President & CEO, Canada Green Building Council (CAGBC)
Vice-President, Sustainability & Resilience, KingSett Capital
There’s a strong business case for decarbonizing large buildings to future-proof assets and investments.
More building owners and developers are pursuing carbon reductions, recognizing the growing business risk carbon poses. Buildings where carbon reductions are not prioritized will miss out on energy efficiency and resiliency gains, just as Canada sees an increase in extreme weather events due to a changing climate. And as regulations shift and carbon prices rise, these buildings will become less attractive to future investors and tenants.
Fortunately, zero-carbon buildings are technically and financially feasible. Made-in-Canada Zero Carbon Building standards are helping Canadian owners and developers map out a path to net zero, building by building.
A global imperative
Carbon-fueled climate change has become a significant risk for building owners as rising temperatures and extreme weather events change how buildings are designed, constructed, and managed.
“There’s widespread recognition that climate change isn’t just real, but starting to pose a physical and economic threat,” says Thomas Mueller, President and CEO of the Canada Green Building Council (CAGBC), the organization behind the Zero Carbon Building standards. “As the impacts of a changing climate become more apparent, how investors evaluate where they invest is changing.”
ESG standards have become a corporate mainstay globally, and real estate investments must now meet requirements associated with resiliency and mitigating climate risk. Along with an increasing carbon price and the potential for government interventions, these shifting business drivers can accelerate the decarbonization of large buildings and whole portfolios.
“The expectations for the building sector have changed,” says Mueller.
Building owners must plan for decarbonization to stay ahead of a changing market. “We already know it’s the right thing to do environmentally,” says Kit Milnes, Vice-President of Sustainability and Resilience at KingSett Capital, a private equity real estate firm that’s leveraging the Zero Carbon Building standards to advance its sustainability commitments. “At KingSett, we’ve been able to show our investors that reducing carbon emissions makes a lot of financial sense.”
All new buildings should be zero carbon or risk expensive retrofits in the future. For existing buildings, planning decarbonization measures around a building’s natural lifecycle can reduce impacts and costs.
“Deep carbon retrofits require you understand your building’s carbon footprint,” says Mueller. “Then you need to do transition planning to understand what investments and technologies are required to achieve decarbonization.”
As the need for deep carbon retrofits grows, so do financing options, such as those offered by CIB, BMO, and other leading financial institutions. Building owners looking for support will find research and training available through CAGBC, and tools such as CAGBC’s Zero Carbon Building standards or KingSett’s Decarbonization Tool.
Because decisions made today about buildings will be in place for decades, both Milnes and Mueller emphasize the importance of making smart choices now that consider future risks.
“The longer you wait, the steeper the curve becomes to achieve something — in this case, reducing greenhouse gas emissions from construction,” Mueller says. “We have to start now.”
Visit cagbc.org/path-to-zero to learn more.