Sustainable living and cities are megatrends at the moment. According to the EarthRate “ESG White Paper: Green Buildings” most megacities in the world are using different kind of best practises in their way to mitigate the climate change and reduce emissions. There is for example the Cities 40 -initiative which says that over 100 cities in the world are reporting about their climate change data to CDP (Carbon Disclosure Project). Cities varies for example from San Jose to Salvador, Basel to Sydney and Moscow to Johannesburg. Two thirds of reporting cities said that they account city-wide emissions.
According to the CDP data, 11 cities reported sea level rises in Europe and 23 cities of temperature increase in 2013. Floods were reported in 16 cities in North America and in 9 cities in Europe. CDP estimates that carbon reductions will lead to ROI of 33 % which means a value of 15 billion US dollars.
Real estates are one of the biggest elements in the cities to reduce emissions and to increase energy efficiency and new renewable energies. According to the United Nations Environmental Protection´s Financial Initiative (UNEP FI) Sustainable Buildings and Climate Initiative, the energy cost of buildings are one third of the total energy consumption globally. So, it is important to understand the whole life cycle of the real estate to examine the emissions and how to try to minimize them.
Now for example the global institutional investors are moving forward to seek real estate investments with energy efficiency ratings and information how the buildings are mitigating climate change. For example the world largest oil fund, the Norwegian Oil fund has said that they have 5 per cent of all the investments, in real eastate. Their portfolio is totally 6534 billion Norwegian kronors. The fund can invest max 35 per cent in France, UK, US and Germany and other countries max 10 per cent. Green Buildings mean higher rents and better sales prices.
BIM is the biggest trend in properties
The biggest trend in the properties is the BIM (Business Information Modelling). This offers savings in time spent in designing the building and finding the right & optimal designs & solutions for the overall use of the building. BIM is the tool for architects, building specialists and project managers to work together for a more sustainable buildings, infrastructure and logistic.
BIM projects are widely used by goverments and in the UK Goverment recuirements is that by the year 2016 all Goverment projects should use BIM to save designing and the overall life cycle costs in the project and far most: to save energy as expected in the designing of the project. BIM is seen as to meet the energy and building performance management targets and it is a way to commit to climate change mitigation.
In the UK the climate change mitigation is targeted so that all the new built homes are zero carbon by 2016. This mandate was effective from April 2014 and it includes that a 6 per cent reduction in carbon emissions for new built homes.
BIM is used in big infrastructure projects like city transportation, logistics, highways, hospitals and other society buildings. This sector is expected to grow rapidly and the OECD estimates more than 40 trillion dollars could be spent on infrastructure projects worldwide by 2030.
Green bonds to excelerate the growth of Green Buildings
Green Bonds by real estate companies and investors is one the increasing phenomenoms in the financial markets at the moment. The aim of the green bonds is to target money to sustainable projects to lower climate change impact in buildings and lower energy use. The use of corporate bonds in also growing as an investment tool.
During the year 2013 and 2014 there have been several different green corporate bonds. Issuers have been for example the Swedish Real Estate company Vasakronan, Toyota Financial Services and Unilever. According to Deallogic, the amount of green bonds has been 7,4 billion dollars.
The most important ESG KPI´s for real estates and building indudstry
EarthRate has made spesific industry ESG (Environment, Social and Governance) KPI´s for real estates and building industry. The KPIs take into account the whole life cycle of the real estate, from the planning/designing of the house to the ending of its life cycle. If you would like to know more about the industry specifications, please send email to EarthRate: firstname.lastname@example.org. Thank you.