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, is being addressed with the updated World Green Building Council (WorldGBC) flagship report ‘Beyond the Business Case’, championing 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.
The ‘Beyond the Business Case’ report, launched at COP26 in Glasgow, sets out the value proposition to drive investment in a sustainable built environment and provides a timely and unique perspective for decision makers to accelerate the industry’s sustainability transformation by capitalizing on the economic opportunities, addressing risk mitigation and, importantly, also embracing the social value case.
Why it Matters
Real estate alone accounts for 37% of annual global greenhouse gas emissions, and the sector has a vast opportunity and potential to embrace 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.
Demonstrated are 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 the report’s findings is the analysis of climate-science aligned 2050 scenario modeling, 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% of annual global greenhouse gas emissions, and real estate alone accounting for 37%, plus 40-50% 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.
About World Green Building Council:
World Green Building Council (WorldGBC) catalyzes the uptake of sustainable buildings for everyone, everywhere.
Transforming the building and construction sector across three strategic areas — climate action, health & wellbeing, and resources & circularity — WorldGBC is a global action network of over 70 Green Building Councils around the world.
As members of the UN Global Compact, WorldGBC works with businesses, organizations and governments to drive the ambitions of the Paris Agreement and UN Global Goals for Sustainable Development. Through a systems change approach, the GBC network is leading the industry towards a zero emission, healthy, equitable and resilient built environment.
The updated ‘Beyond the Business Case’ 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 member Green Building Councils around the world.
About the Author:
Catriona Brady, Director of Strategy and Development at the World Green Building Council.
Prior to joining the World Green Building Council in May 2018, Catriona worked in environmental consultancy with experience in energy modelling and strategy, urban masterplanning and sustainability and health-based certification standards. She is also a fully qualified secondary school teacher, with two years experience of secondary school teaching Geography (plus an experienced spin instructor). Her educational background consists of a degree from the University of St Andrews in Geography. Originally hailing from the west of Scotland, she is currently based in London, in the United Kingdom.