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About WorldGBC Statement Foreword Introduction This assessment assumes a base scenario where climate action broadly follows a 2°C trajectory. Our worst and best case scenarios, aligned with IPCC projections, represent increased and decreased emissions from today until 2050, leading to 3 degree or 1.5 degrees of warming respectively. The outcome of Low, Medium or High for each statement represents the analysis of the business case in this situation, as it relates to the below themes Occupant Benefits Extent to which climate change affects building occupant productivity and health & wellbeing. Costs Extent to which climate change affects building costs including supply chain, construction and operation costs. Risk mitigation Extent to which climate change impacts, such as extreme weather events, or sea level rise, affects buildings and their environments. Asset Values Extent to which climate change affects the value of built environment assets. Even in 1.5 degree scenario, there will still be impacts from extreme weather on buildings and infrastructure. Sustainable assets are more resilient with lower costs from climate impacts. Investors and Reputation Extent to which climate change will affect building investment decisions. Finance Availability of finance for green buildings. Wider role of business Beyond finance, how does the wider role of business support the business case for green buildings. 100 | BEYOND THE BUSINESS CASE
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Drivers of the Business Case The Business Case Strengthening the Case: Social Value The Social Value Case Future-Proofing The Value Proposition 3 o C Climate Change Scenario 1.5 o C Climate Change Scenario Extreme weather reduces building performance resulting in sub-optimal living or working environments. High 3% Up to reduction in productivity in the absence of air conditioning or outdoor working per 1°C temperature rise (6) More extreme weather than today, but many buildings continue to perform to design Low-Medium Extreme weather increases demand cooling sourced from fossil fuels due to lack of energy efficiency regulation. Passive or energy efficient buildings are cheaper to run. Low-Medium Fast climate action drives faster roll out of energy efficiency measures and the installation of low carbon technologies such as heat pumps. Less cooling required but extreme temperatures still occur. High Extreme weather impacts on the ability for buildings and their surroundings to operate effectively. Lower insurance, maintenance or repair costs from resilient and sustainable buildings. Medium-High Cities experience deadly heatwaves(3) Building energy performance considered less in valuation, due to lack of regulation, so reduced intensive retrofits or upgrade of building stock. Climate change resilience and zero carbon buildings movement continues in spite of regualtion in premium office / residential market Medium-High ESG investment considerations continues to grow in all regions, but slowly. Less political pressure for public buildings to become green, with more focus on climate resilience than mitigation. Low-Medium 7% GDP loss per capita (5) 14% of the population exposed to severe heatwaves(2) Even in 1.5 degree scenario, there will still be impacts from extreme weather on buildings and infrastructure. Sustainable assets are more resilient with lower costs from climate impacts. Medium Buildings align to strict climate change regulations. Green buildings have a higher asset value as “less green” buildings are regarded as higher risk of stranded asset, with either significant retrofit required to meet stronger regulation and/or tenants not willing to occupy these particularly in premium areas. High 1% GDP loss per capita (4) Global climate action focus will mean ESG performace, reputation and public perception will grow in importance for all asset classes. This extends to the public building sector where political pressure from voters is also key High Global finance will be available for all types of buildings, backed by weaker regulation. Green finance will grow for premium markets, but not globally. Climate risk may result in insurance being unavailable for some buildings. Low-Medium Finance becomes more available both for building retrofit and to incentivise the development of green buildings. Owners benefit from available insurance and green buildings receive lower premiums. Medium -High Business will see significant stakeholder pressure to take a more leading role in place of government action. Medium 132 million people into poverty over the next 10 years (1) 65 million additional jobs with bold climate action(6) Business becomes a significant driver of climate action, and the market expects fast action. This extends worldwide and to public building sector in response to voter expectations. Medium -High A WORLD GREEN BUILDING COUNCIL REPORT | 101
