Financing for efficient buildings: learning from G20 and GlobalABC

High-Level Roundtable at EE Global, Copenhagen, Denmark

EE Global Intensive Learning Session
UN City, Copenhagen, 21st May 2018, 14:30 to 16:00

Context

The global real estate sector holds around 50% of stored wealth, uses around 40% of global energy and holds much of the untapped energy efficiency potential. Therefore, the efficiency and resilience of the global building stock is key to the realization of the clean energy transition, and to stimulate global sustainable growth. A large share of the global building stock is financed through the loan books of banks, and financial institutions play a key role in providing the capital to refurbish the existing building stock as well as supporting the large amount of new construction in emerging economies to become as efficient as our global objectives under the Paris Agreement require. According to the Sustainable Finance report from the European High Level Expert Group, 75% of the energy efficiency investment gap to meet these goals can be found in the real estate sector.

Zero emissions, efficient and resilient buildings save energy, reduce emission and bring multiple benefits to building occupiers and the economy at large. However, financial institutions can only provide the capital and tailored financial products necessary to utilize this significant potential if policy-makers provide the appropriate political framework that will drive the recognition of energy efficiency in terms of returns (driven by rent, value and yield) and risk (in terms of improved credit taker quality, improved repayment capacity of mortgage takers, and better loan to value ratios).

The current evolution from real estate as a financial asset to real estate as a service provides the basis for enhanced recognition of the multiple benefits of energy efficiency by real estate markets. At this event, participants will discuss ways in which all actors can cooperate to bring the global real estate sector to zero emissions and make it efficient as well as resilient. To achieve this objective, a structured dialogue between financial institutions and policy-makers is required.

This meeting will contribute to this structured dialogue by bringing together financial institutions and policy-makers to discuss how zero emission, efficient and resilient buildings can be practically and financially soundly implemented. The political ambition of zero emissions buildings builds on the momentum generated by the Dec 2017 conference organised in Paris jointly by the European Commission, the Government of France, UNEP FI, the GABC, the IEA and IPEEC on “Energy Efficiency in Buildings: How to accelerate investments?” within the One Planet Summit.

About the GABC, the G20 EEFTG and UNEP FI 

The Global Alliance for Buildings and Construction (GlobalABC) The GABC pursues a vision of a zero-emission, efficient, and resilient buildings and construction sector. Launched at COP21, the GABC is a multi-stakeholder network with over 100 members, 25 of which are countries. The GABC raises awareness through outreach and tracking progress by issuing an annual GABC Global Status Report. The GABC also identifies and provides guidance on key challenges and good practices regarding a zero-emission, efficient, and resilient buildings and construction sector. The GABC developed a Global Roadmap and, on its basis, is promoting peer-to-peer knowledge exchange for climate action in buildings and construction through Regional Roundtables.

The EEFTG is a G20 task group formed in 2014 to enhance capital flows for energy efficiency investments in G20 economies by providing a forum for G20 policy makers to share best practices in policies and financial instruments with members of the private and public finance community, industry and international organisations. G20 EEFTG counts 15 of the G20 countries as formal members and is co-chaired by France and Mexico.

UNEP FI is the global partnership between the United Nations and over 200 major financial institutions – from banking, insurance and investment – who work together to affect systemic change in finance to support a more sustainable world. UNEP FI forms part of the secretariat of the G20 EEFTG.