As #BuildingToCOP27 gains momentum, the World Green Building Council (WorldGBC) network and our partners share their reflections on the broader value proposition for a sustainable built environment, which was unpacked in our flagship report Beyond the Business Case, launched at COP26, November 2021.

Nine months ago, we collaborated with Green Building Councils (GBCs) and partners around the world on the Beyond the Business Case report, which highlights the fact that traditional short-term financial metrics are no longer appropriate to quantify the value of sustainable built assets. This is due to wider socio-economic and environmental benefits, both today and in the future. This ground-breaking report, developed in the lead up to the dedicated Cities, Regions & Built Environment Day at COP26, aimed to trigger heightened awareness and investment in green buildings and assets.

This month we revisit the content of this major publication, with the support of the report partners and co-developers, to highlight the key arguments which underpin the value proposition for sustainability in the real estate sector. In other words, the case for why we can’t  afford not to invest in a sustainable built environment.

What is the context for ‘Beyond the Business Case?’

It is clear that awareness of how our buildings contribute to our communities is on the rise. We have seen examples of how great planning decisions can bring together broken or fractured communities and become hubs for community cohesion. Buildings can be a home, long term or short term, providing shelter when natural disasters strike. The UN Sustainable Development Goals recognise this, and the growth of social sustainability bonds confirm this: The built environment is a foundational building block that can improve our health and wellbeing and contribute to our resilience. Our buildings represent a critical climate solution to decarbonisation.

The EU Taxonomy, Climate Bonds, TCFD and others all highlight buildings as an area where risks and opportunities from our changing climate exist. Investors are making decisions not only on how resilient buildings might be to climate change, but also on how fast they are decarbonising our economy. The business case for healthy, resilient, and positive buildings for people and nature is clear – they make financial, social, and environmental sense.

Jorge Chapa, Head of Market Transformation, Green Building Council of Australia:

“Engaging cities, regions and the built environment with practices aligned with the Paris Agreement goals requires collective and co-ordinated action across all economic and industries sectors. It is essential that governments and institutions provide frameworks and policies addressing sustainability, such as the Sustainable Development Goals, EU Taxonomy, and local policies. In this way, cities, regions, and the private sector can better understand how to tackle climate change related issues and help their country’s Nationally Determined Contribution.

“The Acciona Ombu project showcased in the Beyond the Business Case report is a good example of a project that saw an opportunity to go beyond the business case, achieving a net positive impact on social value and sustainability. The city of Madrid proposed the urban regeneration policies that are at the heart of this project, bringing it to full alignment with the EU Taxonomy criteria and the ‘do no significant harm’ aspects regarding adaptation, biodiversity, and circular economy. These led to a project aligned to 2°C climate change – an exceptional outcome at present.We are calling for a more cohesive and holistic design approach such as the one from Acciona that integrated multiple actors together to a common goal.”

A key part of the business case is the rising industry engagement with sustainable finance and ESG. How does this, and other factors, help to create a financial value proposition for sustainable built assets?

Chris Trott, Partner, Foster + Partners:

“In the current context, it is essential to encourage industry players to commit to responsible investment principles and to address mitigation, adaptation, and resilience criteria in their businesses through concrete actions aligned with ambitious emissions management goals such as carbon pricing and climate risk evaluation and disclosure. It is necessary to move forward in creating and strengthening regulatory instruments that promote and financial systems that support companies and organisations to implement and report their performance within the framework of recognized international frameworks.”

Maria Fernanda Aguirre Bustos, CEO, Chile Green Building Council:

“It’s a misconception that sustainable buildings cost more upfront. Supply chains for green materials have come of age, putting greener options on a par with traditional construction supplies. Sustainable buildings also attract better funding packages. They are cheaper to run, can influence occupant productivity and well-being, and achieve favourable insurance premiums. On top of this, green buildings consistently lease more quickly and achieve better rental and sale prices as companies increasingly commit to their own net-zero targets. Investing in net-zero buildings isn’t just about being a responsible citizen and doing the right thing – it’s a no-brainer economically.”

Mina Hasman, Sustainable Practice Director, SOM:

“A sustainable commercial building delivers excellent acoustic and thermal comfort, first class indoor air quality and better access to daylight and outside views. Such a high quality indoor environment impacts very positively the health & wellbeing of the occupants, thus their productivity and finally the company’s profitability. After moving to their new LEED Platinum certified headquarters, Saint-Gobain North America measured the impact of the new building design on their 800 employees’ comfort and performance. Their satisfaction with indoor environmental quality improved by close to 50% in the new space and the productivity of the call centre increased by 140%, with no changes in hours or staff.”

For the first time, WorldGBC has published a ‘business case’ report that focuses in equal parts on social value. What is the reason for this, and what is the social value proposition for a sustainable built environment?

Pascal Eveillard, Director, Sustainable Business Development, Saint-Gobain:

“Ultimately what we do as professionals in the construction industry has to serve the needs of people, in harmony with environmental sustainability – more recently, national and international policy and legislation has recognised this and therefore it is very appropriate to include a focus on social value in the Beyond the Business Case report. Metrics and measurements to quantify social value keep improving and enable us to hold businesses accountable for delivering social outcomes on projects; however, the ultimate imperative is a fundamentally moral one – to make people’s lives better through our work.”

Eszter Gulacsy, Technical Director, Mott MacDonald:

“A core component of social value is that benefits are realised by everyone, from those working in the supply chain and construction to building occupants and the entire community. By investing in Sustainable Built Environments, more people will have the opportunity to live in buildings and communities that do not negatively affect their physical and mental health, and will instead cater to their needs. On top of that, greater transparency will be seen in the supply chain and protection of vulnerable social groups in the labour market will be ensured.”

The report detailed a number of ‘unquantifiable’ elements of the business case – why are aspects including CSR and resilient future-proofing part of the argument for rapid engagement with sustainability?

Jinan El Hajjar, Sustainability Engineer, Emirates Green Building Council:

“A core component of social value is that benefits are realised by everyone, from those working in the supply chain and construction to building occupants and the entire community. By investing in Sustainable Built Environments, more people will have the opportunity to live in buildings and communities that do not negatively affect their physical and mental health, and will instead cater to their needs. On top of that, greater transparency will be seen in the supply chain and protection of vulnerable social groups in the labour market will be ensured.”

Victoria Burrows, Director of Advancing Net Zero, WorldGBC:

“We titled the report ‘Why you can’t afford not to invest in a sustainable built environment’ as these non-financial factors are a really important reason why every organisation operating in the building sector today needs to get on track with sustainability, now. These factors include reputational risk, risk of stranded assets and resilience to climate change impacts, changing consumer and stakeholder demands – and so many more – that are evidenced by a powerful weight of industry and academic evidence, and brought to life via case studies from a range of typologies from across the world.

“These broader, non-financial factors are vital in market transformation initiatives, as they reach and affect a much wider audience and have multi-sectoral impacts that can span over a period of time far greater than the project construction phase. Although these may be considered “non-financial factors”, investors at all levels are becoming more building savvy and calling for these factors to be registered and reported in order to be evaluated when deciding which projects to include in their portfolios. Furthermore, certain stakeholders, previously considered “blockers” to market transformation towards sustainability, are now found to be quite engaged when these factors are evaluated.”

As well as looking at today’s context, the ‘Beyond the Business Case’ report speaks to the future value proposition, developed through a future scenario modelling methodology. What did this modelling show, and why is this essential for changing the mindset of the wider industry?

Nicolas Ramirez, Executive Director, Green Building Council Costa Rica:

“Our scenario modelling produced for the report shows the business case for building sustainability is strong regardless of future temperatures and attitudes to health. The drivers may change, but the overall case remains strong.

“For example on climate, greater climate change will increase the value of buildings that work well in extreme conditions. Conversely, a world which takes faster climate action will mandate the use of energy efficient, low carbon buildings. Sustainable buildings avoid the need for expensive retrofit or becoming stranded assets.”

David Symons, UK Director of Sustainability, WSP:

“We must develop our buildings and cities thinking with a life cycle vision and even beyond. Sustainable development relies on how are we able to satisfy our needs not compromising those of our future generations, but also thinking backwards and forward. Buildings and cities and their processes, materials and dismantling have a big share on embodied emissions, which we must tackle with a circular approach, resource efficiency and regenerative scope.

What are the next steps, for the business case and beyond?

Catriona Brady, Director of Strategy and Development, WorldGBC:

“In the nine months that have passed since COP26 we have been faced with an exponential range of sustainability challenges, from a global energy crisis, international conflict to record heatwave temperatures and unprecedented environmental events.

“It is becoming clear to us all that we don’t have time to waste to tackle climate change. We remain committed to advocate for essential changes in policy – but ultimately we need to mobilise the entire industry to act with ambition beyond regulatory enforcement. We are looking not just to global organisations, but to SMEs, in all regions of the world, to demonstrate leadership in climate action and sustainability. And as this report proves, the socio-economic benefits of sustainable built assets go far beyond the traditional business case.

“Our industry represents a critical actor in taking the next step towards a sustainable future, and cementing the broader business case is critical to capturing the mass market engagement needed for systemic transformation. Our next step is ensuring we support the Green Building Council network worldwide, alongside industry leaders and changemakers, in adapting this global value proposition to the specific needs of the people and the challenges of the industry they face. We aspire to look beyond the business case towards a truly sustainable future.”

View WorldGBC’s Beyond the Business Case report, including the Executive Summary and full details of the report development Taskforce.

For more information, contact us at office@worldgbc.org.