In January 2020, the World Economic Forum published its annual Global Risks Report and for the very first time and it included only ecological risks in its ranking of the Top 5 global risks.
Many companies have not only committed themselves to protecting the environment, they have already taken action. In early 2020, Microsoft announced that it would be carbon-negative by 2030 and by 2050, it will remove from the environment all the carbon the company has emitted since it was founded in 1975. Apple has committed to achieving carbon-neutrality for its supply chain and products by 2030. And asset manager BlackRock announced that it would be more closely aligning its financial operations with ESG criteria.
By signing the Paris Accord at the end of the UN Climate Change Conference in 2015, almost 200 countries set a common goal of keeping global warming well below 2°C compared to pre-industrial levels and aim to limit the decrease to even 1.5°C. And the only way to achieve this goal is to reduce carbon emissions.
The European Union unveiled its Green Deal at the end of 2019, which included plans to mobilize at least EUR 1 trillion in sustainable investments over the next decade to become climate-neutral by 2050.
Buildings currently account for around 39% of energy-related carbon dioxide emissions – more than the transport sector. According to the Coalition for Urban Transitions, buildings are responsible for 58% of urban carbon emissions. And only 1% of buildings worldwide are rated carbon neutral.
Energy consumption in the building sector is also enormous. Today, buildings are responsible for around 30 percent of final energy use and over 55 percent of global electricity consumption.
According to the World Green Building Council, in order to comply with the Paris Climate Agreement, all new buildings must be carbon neutral by 2030 and, by 2050, all buildings will need to be carbon neutral.
Since around 80 percent of the building stock in 2050 already exists today, a majority of building portfolios will need to be intelligently retrofitted.
When it comes to new buildings, their concept must not be reduced to simply achieving the lowest possible emissions during operation. On the contrary, the volume of greenhouse gases that has been emitted in the production of the necessary building materials, their transport, etc. (“embodied carbon footprint”) far exceeds the building’s operational carbon footprint and needs to be put in the equation right from the beginning.
Climate scientists, environmental activists and policy makers all agree that intense and immediate action needs to be taken. CRREM (Carbon Risk Real Estate Monitor) is a central project supported by the EU and a consortium of leading real estate investors, aiming to create more transparency with regards to creating concrete decarbonization paths. Based on scientific findings on the maximum available global emissions budget that is compatible with the Paris climate goals, CREEM has calculated country and use-specific decarbonization pathways that enable the industry to identify climate risks (“carbon risk”) for the first time and to take appropriate measures to mitigate them.
BuildingMinds applies CRREM decarbonization pathways to identify stranded assets on its platform.
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