Carbon Transition Initiative: Real Estate Sector Investor Brief

Carbon Transition Initiative - Real Estate Sector Investor Brief


The Carbon Transition Initiative aims to study the impact of climate change in emerging markets and identify best practices available to the investment community to help assess and manage climate- and transition-related risks and opportunities. To achieve this objective, the initiative will focus on a series of 12 webinars complemented by investor research briefs on macro issues and sectors that are material to carbon transition.

The real estate sector, including buildings’ construction and operation, is a major contributor to greenhouse gas emissions and hence to global warming. By helping the sector reduce its carbon footprint and prepare for new climate realities, investors contribute to climate transition mitigation and adaptation. Along with environmental considerations, this makes commercial sense. According to a recent report by the IFC, “green” buildings’ operating costs are up to 37% lower, they generate a sales premium of up to 31%, and a rental income of up to 8% above the “non-green” buildings.

The urgent need to go further and faster requires a new response and a new vision for this sector, which is in line with the IPCC’s climate goals established in the Paris Agreement. To achieve this vision, we must take urgent action to tackle upfront carbon while designing buildings with whole life carbon in mind. Real estate investors have various tools at their disposal to make a positive impact, and they should be informed about the risks and opportunities arising from their investments in these assets.