Global Green Building Alliance Set to Bridge ESG Gaps Between Finance and Real Estate Sectors
March 27, 2024
In a pioneering move, the world’s leading green building certification bodies – UK-based Building Research Establishment (BRE), the U.S. Green Building Council (USGBC), and the Green Building Council of Australia-(GBCA), have formed an alliance to create global cohesion in green building standards. This landmark effort bridges the gap between green buildings and the ESG (environmental, social, governance) reporting requirements of the finance sector, unlocking sustainable finance at a global scale.
The Green Building Council of South Africa (GBCSA) works in partnership with GBCA, which means that the alliance will have a positive impact on sustainable finance and the built environment in South Africa too.
Green building verification and certification schemes play a critical role in supporting ESG reporting. Together, the alliance’s three rating systems – namely Green Star1, BREEAM2, and LEED3 – help many thousands of buildings and projects push to achieve net zero, ESG, and sustainable development goals (SDGs) worldwide. By aligning these systems, investors and stakeholders can have confidence that green buildings seamlessly fit into their ESG reporting processes, reducing climate risks, and driving impactful change.
“The Green Building Council of Australia was established in 2002 with the support of BRE and USGBC, so there has always been a long-term global partnership,” explains GBCA CEO, Davina Rooney. “Finance is a global language and it’s important that we join the dots to direct more finance to this critically important area.”
GBCA chief impact officer, Jorge Chapa, adds: “Having been at GBCA for 17 years, I have the benefit of history with each of these organisations. This development does what all of us have wanted to do – advocate for green buildings in a collaborative and aligned manner. It is an exciting proposition that we hope leads to multiple other alignment opportunities.”
The alliance is formed against the backdrop of the global climate crisis. The United Nations’ Global Stocktake report last year sounded the alarm, indicating that the world is not on track to meet the goals of the 2015 Paris Agreement. Even if all countries fulfill their current commitments, the UN predicts a rise in global temperatures of 2.5 to 2.9 degrees Celsius above pre-industrial levels by the end of the century, exceeding the safe limits established by scientists.
One of the key aims of the alliance is to establish an internationally assured definition of a green building, addressing the challenge of inconsistent green building definitions and the risk of ‘greenwashing.’ Currently, the three existing globally recognised tools share common frameworks and objectives but, for those that are not green building experts, their alignment and commonality is not clear .
GBCSA CEO, Lisa Reynolds explains: “The three organisations of the alliance have already put in all the groundwork to create robust, reliable green building certification tools, so it makes sense that we work together and take the lead in guiding the industry. It’s about collaboration, not competition.”
Reynolds adds, “This alliance will enable a positive impact on sustainable finance globally, and at scale. In any country, if a building is rated with one of these tools, investors and stakeholders can have confidence in what this means for their ESG, and also know that risk is lowered.”
GBCSA, Head of Technical, Georgina Smit, adds: “With GBCSA set to launch the new Green Star Transforming Tomorrow Version 2 Tool this year, we want the property and finance sectors to know that we have listened to the market. Our V2 tool will connect more easily into ESG reporting, meaning that it will directly support reporting needs as opposed to adding more work. This tool is credible, relevant, and more streamlined than its predecessor.”
The first milestone for the global green alliance will be educating the industry with the creation of a practical guide to explore the sustainable finance instruments currently available to the real estate market, such as green loans and green bonds.
The new guide will build on an initial document developed by GBCA and launched to the Australian market in 2023. The upcoming version is set to drive awareness of sustainable finance mechanisms among the real estate sector and demonstrate how rating systems like BREEAM, Green Star and LEED ensure compliance with ESG frameworks. It will be published at London Climate Action Week in June 2024.
Lisa Reynolds concludes: “We are so proud to be part of this new groundbreaking alliance, and we’re excited to see how our Green Star certifications can contribute to transforming the South African built environment into a sustainable and thriving place for generations to come. I like to think of this alliance as a magic flywheel. We have three forces coming together creating momentum and the positive impact is multiplied many times over!”
Read more about this alliance at this link.
***
Additional Notes
1Green Star is an internationally recognised rating system setting the standard for healthy, resilient, positive buildings and places. It addresses the design, construction and operation of buildings, interior fit outs and precincts.
2BREEAM (Building Research Establishment Environmental Assessment Method) is a world-leading science-based suite of validation and certification systems for a sustainable built environment, supporting ESG solutions in net zero carbon, health and social impact, and biodiversity.
3LEED (Leadership in Energy and Environmental Design) is a global green building rating system that provides a framework for minimising impacts and maximising benefits to our health, environment, climate, and communities.
