RICS Sustainability Report 2024: a year of progress?

Following the publication of the RICS Sustainability Report 2024, a recent webinar featured a panel of experts discussing how much progress is being made towards sustainability goals.

Overview of the report

The global progress on sustainability is positive, though there remains room for improvement, particularly in measuring embodied carbon and adopting better biodiversity practices, explains moderator Anil Sawhney FRICS, head of sustainability, professional standards at RICS.

The findings of the RICS Sustainability Report 2024 show occupier and investor demand for green buildings continues to rise, with Europe leading the way, partly due to regulatory drivers, he says.

On the downside, the global survey reveals that over half of respondents are not measuring embodied carbon on construction projects:

• 34% of respondents do not measure
• 22% would measure if there was a common standard
• 24%, while measuring carbon, do not use the data to significantly influence their decisions regarding the selection of material and components and
• 21% both measure embodied carbon and use it in decision-making (however, this is an improvement on previous years, where the figure averaged 15–16%).

The uptake of biodiversity practices remains disappointing. When asked to what extent is biodiversity considered in their projects, the survey showed:

• 14% of respondents include it in all their construction projects
• 27% in more than 50% of their projects
• 39% considered biodiversity in less than half of their projects
• 20% didn’t consider it at all.

The key sustainability challenges have remained consistent over time. The top three barriers cited this year are:

1.  the perceived high initial costs of sustainable and green building practices and materials
2. skill shortages, gaps in knowledge and inadequate training of professionals, particularly in areas such as carbon emissions calculations and
3. cultural issues such as established practices and a general lack of awareness of sustainable and green practices.

What progress has been made?

Sustainability has become more embedded in everyday business practices, which can sometimes make it seem less overt, says Frank Hovorka MRICS, RICS management board member and sustainability chair, and director at FPI France. For example, sustainability considerations such as life cycle assessments, carbon impact and climate change resilience are an integral part of the process in Europe, he says.

The built environment is not moving fast enough towards sustainability: emission reduction has stagnated over the past seven years. According to the UNEP Global Status Report for Buildings and Construction, the sector remains off track to achieve decarbonization by 2050, says Gulnara Roll, head of the secretariat of the Global Alliance for Buildings and Construction (GlobalABC) at the United Nations Environment Programme (UNEP). Gulnara further stressed the importance of the international cooperation to support exchange of experience and best practice between governments and other stakeholders, as such exchange is crucial for accelerating the decarbonisation process. International platforms, such as the GlobalABC and the Intergovernmental Council for Buildings and Climate (ICBC) play an important role in facilitating such exchange, explains Gulnara.

‘We are moving in the right direction, but not at the right pace. If we don't move at the right pace, the destination keeps getting further away and requires extra effort to get there’, says Sandeep Singh, operations and partnerships lead, Green Buildings and Green Cities Program at the International Finance Corporation (IFC), World Bank Group. While there is growing awareness of whole life carbon and embodied carbon, wider adoption is needed, he says. Sandeep cites the Buildings Breakthrough initiative, officially launched by France, Morocco and UNEP at COP28, which seeks to ensure that near-zero emission and resilient buildings become the new normal by 2030. He also highlights IFC’s Building Resilience Index, a web-based hazard mapping and resilience tool, which in 2024 saw increasing interest from participants, developers, donors.

While there is a distinction between what countries discuss at global climate summits and what they commit to domestically, 168 out of 194 countries (87%) mention measures for the buildings and construction sector in their Nationally Determined Contributions, says Anna Zinecker, co-chair secretariat at the Partnership for Energy Efficiency in Buildings (PEEB), GIZ. PEEB  is a collaboration between the French development Bank AFD and German international cooperation GIZ. PEEB is a global programme that works with 21 countries across the globe, including Nigeria, Morocco, Indonesia and Argentina, and supports €2.2 billion worth of green building projects.

Encouraging wider adoption and financing

While sustainability progress is being made, much of it is being driven by large organisations, says Sandeep. More effort is needed to encourage the middle and smaller tiers to follow suit, especially in emerging and developing markets, he says. It is estimated that 80% of buildings sector floor area  growth through 2030 will occur in emerging markets and developing economies, according to the  International Energy Agency (IEA). Conversely 80% of existing buildings will still be operating in 2050, according to the World Economic Forum (WEF), so will require extensive retrofitting to meet sustainability goals. Sandeep believes that city governments need to develop more incentive-oriented policies to transition the entire industry to greener practices, for example, through blended finance. This approach would provide greater access to capital for smaller companies and enable city governments to fund sustainability initiatives.

According to a joint report by the IFC and IEA, financing sustainable energy in emerging markets and developing economies requires investment to more than triple from the US$770 billion per year in 2022 to US$2.2–2.8 trillion per year by the early 2030s, and maintain these levels until 2050. Gulnara highlights the growing need to finance greener energy solutions, as increased extreme weather conditions lead to higher energy consumption to heat and cool buildings.

Greener buildings

To promote sustainability, we need to integrate energy efficiency measures into both retrofits and new constructions, while also adopting smarter building practices and selecting more sustainable materials, says Gulnara.

On demand for green buildings, a key challenge is expanding their reach beyond markets where they are already well-established, such as Europe, to ensure they become mainstream and achieve scalability, says Anna. She also discusses the relationship between sustainability and economic factors, which can be difficult to separate. In emerging markets and developing economies, economic development might be more of a target than sustainability and climate change, she explains. For example, cost constraints can lead to inadequate infrastructure, such as a school being unusable for part of the year due to weather conditions. The focus should be on creating buildings that satisfy both sustainable and economic needs.

Gulnara presented on the UNEP’s Generation Restoration programme, which applies an ecosystem restoration approach in 24 cities across 19 countries. The programme aims to improve livelihoods at the city or neighbourhood level but also ensure buildings are prepared for climate change.

Measuring methodologies

Laying the groundwork for climate-related goals will take time, says Anna. Companies need to acquire the skills to measure emissions and act on these measurements effectively.

Frank references RICS’ Whole life carbon assessment for the built environment, which provides a standardised methodology to assess and measure accurately carbon impact throughout a project’s entire life cycle. He stresses the importance of transparency regarding the sources, accuracy and reliability of data, especially when engaging with investors, banks or other stakeholders. He also highlights the role of the International Cost Management Standard in providing a globally consistent method for carbon life cycle reporting across construction projects. Regulation will increasingly mandate the use of carbon emissions data, but the market will also drive its adoption as it seeks to address climate change and mitigate the risk of asset obsolescence, he explains. While such measures may increase costs, they will ultimately reduce risks, he says.

He suggests that climate change will shift the focus of evaluating returns on investment from being largely based on cost and financial returns to incorporating greater consideration of greenhouse gas emissions. In the coming years, he believes people will increasingly assess the investment needed to lower carbon emissions over the lifetime of an asset.

If we want to accelerate the speed of integration of sustainability, we need to integrate processes into the contract that consider the performance, carbon emissions and the lifespan of a building, says Frank. He also advocates the use of digital tools as a means to accelerate sustainability and enhance data transparency through improved accuracy and information sharing.

‘The cost of doing nothing and building as usual is more expensive over time than acting now to reduce greenhouse gas emissions’, emphasises Frank.

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