Comment: How greener buildings will pave the way for meeting climate goals - Reuters

Comment: How greener buildings will pave the way for meeting climate goals | Reuters

Comment: How greener buildings will pave the way for meeting climate goals

The construction site of a skyscraper is seen next to an old Deutsche Bank building in Frankfurt, Germany, July 19, 2023. REUTERS/Kai Pfaffenbach/File Photo Acquire Licensing Rights

October 24 - Consider the building you are in at this moment. It might be an office building, your home, a shopping mall or a recreational facility. What too few of us realise is that the way buildings are designed, constructed and operated contributes enormously to climate change. We are waking up too slowly to this reality. That has to change.

Fortunately, there is more good news than bad on progress toward a net-zero built environment. This is encouraging as we ramp up to the United Nations’ COP28 climate summit in Dubai in late November where net-zero infrastructure and net-zero sustainable cities will be prominently on the agenda.

At WBCSD, we support the campaign announced this week by the We Mean Business Coalition ahead of COP28 to set a timeline for the full phase-out of fossil fuels and to halve greenhouse gas emissions in this decade. A total of 131 companies with a combined revenue of nearly $1 trillion have signed onto the campaign.

The built environment will be crucial to achieving that goal. It represents close to 40% of global, energy-related carbon emissions– approximatively 14 gigatons of carbon each year, the largest share of any sector. To meet the Paris Agreement and limit global warming to within 1.5 degrees Celsius, we need to reach net-zero emissions across all activities in the building and construction system. The goal is for all new buildings to operate at net-zero emissions by 2030 at the latest, and for all buildings to operate at net zero by 2050.

Over my career, I have seen a lot of change, much of it positive, in a green building movement that has evolved to net-zero buildings, given our escalating climate crisis. In the earliest days we saw the emergence of green product standards, rating and certifications, most of these voluntary, all with the goal of delivering sustainable, high-performance buildings. The most widely used green building certification program continues to be LEED (Leadership in Energy and Environmental Design), which now has a LEED Zero framework.
Lights are seen in an office building in Brussels, Belgium. The way buildings are designed, constructed and operated represents nearly 40% of global, energy-related emissions. REUTERS/Yves Herman Acquire Licensing Rights

While all of this is encouraging, it doesn’t take us far enough along the path to net zero. Beyond energy efficiency, net zero raises the bar in multiple ways. One challenge is the difficulty of tackling the embodied carbon of construction and building materials, the majority of it emitted immediately at the start of a building’s life cycle. While 27% of emissions are generated by building operations, often overlooked is the remaining 13% of emissions in the embodied carbon.

To get to net-zero, reducing embodied carbon in buildings will require new innovations alongside currently available technology, materials and products. Our research shows that if we focus on holistic strategies and approaches across the planning, design and construction processes from the beginning, it is possible to reduce the up-front carbon emissions of buildings by 50% compared to business as usual already today.

We are seeing incredible advancement of new technologies and materials, like the world’s first net-zero carbon steel and we’re inching closer towards net-zero concrete, one of the most consumed substances in the world.

But while a growing number of companies in the building sector are eager to start using these innovations to achieve their own net zero goals, we don’t yet have enough demand to make these materials cost effective, attractive and risk tolerant.

High risk tolerance is not something the building sector is known for. It is notoriously slow to advance in its sustainability goals. What’s needed to pick up the pace of change is both the right market signals and enabling policy and regulatory incentives. I am seeing progress on both fronts.
A worker pours concrete at a construction site in Ottawa, Canada. Around 13% of the built environment's contribution to global emissions is contained in embodied carbon. REUTERS/Chris Wattie Acquire Licensing Rights

On the first front, capital and financial markets are increasingly asking companies across every sector how climate risk will affect their business in the short, medium and long term. And if companies don’t demonstrate they have the answers, and are taking action to reduce their risks, they can face financial penalties in terms of their access to capital and attractiveness to investors.

On the second front, policy mandates are emerging. Governments are enacting new environmental, social and governance (ESG) reporting requirements, such as the European Union Corporate Sustainability Reporting Directive (CSRD), the anticipated new ESG reporting requirements from the U.S. Securities and Exchange Commission, and on a state level, California’s recent climate disclosure bill. And the U.S. Inflation Reduction Act (IRA) included a range of tax deductions and other incentives for decarbonising buildings, including programmes to encourage labeling of materials with low embodied carbon.

With these trends, decisions in the building sector that have long been made primarily on cost will shift to a transaction basis that puts carbon emissions and climate impact on the same level as cost. As carbon performance and accountability systems start to take root, these transaction mechanisms will serve a useful purpose in creating the demand signal for both new buildings and existing stock.

So given the growing legislative push and the incentivizing policy, and the advancement of new technologies, there is no reason for the built environment sector not to get moving on its net-zero goals.

This is a huge undertaking. That’s why WBCSD in partnership with the Global Alliance for Buildings and Construction, has launched the Built Environment Market Transformation in the advance of the first Global Forum on Buildings and Climate in March 2024. We convene actors across the full-value chain and from finance and policy to identify critical market barriers and a set of global actions to tackle them, including putting carbon as a key factor alongside cost in decision-making.

This is important because the stakeholders with the highest influence over carbon emissions from built assets – such as real estate developers and owners – are not those who are directly responsible for creating the emissions, but they can incentivize others in the value chain to reduce emissions.

I am optimistic that at this decisive moment for scaling climate action, the built environment can be part of the solution rather than part of the problem. It will take commitment to make decarbonisation of our buildings a priority, working together in collaboration across the value chain. While there are barriers to overcome, there are also untapped opportunities, and I am confident that our built environment will look a lot different in 2030, as long as we get started today.