A new report released by an alliance of leading green building organisations outlines a call to action and strategy to unlock the transition of the built environment at the scale and pace needed.
The report, “Building Transition: How to Scale and Finance an Inclusive Transition for the Built Environment” focuses on the 75% of lower-performing buildings that have not yet adopted green building practices.
The initiative, led by the UK’s Building Research Establishment (BRE), the Green Building Council of Australia (GBCA), the Singapore Green Building Council (SGBC), the U.S. Green Building Council (USGBC), and Alliance HQE-GBC France, seeks to close the gap between top performers and the rest of the market.
With the building sector accounting for a significant share of global emissions, unlocking investments for the underperforming majority is seen as a crucial step in decarbonising at scale. This call to action lays out how to attract capital to this large untapped segment, ensuring that decarbonisation happens across the entire built environment – not just in the elite tier of buildings.
“Building Transition” identifies a critical gap in the industry – while high-performing buildings have access to green finance and resources, most buildings remain locked out due to a lack of capital. The report offers key recommendations to address this challenge:
- Policy and taxonomy reform: Stronger policies and taxonomies that direct capital toward underperforming buildings, and context-specific, performance-oriented criteria tailored to diverse building types, ensuring investment reaches all buildings.
- Global decarbonisation standards: Defining a credible decarbonisation transition and providing common standards, metrics, and decarbonisation tools that can be used globally while allowing for harmonization across diverse assets and geographies.
- Resilience in finance: Incorporating adaptation and resilience in real estate finance to account for the impacts of both acute and chronic climate events. Currently, this is not a common practice in real estate finance, and lack of resilience makes lower-performing buildings, the “other 75%,” more vulnerable to becoming stranded assets and suffering from climate impacts.
Er. Yvonne Soh, CEO of the Singapore Green Building Council said that, “Singapore has set a goal to green 80% of our buildings by 2030. This report reflects our decarbonisation journey and offers insights into where we are currently doing well, and ideas on driving and scaling up market innovation. Partnerships are key to unlocking the potential of sustainable finance, and we look forward to working with all stakeholders to harness sustainable finance to transform our built environment.”
The new call to action builds on the earlier report, Financing Transformation: A Guide to Green Building for Green Bonds and Green Loans, which outlined how green building certifications – such as LEED, BREEAM, Green Star, Green Mark, and HQE – can set the benchmark for sustainable investments. This new report expands the conversation to ensure that financing solutions are inclusive, enabling more building owners to access the funds needed to make meaningful improvements.
“Hundreds of millions if not billions of existing buildings globally must rapidly improve their performance. Building on our first guide, ‘Financing Transformation: A Guide to Green Building for Green Bonds and Green Loans’, we have taken a more proactive stance and a position, on how to move forward, to drive the necessary inclusive transition. This encompasses our views on refining taxonomies, implementing supportive policies, and enhancing rating tools,” added Ar. Benjamin Towell, SGBC’s representative on the Alliance and the World Green Building Council Sustainable Finance Taskforce.
“Building Transition” represents a critical step in making sustainable finance accessible to a wider range of building owners, ensuring that decarbonisation can happen at scale and in every corner of the built environment.
