“Urgency with optimism”

Yesterday marked Built Environment Day at COP26 in Glasgow. It is the first time the climate-change summit has dedicated a whole day to discussing the climate implications of cities, regions and the built environment. You can get an overview of all contributions on the day at:  https://realassets.ipe.com/news/cop26-built-environment-day-roundup/10056287.article

Significantly, the attention of world leaders on the built environment at COP26 coincided with the publication of a thought-provoking interesting article on Workplace Insight titled ‘Why real estate businesses can’t afford not to invest in sustainability’ i.e. the business case for change, just in case saving the planet is not enough… The article refers to the most recent report of the World Green Building Council (WorldGBC), suitably titled ‘Beyond the Business Case’,

which sets out the updated value proposition to drive investment in a sustainable built environment. The report calls on decision makers to accelerate the industry’s sustainability transformation by capitalising on the economic opportunities, addressing risk mitigation and by embracing the social value case.

The Business Case

The ever-broadening issue of sustainability in real estate is addressed and clarified somewhat by urging closer alignment with the UN’s Sustainable Development Goals. Critically, the private development sector is encouraged to see ‘social value’, not just as a consideration, but as a commercial driver. In support of this, evidence-based research and case studies are included to demonstrate that sustainable development has lower or equivalent costs at supply chain, construction, and operational phases. The report also references access to finance for green buildings from banks, bonds and institutional investors. Critically, asset values increase in line with enhanced performance and asset desirability.

Beyond the Business Case

The WorldGBC report includes an 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 includes enhanced corporate reputation, higher asset value and investment resilience, lower build and operational costs and return on investment through occupant productivity.

Speaking about the report launch, Cristina Gamboa, World Green Building Council CEO, repeated that no business can afford not to embrace sustainability in real estate:

 “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.”

The World GBC report can be accessed in full here: https://viewer.ipaper.io/worldgbc/beyond-the-business-case/?page=1