Reducing carbon emissions from the built environment will be vital to meet the Paris Agreement and deliver resilient and sustainable places to live. But financing activities that make this shift possible can remain challenging, with the urban climate finance gap estimated to be in the trillions of dollars.
To discuss what more could be done to drive a greater alignment of finance and investment with sustainable design and construction, Chatham House and the IStructE came together on 21 September 2021 to host a roundtable discussion with leaders of finance and the built environment.
This is a multi-facetted challenge across specialisms and separated communities of practice. And at the moment, there is a lack of common understanding across built environment and finance and investment professionals. This is keeping knowledge constrained within siloed communities and contributing to preventing more effective action.
Yet promisingly, momentum is building that will shift focus across both financial and construction sectors towards longer-term and more expansive social and environmental benefits. Expanding the goal of the built environment system to include wider types of value creation across climate, biodiversity and social inclusion is where we need to get to.
Ultimately, though, this still needs to make economic sense. Finding ways to only fund projects that also deliver environmental and social net-benefits will require a rewiring of how finance and policy currently reward certain approaches to creating built environments.
Shared understanding through collaboration
Despite the common direction of travel that is emerging, there is a lack of shared understanding over the shorter-term actions available to both the finance and built environment sectors to deliver the transition needed. Reaching a point of widespread united understanding and action across both communities requires a level of collaboration that is not currently being achieved.
A network of clear actions, stakeholder roles, and standards needs to be fostered to provide the sustainable transition pathway around which finance and investment can align. Although in progress, the development of investor-ready frameworks for sustainable built environments are in the early stages and not yet standardised nor widely adopted.
Data will also be key to this collaboration. Clear, data-backed evidence of the benefits of applying new approaches should be provided across the ecosystem: the better outcomes across society and the longer-term resilience of investments to name a few. This data ecosystem should be non-commoditized, transparent and open source, including ESG data combined with readily accessible examples of scalable success cases.
The way forward
Novel combinations of skills will be needed to deliver and develop these new approaches and tools. Finding ways to build the capacity and share knowledge will be key. Over the past two years, the IStructE has been helping to foster a culture of sharing sustainable design advice with wider industry. The hope now is that this can be combined with the work that the finance sector is doing, to accelerate progress from both parties.
We are at the beginning of building this shared pool of knowledge and evidence that bridges previously disconnected stakeholders. There needs to be a neutral space for dialogue where stakeholders can bring together the ideas and knowledge that creates solutions. If you wish to join this journey and would like to contribute, please contact [email protected] or [email protected].
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