQE-GBC France.
The Building Sector’s Environmental Impact
The building sector is one of the largest contributors to global greenhouse gas emissions, accounting for approximately 40% of total emissions. This staggering figure is largely due to the energy consumption and resource extraction associated with building construction, operation, and maintenance. The sector’s environmental impact is further exacerbated by the use of non-renewable energy sources, such as fossil fuels, and the resulting emissions of carbon dioxide, methane, and other pollutants.
The Challenges of Decarbonizing the Building Sector
Decarbonizing the building sector is a complex and multifaceted challenge. It requires a comprehensive approach that addresses the entire lifecycle of buildings, from design and construction to operation and demolition. This includes:
Unlocking Investments for the Underperforming Majority
The building sector is characterized by a significant gap between high-performing and underperforming buildings.
The Green Finance Gap
The green finance gap refers to the disparity between the amount of green finance available and the amount needed to support the transition to a low-carbon economy. This gap is particularly pronounced in the building sector, where many high-performing buildings struggle to access the necessary capital to maintain their energy efficiency and reduce their environmental impact.
The Challenge of Accessing Green Finance
High-performing buildings, which are designed to be energy-efficient and environmentally sustainable, often require significant upfront investments to achieve their green credentials. However, these investments can be costly, and many building owners and managers lack the necessary capital to fund these projects. As a result, these buildings are often left without access to green finance, which can limit their ability to reduce their environmental impact and improve their energy efficiency. Key statistics: + 70% of building owners and managers report that they lack the necessary capital to fund green projects. + 60% of high-performing buildings report that they are unable to access green finance.
Mitigating Climate-Related Risks in Real Estate Finance through Adaptation and Resilience.
The Need for Adaptation and Resilience in Real Estate Finance
The real estate sector is increasingly facing the challenges of climate change, with acute and chronic climate events posing significant risks to property values, rental income, and overall financial stability. In response, there is a growing need for adaptation and resilience in real estate finance to mitigate these risks and ensure long-term sustainability.
Understanding the Risks of Climate Change
Climate change is having a profound impact on the real estate sector, with rising temperatures, changing precipitation patterns, and increased frequency of extreme weather events affecting property values, rental income, and overall financial stability. Acute climate events, such as hurricanes and wildfires, can cause significant damage to properties, while chronic events, such as sea-level rise and droughts, can lead to long-term changes in property values and rental income. Key climate-related risks in real estate finance include: + Increased flood risk and damage from rising sea levels + Heat stress and increased energy consumption + Droughts and water scarcity + Wildfires and other extreme weather events
Defining a Credible Decarbonisation Transition
To address the climate-related risks in real estate finance, it is essential to define a credible decarbonisation transition. This involves setting clear goals and targets for reducing greenhouse gas emissions, as well as developing common standards, metrics, and decarbonised tools to support this transition.
This concept, developed by the European Union, aims to bridge the gap between traditional finance and sustainable finance by providing a framework for building owners to transition to more sustainable practices.
The Need for Sustainable Finance
The increasing awareness of climate change and its devastating impact on the built environment has led to a growing demand for sustainable finance. Traditional finance has historically prioritized short-term gains over long-term sustainability, but the need for sustainable practices has become increasingly evident.
