The World Green Building Council (WorldGBC), a global network accelerating sustainability and decarbonisation in the building and construction sector, has set out the updated value proposition to drive investment in a sustainable built environment by launching a new flagship report ‘Beyond the Business Case’ at COP26 in Glasgow.
In the lead up to Cities, Regions and Built Environment Day at COP26 on Thursday 11 November, the report ‘Beyond the Business Case’ provides a timely and unique perspective for decision makers to accelerate the industry’s sustainability transformation by capitalising on the economic opportunities, addressing risk mitigation and, importantly, also embracing the social value case.
Why this report matters
This report draws from and embraces the rapidly growing sustainability agenda across the built environment. The evolving scope of sustainability, broadening of what we call ‘green’, and closer alignment with the UN’s Sustainable Development Goals, and finally the rise in social value as not just a consideration, but a business driver for developers and investors.
The report demonstrates seven irrefutable co-benefits for investing in a sustainable built environment, across both the financial and social value case. These are:
• Social benefits, to building occupants through health, productivity & wellbeing • Lower or equivalent costs at supply chain, construction, and operational phases • Risk mitigation, providing resilience to inevitable climate impacts, environmentally and financially, as well as future-proofing against legislative changes or corporate expectations and reputational risk • Higher asset values linked both to performance and asset desirability • Investment opportunities through a rapidly transitioning finance sector protecting investments, supporting share prices, and increasing requirements on Environmental, Social, and Governance (ESG) reporting • Access to finance due to availability of finance for green buildings, from banks, bonds and institutional investors.
All of these findings are supported by evidence-based research through innovative case studies which bolster both the current, and future, business case for a sustainable built environment.
Going beyond the business case
A central innovation of this report is the analysis of climate-science aligned 2050 scenario modelling, proving that there is a stronger value proposition for investment in sustainable and quality real estate today. This is presented against a backdrop of recent trends. For example, wellness in real estate is projected to rise to a $198 billion industry in 2022 — heightening demand for healthy, sustainable spaces.
A powerful and up to date business case is essential to drive investment into green, sustainable buildings. With the built environment being responsible for 75 percent of annual global greenhouse gas emissions, and real estate alone accounting for 37 percent, plus 40-50 percent of global resources extraction, the critical requirement for enhancing sustainability in the sector is undeniably clear. For the development of new buildings and the required upgrades of existing ones, the financial input will be monumental — new sustainable buildings alone are set to represent a $24.7 trillion investment opportunity in emerging markets alone by 2030, so tackling barriers to mass market engagement is essential.
WorldGBC unpacks the financial business case to explore drivers including the Nationally Determined Contributions (NDCs), or country climate pledges within the Paris Agreement, regulatory change such as the European Union’s Taxonomy, and the rise in sustainable finance and the growth of Environmental, Social, and Governance (ESG) reporting.
Beyond the Business Case also outlines reasons for the optimal economic opportunity from green assets, including greater access to investment, corporate reputation, higher asset value and investment resilience, lower build and operational costs and return on investment through occupant productivity.
Leadership and collaboration from across the globe
This report has been developed by the WorldGBC global network, with collaboration and support from a development task force including the Laudes Foundation, WSP, Johnson Controls, Buro Happold, Saint-Gobain, Mott Macdonald, Foster + Partners, Kingspan, SOM, CBRE, Lendlease, Institute for Human Rights and Business and our member Green Building Councils around the world.
“No business can afford not to embrace sustainability in real estate”
Cristina Gamboa, CEO, World Green Building Council, said: “As WorldGBC prepares for the dedicated Cities, Regions and Built Environment day at COP26, we recognise the need for a compelling value proposition for all actors across the global real estate sector, as well as the increasing importance of social value. People must be put at the heart of the business case, particularly in light of the COVID-19 pandemic, which continues to challenge us.
“Real estate alone accounts for 37 percent of annual global greenhouse gas emissions. Therefore, our report inspires urgency — but urgency with optimism. We champion an achievable transformation that brings future climate scenarios into today’s business decision making, demonstrating total clarity on why no business can afford not to embrace sustainability in real estate.”
COP26 aims to secure tougher measures to cut CO2 emissions
Conference set to begin with afternoon speeches
Weekend G20 summit failed to set positive tone for COP26
Thunberg urges leaders: ‘Face up to climate emergency now’
GLASGOW, Nov 1 (Reuters) – World leaders began arriving on Monday at a U.N. conference critical to averting the most disastrous effects of climate change, their challenge made even more daunting by the failure of major industrial nations to agree ambitious new commitments.
The COP26 conference in the Scottish city of Glasgow opens a day after the G20 economies failed to commit to a 2050 target to halt net carbon emissions – a deadline widely cited as necessary to prevent the most extreme global warming.
Instead, their talks in Rome only recognised “the key relevance” of halting net emissions “by or around mid-century”, set no timetable for phasing out coal at home and watered down promises to cut emissions of methane, a greenhouse gas many times more powerful than carbon dioxide.
Swedish activist Greta Thunberg asked her millions of supporters to sign an open letter accusing leaders of betrayal.Report ad
“As citizens across the planet, we urge you to face up to the climate emergency,” she tweeted. “Not next year. Not next month. Now.”
Many of those leaders take to the stage in Glasgow on Monday to defend their records and in some cases make new pledges at the start of two weeks of negotiations that conference host Britain is billing as make-or-break.Report ad
“Humanity has long since run down the clock on climate change. It’s one minute to midnight and we need to act now,” British Prime Minister Boris Johnson will tell the opening ceremony, according to advance excerpts of his speech.
“If we don’t get serious about climate change today, it will be too late for our children to do so tomorrow.”
Discord among some of the world’s biggest emitters about how to cut back on coal, oil and gas, and help poorer countries to adapt to global warming, will not make the task easier.
At the G20, U.S. President Joe Biden singled out China and Russia, neither of which is sending its leader to Glasgow, for not bringing proposals to the table.
U.S. National Security Adviser Jake Sullivan, on board Air Force One with Biden, said Glasgow could put pressure on those who had not yet stepped up, but that it would not end the global effort.
“It is also critical for us to recognise that the work is going to have to continue after everyone goes home,” he told reporters.
Chinese President Xi Jinping, whose country is by far the biggest emitter of greenhouse gases and ahead of the United States, will address the conference on Monday in a written statement, according to an official schedule.
President Vladimir Putin of Russia, one of the world’s top three oil producers along with the United States and Saudi Arabia, has dropped plans to participate in any talks live by video link, the Kremlin said. read more
Turkish President Tayyip Erdogan will also stay away. Two Turkish officials said Britain had failed to meet Ankara’s demands on security arrangements and protocol. read more
Delayed by a year because of the COVID-19 pandemic, COP26 aims to keep alive a target of capping global warming at 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial levels – a level scientists say would avoid its most destructive consequences.
To do that, it needs to secure more ambitious pledges to reduce emissions, lock in billions in climate-related financing for developing countries, and finish the rules for implementing the 2015 Paris Agreement, signed by nearly 200 countries.
Existing pledges to cut emissions would allow the planet’s average surface temperature to rise 2.7C this century, which the United Nations says would supercharge the destruction that climate change is already causing by intensifying storms, exposing more people to deadly heat and floods, raising sea levels and destroying natural habitats.
Developed countries confirmed last week that they would be three years late in meeting a promise made in 2009 to provide $100 billion a year in climate finance to developing countries by 2020. read more
“Africa is responsible for only 3% of global emissions, but Africans are suffering the most violent consequences of the climate crisis,” Ugandan activist Evelyn Acham told the Italian newspaper La Stampa.
“They are not responsible for the crisis, but they are still paying the price of colonialism, which exploited Africa’s wealth for centuries,” she said. “We have to share responsibilities fairly.”
Two days of speeches by world leaders starting Monday will be followed by technical negotiations. Any deal may not be struck until close to or even after the event’s Nov. 12 finish date.
Reporting by Elizabeth Piper and Jeff Mason; writing by Mark John and Kevin Liffey; editing by Barbara Lewis
The theme for this year’s World Habitat Day is Accelerating urban action for a carbon-free world.
“The urgency of improving living conditions has been brought to the fore by COVID-19, which has devastated the lives of millions in cities. Access to clean water and sanitation, along with social distancing, are key responses to the pandemic. Yet in slums it has proved difficult to implement these measures. This means an increased risk of infection, not only within slums, but in whole cities”
The theme recognizes that cities are responsible for some 70 percent of global carbon dioxide emissions with transport, buildings, energy, and waste management accounting for the bulk of urban greenhouse gas emissions. Events and activities during World Habitat Day will explore how national, regional and local governments and organizations, communities, academic institutions, the private sector and all relevant stakeholders can work together to create sustainable, carbon-neutral, inclusive cities and towns.
World Habitat Day will amplify the global Race to Zero Campaign and encourage local governments to develop actionable zero-carbon plans in the run-up to the international climate change summit COP26 in November 2021.
The United Nations designated the first Monday of October of every year as World Habitat Day to reflect on the state of our habitats, and on the basic right of all to adequate shelter. The Day is also intended to remind the world that we all have the power and the responsibility to shape the future of our cities and towns.
In 1985 the United Nations designated the first Monday of October every year as World Habitat Day. The idea is to reflect on the state of our towns and cities and the basic right of all to adequate shelter. It is also intended to remind the world of its collective responsibility for the future of the human habitat.
World Habitat Day was first celebrated in 1986 with the theme “Shelter is My Right”. Nairobi was the host city for the observance that year. Other previous themes have included: “Shelter for the Homeless” (1987, New York); “Shelter and Urbanization” (1990, London); “Future Cities” (1997, Bonn); “Safer Cities” (1998, Dubai); “Women in Urban Governance” (2000, Jamaica); “Cities without Slums” (2001, Fukuoka), “Water and Sanitation for Cities” (2003, Rio de Janeiro), “Planning our Urban Future” (2009, Washington, D.C.), “Better City, Better Life” (2010, Shanghai, China) and Cities and Climate Change (2011, Aguascalientes, Mexico).
Scroll of Honour
The Habitat Scroll of Honour award was launched by the United Nations Human Settlements Programme in 1989. It is currently the most prestigious human settlements award in the world. Its aim is to acknowledge initiatives which have made outstanding contributions in various fields such as shelter provision, highlighting the plight of the homeless, leadership in post-conflict reconstruction, and developing and improving the human settlements and the quality of urban life. The call for nominations for this year’s award is open until 8 August 2021 and will be announced during the Global Observance of World Habitat Day.
Insurance Journal reviews the construction industry as to how it is globally impacted by climate change. The author L.S. Howard explains how Global Construction Industry Faces Climate Change.
Global Construction Industry Faces Climate Change Challenges, Opportunities: Marsh
1st October 2021
Climate change and the race to net-zero greenhouse gas emissions (net zero) are arguably the greatest challenges that face the construction industry – but will drive new opportunities, according to a report published by Marsh and Guy Carpenter, subsidiaries of Marsh McLennan.
The infrastructure boom is set to fuel global economic growth over the next decade, with global construction output expected to grow by 6.6% in 2021 and by 42% by 2030, driven largely by government stimuli and the demand for residential construction, said the report, titled “Future of Construction: A Global Forecast for Construction to 2030.”
The global construction market is expected to grow by US$4.5 trillion over the decade to 2030 to reach US$15.2 trillion, said the report, noting that just four countries — China, India, US, and Indonesia — will account for almost 60% of this growth. At the same time, the top 10 global construction markets are expected to account for almost 70% of the growth over the same period.
Although the near-term outlook for the global economy remains clouded by a surge in inflation, supply-chain bottlenecks and the Delta variant, the global construction industry is set to lead global economic recovery from the pandemic over the medium-term and is expected to grow faster than the manufacturing or service sectors, said the report, which was written with Oxford Economics.
However, as the sector grows, so too does the risk of greater pollution and waste, the report warned, explaining that construction and the wider built environment currently accounts for around 40% of the world’s global greenhouse gas emissions. (Editor’s note: A Marsh representative explained that “the wider built environment” relates to the construction supply chain, namely the inputs and outputs associated with construction projects.)
During the global transition to net zero, the industry needs to radically reduce the amount of carbon embedded in new construction, infrastructure and buildings, which is already a “huge challenge.”
“An emerging deconstruction industry that will reuse huge existing urban stockpiles of construction materials could reduce embedded carbon in the construction of new buildings and infrastructure,” the Marsh report continued.
In addition, the climate crisis is driving huge demand to decarbonize energy networks and develop renewable energy, the report said, citing Saudi Arabia’s Giga Projects, which is leading net zero initiatives.
“Sustainable and quality infrastructure is a driver of economic growth and social progress and is an enabler to achieving Sustainable Development Goals (SDGs) and Paris Agreement commitments.”
Further, it continued, environmental, social, and governance (ESG)-related capital for infrastructure grew 28% in 2020, which was largely due to a flow of fundraising into sustainability-related strategies. “Given that significant equity is usually allocated to infrastructure by major construction companies and developers using their own corporate balance sheets, opportunities exist for those companies that develop new technologies, designs, and processes.”
“Climate change and the ESG agenda – and the risks and opportunities they present – are among the biggest challenges the global construction industry faces over the next decade. These forces are changing risk profiles for the sector,” commented Richard Gurney, global head of Construction, Marsh Specialty, in a statement.
“Organizations must adapt in order to harness the sector’s massive potential for growth while playing a pivotal role in the advancement of economies and communities around the world,” he said.
“The construction and engineering industry is entering a period of exciting opportunity but also one that will require new ways of approaching risk by the insurance and reinsurance sectors,” said Simon Liley, co-head, Global Engineering, Guy Carpenter.
“These dynamics call for effective knowledge sharing from industry innovators at one end all the way through to reinsurance actuaries at the other,” Liley noted. “Understanding the shifting profile of exposure, technology, and sources of capital will be important to enable insurers and reinsurers to establish underwriting platforms and offer products that meet the construction industry’s changing needs.”
Other Marsh/Carpenter projections for the industry to 2030 include:
Predicted average annual growth in construction of 3.6% per annum – faster than either the services or manufacturing sectors.
The next decade for construction will see global growth up by 35% compared to the previous decade, driven by unprecedented levels of stimulus spending on infrastructure and the unleashing of excess household savings; it will represent more than 10% of GDP in North America.
Global infrastructure construction is forecast to grow by an annual average of 5.1%.
Annual growth in UK infrastructure is expected to average 3.7%, rivaling China over the period as UK mega projects provide heightened growth.
Urbanization is expected to turbo charge growth in emerging markets. Overall growth of the world’s population could add another 2.5 billion people to urban areas by 2050 with almost 90% of this happening within Asia and Africa.
“It is unusual to see construction outstripping growth in both services and manufacturing over a more sustained period. We would normally expect to see construction growing faster than other sectors of the economy for shorter periods in a cyclical upturn,” said Graham Robinson, Global Infrastructure and Construction lead at Oxford Economics and lead author of “Future of Construction.”
“However, it’s not surprising that construction is expected to power the global economy over this next decade, considering the unprecedented nature of the stimulus spending on infrastructure by governments and the unleashing of excess household savings in the wake of COVID,” Robinson affirmed.
At a time where political momentum is growing everywhere in the world to cut greenhouse gas emissions to net-zero by 2050, how to avert a global climate catastrophe by Omar Razzaz from Amman tells us the following.
How to avert a global climate catastrophe
• Current global efforts to raise awareness and nudge and shame policymakers are necessary but not sufficient to prevent an existential climate crisis. Addressing the problem more effectively requires international governance arrangements that amount to a new social contract on global public goods
The hottest day on record in Jordan since 1960 was a staggering 49.3C, (120.7F) in July 2018, one month after I became prime minister. Jordan is not unique: heatwaves have been causing record-high temperatures in countries from Canada to Australia in recent years. The effects of climate change (including increased frequency and severity of floods, hurricanes, and droughts), while felt locally, demand a global response, which should set binding targets that take into account countries’ contributions to the problem and to the solution.
Jordan has been actively pursuing policies and programmes to reduce carbon dioxide emissions. Over the past 15 years, Jordan’s annual emissions per capita fell from 3.5 tonnes to 2.5 tonnes. But Jordan, like the vast majority of countries, accounts for a negligible share of global CO2 emissions – just 0.04% annually. So even if Jordan was to turn its whole economy green overnight, it would hardly make a dent. This does not absolve us of responsibility, but we cannot overlook the fact that emissions are concentrated: the top 20 emitters account for almost 80% of the annual total, with the United States and China alone accounting for 38%. In many countries, the ramifications of climate change for water supply have been staggering. In the case of Jordan, it made an already tight constraint much more acute. Rainfall was previously the saviour for rural communities that engaged in seasonal rainfed agriculture and herding on semi-arid land. Over the last decade, however, a steady decline in average annual rainfall and an increase in the frequency and severity of droughts have undermined these modes of agriculture, deepening the socioeconomic divide between rural and urban areas.
Jordan is by no means unique: the World Health Organisation estimates that half of the world’s population will be living in water-stressed areas by 2025. In essence, what was previously a regional challenge has now become a serious global governance issue with environmental, political, and economic ramifications. More broadly, other manifestations of climate change, and the lack of an internationally coordinated response to them – not to mention to additional threats such as the Covid-19 pandemic – suggest that something is seriously wrong at the global level. According to the recent sober assessment by the United Nations Intergovernmental Panel on Climate Change, the world will not meet the 2015 Paris climate agreement goal of limiting global warming to well below 2C unless it makes huge additional cuts in CO2 emissions.
Quite simply, the results of the world’s climate efforts are dangerously inadequate. According to the Climate Action Tracker, current policies put the world on course to be an alarming 2.7-3.1C warmer by 2100, relative to pre-industrial levels. Yes, many emerging green technologies are promising and should be supported. But in the absence of a global approach, these innovations risk merely redistributing the impact of climate change among countries and regions. Raising awareness and nudging (and shaming) policymakers is necessary, but not sufficient to avert what UN Secretary-General Antonio Guterres has referred to as a “climate catastrophe.” Climate-change mitigation must be pursued as a global public good. The problem is that such goods are plagued by collective-action problems because the costs tend to be spatially and temporally concentrated while the benefits are diffuse. These difficulties can be tackled only by global governance structures that reduce the cost of collective action, internalise externalities, and counter short-term biases in decision-making. To address climate change more effectively, we need global governance arrangements that amount to a new global social contract. Existing international governance structures can serve as a foundation for these new institutions, but will need to be amended and supplemented to address specific problems related to public goods and collective action. For starters, we need a governance structure whose jurisdiction is limited to global public goods that cannot be provided adequately at the national level. Nation-states would be free to opt-in and opt-out, with the benefits of opting in outweighing those of opting out. Decisions would be taken on a majoritarian basis, with no single country having veto power. There would also be appeals and adjudication process that allows decisions to be challenged. Second, a custodial entity would keep track of global natural wealth accounts to address intergenerational equity issues. This entity should be able to place items on the global governance institution’s agenda and to appeal decisions. Lastly, a regime of incentives and disincentives would aim to preserve nature and biodiversity and tax those who consume it, taking wealth and income disparities across countries into account. Establishing global governance mechanisms that focus on the public goods and collective-action challenges of climate change will not be easy. Concerns and fears related to a “democratic deficit” and the need to protect national sovereignty are legitimate, and cannot simply be brushed aside. Nevertheless, we are not starting from scratch. The World Trade Organisation provides an example of a strong and successful global governance structure with binding rules. It is thus both ironic and sad that the WTO has failed to incorporate trade-related environmental and human-rights issues into its regulations in order to ensure a level international playing field. After all, with its sanctioning authority, the WTO is best positioned to link issues such as greenhouse-gas emissions and labour rights to trade rules.
Jordan cannot successfully tackle today’s global climate challenges on its own. Nor can the Middle East, owing to regional conflicts and rivalries. Now that the world has become a village, the task facing the region is instead to agree with other countries – our fellow villagers – on how to mitigate our own excesses and avert an existential threat. This can be achieved only by finding suitable ways to hold ourselves and each other accountable. The solution lies in establishing a global governance system that is based on the nation-state but has the capacity to sanction harmful behaviour. Some might regard the idea of creating such a structure as far-fetched. But unless we do, there is scant hope of preventing the climate crisis – already apparent in Jordan and around the world – from continuing to destroy countless lives and livelihoods. – Project Syndicate
• Omar Razzaz is a former prime minister of Jordan.
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