WWF and KTI have joined forces to encourage the Finnish real estate sector to move towards a building stock that is in accordance with the Paris Agreement. The aim of the agreement, which was concluded in 2015, is to keep the increase in global average temperature to well below two degrees, and to strive to carry out measures which would limit the increase to under 1.5 degrees.
The aim of the collaboration is to offer the parties who report to KTI the opportunity to check how far the building stock they own is from climate targets, based on their energy data. WWF encourages investors and other companies to publish their results as part of their responsibility reporting. An excellent additional tool for a responsible company is the Science Based Targets initiative, which helps companies set emissions reduction targets that are based on climate science.
Ever stricter emissions reduction targets
The Intergovernmental Panel on Climate Change IPCC’s long-awaited special report Global Warming of 1.5°C redefines the targets that the battle against climate change demands. All sectors must reduce their emissions faster than is comfortable – and especially energy refurbishments of buildings could drive emissions down.
According to an assessment by the researchers of the Finnish Climate Change Panel published last summer, we must significantly reduce our greenhouse gas emissions already over the next few years. This applies to both targets, that is, to both the 1.5 degree and the 2 degree scenarios. When we also take into account the so-called historical responsibility of developed countries, emissions must be down to zero by the year 2035 (1.5 degree target) or the year 2040 (2 degree target). In addition to this, we must also aim towards net negativity, meaning that in addition to reducing our emissions to zero we must also reabsorb some of the greenhouse gases that have been emitted into the atmosphere. In other words, we must ensure the preservation of carbon sinks.
”You get what you measure”
European regulation is also focusing on long term developments, which should impact especially the quick renovation of old buildings. The EU has recently agreed on an update to the Energy Performance of Buildings Directive (EPBD), and one of its most interesting requirements is the requirement for member states to draft a long term renovation strategy to make their building stock very energy efficient and low-carbon by the year 2050. WWF strongly supports this aim and hopes that national implementation will not water down its ambition nor forget to take into account the target levels required by the 1.5 and 2 degree scenarios. The next step is to ensure that also large property owners in Finland make sure that energy efficiency improvements are made with the haste climate science demands.
The pressure on companies and investors to report on their activities equally pushes them to behave in accordance with climate science. During the Paris Climate Conference, the outgoing Governor of the Bank of England Mark Carney assembled the Task Force on Climate-related Financial Disclosures (TCFD), led by ex-Mayor of New York Michael Bloomberg, to develop a voluntary frame of reference for detecting and reporting on carbon risks. One key recommendation has been taking into account the different warming scenarios in the business environment – especially the 2 degree scenario. TCDF is quickly becoming a generally accepted reporting standard.
Buildings first in line
The emissions of the Finnish building stock should be driven down before other sectors, because in other sectors technical solutions are still mostly in the distant future. Especially food production and many industrial processes remain difficult to solve. The responsibility of the sectors in which quick emissions reductions are technologically possible is increased. Because of this, there has traditionally been a focus on buildings as easy targets, even though the large mass of buildings adapts to changes slowly, following the rhythm of the normal renovation cycle.
At the same time, concerning buildings it should be taken into account that because of their long life span, 70% of existing buildings will still be in use in the middle of this century. Because of this, adaptation to climate change must become an integral part of the operation of the real estate sector already now. Energy efficient properties are also profitable. For example, the Dutch real estate investor Vesteda invested €23 million into energy refurbishments in its properties in 2015, and was thereby able to significantly improve its ranking in the Global Real Estate Sustainability Benchmark.
Science Based Targets: improving target setting
The Science Based Targets initiative (SBT), developed by WWF, CDP, WRI and UN Global Compact, encourages companies to modify their activities in accordance with the targets of the Paris Agreement and to set ambitious, science-based greenhouse gas emissions targets. According to a recent report, companies that have participated in the initiative feel already now that they have benefitted from it in many ways. Companies that are prepared for the future are a safer investment both for ecologically-minded investors and for those who are concerned simply about risk.
The initiative has already attracted hundreds of companies, which in Finland include big emitters such as Outokumpu and Kesko, which is significant because of its value chain. However, no Finnish real estate company or operator from the financial sector is involved.
It’s a huge challenge, but together we can still change direction.