Sustainable financing for green buildings is a topic that has gained increasing attention in recent years. However, given the complexities associated with buildings across different markets and regions, it’s increasingly difficult to holistically quantify the impact from financing green buildings.
The current reliance on green building certification as an eligibility criterion for financing green buildings is undoubtedly beneficial. While this approach provides a streamlined process for investors and financing institutions alike, it lacks holistic, tangible, and quantifiable impact metrics that capture both the environmental and social factors.
This limitation often leads to an inadequate representation of the real investment value in green buildings, a critical issue that needs a wider discussion.
Since inception, Green Buildings certifications were conceived as a “Label” to communicate excellence and leadership in sustainability. 40 years later, this “Label” needs an overhaul to communicate its value to a wider audience. While it might be easier to quantify – and communicate – the environmental impact of financing green buildings through the “anticipated vs reported” GHG emissions avoided, this would ignore other social and economic impacts that can reflect a true return on investment.
The green building certification bodies have a responsibility to take the lead in communicating the expected – and ultimately the actual – impact of the certified buildings.
In my opinion this would start by establishing transparent and robust impact indicators that consistently and comparably cover wider domains beyond carbon reduction, such as water savings, air quality, climate risk mitigation/ resiliency, and occupant well-being.
These bodies can bridge the gap between certification and long-term impact of green buildings. This step is crucial in ensuring a more accurate representation of the value of green buildings, ultimately leading to more sustainable financing practices and enables investors and financiers to make more informed and responsible decisions.
The recent news about the alliance between BRE , U.S. Green Building Council, and Green Building Council of Australia that would focus on unlocking finance for low-carbon, energy-efficient real estate; seems to be a step in the right direction. I really hope this alliance will enable a wider overhaul of how we certify and communicate green buildings.
Let’s change the narrative!
First published in LinkedIn on March 10, 2024
Regeneology LTD. 