BEYOND THE
BUSINESSCASE
WHY YOU CAN’T AFFORDNOT TO INVEST IN ASUSTAINABLE BUILTENVIRONMENT

November 2021

About WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business Case

The World Green Building Council(WorldGBC) catalyses the uptake ofsustainable buildings for everyone,
everywhere. Our mission is to transformthe building and construction sector
across three strategic areas - climate
action, health & wellbeing, and resources& circularity. We are a global action
network comprising of over 70 Green
Building Councils around the globe.

As members of the UN Global Compact,
we work with businesses, organisations
and governments to drive the ambitionsof the Paris Agreement and UN Global
Goals for Sustainable Development.
Through a systems change approach, ournetwork is leading the industry towards
a net zero carbon, healthy, equitable andresilient built environment.
Read more about WorldGBC’s North
Star Goals for the industry here.

sponsor logos here.

BEYOND THE BUSINESS CASE

The Social Value Case

Future Proofing
The Value
Proposition

Statement

About World Green
Building Council
Through a systems
change approach,
our networkis leading theindustry towards
a net zero carbon,
healthy, equitable
and resilient built
environment.

Strengthening the Case:
Social Valueby Cristina Gamboa, CEO of World Green Building Council’

As one of thelargest economic
ecosystems in theworld, the building
and constructionindustry has acritical role to playin achieving global
sustainability goals,
especially in tacklingthe climate crisis.

As one of the largest economic
ecosystems in the world, the building andconstruction industry has a critical roleto play in achieving global sustainability
goals, especially in tackling the climate
crisis.
The COVID-19 crisis has profoundlychanged human relationships with ourbuilt environment, and the global realestate sector is readjusting to a ‘newnormal’ - with social value rising inindustry attention.

Today’s value proposition for asustainable built environment is bothfinancial and ethical. It is on a powerfultrajectory to amplify in the future.
WorldGBC champions within this reportfor immediate, transformational andregenerative action for people and planet,and stress, based on future scenario
modelling. In short, no business can afford
not to adopt substantive sustainability
measures in the built environment.

In this context, it is crucial that we now
embark on a radical transformation of
the built environment, mitigating theimpacts of climate change, enhancing
equity and justice and implementing
greater economic and environmental
resilience to combat risks. By adopting
sustainable practices at all stages of thelife cycle, we can reduce our reliance on
finite resources, generate positive andrestorative impact, and improve qualityof life for people in all stages of the value
chain.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Foreword
We hope this reportinspires urgency,
but urgency with
optimism.

We believe that sustainability is becoming
part of the business case for the global
real estate market. Since the publicationof WorldGBC’s ‘The Business Casefor Green Buildings’ report in 2013, theWorldGBC global network has seen
the building and construction industry
increasing their awareness aboutsustainability, and starting to differentiate
in quantifying the value of built assets.
There are a multitude of economic
imperatives and opportunities forinvesting, developing, designing,
constructing or occupying sustainablebuildings or infrastructure assets. These
range from higher sale or rental value,
reduced construction and operating
costs, to lower asset risk and insurance
premiums. However, for the global realestate sector today, the value propositionis both broadening and increasing inprominence.
Awareness of social value - comprising
environmental, economic andcommunity-based interventions toenhance people’s quality of life - is on
the rise across the real estate sector1.
Although social and environmental
impacts are not yet being widely captured

BEYOND THE BUSINESS CASE

within asset value, ethical action is
being driven through leaders across thevalue chain - from financial, public andprivate sector organisations - across all
geographies.
Through this report, WorldGBC presents
the drivers for the broadening businesscase within the context of current andfuture market trends. These are both thedrivers that set the economic businesscase, including policy, sustainable finance,and corporate risk and reputation; plus
the compelling forces behind the rise insocial value - from the aftermath of thepandemic to urgency for action on the
climate crisis and wider environmental
and social issues.
Considering the wider value proposition encompassing climate action and social
value alongside financial benefits andrisk mitigation - strengthens the businesscase for a sustainable built environment.
You cannot afford not to be part ofthe sustainability movement - from an
ethical, financial, risk mitigation or futureproofing perspective. Green assets are an
opportunity not to be missed.

IN THEAFTERMATH OF
THE PANDEMIC
THERE ISURGENT ACTION
NEEDED FOR THE
CLIMATE CRISISAND WIDER
ENVIRONMENTAL
AND SOCIALISSUES.

We hope this report inspires urgency, buturgency with optimism. WorldGBC calls
for deep, unprecedented collaborationand multi-stakeholder action acrossthe entire value chain, that will provide
both business benefit and resilience,and create equitable societies living in ahealthy, regenerating planet. Together we
can drive a zero carbon, resilient, healthyand sustainable future.

You cannot afford not to be partof the sustainability movement- from an ethical, financial, risk
mitigation or future-proofing
perspective.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

The Broader Value Proposition fora Sustainable Built Environment
DRIVERS OF
BUSINESS CASE
• Policy change,
nationally, and at citylevel
• Incoming financeregulation, such ascarbon pricing• The risk of sustainablefinance and ESG

THE BUSINESS CASE

• Greater access toinvestment• ESG and corporate
reputation• Higher asset value anddesirability• Resilient investment &lower risk of stranded
asset• Lower operationalcosts and return on
investment• Reduced build costs andcircularity opportunities• Preferential insurance
premiums• Better occupant
productivity incommercial sector

DRIVERS OF
SOCIAL VALUE• The impact of COVID-19• Increased awarenessfrom the private sector,
and rise of CSR• Public drivers, including
policy and procurement

THE SOCIALVALUE CASES• Health and wellbeing atbuilding level• Community benefit.
including jobs, resilienceand equity• Transforming supply
chain and construction,
including worker welfare,human rights andjustice.

BEYOND THE BUSINESS CASE

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Seven Ways to Identify Value froma Sustainable Built Environment
Seven themes consistently emerge in boththe financial business case and social value
proposition sections of this report. Together
these themes outline some of the co-benefits
that enhance the value proposition for asustainable built environment.

Wider role of business(enviro, social, wider thanjust ££ in a business case,
CSR)

Occupant Benefits(productivity & wellbeing)

Finance(access tofinance forgreen buildings,

bonds

Operating Costs

Why youcannot afford
not to invest
in sustainablebuildings

Investments(supply chain,construction,
operation)

Risk Mitigation(protecting
investment supporting shareprices, increasing
requirements)

Asset Values(resilienceenvironmentallyand financially,legislativechanges,
reputation)

Higher asset values
linked both toperformance andasset desirability

THE FUTURE VALUE COSTS• In a 3 degree climate change scenario, sustainable buildingspresent a strong business case in terms of occupant benefits,risk mitigation and asset values. In a 1.5 degree climatechange scenario, costs, finance and reputation are stronger
drivers.

Drivers of theBusiness Case

• In an unhealthy, inequitable world, sustainable buildingspresent a business case through occupant benefits, cost andrisk mitigation. In a healthier, equitable future, costs, assets
values, investor reputation and the wider role of business are
key themes in the value proposition.
A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

1.0

Introduction

We acknowledge
both the challenge
and urgency oftransitioning to a net
zero, regenerative,
healthy andequitable society
before 2050.

This is a critical decade for united,international efforts to enhancesustainability.
The climate crisis must be tackledwith absolute urgency. Climate change
impacts are widespread, real andintensifying, and some impacts are
now irreversible2. Deep and sustained
reductions in emissions of carbon dioxide
and other greenhouse gases are the only
possibility to limit further climate change.
However, with the emissions alreadyreleased to date, it could take 20-30 years
to see global temperatures stabilise.
Therefore some future climate impacts
are, sadly, inevitable3.
The COVID-19 pandemic has amplified adiverse range of inequalities between andwithin societies4. Differences between
high and low income countries, plus
intra-nation health inequalities, genderinequalities and employment disparities
have made their mark on society, andwill likely take decades to heal5. In thenext decade, the global population is
expected to grow to around 8.5 billion
in 2030, combined with changes inspatial distribution driven by increasing
urbanisation6. The risk of inequalities inresource availability and quality of life

BEYOND THE BUSINESS CASE

Introduction

will heighten with rapid urbanisation andpopulation growth, alongside the demandand consumption of global resources andour natural capital.
We acknowledge both the challenge
and urgency of transitioning to a net
zero, regenerative, healthy and equitablesociety before 2050, and we call for thebuilding and construction sector to playits part.
In the last two decades, sustainability
has rapidly mainstreamed to become thepowerful principle it is today – catalysing
efforts, budgets, attention and attitudes7
as climate change is growing in publicawareness8, and governments andinstitutions are committing to
re-evaluating and improving regulations9.
For some societies, sustainable growth
linked with circularity is the most viablelong-term option10. The value proposition
for investment in net zero, healthy andequitable built environments is now
stronger than ever.

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

IN THE LAST TWO DECADES,SUSTAINABILITY HAS RAPIDLY
MAINSTREAMED TO BECOME
THE POWERFUL PRINCIPLE IT IS
TODAY - CATALYSING EFFORTS,
BUDGETS, ATTENTION AND
ATTITUDESA WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

1.1 Why the Built Environment
The scopeand breadth ofsustainability
ambition has
dramatically
expanded

The sustainability movement within the built environment sector has been
on a journey through the last three decades. Initially, the green building
movement focused on operational energy use, efficiency and primarily
environmental concerns. However, the scope and breadth of sustainability
ambition has dramatically expanded - encompassing now the diversityof the UN’s Sustainable Development Goals, to be considered across allstages of the building and construction lifecycle, plus the communities andinfrastructure that serve our buildings as well as the built assets themselves.

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

A Changing World
What is the built environment?
Within this report, the scope of WorldGBC’sreference to the built environment sector
includes;-Buildings, of all typologies and in all
geographies
Construction, as a sector, and considering
the creation of both new and retrofitted
assetsInfrastructure, capturing both Horizontal
Infrastructure, which is composed mainlyof transportation, power & communications
and waste (both overground andsubterranean), and Vertical or Social
Infrastructure, comprising buildings(particularly spaces that facilitate thedelivery of social services by governments),
plus structured facilities (eg. parking areas)and structures

WorldGBC’s calls for sustainability extend
across the entire lifecycle of all built
environment components.

Who are the key stakeholders?
The global real estate sector takes responsibility
for the finance, development, design,
construction, operation, use, maintenance andend of life actions for all the above listed built
assets. Through this report, WorldGBC aims tocatalyse demand for sustainable action fromthese key actors through a narrative which will
focus on:•••Developers and investors: who finance,develop and manage our built assets
Designers and construction: who designand create our built environment
Owners and occupiers: who buy, lease, selland occupy our buildings and spaces
Policy makers: who set targets,requirements and regulation for buildings,
infrastructure and urban areas

Although a non-exhaustive list, these broad
stakeholder groups represent the key actors
who hold the potential to catalyse the systemic,transformational change required across the
supply chain and full lifecycle. Advantages andconsiderations for each stakeholder group arepresented throughout this report.
By demonstrating why these groups cannot
afford not to invest, design, procure, supply,
buy, sell, own or occupy a truly sustainable built
environment asset, we can generate market
stimulus from all actors across the value chain.

BEYOND THE BUSINESS CASE

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

A Changing WorldThe Intergovernmental
Panel on Climate Change(IPCC) suggests that tolimit global warming to lessthan 1.5°C over the next
few decades, global carbon
neutrality must be achievedat the latest by 205022. The
last decade has experienced
the hottest years on record
and increasing extreme
weather events, such as
forest fires, heat waves andfloods23. Global warming
risks are anticipated to
exceed pre-industrial
levels by more than 2°C
by 2060 and could evenreach 5°C by the end of the
century 24. As well as posing
tremendous risk to humandevelopment and quality oflife, environmental changes
may simultaneously affectthe biodiversity, productivity,and stability of the Earth’s
ecosystems25 that we all rely
upon.

BEYOND THE BUSINESS CASE

Foreward

Introduction

The last decade
has experienced
the hottest years onrecord and increasing
extreme weather
events, such as
forest fires, heatwaves and floods.

Drivers of theBusiness Case

The Business Case

The built environment sector
is critical to achieving a moresustainable future due to the impacts
it does, and will, create. These include:

Strengthening the Case:
Social Value

-

-

-

-

-

-

75% of annual
global greenhouseemissions from thebuilt environment, withbuildings accounting on
its own for 37%11 12Around 50% ofemissions from newbuildings will be fromembodied sources, andhalf from operationalsources, between 2020
and 205013
40-50% of resources
extracted for global
materials are used for
housing, construction
and infrastructure14
Building materials
account for half thesolid waste generated
every year worldwide15
230 billion square
meters of new buildings
will be constructed in thenext 40 years16--

The Social Value Case

75% of the infrastructureneeded by 2050 stillneeds to be built17
7% of the global
population is employedin the construction
workforce18
90% of our time is spentinside buildings, andour cities, infrastructure
and urban ecosystems
shape our quality of life19
68% of the world’s
population will live incities by 205020
Green buildings will
represent a $24.7 trillion
investment opportunity
by 203021

It is estimated that over the next
four decades, building floor area
will double, adding the equivalentof a city the size of Paris every
week to the planet in new building
construction26. Most of their growth
will take place in emerging markets
in East Asia, the Pacific and SouthAsia, where more than half of theworld’s urban population will livein 203027. In addition, there is aworldwide deficit of 330 million

Future Proofing
The Value
Proposition

homes, which is expected to growto 440 million homes by 2025, also
including regions like Latin America,
Middle East and Africa28.
We cannot tackle climate change
without addressing buildings,
which account for close to 40% ofemissions, and our cities that hostthe majority of our population29.
Switching from fossil fuels to clean
energy sources, optimising resource
consumption and prioritising deepenergy efficiency retrofits canprovide local governments and otherproperty owners with an opportunity
to also improve health and reduce
healthcare costs, generate jobs,
address fuel poverty, reduce asset
maintenance costs, and increase
the productivity and educational
attainment of urban residents30.
A sustainable built environment
will provide infrastructure to enhance
the quality of life and resilience ofcommunities.
The built environment represents
one of the biggest global investment
opportunities of the next decade,an avenue to enhance sustainable
development and human quality oflife, and - if tackled correctly - reduce
emissions and combat the climate
crisis31.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

SE Asia

Barriers to green building: globally and by region

1.2 Introducing the Broader Business Case
WorldGBC presents
a broader andenhanced value
proposition forachieving thesesustainability
goals for the built
environment

In this report, WorldGBC presents a
broader and enhanced value proposition
for achieving these sustainability goals
for the built environment, consideringbuildings, their supply chain and theinfrastructure that supports them.
Within this value proposition, seven key
co-benefits emerge across both thefinancial and social value proposition.

Whilst climate action should be an
absolute and urgent priority for the
global real estate sector, in this report
WorldGBC isn’t presenting the details of
the environmental case for a sustainablebuilt environment. Market action in thelast decade has demonstrated that, while
many leaders are motivated by tacklingthe climate crisis, to motivate the global
mass market in all geographies andacross competing priorities, a broader
value proposition that speaks to thecore priorities of most organisations isessential to stimulate action. This priority
is, of course, finance.

BEYOND THE BUSINESS CASE

Barriers to green building:globally and by region

Higher(perceived or
actual) first costs

Barriers to green building data highlight thatthree of the five most substantial obstacles
to sustainable buildings globally relate tofinance, and are most often cited in North
America and South Asian markets32.

North America

64%

Higher (perceived or actual)
first costs

52%

Lack of political support orincentives

34%

Lack of public awareness

28%

Affordability, green building is
for high-end projects only

27%

Lack of market demand26%

Lack of trained/educated green
building professionals

24%

Not able to prove the business casebecause of the spit between capitalversus operating costs

24%

Lack of products or solutions
available in your market

17%

Access to capital

16%

High levels of corruption in theindustry and/or government

12%

Other

4%

None

4%

Lack of publicawareness

Lack of market
demandNorth America

36%

Lack ofpolitical support
or incentives
Central/South America
and Caribbean

49%

Sub-SaharanAfrica43%

Affordability,
green building
is for high-end
projects only
South
Asia

38%
Lack of trained/educatedgreen building
professionals
South Asia

36%
This report is clear in its recommendationthat the real estate and built environment
sector cannot afford not to invest in asustainable built environment, and commit
to urgent action to tackle the climate crisis.
In this report, WorldGBC presents both thefinancial business case and the social value
case. We believe that social value is on an
increasing trajectory of importance that willsoon be reflected in financial metrics.

The business case is starting to stack up.
The financial drivers are improving and it’salso the right thing to do. Considering socialand environmental value considerations
strengthens the business case, making
sustainable built assets a powerful financial
opportunity. You can’t afford not to act.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Foreword CEO
Statement

Executive Summary
Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

1.2 The Future we Face
•
•
•
•
•
•

•

Pollution from materials
extraction (environmental)
Human rights violations
and forced labour inmaterials supply chain
Worker welfare inConstruction
Use of virgin materials
and waste creation(environmental)
Built environments canenhance inequalities
Climate change
unmitigated - extreme
weather events, eg. forest
fires, heat waves andfloods - global warming
could reach 5°C by the endof the century
Land intake of buildings
leads to ecologicaldisturbance and impacts••

damage to buildings andinfrastructure, risk of
stranded assets, higher
insurance premiums
Occupant health andcomfort harder to achieve,
worsening in warming
world

•

•
•
•

•

BEYOND THE BUSINESS CASE

Protection of human rights
and health in materials
supply chain
Worker welfare and rights
protected and enhanced
Materials and resources
used in a circular system,
reducing waste andregenerating economy
Built environments can
reduce inequalities••

Climate change mitigated
and tackled with resilience- extreme weather events
do occur, but people areprotected from impacts by
their built environment (eg.
flood defences, buildings
designed with shading)Occupant health andcomfort easier to maintain,
protected from inevitableclimate change, prioritised
in society
Buildings as materialbanks, material waste fromdemolition and renovation
used in other projects

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

2.0

Drivers of theBusiness CaseAs the urgency ofclimate change isbecoming clearer,sustainability is
being integrated into
every corner of theeconomyToday, sustainability is an essential
component of any organisation’s
future risk mitigation strategy, and anincreasing body of evidence suggests thatsustainable built assets offer preferential
financial opportunities in the current
context. This trend is being strengthenedby the contextual factors outlined in thischapter.
As the urgency of climate change isbecoming clearer, sustainability is
being integrated into every corner of theeconomy. This includes finance, politics
and consumer purchases, in addition toreal estate that is also, in many markets,on the same trajectory33. Regulation,
financial trends and growing expectationsof corporate responsibility are cementing
the business case for sustainability in thebuilt environment in both a current andfuture context.

BEYOND THE BUSINESS CASE

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

TODAY, SUSTAINABILITY IS AN
ESSENTIAL COMPONENT OF ANY
ORGANISATION’S FUTURE RISKMITIGATION STRATEGY

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

2.2 Policy Change
The global realestate market
should expect
increasing
regulatory
enforcement toadvance sectoral
mitigation goals

2.1.1 Nationally Determined Contribution
An important stimulus for thebusiness case for sustainable assets
is compliance with the incoming
regulatory change that our global
leaders have committed to enforcing
in order to meet their nationalsustainability goals.

indicate building energy efficiency
in their NDCs or climate action
strategies including energy codes for
new and existing buildings, energy
efficiency resources, rating systems,
renovation targets and energy
consumption targets35.

Nationally Determined Contributions(NDCs) are at the heart of the2015 Paris Agreement and theachievement of the proposed
long-term environmental goals.
NDCs articulate each country’s
efforts to reduce national emissions
and adapt to the impacts of climatechange, requiring them to prepare,report and maintain successive
domestic mitigation measures inorder to meet the targets of thesecontributions.

The global real estate market
should expect increasing regulatory
enforcement to advance sectoral
mitigation goals. Expectations fromconsumers and the public sector willbe that private sector organisations
also align with the trajectory of
NDCs and the 1.5 degree warming
pathway36. The ambition is also
not fixed - the improvement ofthese national commitments is
expected to continue as countries
heighten their commitments forenhanced ambition of their NDCs
to meet the 1.5°C temperaturerise goal37. Businesses looking
to avoid financial repercussions
can consider implementing highly
ambitious sustainability policies
today, targeting net zero well before
2050, as an investment in futurecompliance.

As of early 2021, of those whohave submitted an NDC, 136
countries mention buildings, 53
countries mention building energy
efficiency, and 38 specifically callout building energy codes, indicating
the importance of building energy
efficiency to our climate future34.
Furthermore, in the top 10 building
energy consumers globally, 80%

BEYOND THE BUSINESS CASE

2.1.2 City Level Shift

We cannot
tackle climatechangewithout
addressingbuildings in
our cities,
which canaccount
for 40% ofemissions.

Cities, in which currently more thanhalf of the global population currently
live, and expected to reach twothirds by 205038, are an important
player in the sustainability transition.
Many cities, as major policy enablers
and owners of real estate, arecommitting to action faster thannational governments. City policy isable to change at a faster trajectory,
hence, real estate stakeholders inthese locations, especially Small and
Mid-Size Enterprises (SMEs), arelikely to be impacted by increasing
ambition of regulation.
More than 700 cities39 in 53
countries are now committed tohalving emissions by 2030 andreach net zero by 2050, while
employing innovative approaches toachieve these goals. For example,
Amsterdam is delivering a strategy
to halve the use of new raw materials
by 2030 and achieve a fully circular
city by 2050, and Oslo is piloting
fossil fuel free construction sites
on public procurement projects.

Net zero trends will ultimately
be reflected in local policies andplanning laws, such as those alreadyin place in Vancouver and Tokyo40,
and are likely to present increased
opportunities for organisations
prepared for such changes.
As with national policy change
determined by NDCs, the businesscase for the real estate sector atcity-scale is future proofing for the
regulatory change our city leaders
have committed to - but with theunderstanding that cities are moving
further, and faster.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

2.1.3 Carbon Pricing

CURRENTLY, IT IS CONSIDERED
THAT CARBON PRICING CANPLAY A ROLE IN INCENTIVISINGLOW CARBON ACTIONS BY
INTERNALISING THE COST OF
GHG EMISSIONS.

Trends suggest that carbon pricing
is coming, and will likely soon bea significant consideration for allorganisations operating on the
global market41. As emissions are
increasingly quantified and reported
on, real estate actors risk being
severely financially impacted if they
do not implement decarbonisation
efforts in line with the trajectory of
the Paris Agreement.
Today, carbon pricing is one of themost debated tools for mitigating
the effects of climate change.
Carbon pricing works by financially
incentivising low carbon actions
and adapting to the potential risks
and opportunities associated withthe transition to a low-emission
economy.

The Canadiangovernment announcedin December 2020 thatthe price of its federal
carbon tax will increaseby over 450% in thenext decade
BEYOND THE BUSINESS CASE

Despite the economic and social
upheaval of COVID-19, carbon pricing
instruments, such as a carbon tax orenergy tax related to carbon content,
have continued to be rolled out or
increased in ambition42. For example:• China’s emissions trading
system, the largest carbon
market in the world, waslaunched in 2021 covering
around 4,000 MtCO2
annually, or 30% of its
national GHG emissions,with prices expected
to increase in line withemission reduction goals43.
• The Canadian government
announced in December
2020 that the price of its
federal carbon tax will
increase by over 450% in thenext decade44.
• In the private sector, nearly
half of the largest 500
companies in the world
have reported the use of
an internal carbon price, or
have declared the intention
to use one within the next
two years45.

The trajectory of carbon taxationis continuing to rise, and can be
expected to strengthen in the
coming decades. The implications
on organisations will be reduced
where preemptive steps are taken
to measure and reduce carbon
footprints across the lifecycle ofinfrastructure - higher performing,
lower carbon built assets will be
faced with more manageable offset
payments46.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

CASE
STUDY

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

EU Green Dealand EU Taxonomy
The EU Taxonomy is set to be afoundational tool of the European
Green Deal and represents global
innovation in financial regulation.
It is increasing global awarenessin sustainable investment and ESG
reporting, creating a classification
system for economic activities andsectors critical to climate change
mitigation and adaptation, based on
impact and performance — including
the building and construction
sector47.
It will strengthen the value
proposition for a sustainable built
environment by:
•
•

•
•
•

BEYOND THE BUSINESS CASE

Future Proofing
The Value
Proposition

Enabling owners and developers
to access dedicated green
financial products
Stimulating investment forrenovating less energy efficientbuildings and constructing newenergy efficient buildings
Advancing market
competitiveness and combat‘greenwashing’
Creating a context for corporate
best practice, influencing
reputation and risk management
Reducing risk by establishing acommon sustainability language
and criteria••

The EU Taxonomy will bemandatory within 2022 for asignificant number of European
financial institutions andcompanies48. Every organisation
offering financial products on
the European market will have tocomplyThis will include the construction
sector and the implications arelikely to be felt worldwide. It isalso likely that other countries
will prepare or adopt similar
approaches, such as the UK
Taxonomy currently underdevelopment49.

In this context, advancing adecarbonised and sustainable
environment will become necessary
as well as desirable, and the global
real estate market is advised tofuture-proof assets and investments
against future regulatory change orcompliance risks.

The European Green Dealis an example of global
leadership in ambitious
sustainability policy.
A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

3.0

The Business CaseA cleaner andmore sustainableeconomy will growstronger and fasterin an increasingly
low-carbon global
economyIn this chapter, WorldGBC presents
financial reasons of why a sustainablebuilt environment is a better return on
investment if you are a developer, owner
or any actor in the real estate sector.
Real estate is a major asset classaccounting for 10% of global GDP50.
Therefore, the creation, renovationand maintenance of a sustainablebuilt environment offers large scalefinancial opportunities, from a market
competitiveness and risk mitigation
perspectives.
A growing body of evidence has shownthat unmanaged climate change
generates significant value risks forinvestors and that the inclusion ofclimate factors can improve returns51.
It is now more widely accepted thatmaximising returns goes hand in handwith minimising environmental impact52.
Global market leaders are making
ambitious sustainability commitments,
with one of the largest corporate pension
schemes in the UK setting a 2050
net-zero financed emissions targets
towards the end of 2021, aiming to halve
emissions of this decade53.

BEYOND THE BUSINESS CASE

Introduction

Consequently, financial markets are
increasingly directing their investments
towards projects and companies thatguarantee (in addition to economic
profitability) the achievement of socialand environmental development goals54.
These financial business benefits of thisapproach are outlined in this chapter,highlighting specific opportunities forkey stakeholders across the building andconstruction value chain.

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition“GREEN BUILDINGS ARE OF HIGH
VALUE BECAUSE OF LOWER
OPERATING COSTS, HIGHEROCCUPANCY RATES AND RENTALINCOME. IN ADDITION TO
AVOIDING FINANCIAL PENALTIESFOR CARBON EMISSIONS. WHICH
MAKES GREEN BUILDINGS ABETTER CREDIT RISK ASSET AND
BETTER COLLATERAL.”INTERNATIONAL FINANCE CORPORATION (2019), GREEN BUILDINGS: A FINANCIAL
AND POLICY BLUEPRINT FOR EMERGING MARKETSA WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

3.1 ESG: Underpinning the Business 			Case for all Real Estate Actors
The impacts of climatechange have alreadyinfluenced real estatemarkets at the global
scale

Environmental, Social andGovernance (ESG) reporting is not a
new phenomenon, as these issues
have long been a consideration ofmany companies and organisations.
However, ESG is dramaticallyincreasing in industry influencein developed markets55, and are
no longer being considered oflesser importance to investors andorganisations operating globally.
Note: ESG investing and reportingis currently much less prominent indeveloping countries, but there are
growing efforts to support popularityof ESG investing in all markets56 57.
In recent decades, institutional
investors and pension funds havebecome too large to diversify awayfrom systemic risks58, forcing themto consider the environmental andsocial impacts within their portfolios.
The UN Principles for Responsible
Investment (PRI) have also heightened
accountability of investment
decisions, and the increasing
availability and popularity of voluntary
reporting tools such as CDP, GRESB
or the Task Force on Climate-Related
Financial Disclosures (TCFD)59, havefacilitated mass market engagement.

BEYOND THE BUSINESS CASE

In today’s market, it appears the
majority of investments integratesustainability issues, including
environmental action and social
value into investment criteria. This
trend is true for built asset owners
as environmental initiatives such as
reducing energy or water usage havebeen attractive due to their tangible
financial benefit from lower operating
costs. The impacts of climatechange have already influenced realestate markets at the global scale,with 65% of investors expressing
their motive for taking ESG issues
into consideration to help manage
investment risks, as 35% of Real
Estate Investment Trusts’ (REITs)
properties are exposed to climate
hazards60.
More than half of global asset
owners are currently implementing
or evaluating ESG considerationsin their investment strategy61 and it
is estimated that ESG funds undermanagement will represent the
majority of proportions of mutual fundassets by 202562. ESG now represents
a priority for leaders and companies
in all sectors, including real estate63.

Five ways ESG reporting iscreating a business case forsustainable built assets:

More than half ofglobal asset owners are
currently implementing
or evaluating ESG
considerations in theirinvestment strategy

ESG is changing market trends:
adopting more responsible
behaviour in terms of resource
management, environmental
and social impact is becoming
business as usual. As of July
2020, 90% of companies in
the S&P 500 released ESG or
annual sustainability reports64.

The growing popularity of
ESG is increasing pressure
from investors, employees,
customers and numerous
other stakeholders to increasetransparency on sustainable
and socially responsible
practices67.

Shareholder expectations:trend predictions expectorganisations will soon be held
accountable by shareholders
for their ESG performance65.

ESG has influenced a newgeneration of consumers:
92% of ‘Generation Z’
consumers would switch toa brand that supports ESG
issues over one that does not68.

Regulatory enforcement:in the EU, the Sustainable
Finance Disclosure Regulation(SFDR) imposes mandatory
ESG disclosure obligations
for asset managers andother financial markets
participants66.

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Increasing use of Certification in Buildings

More than half ofglobal asset owners are
currently implementing
or evaluating ESG
considerations in theirinvestment strategy

The ESG reporting industry is
set to continue growing in the
coming decades, with new toolsof sustainable finance emerging tomeasure criteria within organisations
in a transparent and harmonised
way69. This provides investors witha significantly improved ability tocompare investment options interms of ESG factors, supportingthem to make informed decisions
that align with their impact investing
goals.

The building and construction sector
should, therefore, ensure rigorous
sustainability enhancements
during supply chain, construction
and operational phases in line withincreasingly stringent ESG targets
and organisational transparency.
The market trajectory outlined above
suggests that actors across thebuilding and construction sector developers, designers, construction,
owners - will be in a stronger
financial position by committing toambitious sustainability measuresin line with the targets of the
Sustainable Development Goals andParis Agreement. The specifics ofthis stronger financial position, or
business case, are outlined in thechapters below.

For more than two decades, green
building certification schemes
and rating systems have aimed at
mitigating the impact of buildingson the natural environment
through more sustainable designs.
Application within the sector
continues to grow year on year, ata global scale. As of 2020, morethan 3.5 billion square metres ofgreen building space were certified
worldwide through the WorldGBC
network alone70 — a tenfold increasein 10 years. Research identifies thefrequency of certified projects that is
expected to grow significantly in thenext three years, with highest levelsof activity in Australia, Brazil, Canada
and US, with owners and developers
representing the largest demand for
certification for new commercial or
institutional assets71.
From a financial perspective,
certifications have provided
verified, third-party frameworks onwhich to base investment criteria.
Sustainability ratings for built assets
have provided the real estate market

BEYOND THE BUSINESS CASE

with benchmarks for comparability
and targets for design, performanceand maintenance ambition72.
Demand for verified sustainable
construction is also increasing inmany geographies due to inclusion in
local building and planning policy73.
This growth will continue inhigh-income countries, and it isexpected that emerging economies
will demonstrate the highest
utilisation of rating tools in pursuit ofsustainable outcomes74.
For investors and developers, aswell as organisations seeking new
or additional built space, requiring
or acquiring assets that meetcertification criteria - or equivalentlevels of SDG-aligned ambition - forsustainable performance, will not only
lead to the creation of better quality
and higher value asset, but also
ensure compliance with incomingbuilding regulations and both market
and consumer expectations.

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CASE
STUDY

Sustainable Buildings Research Centre,
University of Wollongong, New South Wales,
Australia: ‘Australia’s most sustainable building’In operation, thecentre produces
all its own power
on-site fromrenewable sources
and is close towater neutral

Low embodied carbon, net zero
operational energy and eliminating
toxic materials.
••

Deemed “Australia’s mostsustainable building”, theSustainable Building ResearchCentre is designed to act as aliving laboratory. The 900m2
research centre has a net zerocarbon certified Living Building
Challenge rating.

- construction for durability
and ease of maintenance andcleaning, with incorporated
design for disassembly at endof useful life

During design and construction,
embodied carbon was
minimised through;- design interventions suchhigh proportions of recycledcontent, extensive reuse ofmaterials from demolition ofother sites or infrastructure(including steel from train
tracks and timber from abridge), plus use of exposed
finishes to avoid unnecessary
material use,
- optimised passive design
reducing the size of HVAC
systems,

BEYOND THE BUSINESS CASE

- material selection for reduced
life-cycle impact, such as
locally sourced re-used bricks(that were heavily insulated toassist with thermal comfort)
to minimise transport energy
and support local economies,- All remaining embodied
energy for the project
including materials,
construction, waste andpredicted maintenance andrepairs over the lifetime of thebuilding has been offset using
premium market offsets•

Drivers of theBusiness Case

The Business Case

For occupants, early modellingof energy, daylight, glare,
thermal comfort and air flows
in the building helped to informthe design of the building
and systems, which aims toeliminate the 14 most common
toxic chemicals found inbuildings (known as the ‘Red
List’). It also incorporates urban

The Social Value Case

farming, providing native fruits,
vegetables, herbs and otherproductive materials for use
by students, staff and the local
Aboriginal community.

vast majority of the building
designed to be self-sufficient forwater in an average year using
rainwater harvesting and black
water recycling systems.
•

Strengthening the Case:
Social Value•

The centre aims to address thechallenge of transforming ourbuildings and built environment
into sustainable, resilient andeffective places for people tolive and work, and demonstrates
this through third-party
certification of environmental
credentials.

•

Future Proofing
The Value
Proposition

The University expects a
resulting return on investment
through reduced operating
costs, from operational energy
and water savings as well as
less tangible measures suchas increased student andstaff attraction and retention,
improved productivity andlearning outcomes.

In operation, the Centre
produces all its own power
on-site from renewable sources(an on-site PV system where
excess renewable energy isused to power another nearbybuilding, and after that any
surplus electricity is sold backto the electricity grid) and isclose to water neutral - with the

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Statement

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

3.2 Business Case For Investors And Developers
Low-carbon
buildings are oneof eight sectors
accepted for theuse of income under
the green bondtaxonomy

3.2.1. Greater Access To Finance - Bank and Lenders
Green finance is accelerating rapidly,and expected to overtake ‘standard’finance in market size in the coming
years75 76. Consequently, there isincreasing finance available forsustainable built asset projects fromcountries, banks and institutions.
Real estate market actors who arecommitting to provide social andenvironmental benefits with theirprojects are therefore eligible for
exclusive financial opportunities,
creating a business case forsustainable built assets.

some cases corporations, whichfund projects that have positiveenvironmental and sustainability
benefits78. The green bondmarket is also benefiting fromchanging priorities at national andsupranational level79, including
green investing as part of national
COVID-19 recovery programmes or
strategies80, and has seen significant
growth in recent years81 - reaching
USD $1 trillion in cumulativeissuance by December 2020, since
its market inception in 200782.

In the last decade, banks havebegun to consider sustainability
as strategically important for risk
and opportunity management,
increasingly inspired by the ESG
agenda77. As a result, various
financial products and opportunities
have emerged: voluntary principles
for sustainable lending andinvestment, enhanced environmental
disclosure and governancerequirements, and financial products
such as green loans, green bonds,
and green infrastructure investment
funds.

Green buildings have developed to
be one of the most important asset
classes in the green bond market83.
In 2019, USD $66 billion of green
bonds were used to finance orrefinance green buildings or loans
for green buildings - 28% of thetotal 2019 green bonds issuance84.
ASEAN governments are also
encouraging the use of this source offinance to address underinvestment
in green buildings through both local
currency and international green
bonds and endorsing investment
in green buildings through green
building standards85 86.

Green bonds are finance packages,
usually issued by banks and in

BEYOND THE BUSINESS CASE

Green bonds tap
into international
resources toleverage abroader investor
base such aspension funds,
sovereign
wealth funds
and insurancecompanies.
They can provide
table andlow-cost financing
opportunities.

A key part of the value proposition
for sustainable built assets forinvestors and developers is greater
access to finance from banks andlenders, due to:• Lender recognition thatsustainable buildings canhave a higher value thanstandard structures due tolower tax, regulatory, andreputational risks87.
• Banks gaining access to newsources of capital throughgreen bonds, green lines ofcredit, green securitisations
and impact funds, enablingthem to offer sustainablebuilding financing andmortgages88.
• By offering better financing
terms, banks are driving boththe supply and demand sides,
enticing developers to green
their buildings and generateinterest from commercial
tenants and homebuyers89.
• Access to international
resources from green bonds
to leverage a broader investor
base such as pension funds,
sovereign wealth funds andinsurance companies.
Low-carbon buildings are oneof eight sectors accepted
for the use of income under
the green bond taxonomy 90.
2018 saw a record of $167.4
billion in green bond issuance,bringing the total market size
to $521 billion91.

From an investor perspective, theincreasing availability of green
finance presents sustainablebuildings and infrastructure as afavourable investment versus othercomparable market products92.
The real estate sector as aresult has untapped potential tostimulate economic growth andadvance sustainable developmentin geographies around the world
due to the massive quantity offinance available. All real estate
actors should therefore ensure that
their sustainability commitments
and ambition are in line with theParis Agreement, SDGs and otherinternational targets to facilitate
the opportunity to access available
finance for green projects.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

CASE
STUDY

Statement

Foreward

Introduction

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

One Taikoo Place, Hong Kong Access to green finance

THE DEVELOPMENTSAVES 278 TONSOF CO2 EMISSIONSANNUALLYREQUIRING THE
EQUIVALENTOFFSET FROM
1,400 TREESBEYOND THE BUSINESS CASE

Drivers of theBusiness Case•

One Taikoo Place is a 48-story
commercial building in Hong
Kong, achieving Platinum level
certification under LEED, WELL &BEAM Plus.

•

The project developers,
Swire Properties, entered into
agreements with Standard
Chartered Bank and DBS tosecure a total of HK$3 billionof sustainability-relatedloans. With this capital, Swire
Properties were the firstcompany in Hong Kong tolaunch a financing mechanism
where interest rate is indexedbased on improvements of ESG
performance, with their firstgreen bond issued in January
2018 and raising US$500 million.
As of September 2020, close to80% of the net proceeds fromthese green bonds had been
allocated to green building
projects.

•

Over HK$3.4 million had
been allocated to One Taikoo
Place. The availability of thisfinance has led to buildinglevel sustainability credentials
including; smart energy
management, integrating alldata collected from sensors
with the BMS system, biodiesel generator consuming
biodiesel from 100% food waste
and waste-oil recycled to local
biofuel plants, plus 500m2 of PV
panels installed on the rooftop.
The development saves 278
tons of CO2 emissions annuallyrequiring the equivalent offset
from 1,400 trees.

•

In 2020, Taikoo Place wasawarded the 2020 Asia PacificAwards for Excellence by the
Urban Land Institute. Taikoo
Place has demonstrated
innovation in financing theconstruction of a sustainablebuilding.

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

3.2.2. Greater Access to Finance - Institutional and Private Investment
The market trends are clear demand for sustainable investingin most markets worldwide isskyrocketing, and therefore providing
preferential market opportunities
for green asset owners, such asreal estate owners, developers
or investors. This is particularly
prevalent in the private andinstitutional investment market.
Climate change is leading toa profound reassessment of
the risk and value of financial
assets93. Investors are increasingly
recognising that climate risk isalso an investment risk94. Since
2014, global sustainable andenvironmentally responsible asset
investments have increased by
68% and now exceed $30 trillion95.
Demand for sustainable funds andexchange traded funds reachedrecord levels in 2020, with estimatednet flows of USD $ 269 billion - a
figure that increased tenfold over the
past five years96.

BEYOND THE BUSINESS CASE

Sustainable investing is increasingly
recognised as a strong foundation
for allowing clients’ portfolios
to grow97 as having a positiveenvironmental impact can go
hand-in-hand with financial
performance and provides ESG
opportunity 98. This is clearly
demonstrated through the following
trends, that continued strongly
despite COVID-19 pandemic
disruption to business-as-usual:• From 2016-2018, Socially
Responsible Investing (SRI)
assets across the world’s fivebiggest regional markets saw
a 34% increase99.
• Among global asset owners
in 2019, 80% said they
were actively integrating
sustainable investing, a rise of
10% from 2017100.
• During 2020, 81% of a
globally-representative
selection of sustainableindexes outperformed theirparent benchmarks.
• A 2017 study reported thatfrom 2012 to 2015, thecompanies with the highest

ESG ratings outperformed
the lowest-rated firms by asmuch as 40%101.
• From January to November
2020, investors in mutual
funds and exchange-tradedfunds invested $288 billion
globally in sustainable assets,
a 96% increase over the wholeof 2019102.
• In 2019, a reported USD $12
trillion was invested in linewith ESG factors, indicating
a quarter of US assets undermanagement.

Additional to a pattern of growth,
the business opportunity is one ofprotecting against future exclusivity
measures. Most institutional
investors foresee a time when they
will limit allocations exclusively toinvestment managers with a formal
approach to sustainable investing103.
Almost 43 global institutional
investing firms have indicated that
ESG was universally top of mind
for these executives. These include
the world’s three biggest asset
managers: BlackRock, Vanguard,
and State Street; as well as, large

asset owners such as the California
Public Employees’ Retirement
System and the government pension
funds of Japan, Sweden, and theNetherlands104.
Alongside changing regulations andother drivers discussed earlier in thisreport, the UN-backed Principles
for Responsible Investment (PRI)
are driving the same engagementwith sustainable investing. The
PRI promotes ESG factors whenanalysing returns and managing
risk, and its influence is rapidly
growing - PRI is currently supporting
over 2,300 signatories worldwide,
representing roughly USD $80 trillionof sustainably invested assets105.
Studies point to this trend developingin the building and construction
sector specifically106 107, for example
investment in energy-efficientbuildings in all global markets
increased to USD $152 billion in
2019108. Total investment in the
global buildings sector is set toincrease from around USD $ 4.9
trillion in 2017 to more than USD $5.4 trillion in 2050, with more than
70% of the investment expected

to be for building construction
and renovation. The investment
opportunity is seen to be particularly
strong in new residential buildings.
The green residential sector is
expected to grow at a compound
annual rate of 10.9% between 2018and 2023, with the non-residential
segment of the market expecting
compound annual rate of 9.3%
growth over the same period109.

Demand for sustainable
funds and exchange
traded funds reachedrecord levels in 2020,
with estimated net flows
of USD $ 269 billion
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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Natural Capital

The business case for the global
real estate market to embracesustainability for all assets isstrong from both the investor anddeveloper/owner perspective.
For investors, market signals showthat sustainable built assets are agood investment opportunity110 111. In
addition to strong market returns, thefollowing opportunities are part ofthe current and future business case:• Sustainable built assets offeralignment with Principles for
Responsible Investment (PRI),
which currently underpin
many organisational ESG
strategies• There are specificopportunities within thereal estate sector in certain
geographies, (e.g. European
Renovation Wave andassociated policies to reduce
EU emissions to 55% by
2030112) that will demandfinance for built asset retrofit• Lower investment risks andgenerate excess returns:
socially responsible investingis a means to manage
ESG-related risks, which canpotentially mitigate risks andimprove returns113

BEYOND THE BUSINESS CASE

• Sustainability frameworks
for buildings can provide
investment benchmarks,
compliance standards, andcomparability in reporting,including sustainable building
certifications, sustainability
indexes such as the Dow
Jones Sustainability Indices,or the UN Sustainable
Development Goals (SDGs).
• Reputational risk:
investors are becoming
increasingly concerned
about their reputation whenbeing associated withunsustainable assets114.
Sustainable investments are asafer option115.

For all actors in the global real estate
sector the increasing attractivenessof the business case for investment
in sustainable built assets sends
a clear signal. The trajectory ofprivate and public investment isincreasingly weighted towards
socially responsible, sustainable
investing. Institutional investors
may soon be formally excluding
investment opportunities that don’t
meet sustainability criteria116. Realestate developers, asset owners
and managers in all geographies

and typologies should ensure theirambition for new and existing built
assets are aligned with global
climate and sustainability targets
to facilitate incoming investmentthat will both enhance profitability
and contribute to the necessarytransformation of our built
environment.

“As the focus on climate
issues intensifies, we arepleased to see more asset
owner investors making net
zero commitments. These
commitments are incredibly
important, and the first stepon the road to investors
putting a net zero investment
strategy in place. We lookforward to working withthese asset owners on their
net zero strategies and invite
other climate-conscious
asset owners to consider
becoming signatories to theParis Aligned Asset Owners
pledge”
Stephanie Pfeifer, CEO,Institutional Investors Group on
Climate Change

Natural capital can be definedas the world’s stocks of natural
assets which include geology,
soil, air, water and biodiversity117.
The continued, thriving existenceof these natural resources are
essential to supporting theecosystem services that oursurvival on this planet, in both oururban and rural environments,
ultimately depend on.
Natural resources and ecosystemservices support many key
economic activities, from farming,
to energy generation, andmaterial extraction for medicinesor building materials118. Witha particular focus on the built
environment, nature also provides
physical protection to numerous
key human settlements, and isessential for climate regulationand the continued cycling ofwater, materials and chemicals,
essential to our continued
utilisation of the planet forhuman habitation. These benefits
translate to better air quality,
lower urban heat island effect,
stronger nutrient cycle and alsoenhanced resilience to climatechange impacts. However - theover-extraction of natural capital,
without allowing adequate

recovery of natural systems,
poses a significant risk of local,
regional or even global ecosystem
collapse119.

natural capital by supporting thecontinued availability of resources
used for building construction andoperation, such as:

Natural capital is able to befinancially quantified - and isvalued at USD $145 trillion/
year, twice as much as global
aggregate GDP120. Many studies
have quantified the value provided
by nature in the built environmentin economic terms - for example,
street trees in California provide
USD $ 1 billion per year inecosystem services, throughclimatic regulation and flood
prevention in urban environments,and Mexico’s mangrove
forests provide an annual USD$ 70 billion to the economy
through storm protection andprotecting the fishing industry121.
Therefore, natural capital should
be considered part of thebusiness case for a sustainablebuilt environment. Protecting
ecosystems and biodiversity
today can protect against future
replenishment costs down theline, and also provide a range ofbenefits.

• Timber, by increasing demand
for sustainable materials,
favouring re-use as far as
possible• Water, by promoting water
efficiency at all stages oflifecycle and tracking andreporting during construction
and operation phases• Biodiversity, by actively
increasing diversity of floraand fauna on-site and in local
communities, and supporting
ecosystem development
for pollinators and other key
species.

In the real estate sector, thereis opportunity to enhance

The protection of nature is also,
undeniably, the right thing to
do - but in a world of competing
priorities it can be difficult tobalance the environmental andthe economic. Natural capitalenables us to place a financial
value on the invaluable natural
services provided by our planet,with which we can hope the clarityof the business case will inspirepreservation and regeneration of
our natural ecosystems.

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

3.2.3 Higher Asset Values

MARKET DEMAND FOR GREEN BUILDINGSHAS INCREASED IN THE PAST DECADEDUE TO ENVIRONMENTAL REGULATIONS,GREATER CORPORATE AND CONSUMERENGAGEMENT IN SUSTAINABILITY, AND
THE DRIVE FOR HEALTHIER BUILDINGS- UNDOUBTEDLY ACCELERATED BY THE
IMPACT OF THE COVID-19 PANDEMIC“Green buildings are of high value
because of lower operating costs,
higher occupancy rates and rental
income. In addition to avoiding
financial penalties for carbon
emissions. Which makes green
buildings a better credit risk asset
and better collateral.”International Finance Corporation(2019), Green Buildings: A Financial
and Policy Blueprint for Emerging
Markets“Research by JLL in 2020 identified
that sustainable buildings in central
London have a rental premium of
6–11% and that building occupancy
was higher for buildings which
achieved a BREEAM rating of
Outstanding/Excellent compared tothose that were rated Very Good.”
JLL (2020), The impact ofsustainability on value. Developing
the business case for net zerobuildings in central London

BEYOND THE BUSINESS CASE

Evidence from the past decadesuggests that sustainable buildings
tend to have higher asset values
than conventional buildings encompassing higher rental values,
lower operating costs, and higher
occupancy rates122. In this section,higher rental values and occupancy
rates are explored, with operating
costs presented as a business casefor the owner later in this chapter.
The business case for the real estatemarket is clear however - invest,
develop or design better and moresustainable buildings, and you
should be financially compensatedat point of sale or rental.
Market demand for green buildings
has increased in the past decadedue to environmental regulations,
greater corporate and consumer
engagement in sustainability, andthe drive for healthier buildings undoubtedly accelerated by the
impact of the COVID-19 pandemic123.
Research suggests demand forgreen buildings could double inmany parts of the world in the near
future124 with additional evidence
from global markets specificallypointing to an increasing demand forenvironmentally friendly homes125
126 127.

A Changing World
Awareness of global
environmental issues
is changing the habitsof consumers. 8 in 10
consumers indicate
sustainability is important
for them; and for those who
say it is very/extremely
important, over 70% would
pay a premium of 35%,
on average, for brands
that are sustainable
and environmentally
responsible128. These
attitudes are driving
global market choice for
products that are ‘cleaner’,are sustainable andenvironmentally responsible,
support recycling, or use
natural ingredients129, andare being reflected in market
trends in real estate.

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

3.2.4 Reduced Risk ofStranded Assets
There is strong evidence thatsustainable built assets positively
affect both capital and operational
expenses130. Increasing market
demand has helped to raise apremium in the value of sustainableassets. In the commercial sector inparticular, tenants are increasingly
willing to pay a premium for moresustainable spaces131, often
demonstrated with a certificationor building rating. The 2021 ‘World
Green Building Trends’ report has
shown that about two-thirds ofowners and developers believethat green building will increase a
new building’s asset value by 6% or
more132. Premium certified buildings
have been seen to command agreater than 12% rental premiumin some markets133. Reasons forthis premium at sale or rental point
include:BEYOND THE BUSINESS CASE

• International investors
are now demanding
buildings with sustainability
certifications134. Trends
show that today’s real estate
investors are willing tospend more for real estatethat is energy efficient andenvironmentally friendly135.
• Green accreditation of realestate can help to increase
occupancy rates by attracting
more tenants, thus loweringvacancy rates136 137.
• New generations ofrenters and aspiring
sustainable homeowners
are concerned about healthand sustainability withinbuildings138.

The 2021 ‘World Green
Building Trends’ report
has shown that about
two-thirds of owners
and developers believethat green building
will increase a newbuilding’s asset value by
6% or more.
Evidence shows that green assetscommand higher asset values, inmost markets of the world139. For
developers and investors, this trend
creates a clear business case - there
is heightened financial opportunityfrom asset value of sustainablebuildings. Committing to action onsustainability across all built assets
makes financial sense.

A WORLD GREEN BUILDING COUNCIL REPORT

Stranded assets are defined asassets that suffer from unexpected
and often premature financial
devaluation, often warranting
to a loss of investment140. The
risk of stranded assets in thebuilt environment caused byenvironmental factors, such as
the impacts climate change, both
physically on the asset itself andvia associated policies to tackle
the climate crisis, has become a
topic of increasing importance andresearch attention141. In recent years,
climate-related stranded assets
have received international attention
from the UN, OECD, G20 Financial
Stability Board, plus a number of key
financial institutions and national
governments142.
Focusing on the built environment,
stranded assets present a majorrisk to both existing building andinfrastructure assets, plus thoseunder construction. Extreme
weather events can damage ordelay projects in construction
processes, disrupt supply chainsand delay work programmes, cancause physical damage and systemstresses to existing assets, andimpact insurance premiums - all withfinancial repercussions. Additionally,
increasing policy requirements
can lead to non-compliant assets
suffering from plummeting value,
which is a growing concern for
asset managers in countries likethe UK, where minimum EPC rating
requirements are set to be raised tocounter climate change143.
The potential impact of climatechange related effects risk value
for residential real estate property
assets alone would be USD $16
trillion, plus USD $5 trillion for global
commercial assets144. Therefore asustainable building or infrastructure
project that has resilience measuresembedded within it, both in terms ofphysical climate impacts but also
future-proofing against futurecompliance measures, presents
a lower risk in terms of ‘stranded
assets’145 146 .

Extreme weather events
can damage or delay
projects in construction
processes, disrupt
supply chains and delay
work programmes, cancause physical damage
and system stresses toexisting assets

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Statement

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

3.3 Business Case for
Designers & Construction
3.3.1 Reduced Build Costs

Design principles
include passive
design principles,
energy-efficientequipment
and storage,
carbon-negative
materials and a
combination of
onsite and offsite
production of clean
energyBEYOND THE BUSINESS CASE

Sustainable buildings havetypically been considered premium
developments, associated withhigher costs. However there is
growing evidence showing that thisis not always the case, especiallyduring the construction stage.
Design techniques andtechnologies for constructing
sustainable buildings are
increasing in accessibility and costcompetitiveness147. Design principles
include passive design principles,
energy-efficient equipment andstorage, carbon-negative materials
and a combination of onsite andoffsite production of clean energy.
Construction principles include
prefabrication and modular
construction. The mass market
utilisation of these processes
could substantially reduce demandfor virgin materials and energy,
facilitate the development of thecircular economy, and create abusiness case through lower cost of
construction and material sourcing.

AS MUCH AS 32% OF
LANDFILL WASTE
COMES FROMCONSTRUCTIONSITES, WITH 13%
OF MATERIALSDELIVERED TO
A CONSTRUCTION
SITE BEING SENTDIRECTLY TO
LANDFILLS WITHOUT
HAVING BEEN USEDIn recent decades, the construction
sector is recognising a number oftrends that provide opportunity
for significant impact in reducing
the environmental impact of thesector. Prefabrication and modular
construction are both experiencing
a significant expansion, as theconstruction industry seeks to
improve safety, productivity, quality,
cost, schedule and sustainability
performances153.
Modular construction candemonstrate a series of benefits
over traditional construction for
appropriate projects, for example,
reduced build cost and overall
lifetime cost of the building throughaccelerated build schedules154.
Recent modular projects havealready established a solid trackrecord of accelerating project
timelines by 20–50%, however this is
still exceptional rather than normal
practice155.
As the market value for modular
in new real-estate construction
alone could reach USD $130 billion
in Europe and the United States by
2030156, it is feasible that economies

of scale and greater cost savings
could be realised. Currently,
prefabricated housing has achieved
a foothold in a few locations,
including Scandinavia and Japan157.
Modular construction could scale
to an industry that represents morethan USD $100 billion in US andEuropean real estate, delivering USD$20 billion in annual savings158.
Additionally, sustainable buildingsthat protect human rights acrossthe lifecycle can protect lower
build costs via risk mimtigation.
For example ensuring adequate
participation of surrounding
communities, avoiding harm toworkers on site and through supply
chains, and ensuring accessibility
on site can avoid costly delays,
disruption and adjustments during
design or construction stages.
Further to mitigating the potential
loss of value, these interventions
also generate positive social value.

THE MARKET VALUE FOR
MODULAR IN NEW REAL-ESTATECONSTRUCTION ALONE COULD
REACH $130 BILLION IN EUROPE
AND THE UNITED STATES BY 2030

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CASE
STUDY

3.3.2 Economic Value Retained
Through Material Banking
Reducing waste in the construction
process - both by sourcing re-usedmaterials at point of construction,and by returning functional materials
to the market at end of life point,
offers financial opportunity versus
standard building construction
practice.
Business as usual in many
geographies today is that excess
building materials - both surplus in
the construction process to thoseavailable at end of life stage - end up
as waste148. The US Environmental
Protection Agency found that
total waste from constructionrelated projects was double that ofmunicipal waste from households
and businesses149. As much as
32% of landfill waste comes fromthe construction site, with 13% ofmaterials delivered to a construction
site being sent directly to landfills
without having been used150.
However, sustainable building
efforts can help the constructionindustry substantially reduce waste
generation151.

BEYOND THE BUSINESS CASE

Drivers of theBusiness CaseWith the transition to a circular
economy, buildings, infrastructure
and the materials that create them
are considered reusable assets,with lasting value. Flexibly designed
buildings become banks of valued
materials, able to be extracted
without damaging or degrading thematerial and facilitating reuse inanother project - thereby slowing
resource use to a pace that issustainable for the planet. Materialsbanking represents a source ofadditional financial value as aresource to be realised once thebuilding reaches the end of its use.
For example, re-using asphalt andconcrete has been shown to save up
to 25% on material costs152.
For the asset owner, realisingmaximum value depends onchoosing the right materials andconstruction techniques that are low
cost to dismantle, reuse and recycle.
This approach can also be applied ina similar way to existing assets. For
example, if the building is examinedin advance with the goal of capturing
value at the end of its use, the ownerwill be aware of the materials thathave potential value and how theyshould be dismantled to preserve it.
With this approach, financial value
is embedded within the fabric of thebuilding, to be accessed at point of
deconstruction.

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Mansour Residences,
Aytou Village,
LebanonEconomic value retained throughmaterial banking•

Mansour residences are threeresidential houses that havebeen built in Aytou Village,
Lebanon.

•

Built at an altitude of 1,100m
using ‘Design for Life’ principles,the development included a
range of sustainability strategies
to optimise material efficiency,such as structural waste
reduction and reuse of excessmaterials, extended material
life span due to use of durable
concrete and local stone facade
cladding, plus energy efficiency
measures leading to reduction in
CO2 emissions

THIS PROJECTWAS 8% CHEAPER
THAN SIMILAR
PROJECTS•

Through these interventions, theproject demonstrates optimal
financial value at the residential
scale: the residences were 8%
cheaper than similar projects
due to waste reduction andreuse of excess materials, andpresent a 12% cost reduction
due to energy and material
optimization and circular designprinciples•

The project also contributes
to local resilience measureswith features such as a water
harvesting system, that canstore up to 460m3, plus over
100 trees that both contributeto biodiversity and to feeding
residents. This case study
demonstrates that sustainability
principles can be implemented
in all climates, geographies andtypologies - and the businesscase benefits experienced atboth large and small scales.

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CASE
STUDY

Acciona Ombu, Madrid, Spain – Adaptive reuseof a historic industrial building, saving carbon,
resources, money and enhancing social value•

The Acciona Ombu development
in Madrid comprises over 10,000
square meters of new officespace, combining private andpublic land with green landscape,by restoring an abandoned listed
industrial building built in 1905.

•

When comparing the cost ofdemolition and new construction
with restoration of the façade
and roof of the existing building,
the restoration saved about€1.5million.

•

The restoration of an existingbuilding has offered substantial
financial and environmental
benefits. By retaining the existingbuilding, specifically the reuse ofmasonry walls and primary steel,
30% of the embodied carbon
related to structures and 50% of
the embodied carbon related to
the façade was avoided with an
overall reduction in embodied
carbon (included allowancefor future refurbishment) of
25% across the whole life
cycle compared to a typicalnew office building designed.
The restoration of the historicbuilding reused 10,000 tons ofbrick.

•The return on investment fromenergy efficiency is highly
significant in this development:
35% energy savings over
ASHRAE baseline equates tosavings of around EUR €60,500
per year, which results in asavings of about EUR €3.5
million over the life cycle of thebuilding.

BEYOND THE BUSINESS CASE•

These financial benefits fromenergy efficiency are boosted bya further 10% saving consideringboth waste and water savings.

•

Combining the 35% energy
efficiency with 100% renewableenergy supply avoids close
to 5,700 tonnes CO2 being
released into the atmosphere.
Furthermore, the new internal
timber structure will store 1,640
tonnes CO2 and is recyclable
and demountable.

•

The development has also
increased social value andcommunity benefit by creating
a positive multiplier effect in an
important and accessible area ofthe city that had been previously
deprived. Through net social
impact modelling, it is estimatedthat 800 jobs in the local
community have been provided
by this development.

•

The net asset value of thebuilding has increased
substantially, consideringboth operational savings andoccupant health productivity
improvements (over 600 €/sqm
NAV over 20 years).

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

35% PROJECTED ENERGYSAVINGS OVER ASHRAE BASELINE,
EQUATING TO THE SAME LEVEL OF
ENERGY COST SAVINGS IN USE.

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Sustainablebuildings do notalways cost more,
and uplift is often
negligible

Statement

Foreward

Introduction

Drivers of theBusiness Case

3.4 Business Case
For Owners & Occupiers

CASE
STUDY

Evidence across diverse geographies
demonstrates that sustainablebuildings do not always cost more- or where they do, price uplift isoften negligible. Once operational,
sustainable buildings can offer
owners a faster and better term
return on investment versus astandard asset, offering afuture-proofed and resilient
investment.

13 year return on investment plussocial value creation.
•

UDLAPARK is an 8-story
education facility extension
project in Quito, Ecuador’scapital city, certified with apreliminary EDGE Advanced
certificate due to access togreen credit and green loans.

•

Developed in a former landfill,
the UDLAPARK campus
demonstrates the regenerationof urban space. The landfill site
was recovered by planting native
species, which receive irrigationfrom the wastewater treatment
plant.

•

BEYOND THE BUSINESS CASE

The Business Case

Diverse sustainability features,
including energy-efficient design
with on-site solar renewableenergy generation, recycledwater treatment plant and water
conservation technologies,
façade technology with aeratorsand natural ventilation, passive
design strategies to reflect solar
radiation and help reduce theurban heat island effect plus
large areas of green space

Strengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

UDLAPARK,
University of Las Américas campus,
Quito Ecuador•

The facility achieved 46%
energy savings (close to 250
tonnes CO2/year) and 38% lessembodied energy in materials,
plus 71% water savings, whencompared with a traditionalbuilding located in Quito. A 10%
saving in material use and waste
generation was quantified using
BIM processes.

•

Additionally, environmental
resilience has been futureproofed by leaving more than
50% of the site with no built
footprint or hard surfacing,
to promote the infiltration of
rainwater and to protect the
public sewage system fromflood risk.

•

The campus supports social
value through provision ofservices for community benefit,
including a gym, auditorium,
restaurants, multiple use spaces,
a bar and cafeteria, as well as theeducational facilities•

The EDGE Certification tool
calculated an approximate 13
year payback period for all green
installations on site, at which
point the sustainability features
will contribute to development
lifetime profit and heightened
asset value.

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3.3.3 Lower Operating Costs Outweigh Cost Uplifts toCreate Return On Investment
A fundamental part of thebusiness case for sustainablebuildings and infrastructure is
improved operational efficiency,
and consequently lower operating
costs159. These operational costsavings can, in many cases, negate
any cost uplift associated withdesign and translate to a stronger
and faster return on investment - andhave been consistently reported in
global green building market trends
in the past decade160.
Sustainable built assets of all types
are typically perceived to be more
expensive than standard. Howevera growing body of evidence suggest
that, if any, cost uplift can be far
lower than the market expects161.
These costs can be negated atpoint of sale, or can also be feasibly
recouped through lower overhead
costs, due to enhanced energy
efficiency, energy generation onsite, and lower thermal conditioning
requirements. Recent research from
UKGBC highlights that sustainablebuildings can result in rental value
increases of 6-11% plus lower void
periods that could potentially offset
increases in capital costs162. Plus,

BEYOND THE BUSINESS CASE

estimates reveal that the rental
premium and yield compression
could take a typical scheme from
15% profit on cost to over 20% profit
on cost163.
Furthermore, sustainable buildings
often perform with enhanced
operational efficiency. New green
buildings have on average a 14%
lower operating cost164. Therefore
these assets can offer preferential
payback opportunities due to these
reduced overheads, and better returnon investment165. Research suggeststhat net zero carbon buildings canprovide a positive financial return
over a 25-year period, inclusiveof incoming carbon pricing, andrequire only a modest capital costpremium166. Studies have also shownthat operating costs for sustainableassets are over 13% lower for new
construction and close to 9% forretrofitted building projects167. Witha focus on retrofits, the World Green
Building Trends 2021 study showedthat 18% of respondents who had
retrofitted buildings believe that thiswill lower operating costs by morethan 15% over the next year and 35%
over the next five years168.

Over an asset’s 50+ year life
expectancy, this financial payback
trajectory period can offer
substantial savings versus astandard development. The returnon investment for green buildings
has been evidenced for over a
decade169, and is also likely that thefinancial proposition will strengthen
in the future, as explained in Chapter
Six, offering even higher return on
investment opportunity.

Drivers of theBusiness CaseStrengthening the Case:
Social ValueThe Social Value Case

CASE
STUDY

National University of Singapore
School of Design and Environment
campus redevelopment

Net zero emissions with eight year
payback period

•

•

•

•

A WORLD GREEN BUILDING COUNCIL REPORTThe Business Case

The National University ofSingapore redevelopment of
the SDE4 building represents
the first purpose-built net zeroenergy building in Singapore.
Not only does the building
operate at net zero, but it
exceeds current standards
for environmental quality byensuring equitable access toviews, daylight, air, greenery,and community spaces. The
same approach was extended
within the SDE campus forthe renovation of the existingbuildings and facilities.
The development has achieved
certification from a range of
local and international rating
tools including BCA Green Mark
Platinum, BCA Green Mark
Design Prototype - Net-zeroenergy, WELL Certification Gold,
WELL HSR Rating and ILFI Zero
Energy certification.

The development has been
designed to be highly energy
efficient and climate-sensitive,
consuming only as much energy
as it creates, utilising solar
roofs, a hybrid cooling system,
innovative ventilation systems,
and passive architectural
structures that provide shade.
The renovation wraps theoriginal structure, modulating
solar radiation, naturalventilation, and rain, and hostinga full array of photovoltaic panels
to meet the energy demands ofthe building.

•

The project demonstrates acommitment to reduced material
expenditure and embodied
carbon by using the original
structural frame.

•

The project has helped challenge
negative assumptions around
comfort and cost of sustainablebuildings in the equatorial region,
presenting evidence that it has
limited additional cost comparedto similar, industry-standard
models. The cost premium toinclude sustainability features
within similar public buildingsin Singapore was described

Future Proofing
The Value
Propositionas ‘marginal’. The return on
investment for the rooftop
photovoltaic system has been
calculated to be 8 years, at which
point it will offer operational costsavings.
•

Preliminary occupant survey
results have also shown highlevels of occupant satisfaction
with the environmental
conditions created within thebuilding.

DESIGNED TO BE HIGHLY
ENERGY EFFICIENT AND
CLIMATE-SENSITIVE

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Drivers of theBusiness Case

The Business Case

4.3.2 Preferential
Insurance Premiums
A sustainable built environment
offers greater social and economic
resilience to expected future climatechange impacts170. More resilient
buildings and infrastructure areless likely to be at risk from physicaland systemic stresses of extreme
weather or climate events, including
heatwaves, flooding, droughts or fire
events171. This is in-turn reflected
in reduced insurance premiums
for building owners or occupiers172,
offering lower operational overheads
in comparison to a less sustainable
and resilient alternative asset.

The Social Value Case

Future Proofing
The Value
Proposition

3.3.5 Return On Investment ThroughEnhancing Health And Productivity
A range of specific market
insurance options exist to endorse
sustainable built asset purchaseand retrofit, ranging from differential
premiums based on environmental
characteristics and performance;
to products specifically tailored forclean technologies and emissions
reducing activities173, such as
discounts for certificatied buildings
or rewards for eco-friendly material
replacement endorsements174.
These opportunities can incentivise
the uptake of sustainable building
strategies by reducing financial
barriers and providing guidance andopportunities for building owners or
occupiers.
Preferential insurance opportunities
also exist for private sector
organisations, including fordevelopers, due to the availabilityof renewable energy-related
insurance products, such as carbon
emissions credit guarantees,
focused on enabling private entities
to participate in offset projects andemissions trading175.

BEYOND THE BUSINESS CASE

Strengthening the Case:
Social ValueA NEW SUSTAINABLE BUILDING,OR AN ENERGY-EFFICIENTRETROFIT OF AN EXISTINGBUILDING, OFTEN IMPROVESMANY FACTORS OF OCCUPANTHEALTH AND COMFORTA RANGE OF SPECIFIC MARKET
INSURANCE OPTIONS EXISTTO ENDORSE SUSTAINABLE
BUILT ASSET PURCHASE AND
RETROFIT

Sustainable buildings can provide
owners or occupants with financial
co-benefits by facilitating betterindoor environmental quality thatboth protects health and enhances
wellbeing. WorldGBC and othervoices have published numerous
studies in the past decade thathave demonstrated sustainablebuildings stimulating higher
occupant productivity, particularly in
a commercial setting, including thenotable CogFX studies undertakenby the Harvard School of Public
Health176 177 178 179.
A new sustainable building, oran energy-efficient retrofit of an
existing building, often improves
many factors of occupant healthand comfort. Design or retrofit
strategies can enhance bothmental and physical health andconsequently improve productivity,
reduce absenteeism, lessen‘presenteeism’, and have even beensuggested to lessen staff turnoverand consequential recruitment andtraining costs - presenting a returnon investment against any cost upliftin implementing health-focuseddesign interventions180.

In a commercial organisation,
where 90% of typical overheads
are spent on human capital, even a
minor improvement in productivity
can substantially impact company
turnover and profit181. Research has
shown in numerous geographies andtypologies that subjects occupying
sustainable buildings are healthier,happier and more productive182.
These improvements to health andproductivity can translate to financial
gains as substantial as over USD$900,000 of annual energy savingsat the Akron Children’s Hospitalproject, also creating a healthierenvironment for healthcare, or over
USD $272,000 in savings a year fromlower staff turnover and sickness
Cundall’s London office183. Increasing
occupant health, happiness andproductivity is a highly sought after
building attribute in a commercial
environment, but also invaluable inan education, learning or healthcare
setting.

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STUDY
Return on investment throughenhancing occupant health andproductivity.
•••

The 277,000-square-footbuilding, which was certified
LEED Platinum for bothcommercial interior and coreand shell, was created throughadaptive reuse of a dormant
office building, with 15% of
the project classified as new
construction and 85% asrenovation.
Approximately 800 employees
are housed at the nextgeneration headquarters, whichfeatures collaborative spaces forwork and recreation, including
a fitness centre, walking trails
and reclaimed water fountaininstallation
The health-oriented design
elements in the development
are based on Saint-Gobain’s
Multi Comfort principles, andinclude biophilic design andengagement with nature, variableairflow and thermal conditions,acoustic absorption anddiffusion, daylighting, and fresh
air ventilation.

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Saint-Gobain North American corporate
headquarters in Malvern,
Pennsylvania•- Employees experienced
a 91.6% improvement
in collective indoor air
comfort in the new Malvern
headquarters compared to
the former heawdquarters,
due to strategies such as
air-sanitising wall coverings,
wallboard and ceilings thatabsorb VOCs, and offers
superior mould resistance.

Due to these health-based
interventions, employees’
perceptions of productivity
and happiness at work havedramatically improved. SaintGobain report that these‘real results go straight to acompany’s bottom line as ahealthier, happier workforce
leads to a more profitablecompany’. For example;- Employees reported a 56%
overall improvement invisual comfort in the newheadquarters due to increased
access to daylight andreduced glare- Design strategies were used
to ensure acoustic comfort
for all 800 occupants,
including sound-absorbing
surfaces, high-performanceinterior partitions and exterior
façades, and generation ofwhite noise to mask sound.
As a result, average occupant
acoustic comfort improved byover 42%.

BEYOND THE BUSINESS CASE•

Overall, occupants’ satisfaction
with indoor environmental
improved by close to 50%
in the new space. Perceived
productivity also increased byclose to 40% in the Malvern
facility. During the first three
weeks of occupancy, theproductivity of Saint-Gobain’s
Call Centre increased by 140%,
with no changes in hours or staff.

•

Employees also find the newbuilding to be supportive of
their health and wellbeing
and reported a 54% increasein perceived health based on
improved indoor environmental
quality. Additionally, the averagefrequency of employees
suffering from Sick Building
Syndrome symptoms decreased
by close to 30% in the newheadquarters compared to theprevious facility.

EMPLOYEES REPORTED A 56%
OVERALL IMPROVEMENT IN VISUAL
COMFORT

About WorldGBC

Statement

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

The Drivers of Green Buildings
In the 2021 Dodge Data & Analytics‘World Green Building Trends’ report,
environmental regulations, being the“right thing to do”, healthier buildings,
and lower operating costs are the top
factors motivating green building,each reaching at least 29% in 2021.
Internal corporate commitments,
market transformation, and clientdemands are second-tier drivers.
These drivers represent a mixture offinancial business case and social
value case, illustrating that it’s the
combination of both economic andethical drivers that are catalysing theincreased market engagement withsustainable buildings.

Environmental Regulations

35%

Right thing to do

31%

Healthier buildings

30%

Lower operating costs

29%

Internal Corporate Commitment

24%

Market transformation

24%

Client demands

22%

Higher building values

16%

Branding/ PR

13%

Most Important Benefits of Green Buildings, per Region
GlobalAverage

Top-5
Countries

Lower operating costs(energy costs, total
lifecycle costs)

66%

Canada87%

Cameroon
85%w

USA
80%

Singapore75%

Colombia
69%

Improved occupant
health and well-being

62%

Canada
79%

USA
75%

Colombia
71%

Cameroon
67%

Singapore64%

Future proofing assets

33%

Australia
57%

India
52%

Saudi Arabia
49%

South Africa
43%

Canada38%

Documentation andcertification providing
quality assurance

32%

Saudi Arabia
49%

Singapore
41%

India
41%

China, People’s
Republic
40%

Australia
40%

Education of occupants
about sustainability

32%

Cameroon
67%

Brazil42%

China, People’s
Republic
38%

Singapore
36%

South Africa
35%

Fulfilling corporate and/or shareholder reporting
requirements

28%

Australia
47%

Singapore
34%

China, People’s
Republic
33%

Mexico
32%

India
31%

Higher value at pointof sale26%

Mexico42%Brazil36%

China, People’s
Republic
36%

Germany
30%

Singapore
28%

Increased productivity
for tenants

22%

Saudi Arabia
40%

India
39%

Australia
27%

South Africa
26%

Cameroon
26%

Flexibility of design built
into green buildings

20%

Saudi Arabia
46%

Cameroon
33%

South Africa
31%

Singapore
26%

India
26%

Local Competition

11%

10-year costs better

10%

Employee recruitment and/or
retention

6%

Market demands

4%

Higher ROI

3%

Higher occupancy rates

1%

Higher rents

1%

Other

3%

Higher rental rates

18%

Mexico28%

Saudi Arabia
26%

Brazil24%

Singapore
24%

India
22%

None

3%

Higher occupancy rates

16%

Saudi Arabia
34%

India
33%

Singapore25%

Mexico23%

China, People’s
Republic
20%

Graphs data reference: Dodge Data & Analytics. 2021. World Green Building Trends 2021.
BEYOND THE BUSINESS CASE

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4.0

Strengthening the Case:
Social Value

Value has increased
massively in certain
geographies inrecent years, andwithin this chapter
we explain how andwhy

The Social Value case is the benefit
the built environment can bring topeople and the planet. Although not yet
financially quantified within market valueof a built asset, the provision of social
value strengthens the business casefor sustainable buildings - as presented
in the following chapter of this report.
Real estate sector awareness of social
value has increased massively in certain
geographies in recent years, and within
this chapter we explain how and why.

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

IN THE CONTEXT OF THE BUILTENVIRONMENT, SOCIAL VALUEIS CREATED WHEN BUILDINGS,
PLACES AND INFRASTRUCTURE
SUPPORT ENVIRONMENTAL,ECONOMIC AND SOCIAL WELL
BEING, AND IN DOING SO
IMPROVE THE QUALITY OF LIFE
OF PEOPLE. EXACTLY WHICHENVIRONMENTAL, ECONOMIC
AND SOCIAL OUTCOMES CREATESOCIAL VALUE WILL DEPEND ON
THE BEST INTERESTS OF THE
PEOPLE MOST IMPACTED BY THE
PROJECT OR BUILT ASSET.”UKGBC, FRAMEWORK FOR DEFINING SOCIAL VALUE 188 (2021)

BEYOND THE BUSINESS CASE

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

4.1 What Is Social Value?

Social value is anincreasingly popular
trend around theworld, adapting todifferent contexts

BEYOND THE BUSINESS CASE

Although finances, budgets andvalue engineering remain essential
components of any new or retrofit
development, in today’s context
there are additional considerations.
The generation of social value - ofcreating positive social impact
and inclusive growth, facilitating
restorative environmental benefit,
and ensuring that economic
growth benefits everyone184 has become a responsibility ofall sectors, particularly the built
environment. Social value is thecreation of direct, positive impacts
on people and communities byprotecting human rights, dignity,and health and wellbeing, providing
community benefit and committing
to social justice and equity185. This
includes indigenous rights, genderequality, diversity and inclusion,that would provide long term value
to communities and improve local
quality of life186.

be considered at all stages of thelifecycle, from risk mitigation andmaximization of social outcomes
for the project at siting, planningand financing stages, to taking alonger-term view of the social value
and economic benefits generated
through operation and use.188
Social value is an increasingly
popular trend around the world189,
adapting to different contexts,
becoming a tool for measurement,
and contributing to a broader
value proposition and sustainable
development - now, and in future.
WorldGBC recognises differing
trends around the world, however thecommon drivers presented below
are increasing scrutiny on social
value across multiple geographies,
particularly for the built environment
sector that shapes the fabric of oursociety.

“In the context of thebuilt environment,social value is created
when buildings, places
and infrastructure
support environmental,
economic and social wellbeing, and in doing so
improve the quality of lifeof people. Exactly which
environmental, economic
and social outcomes
create social value will
depend on the bestinterests of the people
most impacted by the
project or built asset.”
UKGBC, FRAMEWORK FOR
DEFINING SOCIAL VALUE 188(2021)

Defining terms: Social value, equity,
impact and justice
The term Social Value may be differently
interpreted across different geographies, andthe definition presented in this report is often
interchanged with social equity, justice or impact.
These terms have been defined by the BRE as187:
•

•
•
•

Social Equity - the equitable access of all
people to resources and opportunities andfull participation in the social and cultural life
regardless of background
Social Justice - the fairness in achieving
advantages and opportunities for each citizen.
Social Impact - the effects on people andcommunities as a consequence of the built
environment related to action or activity
Social value - A cumulative benefit of allsocial impacts from the built environment to
individuals, communities and local businesses.

Based on the above definitions, this report will
use Social Value as the main term due to its
collective meaning broadly encompassing all
existing terms. The priorities of enhancing equity
and justice for all people at all stages of the supply
chain are synonymous across all terms, andremains the fundamental aim of the sustainablebuilt environment movement.Social value should

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

4.2 The Impact Of COVID-19“Everything we doduring and after
this COVID-19
crisis must bewith a strong focus
on building moreequal, inclusive
and sustainableeconomies andsocieties that are
more resilient in theface of pandemics,
climate change,
and the many otherglobal challenges
we face.”
UN Secretary-General
António Guterres

BEYOND THE BUSINESS CASE

One of the impacts of COVID-19 has
been a dramatic increase in interest andawareness on social value, particularlyaround health and equity. In the era of thepandemic, it has become increasingly
clear that the world can no longer justify
tackling issues indirectly and individually,
but that a collective approach addressing
the total impact on people’s quality of life
should be prioritised190. The effects of the
COVID-19 pandemic are reshaping the
profile of sustainable buildings demand,
while influencing the occupancy patterns
and prospects of urban spaces andthe needs of occupants, owners andmanagers191.
The COVID-19 pandemic has not only
devastated economies but has greatly
accelerated the impact of inequality.
Inequalities between high and low
income countries, employment status,
population group and income levels haveheightened192. A survey conducted in 37
countries indicated that 3 in 4 households
were suffering declining income, with
82% of low-income households being
affected. This can be seen prominently
in the USA, where over 44 million people
lost their jobs and unemployment surged
towards 15% during the early monthsof the pandemic193. While high-income

countries found over USD $7 trillion tosustain their businesses, retain jobs
and reinforce safety nets, low-income
countries had little capacity to do thesame194. Public sector institutions andcorporates will be under pressure toensure their investments reflect genuine
value to society. An estimate 25% ofconsumers and 22% of investors cite a“zero tolerance” policy toward companies
that embrace questionable practice on
the social value front195.
For the real estate sector specifically,a notable aspect highlighted by the
pandemic has been the increased
awareness of the need for buildings toprovide healthy indoor environments.
Fundamentals of healthy indoor
environmental quality are outlinedin WorldGBC’s Health & Wellbeing
Framework, and include: air quality andventilation, thermal comfort. acoustics,
lighting, mental health and access tonature, amongst many others196. Poor
indoor air quality and ventilation areassociated with increased symptoms ofsick building syndrome, increased riskof transmission of infectious diseases
and reduced cognitive function197. Morethan 1.6 million COVID-19 infections
worldwide are believed to have occurred

due to poorly ventilated indoor
spaces198 199. Indoor environmental
quality is closely linked to income
status and equity - lower quality
buildings and housing are often
poorly designed and constructedwith cheaper materials, and hence
often overcrowded and occupiedby the most vulnerable populations- putting occupants at higher risk ofmental and physical health impacts,
further exacerbating the inequality of
disease transmission200 201.

“Following our collective experienceof the global coronavirus pandemic,
we are asking ourselves how places
need to change, to be resilient tofuture challenges including therisk of prolonged social isolationthat can clearly exacerbate what isalready an epidemic of lonelinessin our cities. Consciously designing
our homes, workplaces and public
spaces with connectedness in mind
is critical to ensure we are creating
places that are fit for the future.”

COVID-19 mitigation measures have
not only raised awareness of social
value, but also challenged the sector
to rethink building and urban design,serving as a market stimulus that ahealthy, equitable built environment
should be an expectation203.

Paul King - Managing Director,
Sustainability and Social Impact Lendlease Europe

WorldGBC implores organisations
supporting economies struggling torebuild in the wake of the pandemic
to prioritise health and social value
in the creation and maintenance ofthe built environment. We also callon governments and policy makers
to address the recovery from thepandemic in harmony with theclimate crises.

Selected/Upgraded HVAC system toallow for more fresh/filtered air
Changed layout for greater spacing
between building occupants
Included an indoor air quality monitor
Included/switched to no touchbathroom fixtures
Increased use of sensors and other
IOT technology

Changes in Building
Projects due to COVID-19
Pandemic
In answer to the question,‘What changes have you
made to or seen on yourbuilding projects (new or
renovation) specifically inresponse to the COVID-19
pandemic?’ as part of theWorld Green Building Trends
2021 survey, changes tothe HVAC system to allow
for fresh air is the mostfrequent change made orseen on building projects202.
53%
38%
37%
34%
33%

Included operable windows

24%

Selected furnishing/finishes with
antibacterial coatings

20%

Used more hard surfaces

15%

Other

14%

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Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

4.3 Increased Focus on Social
Value In Private Sector
73% of investors
surveyed in a UK
study state efforts
to improve theenvironment andsociety play into
their investment
decision-making

Social value is increasing in theprivate sector as organisations
recognise market expectation,industry competitiveness, staff
retention and increased reporting
expectations. Programs of socialand environmental responsibility
within the construction sector haveunlocked opportunities for more
ambitious sustainability measuresthroughout the value chain, suchas equitable and formal labour
practices that have increased theeconomic development of morecommunities204. Organisations
including the users and community
needs within the design andconstruction process, have also
experienced improved value ofbuilding assets205 206.
Such results have increased
awareness of social value,and consequential corporatepressure on their supply chain todemonstrate and disclose ethicaland environmental good practices
via Corporate Social Responsibility(CSR) reports. This rise in CSR isalso driving social value. Due toincreasing expectation onreporting and ethical action, there

BEYOND THE BUSINESS CASE

is increasingly quantified andambitious target setting aroundsocial value indicators.
73% of investors surveyed in a
UK study state efforts to improvethe environment and society playinto their investment decisionmaking211. With better returns andbetter investment opportunities,
social value is therefore becoming
a competitive advantage in thereal estate sector 212. For instance,in the UK, within a 15-year period,social indicators were noted toincrease shareholder value byalmost USD $1.7 billion, with CSR
reports predicted to help companies
increase market value by 4-6%213.
For developers in certain markets,
social value has evolved to become atool of measurement to quantify the
impact that built asset developments
have on local communities and wider
society. In these regions, notably
the United Kingdom, Europe, USA,
Canada and Australia, the real estateorganisations operating in thesemarkets will have to engage moreformally with social value throughdedicated assessments, which are

WITH BETTER
RETURNS AND
BETTER INVESTMENTOPPORTUNITIES,SOCIAL VALUE IS
THEREFORE BECOMINGA COMPETITIVEADVANTAGE IN THE
REAL ESTATE SECTOR

becoming increasingly sought after
by investors and lenders, or in somecases, enforced by local authorities
and regulation214 215. Social value
assessments quantify benefits tocommunity through parameters
including jobs and employment
opportunities, and health benefits216.
Compliance with current or incoming
policy requirements is anothercatalyst for increasing social value.

The Rise Of CSR
Business leaders are no longer satisfied solely with financial
performance; transparency and progress on environmental, socialand governance issues are increasingly becoming relevant207. An
estimated 90% of companies on the S&P 500 index published a
CSR report in 2019, compared to just 20% in 2011, with nearly 99%
of CSR professionals believing COVID-19 has impacted their CSR
efforts and initiatives208. The consumer market is transitioning to
one which values responsibility, and sustainability 209. As consumers
increasingly embrace environmental and social causes, they seek
products and brands that align with their values. The upward trend in
Corporate Social Responsibility reporting demonstrates the growing
expectations, noted as a worldwide trend, of generating social value
being a core business objective210.

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Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

4.4 Public Drivers of Social Values
4.4.1 Public Procurement

National and local
governments
recognise this needand opportunity
to accelerate
the economy
while increasingsocial value andinclusion for morecommunities

BEYOND THE BUSINESS CASE

The rise in social value is being
driven by public sector action,
alongside private, both inprocurement and policy.

Public procurement generates
expenditure by governments andstate-owned enterprises on services
and assets, including buildings,
infrastructure, and other key services
in our communities217. The current
global value of public procurement
is estimated at USD $13 trillion218.
With such economies of scale, cobenefits of such sizable investments
can generate massive benefits toa local community. National andlocal governments recognise thisneed and opportunity to accelerate
the economy while increasingsocial value and inclusion for
more communities219. By placing asignificant weighting on social value
and following that through with
contractual obligations to report anddeliver, governments are promoting
a bottom-up systemic change220.
Generating and measuring social
value is increasingly becoming an
expectation within procurement
contracts.

In the built environment, acompendium of examples fromwithin the EU demonstrate socially
responsible procurement inconstruction. In the UK, the PublicServices (Social Value) Act 2012
requires local authorities to prioritisesocial value when procuring andawarding contracts221. In the last
decade, the importance of social
value has increased in procurement
tenders, with weighting of the social
value elements in procurement
contracts risen from 5% up to 40%
today 222. UK city councils have put
forward a value of over USD $10
million for the adoption of strictmeasures that will create social value
and community resilience223.
A public sector that can demonstrate
a strong commitment to social
value has been seen to createstrong economic benefits andmultiplier effect, with institutions
managing to increase their spending
in the city’s local economy from by
300% between 2013 and 2017224.
Organisations who want to be
involved in public procurement
processes or public-private
partnerships should see enhancing
social value as an opportunity toenhance their competitiveness, toaccess to more contracts, financial
schemes, training programs, andvisibility 225.

A public sector thatcan demonstrate astrong commitment
to social value has
been seen to createstrong economic
benefits

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Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

4.4.2 Policies and Incentives
The public sector plays a keyrole in both setting an example
through procurement but also
pulling the market transformation
through policies and incentives.
Clear messages have been sent
at international level, with a visible
momentum underway from
European governments passing
legislation on mandatory humanrights and environmental due
diligenceREF.
For instance, the European
Commission directly includes
social goals through initiatives
such as the EU Taxonomy and thenational development strategies226.
Other notable examples include
the UK Public Services (Social
Value) Act 2012 which requires all
public sector organisations, andtheir suppliers, to look beyond thefinancial cost of a contract andconsider how the services they
commission and procure might
improve the economic, social andenvironmental well-being of anarea227. Available evidence suggeststhat regulation around social value
is most mature in Europe andUK, however there is evidence to

BEYOND THE BUSINESS CASE

suggest that policies around social
value, both in procurement andmore broadly, have precedent in
non-regulatory guidance in markets
such as Canada228. We therefore see
increasing likelihood of legislative
action on social value, which could
be particularly relevant for built
environment actors through local
planning policies or building
codes. Organisations looking tofuture-proof their compliance should
be considering and enhancing social
value at all stages of the lifecycle.

The public sector plays a
key role in both setting an
example through procurement
but also pulling the market
transformation throughpolicies and incentives.

The European Commission
directly includes social
goals as part of inclusive
growth, which seeks toincrease employment rates
and reduce poverty andsocial exclusion

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Statement

Foreward

Introduction

4.4 Opportunities for Circularity
Summary from WBCSD ‘The business casefor circularbuildings: Exploring the economic, environmental andsocial value’’ report“Business casefor circularbuildings: Exploring
the economic,
environmental andsocial value”

World Business Council for
Sustainable Development (WBCSD)
has recently published a reporton the “Business case for circularbuildings: Exploring the economic,
environmental and social value”,
supported by the World Green
Building Council. Similar to thisresearch, the ‘Business Case forcircular buildings’ report aims
to articulate the economic value
alongside broader value case
impacts in pursuing circularity in thebuilt environment. The report brings
together qualitative and quantitative
research identifying how to derivevalue and who could capture thatvalue.
The case studies of circular projects
analysed in the report illustrate thefollowing results to support the
emerging business case:•

BEYOND THE BUSINESS CASE

A lease price advantage fromincreased flexibility and lower
costs resulting from changing
interiors or workplaces,
which opens the potential forincreased rental prices andlowers operational costs attenant turnover•Market differential and rapid
sales through enhanced
branding and local community
buy-in•Increased value by residualmaterial valuation andcomponent value after
deconstruction – for example
the design for disassembly andmaterial bank value added EUR€125 – 135/m2 net lettable area
gained in Park 20|20 project•

Close to 30% emissions
reductions and social value fromjobs created using old building
materials, plus keeping thebuildings ahead of impending
future legislation•

Developments avoid costs
from new land acquisition andlandfilling costs by prioritizing
existing building land use•

Overall decrease in acquisition
and maintenance costs,
compared to a standard
building.

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

These business case benefits have been demonstrated through case studies, including Park 20|20, and Upcycle
Studios & Resource Rows, and are summarised below:
Business Benefit Impact
CASE

DESIGN &CONSTRUCTION
COSTS

ASSET
VALUES

Resource Rows/
Upcycle Studios

Land and acquisition costs avoided
from asset reuse
High-quality building
pricing: circularbuilding being 8-10%
more expensive,
due to innovative
approaches
Lower costs ofmaterials but higher
costs of manufacturing – re-processing secondary
materials can be
costlyFastest sales in theneighborhood
6% overall decreasein acquisition andmaintenance costs
Branding and market differentiation

Park 20|20

Higher design andConstruction cost(+ 21%)

Servitization
mitigates against
obsolete equipment
risk
The higher rental
price used to offset
higher initialconstruction costs.
(EUR €25/m2 per
year)
Design for disassembly & materialbank value: adding
EUR €125 – 135/
m2 net lettable area
gainedExchange House
BritishLand andGlobechain

OPERATIONALCOSTSReduction of appr.
40% energy compared with existingbuilding offices;savings of EUR€80.000/year

RISK
MITIGATIONENVIRONMENTAL
VALUE

SOCIAL
VALUE

Collaboration
between partners
in design andconstruction led tolower risk in material acquisition
Project partnerships
reduced delays inthe building process
when working
with innovative
approaches

Upcycle Studios:
65 tonnes CO2-eq ~45% savings
914 tons of waste
avoidedResource Rows
20 tonnes CO2-eq ~29% savings
463 tons of waste
avoidedUse of existingmaterials creates
uniqueness andcatalyzes a senseof ownership in thebuilding
18 jobs created

The risk of productfailure or the
responsibility for
maintenance (product as a service)
Increased flexibility
and development
margin (+5%) leadto lower operating
costs and reduce
the real estate
investment risk

Buildings designed
to perform 54% more
efficiently than aconventional code
complaint building+3% productivity
based on non-toxic
materials, the shapeof the building andlayout of the plan
Shared spaces
improve spatial use
costs, providing
capital expendituresavings of 4%

Supported British
Land’s commitment
to achieve a net-zerocarbon portfolio andcreate greater social
impactMaterial reused: 137
tonsCharities havecollected andbenefited of 5,889
items, improving
spaces and facilities
they use

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Statement

Despite the illustrated economic,
environmental and social
advantages of implementing circular
economy solutions, these remaindifficult to measure quantitatively.
Stakeholders across the supply
chain increasingly need to measureand better quantify the benefit orconsequence of their activities on
the wider industry or community,
reducing negative environmental
impacts such as pollution, CO2
emissions, and on biodiversity, andunderstanding performance andprogress.
Yet, conventional economic andenvironmental tools fail to capture
value from circular solutions andthe retained value from adopting acircular approach.

Foreward

We call on business tomeasure circularity, adopting
established industry tools suchas whole-life carbon and life-cycle
costing approaches to inform early
decision-making. Life-cycle costingshould account for residual value.
This will help to:•

Identify a consistent set ofwhole-life carbon and costbenefits related to a circular
economy;•Articulate and understand thebusiness case following thesteps described;•

Develop a supportive ecosystem
across the value chain forcircular solutions.

Introduction

Governments and public authorities
are also key stakeholders in
embedding requirements fordevelopment projects to prioritize
asset and material reuse. This
will in turn help to strengthen thebusiness case, catalyze the market
and create supply demand for
projects and their supply chainsthrough clear, consistent and longterm regional policies on circular
economy directives. Such directives
would enshrine requirements fordevelopments that address circular
economy thinking and makeinvesting more attractive, as well as
incentives for innovation and newcollaborations to catalyze uptake.

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

ECONOMIC,ENVIRONMENTAL
AND SOCIALADVANTAGES OF
IMPLEMENTINGCIRCULARECONOMYSOLUTIONS,REMAIN DIFFICULTTO MEASURE
QUANTITATIVELY.

Stakeholders across the supply chain increasingly
need to measure and better quantify the benefit
or consequence of their activities on the wider
industry or community
BEYOND THE BUSINESS CASE

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Foreward

5.0

The Social
Value Case

Providing andenhancing social
value is both theright thing to do, andstrengthens thefinancial businesscase for investment
in sustainablebuildings

The built environment that shapes the
fabric of our lives has the opportunity
to enhance social value in many ways
- both through assets in operation andthroughout the lifecycle. Although these
are not currently financially quantified
within market value of a built asset, theprovision of social value can enhance thedesirability of a project and aligns withcorporate social responsibility targets thatare increasingly expected in developed
markets229.
There is growing expectation thatcompanies respect human rights
throughout their operations and supply
chains, as set out in the UN Guiding
Principles on Business and Human Rights
and the OECD Guidelines (both of which
are included in the `safeguards’ provisions
in the EU Taxonomy).

BEYOND THE BUSINESS CASE

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Providing and enhancing social value isboth the right thing to do, and strengthens
the financial business case for investment
in sustainable buildings.
There are three scales at which the built
environment should add value to people’s
lives: buildings, community, and supply
chain. In the below sections, opportunities
to do so are presented for the global realestate industry.
Guidance on maximising social value
across the lifecycle can be found in
IHRB’s ‘Framework for Dignity in the Built
Environment’.

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Statement

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

5.1 Social Value At Building Scale:
Enhancing Occupant Health And Wellbeing
People spend an
average of 90% of
their time insidebuildings

Social value can be created byenhancing health and wellbeing ofoccupants at building level, withstrategies including;

The built environment affects both ourphysical and mental health, amplified
by the fact that people spend an
average of 90% of their time insidebuildings230. The buildings in which welive, work and learn can both enhance
our quality of life and protect our health,but more commonly are attributed tonegative impacts. WorldGBC has awealth of past research on this topic,
demonstrating the link between betterbuildings and occupant and community
health in a range of typologies andgeographies - including offices, schools,
retail and residential sector 231 232 233 234
235 236.

SUSTAINABLE BUILTENVIRONMENTS THAT PREVENT
OR REDUCE THESE PROBLEMSPROVIDE SOCIAL VALUE
THROUGH THE IMPROVEMENTOF HEALTH AND WELLBEING OF
BUILDING OCCUPANTS.

BEYOND THE BUSINESS CASE

• Design, construct andoperate buildings to tackle
common physical healthrisks stemming from poor
indoor environmental quality:
fatigue, stress, loss of
productivity, and illness canresult from poor indoor air
quality, thermal conditioning,lighting and other specificbuilding aspects237,
which can be reduced as
far as possible throughstrategic building designand education of building
occupants. Pollutants suchas particulate matter andVolatile Organic Compounds
can cause adverse healtheffects, and exacerbate
respiratory conditions suchas asthma and allergies,
but concentrations can besubstantially lowered withadequate ventilation andhealthy, non-toxic material or
furnishing choices238.

• Reduce transmission of
infectious disease, as far
as possible: air pollution
represents an importantfactor increasing the risk ofmortality from COVID-19,
as estimates suggest thatparticulate air pollution
contributed 15% to COVID-19
mortality worldwide239.
Better building design toenhance air circulation, andaccess to nature and green
infrastructure to encourage
occupants to have a healthierlifestyle, can all contribute to
overall occupant health240.
• Support occupant mental
health: sustainable buildings
should prioritise theprotection of mental as well
as physical health, creating
positive psychological andsocial experiences; theInternational WELL Building
Institute claim that buildings
can significantly improve
cognitive and emotional
health through design,technology and treatment
strategies241. Urban living

is associated with greater
stress response in areas
linked to emotional regulation,
depression and anxiety in thebrain, seen through a 21%
increase in anxiety disorder,and 39% increase in mooddisorders242 - therefore design
and urban planning could playa role in reducing stress andmental health risk.

Sustainable built environments thatprevent or reduce these problems
provide social value through the
improvement of health and wellbeingof building occupants. However, as
the predicted impacts of forthcoming
climate change will likely generate
severe health impacts and social
repercussions, the challenge of
maintaining health will likely heighten
in future.

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Statement

THE BUILDING
IS DESIGNED TO
MAXIMISE THERMALPERFORMANCE AND
ENERGY EFFICIENCY- BOTH NOW, AND
DURING FUTURE
CLIMATE EVENTS

Foreward

Introduction

Drivers of theBusiness Case

CASE
STUDY
•

A nine-story office building,developed by Lendlease, in
Stratford’s International Quarter
London, is a flagship example ofsustainable development thatenhances occupant, communityand planetary health - both today
and with the future impacts ofclimate change.

•

2 Redman Place has achieved
BREEAM Outstanding and
WELL Gold certification, and at
the time of award, the score of
94% was the second highest
ever BREEAM score in the UK
for a commercial building (NewConstruction 2014 in the UK for
Post Construction certificate).
Achieving BREEAM Outstanding
puts 2 Redman Place in the
top 1% of sustainable newcommercial buildings in the UK.

•

BEYOND THE BUSINESS CASE

The Business Case

The building is designed tomaximise thermal performanceand energy efficiency - bothnow, and during future extreme
climate events. Energy efficiency
features such as triple glazing
are combined with on-siteenergy generation from solar
panels, amounting to 304 tonnes

Strengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

2 Redman Place,
London, UK - Future-proofing healthand wellbeing for a warming worldof carbon savings each year –approximately the same amountas would be produced by running
3,000 fridges. Building owners
DWS are delivering occupant
thermal comfort through heating
and cooling systems, ensuring
temperatures remain between
22-24 degrees, plus 100% fresh
air through air conditioning
systems. Floor-to-ceiling
triple-glazed windows deliver
an abundance of natural lightwithout compromising facade
thermal performance. Indoor
environmental quality design
will maximise productivity andwellbeing.
•

The development encourages
active design and efficient
resource use. Sustainabletransportation for those visiting
and working at 2 Redman
Place is encouraged throughprovision of showers, changing
facilities and storage facilities
for over 200 bicycles. Rainwater
harvesting saves the equivalentof 4.5 Olympic-sized swimming
pools of drinkable water
annually.

•

Biodiversity on site offers
biophilic mental health benefits
to occupants, plus localised
environmental benefits. The
pre-development area had
no vegetation on-site, but theoperational project features
one of London’s largest “living
walls”, a 2,000m2 habitat for
wildlife comprising thousandsof native plants and benefitting
local air quality and carbon
sequestration.

•

Social value was created during
the construction process
through meaningful community
engagement, including
participation from local school
pupils with biodiversity design
challenges, plus receiving
mentoring from occupier Cancer
Research UK. Lendlease also
hosted over 300 children for
education sessions around theregeneration of the once derelict
Queen Elizabeth Olympic Park.

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

5.2 Supporting Social Value In The Community

At community level
these benefits canbe realised throughincreased jobs,
community healthand benefit, resilient
infrastructure,protecting
biodiversity andecosystem services
through enhancing
natural capital, andmore

BEYOND THE BUSINESS CASE

The social value case for the realestate sector is the benefit thebuilt environment can bring topeople - economically, socially andenvironmentally. At community
level these benefits can be realised
through increased jobs, community
health and benefit, resilient
infrastructure, protecting biodiversity
and ecosystem services throughenhancing natural capital, and more.
Often, the interests and resourcesof all social groups are not equally
integrated into policy and decision
making in the built environment243— the risk being that the outcomes
will not be socially equitable andjust, especially to vulnerable groups.
Lower income or disadvantaged
areas are recognised to impact
community health and quality oflife244, further reinforcing the existing
inequality in the health of lowincome citizens. A core componentof social value is that benefits are
realised by the entire community.

As per the UKGBC Framework for
Defining Social Value, the local
community can be defined as “thepeople who are most impacted bya building, infrastructure asset orplace… and will include residents,
local business owners, workers andvisitors.245” The Framework also
highlights that ‘community’ should
include future stakeholders, andin some cases future generations.
USGBC’s ‘Social Equity in theCommunity’ pilot credit in LEED
v4.1, calls for “fairer, healthier, andmore supportive environments… that responding to the needsof the surrounding community
to promote a fair distribution of
benefits and burdens, promoting
fair trade, respect for human rights,
and other equity practices among
disadvantaged communities”246.
In both the UK and US market,
and many other countries inwhich social value is advancing inimportant, the benefits and impact
on the aforementioned community
groups can be quantified by social
value assessment, or social equity
assessments247.

A sustainable built environments
can provide social value for allgroups community level, such as:• Jobs and employment
opportunities, addressing
skills gaps and providing
opportunities in high growth
sectors248 - for example ashift to a greener economy
could create 24 million newjobs globally by 2030 if theright policies are put in place,says the International Labour
Organization (ILO)249.

A sustainable built environments can provide
social value for all groups community level• Improved environmental
quality, from environmentallyconscious construction
practices which result ina lower amount of dust,
pollution, congestion andnoise250 or interventions
such as reduced vehicularpollution and enhanced green
infrastructure. Neighborhood
restoration can also be
provided through building
renovation.

• Economic development fromregenerating brownfieldsites251, plus the presenceof workers who makefinancial transactions in thecommunity contributes to a
positive multiplier effect.
• Resilient building andinfrastructure design should
protect wider community
in face of extreme weather
events and future climate
impacts252.
In general terms, these improvements
will likely contribute to improved
public health, safety, and wellbeing,plus providing economic stimulus toan area - contributing to social value
and improving the quality of life incities at community level.

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Peace Slum Institute(Instituto Favela da Paz),
São Paulo, Brazil

Net zero buildings that enhancecommunity health and social value•••

The ‘Favela de Paz’, or Peace
Slum, is located within theinformal favela settlements
located in the city of São Paulo,
BrazilRecognized worldwide as an‘Urban Ecovillage’, the mixeduse development consists ofthree net zero energy residentialbuildings and one music studio,
rated with Zero Energy PreCertification from the Green
Building Council of Brazil (andwill be re-certified annually).
The buildings are actively
generating positive localisedsocial, economic andenvironmental impact, byenhancing educational
programs, offering community
locations such as studios
for local musicians, andencouraging the wider
community to replicate
sustainable practices.

BEYOND THE BUSINESS CASE•

Specific sustainability
interventions include;- biodigestion systems andorganic waste turned into
biogas for cooking,- rainwater harvesting andreuse,- vertical gardens forbiodiversity inclusion and,- energy efficiency andrenewable generation
measures- including
replacing electric showers
with homemade recycled
solar systems to heat water,
LED lamps for lighting
systems, and a gridconnected micro solar energy
generator•

A major positive social
implication of this project isthe financial opportunity thesebuildings create within thecontext of their neighbourhood.
Inflation in Brazil is leading
to high costs for lighting
and natural gas for cooking.
The social impact of thissituation is tremendous in
low-income communities,
leading to occupant energy
poverty in many cases. In the
net zero buildings, occupants
reports that “we are not paying
energy and gas bills anymore”- demonstrating the direct
financial benefit to the occupantof renovating and occupying asustainable, net zero building.

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

5.3 Social Equity Throughout The Whole Lifecycle

Millions of workers
are directly
employed in theconstruction sector
worldwide“Almost all modern
construction projects
around the world are
subsidized with slavery,
dueto unchecked forcedlabor that permeates
thousands of raw andcomposite materials
sourced locally to
globally.” 259
Design for Freedom, 2020

BEYOND THE BUSINESS CASE

Social value is often focused onbuilding occupants or the local
community in the built environment
industry. However enhancing health,equity, employment opportunities
and human rights at all stages of thelifecycle must also be considered.
International human rights
standards, including the Universal
Declaration, and ILO fundamental
principles on rights at work,
encompass areas such as worker
rights and freedoms, mitigation ofrisks of forced labour and modern
slavery, secure working conditions
with fair remuneration, genderequality (including equality in pay),
the right to adequate housing, andduties to the community. The UN
Guiding Principles on Business andHuman Rights set out the duties ofgovernments with regards to private
sector actors, the responsibilities ofbusiness, and principles on accessto remedy. Millions of workers are
directly employed in the construction
sector worldwide, approximately
7% of the global workforce, and theprotection and enhancement of
their health and quality of life must
be a priority to the global real estate
sector 253 254.

WorldGBC recognises increasing
attention on human rights andmodern slavery across the built
environment industry in recent years,
especially within the material supply
chain and construction sector where
human rights violations are known to
be endemic within the sector 255 256.
Forced labor and human trafficking
is an estimated USD $150 billion
industry, holding 25 million people
in modern slavery 257. Researchtells us that modern slavery occurs
in every region of the world andunderpins the material supply chain
upon which the built environmentand construction sector relies258.
The scale of industry, lack ofmodernisation and fragmentation
down the supply chain make tracing
the journey of materials in theconstruction industry very difficult but increasing industry awareness isa necessary first step for action.
Additionally, at the construction
stage of the building lifecycle, worker
welfare and human rights is also
a key social value consideration.
Construction workers have a highrisk of developing diseases from anumber of health issues260. Exposure
to hazardous substances, suchas asbestos or silica dust, is arecognised cause of the heightenedrisk of lung and other cancers, aswell as broader respiratory andcardiovascular health issues261. In
the UK, construction accounts forover 40% of occupational cancer
deaths and cancer registrations262.
Construction workforces are, in mostgeographies, predominantly made up
of migrant workforces. In all regions,evidence shows construction
workers frequently face dangerous
working conditions, meagre or even
unpaid wages, and other forms of
exploitation on construction sites263.
In some regions of the world, suchas the Gulf States in the Middle
East, the majority of construction
firms have not been disclosing what
measures they have in place to meet
local labour laws in recent years264.
It is expected that scrutiny will
therefore be increasing, particularlyin the region, catalysed by the growthof awareness around human rights
violations within the construction
sector and the rise of campaigns
such as the Design for Freedom
movement. Increasing awarenessand expectations on transparency
across the supply chain iscalled upon from private sector
organisations and policy makers byleading voices265. Market demand
may likely reflect this developing
consumer expectation.
Opportunities to address toenhance social equity are:• Ensure the protection of rights
of vulnerable social groups inthe labour market and within
the construction sector, suchas migrant workers, that do
not enjoy the same protection
as others266 through supply
chain audits, specifications intenders and subcontracting
requirements.
• Tackling inequalities indiversity: Organisation should
also promote diversity within
the sector, as it is well known
that the built environment
lacks gender equality.
• Promoting a justtransition: the process ofdecarbonisation can also risk
the increased vulnerabilityof marginalised low-income

groups267, for example byforced movement into lowincome neighbourhoods.
Social value with sustainable
development means
protecting the livelihoodsof all as we transition to a
decarbonised society.
• Raise awareness of social
value challenges outside ofcurrent stakeholder influence,
particularly human rights andmodern slavery within the
supply chain.
Organisations are now signing on for
greater transparency in the supply
chain. In recent years, a growing
number of multinationals havecommitted to working only with
suppliers that adhere to social andenvironmental standards268. The
transition to a sustainable futureneeds to serve and benefit everyone,leaving no one behind. There can be
no sustainable transition without ajust transition.

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Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Changes in Building Projects due to COVID-19 Pandemic
Social: Research suggests Central/South America and the Caribbean are more likely than otherregions to value promoting better occupant health and wellbeing. Sub-Saharan Africa mostoften prizes encouraging sustainability, and MENA places more importance on greater worker
productivity and supporting the domestic economy.

Environmental: Reducing energy consumption is the most important environmental reason forgreen building with 66% rating this aspect as very important. Respondents located in Central/
South America and the Caribbean rated four of the five environmental reasons higher than did
other regions. South Asia more often placed high importance on protecting natural resources.

Promotes improved
occupant health &well-being

Reduce energy
consumption

Encourages
sustainablebusiness practices

Increases worker
productivity

East Asia

South Asia
81%
78%

Supports thedomestic economy

78%

70%

78%

71%

63%

63%

50%

39%

51%

46%

SE Asia
79%
76%
64%

Reduce water
consumption

Lower greenhousegas emissions

EuropeNorth America
86%

88%

79%

87%

82%

70%

94%

75%

70%

78%

71%

80%

76%

83%

76%

38%

36%

Protrct natural
resources

East Asia

43%

47%

62%

Improve indoor air
qualityEurope

78%

66%

71%

Is aestheticallypleasing

North America

55%

70%

eates a sense ofCre
community

83%

72%

67%
59%

89%

78%
87%

77%
74%
73%
58%
76%
60%
58%
59%
51%
53%
55%

SE Asia

46%

Australia/New Zealand

BEYOND THE BUSINESS CASE

76%

73%

78%

76%

86%
65%
60%
63%
51%

Central/South America
and Caribbean

87%
72%
68%

75%

58%

85%

89%

51%

71%

89%

55%

67%

95%

66%

74%

Sub-Saharan Africa

MENA

84%

SE Asia

Australia/New Zealand

87%

91%

77%

86%

91%

74%

59%

64%

89%

87%

83%

90%
86%

Central/South America
and Caribbean

82%

91%

MENA

Sub-Saharan Africa

A WORLD GREEN BUILDING COUNCIL REPORTA WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

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5.4 Environmental Action Is Part Of Social Value

Millions of workers
are directly
employed in theconstruction sector
worldwide

Part of the social value case for thebuilt environment is the environmental
improvement made by decarbonisation andclimate action in our buildings, infrastructure
and cities. Environmental action in the built
environment is increasingly high profile- shown by recent research that net zerocarbon buildings are considered in the ‘World
Green Building Trends 2021’ as the mostimportant concept to improve the building
and construction industry’s sustainability,
followed by controlling embodied carbon on
projects269. As with social considerations,environmental actions must also be
considered across all stages of the building
and construction lifecycle.
Opportunities of taking environmental
action as part of a real estate social
value strategy include:• Improving ambient air pollution, withlocalised and global benefit from thereduced combustion of fossil fuels,
and the reduced urban heat effect incities and communities• A lesser risk of fuel poverty due toenergy efficiency measures• Efficient use of natural resources,
including water - of key importancegiven water consumption has
grown twice as fast as the humanpopulation over the last century270,
and almost half of the world’s
population already live in areas that

BEYOND THE BUSINESS CASE

are potentially water scarce at least
one month a year271.
• Sustainable building andinfrastructure assets can offer
superior physical and systemic
resilience to current and futureclimate change impacts• Protection and enhancement of
biodiversity, enhancing stocks ofnatural capital, during material
sourcing, construction phase andoperation and end-of life lifecycle
phases• Decarbonisation today will increase
likelihood of compliance with
future policy change, alignment
with commitments on net zero andscience-based performance targets,and act as a risk mitigation strategy
for corporate reputation in time ofchanging consumer and financial
sector expectations
WorldGBC directs readers of this report toour extensive body of research and industry
guidance on sustainable built environments
in all typologies and geographies272.
Environmental action is part of the definitionof social value273. And although social value
imperatives are not yet reflected in financial
parameters, with increasing quantificationof social value outcomes WorldGBC expects
these soon to be reflected in asset values.

Drivers of theBusiness Case

CASE
STUDY

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Ward Village,
Hawaii, USA
development guards against
seawater penetration into
the utility infrastructure by
installing detention basins fornatural filtration systems withdry wells as a part of regional
infrastructure improvement
initiatives. This development
plus best management practices
have led to improved water
quality and habitats by reducing
the leading cause of pollution,
which is urban stormwaterrunoff.

Ward Village, Hawaii USA: Providing
social value with resilience andsustainability•

Ward Village is a 60-acre
master-planned community
village achieving LEED Platinum
certification, located in Hawaii.

•

The project is committed
to sustainability in building
operation with energy andwater-efficient design, and theuse of sustainable materials.
Urban planning and designinterventions facilitate low
carbon and healthy user
behaviours through provisionof sustainable infrastructure,including electric vehicle
charging stations, bike lanes,
rideshare drop-off points, andwalkways that allow residents
to reduce transportation carbon
emissions

DESIGNED WITHRESILIENCE TO WINDAND HURRICANES•

Ward Village assets have been
designed with resilience to windand hurricanes for the waterfrontneighbourhood, whilst alsopreserving local water quality
and enhancing quality of lifeof the local community. The•

Sales for Ward Village began
in 2014 and this thoughtful
approach has led to the sale ofmore than 1,900 homes to date.
Ward Village has subsequently
received many recognitions,
including ‘Master Planned
Community of the Year, 2018’
by the National Associationof Home Builders and ‘Best
Planned Community in the
United States’ by Architectural
Digest.

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The Business CaseStrengthening the Case:
Social Value

CASE
STUDY

UN Offices,
Gigiri, Kenya

Protecting water resources throughthe built environment••

The UN Offices in Gigiri housethe Headquarters of the UN
Habitat and UN Environmental
Program offices, located in the
Gigiri region of Nairobi, Kenya.

•

In a nation facing both a growing
population and depleting water
resources, drought remains ahigh-risk environmental issue
to millions of Kenyan people*.
Water efficiency is therefore bothan environmental requirement
and social value consideration
to preserve limited resources forpeople.

The Social Value Case

Future Proofing
The Value
Proposition

Through a design committed
to water efficiency and quality,
the UN Gigiri offices have
implemented sustainability
measures to combat both water
shortages and contamination
issues. These include:•

Other sustainability features
include; enhancing health andcomfort for office users withinterior air flow, access tonature and views, and internal
overheating measures throughpassive material specifications.

- Rainwater collection, with
7.5 million litres of rainwatercollected from the roof, withexcess trickling into thelagoon, also used to irrigate
landscaped areas, sustaining
biodiversity- Wastewater treatment,using a modern plant forwater recycling and natural
purification before being fed
into the lagoon•

On-site reduction of greenhousegas emissions has beenachieved through the installationof 6,000 solar panels thatgenerate 100% of the overall
energy use of the development which is estimated to be 750,000
kWh annually.

•

This development contributes tosocial value and environmental
action by preserving water
resources, restoring the naturalenvironment, and creatinga healthy environment for
occupants and the local
community.

- Water efficient features,
including dual flush cisterns,
saving up to ten litres of watercompared to older models

7.5 MILLION LITRES OF RAINWATERCOLLECTED FROM THE ROOF

BEYOND THE BUSINESS CASE

BEYOND THE BUSINESS CASE

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

5.5 Measuring Social Value

WorldGBC calls
for investor
requirements forsocial value as thebuilt environment
sector is starting to
mainstream action
on sustainability

Measuring social value has become a vital
part of communicating and committing
to social value creation across thedevelopment lifecycle. However, themeasurement of social value in thebuilt environment is a rapidly evolving
area of practice, as a vital part of bothcommunicating and committing tosocial value generation across the built
environment lifecycle.
Financial actors look to compare thesocial value of development proposals
to help inform investment decisions ina quantified and consistent way 274 275.
Hence, asset managers must begin
reflecting the social value of portfolios
using data that is easily collected andaggregated across different asset
types and geographies276. Common
measurement approaches include costbenefit analysis and wellbeing valuation,with useful databases and tools alreadyin place such as the New Manchester
Economy Unit Cost Database or the HACT
Social Value Bank277.

BEYOND THE BUSINESS CASE

WorldGBC expects the increase in theability to measure social value within
and between geographies to support acontinued rise in importance of social
value within ESG assessments, private
sector sustainability targets, public
procurement targets, policy directives andmore. Although currently not reflected in
asset value or other financial parameters,
WorldGBC suggests the increased ability
to quantify social value will initiate thischange, and catalyse market momentum
which favourably values built assetsthat advance social value across the
supply chain. WorldGBC calls for investor
requirements for social value as thebuilt environment sector is starting to
mainstream action on sustainability.

MEASURING SOCIALVALUE HAS BECOME
A VITAL PART OF
COMMUNICATING
AND COMMITTINGTO SOCIAL VALUECREATION ACROSS
THE DEVELOPMENT
LIFECYCLE.

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6.0

Future Proofing theValue Proposition

The businesscase needs to beconsidered acrossthe lifespan of abuilding or built
asset

Through this report, WorldGBC has
endeavoured to demonstrate that intoday’s market, undertaking the urgent
transition to a decarbonised andsustainable building portfolio makes
strong business sense from both afinancial and social value case. However the business case needs to be considered
across the lifespan of a building or built
asset - approximately 50 years, but often
far higher for infrastructure assets.
Transporting us to 2050, the below
tables demonstrate the outcomesof research and analysis undertaken
through dedicated future scenario
modelling workshops, carried out for the
purpose of this report. An exploration of
future scenarios, based on 2050 IPCC
projections, analyses two contrastingfeasible situations around climate change
mitigation, and development of social
value, health and welfare. This analysis
is presented through the key themes ofthis report.

BEYOND THE BUSINESS CASE

Introduction

Through these future scenarios, is it
clear that the value proposition for asustainable built environment is stronger
than an unsustainable future - from boththe financial and social value case.

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

THROUGH THIS REPORT,WORLDGBC HAS ENDEAVOUREDTO DEMONSTRATE THAT IN
TODAY’S MARKET, UNDERTAKINGTHE URGENT TRANSITION TO A
DECARBONISED AND SUSTAINABLE
BUILDING PORTFOLIO MAKES
STRONG BUSINESS SENSE FROMBOTH A FINANCIAL AND SOCIALVALUE CASE

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Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social Value

3oC Climate Change Scenario

This assessment assumes
a base scenario whereclimate action broadly
follows a 2°C trajectory

Extreme weather increases
demand cooling sourced
from fossil fuels due tolack of energy efficiency
regulation. Passive orenergy efficient buildings
are cheaper to run.
BEYOND THE BUSINESS CASE

High

Occupant Benefits
Extent to which climate change effects building occupant
productivity and health & wellbeing.

Extreme weather reduces building
performance resulting in sub optimalliving or working environments.

Costs
Extent to which climate change effects building costs
including supply chain, construction and operation costs.

Extreme weather increases demand cooling sourced
from fossil fuels due to lack of enery efficiency regulation.
Passive or energy efficient buildings are cheaper to run.

Risk mitigation
Extent to which climate change including extreme
weather events, sea level rise effects buildings and theirenvirons.

Extreme weather impacts on
the ability for buildings and thiersurroundings to operate effectively.
Lower insurance, maintenanceor repair costs from resilient andsustainable buildings.

Asset Values
Extent to which climate change affects the value ofbuildings.

Building energy performance considered less in valuation,
due to lack of regulation, so reduced intensive retrofit/ upgrade. climate change resilience and zero carbon
buildings continues in spite of regualtion in premium
office / residential market

Investors and Reputation
Extent to which climate change will effect building
investment decisions.

ESG investment considerations
continues to grow in all regions, but
slowly. Less political pressure forpublic buildings to become green,with more focus on climate resilience
than mitigation.

Finance
Availability of finance for green buildings.

Global finance will be available for all types of buildings,
backed by weaker regulation. Green finance will grow forpremium markets, but not globally. Climate risk will resultin insurance being unavailable for some buildings.

Wider role of business
Beyond finance, how does the wider role of businesssupport the business case for green buildings.

Business will see significant
stakeholder pressure to take aleading role on financial metrics....
be significant stakeholder pressure
for business to take a more leadingrole in place of government action.

Low-Medium

3%

Low-Medium

Citiesexperience
deadlyheatwaves(3)Medium-High

7%

GDP loss per
capita (5)MediumFuture Proofing
The Value
Proposition

1.5oC Climate Change Scenario

Up toreduction in productivity in theabsence of air conditioning or outdoor working
per 1°C temperature rise (6)Medium-HighThe Social Value Case

Low-Medium

132
millionpeople intopoverty over the
next 10 years (1)More extreme weather than today,
but many buildings continue toperform to design

Fast climate action drives faster roll out of energy
efficiency measure and the installation of low carbon
technologies such as heat pumps. Less coolingrequired but extreme temperatures still occur.

14%of the population
exposed to sever
heatwaves(2)Even in 1.5 degree scenario,
there will still be impacts fromextreme weather on buildings andinfrastructure. Sustainable assets
are more resilient with lower costs
from climate impacts.

Buildings align to strict climate change regulations.
Green buildings have a higher asset value as “less green”
buildings are regarded as stranded assets with either
significant retrofit required to meet stronger regualtion
and/or tenants not will to occupy these particularly inpremium areas.

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 politicalpressure from voters is also key

Finance becomes more available both for building
retrofit and to incentivise the development of green
buildings. Insurance is available and green buildings
receive lower premiums.

65

million additionaljobs with boldclimate action(6)Business becomes a significant
driver of climate action, and themarket expects fast action. Thisextends worldwide and to publicbuilding sector in response to voter
expectations.

Low-Medium

High

MediumHigh

High

Medium -High

Medium -High

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Unhealthy World Scenario

This assessment assumes
a base scenario where
health & wellbeing broadly
follows existing regulationand policies on health andsocial value in the built
environment. An unhealthy
world scenario is where
health & wellbeing action issignificantly less than this.
A health world scenario is
where action is greater than
this.

Global health & wellbeing
focus will mean ESG
performance, reputationand public perception growin importance for all asset
classes. This extends topublic buildings due topolitical pressure.
BEYOND THE BUSINESS CASE

Occupant Benefits
Extent to which climate change effects building occupant
productivity and health & wellbeing.

Global decline in health & wellbeing,inequalities and injustice between
regions means buildings with health& wellbeing credentials are beneficial
and enhance productivity.

Costs
Extent to which health and wellbeing effects building costs
including supply chain, construction and operation costs.

Reduced demand for health building design such as ventilationand landscaping reduces operation costs. Less regulation on
health & wellbeing in the supply chain or during construction
could increase cost due to ill health.

Risk mitigation
Extent to which health and wellbing trends affects risks.

Global health issues impact significantly
on society, buildings built to enhance
health and social value are less common,and therefore premium assets. Further
global inequality and injustice is a risk
to the building supply chain potentiallyheightening building cost.

Asset Values
Extent to which health and wellbing affects the value ofbuildings.

Lesser consideration of health & wellbeingbuilding credentials in valuation as regulation
does not drive intensive retrofit / uprage.
Premium office / residential market wherebuilding health & wellbeing certifications
continues in spite of regulation may achieve
high rental premiums or sell more quickly.

Investors and Reputation
Extent to which health and wellbeing will effect building
investment decisions.

ESG investment considerations
contine to grow in all regions, but ata slower pace. Less politcal pressure
for public buildings to consider health& wellbeing.

Finance
Availability of finance for healthy buildings

Global finance for buildings will be available for all typesof buildings, backed by weaker regulation. Green financewill continue to grow for premium markets, but this is not
the case worldwide.

Wider role of business
Beyond finance, how does the wider role of businesssupport the business case for healthy buildings

Business may continue to focus juston financial metrics. But there could
be significant stakeholder pressure
for business to take a more leadingrole for health & wellbeing and thewider community impact in place ofgovernment action.

Medium-High

Medium-High$7,500Higher ventilation up to
per person per year in employee
productivity (4)Wellness real estate projected to drop to

Expectation that healthy building demand will

92% by 2024 (2)89.5% plan to enhance their company’s
health and wellbeing strategy in 2022 (1)Low-Medium

Global improvement in health& social value between regions,building smart technology andindividual health monitoring reducedbuilding impact. Healthy buildings
are desirable.

Increased demand for buildings with health & wellbeing
credentials drives down the cost of green buildings.
Technological advances lower cost of use and healthregulation during construction lowers costs.

Mediumincrease by

Low

Future Proofing
The Value
Proposition

Healthy World Scenario$198 billion in 2022 (3)MediumThe Social Value Case

Low-Medium

There will still be a risk that buildings
worsen health & wellbeing, but a shift inglobal management of health & wellbing will
reduce the building impact. There will still be
an expectation for healthy buildings creatinga higher risk for non-compliant owners.

Buildings with health & wellbeing credentials
have a higher asset value as “less green”
buildings are regarded as stranded assets
with either significant retrofit required tomeet stronger regualtion and/or tenants
not will to occupt these particularly inpremium areas.

Global health & wellbeing focus will
mean ESG performance, reputationand public perception grow inimportance for all asset classes.
This extends to public buildings due
to political pressure.

Finance becomes more available both for building retrofit
and to incentivise the development of green buildings.
Lower insurance premiums for buildings which have
health and wellbeing credentials.

52 million

By 2030,
people will die due to chronic diseases
caused by poor lifestyle.(5)Regulatory building policies consider
health & wellbeing. Business becomea significant health & wellbeing driverglobally including the wider community
impact, as stakeholder expect fastaction. This extends to public building
sector in response to voter expectations.

Medium -High

Medium -High

Medium -High

High

High

Medium -High

Medium -High

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7.0

Conclusion

Through this report,
WorldGBC haspresented why the
global real estate
sector cannot afford
not to act on climatechange and invest ina sustainable future.

The built environment has a critical roleto play in tackling the climate crisis andadvancing sustainable development.
The urgency of the situation cannot
be overstated, and the time fortransformational action is now.
The value proposition for this action isbroader now than ever before - looking at
the business case and beyond by showing
how the financials are strengthened bysocial value and climate action. The future
value proposition, across a diverse rangeof scenarios, shows the value proposition
for sustainability in the built environment
will only continue to grow.
Through this report, WorldGBC haspresented why the global real estate
sector cannot afford not to act on climatechange and invest in a sustainable future.
The themes that underpin the value
proposition have consistently beenpresented throughout the financial andsocial value case within this report, as
we recognise that a sustainable built
environment provides seven co-benefits
that underpin the broader business case;

BEYOND THE BUSINESS CASE

Introduction• Social benefits, to building occupants
through health, productivity & wellbeing• Lower (or equal) costs at supply chain,construction, and operational phases• Risk mitigation, providing resilience
to inevitable climate impacts,
environmentally and financially, as well as
future-proofing against legislative changes
or corporate expectations and reputationalrisk• Higher asset values linked both toperformance and asset desirability• Investment opportunities througha rapidly transitioning finance sector
protecting investments, supporting shareprices, and increasing requirements on
ESG• Access to finance due to availability offinance for green buildings, from banks,
bonds and institutional investors• The wider role of business, as recognisedthat organisations must engage withsustainable development, including
environmental action and social value, andcommit to considerations broader thanprofit margins

Drivers of theBusiness Case

The Business Case

The current and future trends
presented in this report demonstrateconcentrated efforts are being
undertaken to advance the triple
bottom line of sustainability within
our built environment. There is muchto be optimistic about, but so much
more still to be done. Urgent action
will be needed from all players governments, the private sector, civilsociety, and residents - to achieve amore sustainable future for the built
environment, and for all of us wholive within it.

Strengthening the Case:
Social ValueThe Social Value Case

Through the World Green Building
Council network and global
sustainable buildings movement, we
will continue to challenge the trailingactors in the building construction
sectors to mitigate damaging
practices and enhance sustainable
development. Join us, in creating
sustainable buildings for everyone,
everywhere. You can’t afford not to.

Future Proofing
The Value
Proposition

THE URGENCY OF THE
SITUATION CANNOTBE OVERSTATED,AND THE TIME FOR
TRANSFORMATIONALACTION IS NOW.

THERE IS
MUCH TO BE
OPTIMISTICABOUT, BUT
SO MUCH
MORE STILLTO BE DONE.

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Recommendations
The World Green Building
Council network has
published an immense
quantity of thought
leadership and guidance
for the building andconstruction sector toguide the transformationof the built environment, at
a global level and throughthe 70 national Green
Building Councils.
WorldGBC encourages
all readers to reach out tonational GBCs for specificmarket content andthought leadership.

Climate Action

The Net Zero
Carbon Buildings
commitment

Health, Wellbeing and Social Value

Bringing Embodied
Carbon Upfront

Advancing Net Zero
Status Report 2021

Health & Wellbeing
Framework

Building the Business
Case: Health,Wellbeing and
Productivity in Green
Offices

Doing Right by Planet
and People (CaseStudy report)

Green and Healthy
Schools

Health, Wellbeing and
Productivity in Retail

Health, Wellbeing &Productivity in Offices

Healthier Homes,
Healthier Planet

The following materials
from the WorldGBC can beaccessed here:

Advancing Net Zero Whole Life Carbon:
Offsetting Residual Emissions from the
Building and Construction Sector

BEYOND THE BUSINESS CASE

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

Acknowledgements
With thanks to the report funders, partners, Taskforce, Expert Review Paneland the WorldGBC network

FUNDERSCONSULTANTS (pro bono)Expert Review Panel

Authors:

Usha Iyer-Raniga
RMIT University

Jana HockSHAREACTION

Catriona Brady
Director of Strategy & Development, WorldGBC

Clay Nesler
WRI

Nora Steurer
UNEP

Victoria Burrows
Director of Advancing Net Zero, WorldGBC

Victor Martinez
ARCHITECTURE 2030

Cassie Sutherland
C40

Ahmad Al-Musa
Advancing Net Zero Project Officer, WorldGBC

Cristiana Ciaraldi Jolivet WBCSD C40

Sara Kawamura
Better Places for People Project Officer,
WorldGBCWorldGBC Advancing Net Zero
Steering Committee

Carolina Montano Owen
Projects and Grants Officer, European Regional
Network, WorldGBC

WorldGBC Better Places for Peopel
Steering Committee

Arianna Palmieri
Project Manager, WorldGBC

WorldGBC Established GBC
CEO Network

BEYOND THE BUSINESS CASE

A WORLD GREEN BUILDING COUNCIL REPORTAbout WorldGBC

Statement

Foreward

Introduction

Drivers of theBusiness Case

The Business CaseStrengthening the Case:
Social ValueThe Social Value Case

Future Proofing
The Value
Proposition

References1 		 JLL, ‘Why social awareness at companies is on
the rise’ (2020)
2		 IPCC, ‘Climate Change 2021: The PhysicalScience Basis’ (2021)
3		 IPCC, ‘Climate Change 2021: The PhysicalScience Basis’ (2021)
4		 WEF, ‘COVID-19 is increasing multiple kinds ofinequality’ (2020)
5		 UN Foundation, ‘The shadow pandemic: how
the COVID-19 crisis is exacerbating genderinequality’ (2020)
6		 UN, ‘Population 2030’ (2015)
7		 McKinsey, ‘McKinsey on Climate Change’(2020)
8		 Yale, ‘Climate Change in the American Mind’(2021)
9		 UN, ‘Transforming our world: the 2030 Agenda
for Sustainable Development’ (2015)10		 CNBC. ‘Amsterdam bet its post-Covid recovery
on ‘doughnut’ economics — more cities are
now following suit’ (2021)l11		 Architecture 2030, ‘The 2030 Challenge’ (2020)12		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2021)
13		 Architecture 2030, ‘Why the Building Sector?’(2019)
14		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2020)15		 Transparency Market Research, ‘Construction
Waste Market - Global Industry Analysis, Size,
Share, Growth, Trends, and Forecast 20172025’ (2021)
16		 UNEP, ‘As buildings and construction sector
grows, time running out to cut energy use andmeet Paris climate goals’ (2017)17		 Global Infrastructure Basel Foundation, ‘4th
GIB Summit Report’ (2014)18		 McKinsey, ‘Reinventing Construction: a routeto a higher productivity’ (2017)19		 EPA, ‘Report on the Environment (ROE): Indoor
Air Quality’ (2021)
20		 UN, ‘World Urbanization Prospects’ (2018)21		 Taskforce on Climate-Related Financial
Disclosures, ‘Climate change presents financial
risk to the global economy’ (2021)
22		 IPCC, ‘Summary for PolicyMakers’ (2018)23		 IPCC, ‘Summary for PolicyMakers’ (2018)24		 IPCC, ‘Summary for PolicyMakers’ (2018)

BEYOND THE BUSINESS CASE

25		 Science, ‘Anthropogenic environmental
changes affect ecosystem stability via
biodiversity’ (2015)26		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2020)27		 IFC, ‘Green Buildings: a finance and policy
blueprint for emerging markets’ (2020)28		 WEF, ‘Making Affordable Housing a Reality inCities’ (2019)29		 UNEP ‘Building sector emissions hit record
high, but low-carbon pandemic recovery canhelp transform sector – UN report’ (2020)30		 BuroHappold, ‘Supercharge your net zero case’(2020)
31		 IFC, ‘Green Buildings: a finance and policy
blueprint for emerging markets’ (2020)32		 Dodge Data & Analytics, ‘World Green Building
Trends’ (2021)
33		 Stanford Social Innovation Review. The Next
Phase of Business Sustainability. (2018)34		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2020)35		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2020)36		 Climate Analytics. ‘1.5 Degree C National
Pathways’ (2021)
37		 UN, ‘NDC Synthesis Report’ (2021)
38		 UNIDO, ‘Sustainable Cities’ (2016)39		 C40, ‘C40 Mayors’ Statement for a Green and
Just Recovery’ (2020)40		 C40, ‘C40 Mayors’ Statement for a Green and
Just Recovery’ (2020)41		 WorldBank, ‘State & Trends of Carbon Pricing
2021 Executive Summary’ (2021)
42		 WorldBank, ‘State & Trends of Carbon Pricing
2021 Executive Summary’ (2021)
43		Ibid
44		Ibid
45		 WorldBank, ‘State & Trends of Carbon Pricing
2021 Executive Summary’ (2021)
46		 UKGBC, ‘Building the case for Net Zero’ (2020)47		 EU, ‘Taxonomy: Final report of the TechnicalExpert Group on Sustainable Finance’ (2020)
48		 EU, ‘Taxonomy: Final report of the TechnicalExpert Group on Sustainable Finance’ (2020)49		 NATIXIS, ‘Sustainable Taxonomy development
worldwide: a standard-setting race between
competing jurisdictions’, (2021)

50		 WEF, ‘A Framework for the Future of Real
Estate’ (2021)
51		 Grantham Research Institute, ‘Climate change
and the just transition’ (2018)52		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2020)53		 Edie. ‘HSBC sets 2050 net-zero financed
emissions target for £36bn UK pension
scheme’ (2021)
54		 Harvard Business Review, ‘The Investor
Revolution’ (2019)55		 Harvard Business Review, ‘The Investor
Revolution’ (2019)56		 Columbia School of International and Public
Affairs for United Nations Development
Programme, ‘ESG INVESTING: HOW TO
INCREASE ESG INVESTING IN DEVELOPING
COUNTRIES’ (2018)57		 OPEC Fund for International Development,‘ESG and Development’ (2020)58		 Harvard Business Review, ‘The Investor
Revolution’ (2019)59		 PRI, ‘TCFD for Real Assets Investors’ (2021)
60		 GRESB, ‘The Business Case for ESG in Real
Estate’, (2020)61		 Harvard Business Review, ‘The Investor
Revolution’ (2019)62		 PWC, ‘Embracing ESG transformation. How
asset managers are leveraging regulation todrive value creation’ (2021)
63		 Harvard Business Review, ‘The Investor
Revolution’ (2019)64		 G&A, ‘Flash Report Russell 1000® - Trends on
the sustainability reporting practices of theRussell 1000 Index companies’ (2020)
65		 Harvard Business Review, ‘The Investor
Revolution’ (2019)66		 KPMG, ‘SFDR - a Snapshot’ (2021)
67		 UL, ‘Why ESG Reporting Is Essential For Your
Business’ (2020)
68		Ibid69		 UNEP FI, ‘Global ESG Real Estate Investment
Survey Results’ (2020)70		 WorldGBC, ‘Annual Report 2020’ (2020)71		 Dodge Data and Analytics, ‘World Green
Building Trends’ (2021)
72		 GRESB, ‘Real EstateReference Guide’ (2021)
73		 Ramboll, ‘Sustainable Buildings Market Study’(2021)

74		 Dodge Data & Analytics, ‘World Green Building
Trends 2018’ (2018)75		 IISD,’ Sustainable Investing Shaping the futureof finance’ (2020)76 		 S&P Global, ‘Green Finance: the Next Driver ofReal Growth?’, (2017)77		 EY, ‘How banks are defining and internalizing
sustainability goals’ (2020)78		 Climate Bonds Initiative, ‘Explaining Green
Bonds’ (2021)
79		 Climate Bonds Initiative, ‘Sovereign Green,
Social, and Sustainability Bond Survey The
ultimate power to transform the market’ (2021)
80		 OECD, ‘Making the green recovery work forjobs, income and growth’ (2020)81		 NN Investment Partners, ‘Sovereign Green
Bond fund: financing the green recovery’(2021)
82		 Climate Bonds Initiative, ‘Explaining Green
Bonds’ (2021)
83		 Environmental Finance, ‘Green Buildings andGreen Bonds’ (2020)84		 Environmental Finance, ‘Green Buildings andGreen Bonds’, (2020)85		 ADBInstitute, ‘The viability of green bonds asa financing mechanism for green buildings inasean’, (2020)86		Ibid87		 IFC, ‘Green Buildings: a finance and blueprint
for emerging market’ (2020)88		 Climate Bonds Initiative, ‘Sovereign Green,
Social, and Sustainability Bond Survey The
ultimate power to transform the market’ (2021)
89		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2020)90		 Climate Bond Initiative, ‘Green Bonds: The
State of the Market’ (2018)91		 Climate Bonds Initiative, ‘Sovereign Green,
Social, and Sustainability Bond Survey The
ultimate power to transform the market’ (2021)
92		 Harvard Business Review, ‘The Investor
Revolution’ (2019)93		 Fink, ‘Annual Letter to CEO’s’ (2021)
94		 Fink, ‘Annual Letter to CEO’s’ (2021)
95		 IBM, ‘Meet the 2020 consumers driving
change’ (2020)96		 Morningstar, ‘Sustainable Funds U.S.
Landscape Report’ (2021)

97		 Fink, ‘Annual Letter to CEO’s’ (2021)
98		 WEF, ‘Why a healthy planet and a healthy
economy go hand-in-hand’ (2020)99		 Rathbones, ‘Why sustainable investing is here
to stay’ (2019)100		 Morgan Stanley, ‘7 insights from Asset Owners
on the Rise of Sustainable Investing’ (2020)
101		 Harvard Business Review, ‘The Investor
Revolution’ (2019)102		 Blackrock, ‘Here to stay’ (2021)
103		 Morgan Stanley, ‘7 insights from Asset Owners
on the Rise of Sustainable Investing’ (2020)
104		 Harvard Business Review, ‘The Investor
Revolution’ (2019)105		 Rathbones, ‘Why sustainable investing is here
to stay’ (2019)106		 Dodge Data & Analytics. ‘World Green Building
Trends 2021’. (2021)
107		 Ramboll. ‘Sustainable Buildings Market Study’(2019)
108		 GlobalABC, ‘Global Status Report for Buildings
and Construction’ (2020)109		 IFC, ‘Green Buildings: a finance and policy
blueprint for emerging markets’ (2020)110		 Colliers, ‘Building the Green Way: Opportunities
in Green Building Development’ (2020)111		 Better Buildings Partnership. ‘Sustainability inbuildings makes for a better investment’ (2015)112		 European Commission. ‘Renovation Wave:
doubling the renovation rate to cut emissions,boost recovery and reduce energy poverty’(2020)
113		 Research Affiliates, ‘Unlocking the
Performance Potential in ESG Investing’ (2018)114		 Raconteur, ‘Should investors be wary of
stranded assets?’ (2019)115		 Ramboll, ‘Sustainable Buildings Market Study’(2021)
116		 Morgan Stanley, ‘7 insights from Asset Owners
on the Rise of Sustainable Investing’ (2020)
117		 Natural Capital Forum, ‘What is Natural
Capital?’ (2021)
118		Ibid
119		Ibid
120		 Paladino, ‘The Economic Value of Natural
Capital in the Built Environment’ (2020)121		 Natural Capital Forum, ‘What is Natural
Capital?’ (2021)

122		 Real Assets IPE, ‘The future of green building
ratings’ (2018)123		 Dodge Data and Analytics ‘World Green
Building Trends 2021’ (2021)
124		 Dodge Data and Analytics, ‘World Green
Building Trends 2018: Europe’ (2018)125		 Savills, ‘Does demand for green buildings leadto a premium?’ (2021)
126		 Savills, ‘Does demand for green buildings leadto a premium?’ (2021)
127		 SPanasonic, ‘Green housing trends in Malaysia’(2016)
128		 IBM, ‘Meet the 2020 consumers driving
change’ (2020)129		 IBM, ‘Meet the 2020 consumers driving
change’ (2020)130		 Schneider Electric, ‘Why invest in highperformance green buildings?’ (2012)131		 JLL, ‘Why companies are willing to pay more togo green’ (2021)
132		 Dodge Data and Analytics. 2021. World Green
Building Trends 2021.
133		 Knight Frank, ‘The Sustainability Series’ (2021)
134		 Ramboll, ‘Sustainable Buildings Market Study’(2021)
135		 Forbes, ‘The Increased Importance Of
Environmental Sustainability In Real Estate’(2019)
136		 Savills, ‘How green is your workplace?’ (2021)
137		 Building Engines ‘Attract and Retain Tenantswith Green Building Certification’ (2021)
138		 Forbes, ‘The Increased Importance Of
Environmental Sustainability In Real Estate’(2019)
139		 Dodge Data & Analytics. ‘World Green Building
Trends 2021’ (2021)
140		 Lloyds ‘Stranded Assets’ (2021)
141		 Muldoon-Smith and Greenhalgh. ‘Suspect
foundations: Developing an understanding ofclimate-related stranded assets in the global
real estate sector’ (2019) Energy Research &Social Science
142		 Energy Research & Social Science, ‘Suspect
foundations: Developing an understanding ofclimate-related stranded assets in the global
real estate sector’ (2019)143		 Building, ‘Sustainability: How EPC
requirements could leave buildings at
stranding risk’ (2019)

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Statement

144		 Energy Research & Social Science, ‘Suspect
foundations: Developing an understanding ofclimate-related stranded assets in the global
real estate sector’ (2019)145		 GRESB. ‘Addressing stranded asset risk in realestate investment’ (2016)146		 OECD. ‘Climate resilient infrastructure’ (2018)147		 Ramboll, ‘Sustainable Buildings Market Study’(2021)
148		 EEA, ‘Construction and Demolition Waste Challenges and Opportunities in a Circular
Economy’ (2020)
149		 BigRentz, ‘23 Construction Waste Statistics &Tips to Reduce Landfill Debris’ (2021)
150		 Designing Buildings, ‘Construction waste’,(2021)
151		 Lu, Chen, Peng and Liu. ‘The effects of green
building on construction waste minimization:
Triangulating ‘big data’ with ‘thick data’’(2018)
Waste Management.
152		 Park Enterprise Construction Co. Inc.,‘Recycled Construction Materials Can Save
You Money & The Environment’ (2020)
153		 Dodge, ‘Prefabrication and Modular
Construction 2020’ (2020)
154		 McKinsey, ‘Modular construction: Fromprojects to products’ (2019)155		 McKinsey, ‘Modular construction: Fromprojects to products’ (2019)156		Ibid
157		 McKinsey, ‘Modular construction: Fromprojects to products’ (2019)158		 McKinsey, ‘Modular construction: Fromprojects to products’ (2019)159		 Dodge Data & Analytics. ‘World Green Building
Trends 2021’ (2021)
160		 Ibid, and Dodge Data & Analytics. ‘World Green
Building Trends 2018’ (2018)161		 UKGBC, ‘Delivering Building Performance’(2016)
162		 UKGBC, ‘Building the Case for Net Zero’ (2020)
163		 UKGBC, ‘Building the Case for Net Zero’ (2020)
164		 Dodge Data & Analytics. ‘World Green Building
Trends 2018’ (2018)165		 Dodge Data & Analytics. ‘World Green Building
Trends 2021’ (2021)
166		 CaGBC, ‘Making The Case For Building To Zero
Carbon’ (2019)167		 Climate Action & Schneider Electric, ‘Why
invest in high-performance green buildings?’(2012)
168		 Dodge Data and Analytics. 2021. World Green
Building Trends 2021.

BEYOND THE BUSINESS CASE

Foreward

169		 Climate Action & Schneider Electric, ‘Why
invest in high-performance green buildings?’(2012)
170		 UNEP, ‘5 ways to make buildings climatechange resilient’ (2021)
171		 UNEP, ‘5 ways to make buildings climatechange resilient’ (2021)
172		 Forbes, ‘Can You Make Your Insurance Green?’(2021)
173		 Green Finance Institute, ‘Financing energy
efficient buildings:the path to retrofit at scale’,(2020)
174		 Forbes, ‘Can You Make Your Insurance Green?’(2021)
175		 Green Finance Institute, ‘Financing energy
efficient buildings:the path to retrofit at scale’,(2020)
176		 Harvard University, ‘The impact of green
buildings on cognitive function’ (2018)177		 WorldGBC ‘The Business Case for Green
Building report’ (2013)
178		 WorldGBC ‘Building the Business Case: Health,Wellbeing and Productivity in Green Offices’(2016)
179		 WorldGBC ‘Doing Right by Planet and People’(2018)
180		 WorldGBC, ‘Health, Wellbeing & Productivity in
Offices’ (2014)
181		 WorldGBC ‘Building the Business Case: Health,Wellbeing and Productivity in Green Offices’(2016)
182		 IEA, ‘Energy Efficiency 2020’ (2020)
183		 WorldGBC ‘Doing Right by Planet and People’(2018)
184		 Supply Chain Sustainability School, ‘Social
Value in the Built Environment’ (2020)
185		 Social Value UK, ‘What is Social Value?’ (2021)
186		Ibid
187		 BREEAM, ‘Encouraging positive social impact
and equity using BREEAM’ (2020)188		 UKGBC, ‘Framework for Defining Social Value’(2021)
189		 Business Growth Hub, ‘Social Value: what it is
and why it’s more important than ever’ (2020)
190		 Buro Happold, ‘Defining social value in agreener built environment’ (2020)
191		 Ramboll, ‘Sustainable Buildings Market Study’(2021)
192		 WEF, ‘COVID-19 is increasing multiple kindsof inequality. Here’s what we can do about it’(2020)
193		 WEF, ‘COVID-19 is increasing multiple kindsof inequality. Here’s what we can do about it’(2020)

Introduction

194		 Financial Times, ‘Covid-19 has made fighting
inequality more critical than ever’ (2021)
195		 Impact, ‘A handy list of social value statistics’(2021)
196		 WorldGBC, ‘Health & Wellbeing Framework
Report’ (2020)
197		 HarvardTHChan, ‘Buildings for health’ (2021)
198		 WorldGBC, ‘Can we achieve healthy indoor air
quality and net zero during a global pandemic?’(2021)
199		 medRxiv, ‘Indoor transmission of SARS-Cov-2’(2020)
200		 Inside Housing, ‘The housing pandemic: fourgraphs showing the link between COVID-19
deaths and the housing crisis’ (2020)
201		 Frontiers, ‘Poverty and Covid-19: Rates of
Incidence and Deaths in the United States
During the First 10 Weeks of the Pandemic’(2020)
202		 Dodge Data and Analytics 2021. World Green
Building Trends 2021.
203		 MDPI,COVID-19 Could Leverage a Sustainable
Built Environment, 2020
204		 World Bank Group - World Development Report
2019: The Changing Nature of Work.
205		 Oxford Brookes University’s School of the
Built Environment & Trowers & Hamlins: Highly
Valued, Hard to Value: Towards an integrated
measurement of real estate development.
206		 International Living Future Institute (2013) The
Economics of Change:
		 Integrated Policy Approaches to Unlocking theValue of a Restorative Built Environment
207		 Harvard Business Review, The Investor
Revolution, 2019208		 Impact, ‘A handy list of social value statistics’,2021
209		 Business Wire, ‘Consumers expect the brands
they support to be socially responsible’ (2019)210		 International Journal of CSR, A literature
review of the history and evolution of corporatesocial responsibility, 2019211 Harvard Business School Online. ‘15
EYE-OPENING CORPORATE SOCIALRESPONSIBILITY STATISTICS’ (2021)
212		 Faithful+Gould, ‘Embedding Social Value within
the Built Environment’, 2016
213		 Impact, A handy list of social value statistics,
2021 https://impactreporting.co.uk/socialvalue-stats/214		 RICS ‘Measuring social value in infrastructure
projects’ (2020)
215		 UKGBC ‘Defining Social Value- Measurement’(2020)

Drivers of theBusiness Case

The Business Case

216		 Public Health England. Social Value Briefing.
2015
217		 OECD. ‘Public procurement’ (2021)
218		 Spend Network. ‘$13 Trillion – The Global
Value Of Public Procurement’ (2021)
219		 ICLEI. ‘Making Socially Responsible Public
Procurement Work’ (2020)
220		 Osborne Clark. ‘Government’s new
procurement policy accelerates delivery ofsocial value’ (2020)
WorldGBC ‘Build Upon2 Energy Renovation
Framework’ (2021)
221		Business Growth Hub. ‘Social Value: what it is
and why it’s more important than ever’ (2020)
222		Ibid
223		 UCL Institute of Health Equity, ’Using theSocial Value Act to reduce health inequalities
in England through action on the social
determinants of health’ (2015)
224		 UCL Institute of Health Equity, ’Using theSocial Value Act to reduce health inequalities
in England through action on the social
determinants of health’ (2015)
225		https://www.gov.uk/government/news/newmeasures-to-deliver-value-to-society-throughpublic-procurement226		 European Commission: https://knowledge4policy.ec.europa.eu/territorial/social-issues_en227		https://www.local.gov.uk/our-support/
financial-resilience-and-economic-recovery/
procurement/achieving-community-benefits
228		 Social Value Portal. ‘Social Value in Canada’(2017)
229		 Institute of Civil Engineers. ‘Maximising Social
Value from Infrastructure Projects’ (2020)230		 EPA, Report on the Environment (ROE): Indoor
Air Quality, 2021
231		 WorldGBC ‘The Business Case for Green
Building report’ (2013)232		 WorldGBC ‘Building the Business Case: Health,Wellbeing and Productivity in Green Offices’(2016)
233		 WorldGBC ‘Doing Right by Planet and People’(2018)
234 WorldGBC, ‘Healthier Homes, Healthier Planet’(2018)
235		 WorldGBC, ‘Green and Healthy Schools’ (2017)236		 WorldGBC, ‘Health, Wellbeing and Productivity
in Retail’ (2016)237		 EPA, Report on the Environment (ROE): Indoor
Air Quality, 2021

Strengthening the Case:
Social ValueThe Social Value Case

238		 EPA: https://www.epa.gov/indoor-air-qualityiaq/volatile-organic-compounds-impactindoor-air-quality
239		 ESC, Regional and global contributions of air
pollution to risk of death from COVID-19, 2020
240		 WorldGBC, ‘Health and Wellbeing Framework’(2020)
241		 WELL Standard: https://standard.wellcertified.
com/mind242		 The Guardian, Could bad buildings damage
your mental health?, 2016
243		 Ramboll, ‘Social Equity in the Decarbonisationof the European Built Environment’, 2021
244		 Ade Kearns, Elise Whitley., Are housing andneighbourhood empowerment beneficial for
mental health and wellbeing? Evidence fromdisadvantaged communities experiencing
regeneration, 2020245		 UKGBC. ‘Framework for Defining Social Value’(2021)
246		 USGBC ‘Social Equity in the Community; (2021)
247 USGBC ‘Social Equity Planning and Assessment
Tool’ (2021)
248		 GOV.UK ‘The Social Value Model’ (2020)249		 United Nations. ‘Green economy could create
24 million new jobs.’ (2019)250		 Office of Energy Efficiency and Renewable
Energy - Department of Energy USA - The
Social Benefits of Sustainable Design (2021)
251		 One Planet Network. ‘Global State of Play for
Circular Built Environment.’ (2021)
252		 USGBC. ‘Why green building is synonymouswith resilience’ (2019)253		 McKinsey, ‘Reinventing Construction: a routeto a higher productivity,’ 2017254		 OECD Insights. ‘The Global Construction
Sectors Needs a Big Push on Corporate
Responsibility ‘ (2016)
255		 Design for Freedom, 2021 ‘The Facts’
https://www.designforfreedom.org/get-thefacts/#the-scope256		 UN, Universal Declaration of Human Right
https://www.un.org/sites/un2.un.org/files/
udhr.pdf
257		Ibid258		 Design for Freedom, 2021 ‘The Scope of the
Problem’ 2021
259		 Design for Freedom,. ‘A Call to Action forpracticing professionals within the ecosystemof the built environment’. (2020)
260		 HSE, ‘Construction health risks: key points’(2020)
261		 HSE, ‘Construction dust’, (2020)

Future Proofing
The Value
Proposition

262		 HSE, ‘Construction health risks: key points’(2020)
263		 IHRB. ‘Human RIghts and the Built
Environment - A Call for Action’ (2019)
264 Business and Human Rights Resources Centre.
‘The construction industry must step up on
human rights - Our outreach to firms’ (2016)265		 IHRB. ‘Human RIghts and the Built
Environment - A Call for Action’ (2019)266		 ILO, ‘Migrant Work & Employment in theConstruction Sector’, (2016_267		 Ramboll, ‘Social Equity in the Decarbonisationof the European Built Environment’ (2021)
268		 Harvard Business Review, ‘A More Sustainable
Supply Chain’ (2020)269		 Dodge Data and Analytics. 2021. World Green
Building Trends 2021.
270		 UN, ‘Water Scarcity Facts’ (2018)271		 UN, ‘Water Scarcity Facts’ (2018)272		 WorldGBC ‘Our Work’ 2021
273		 National Social Value Taskforce. ‘Getting themost from Social Value’ (2020)274		 Good Finance. ‘Measuring Social Impact’(2021)
275 Stanford Social Innovation Review. ‘Measuring
Social Value’ (2010)276
277 Ibid

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