The International Finance Corporation (IFC), which has invested more than $10bn into developing nations for clean and green construction projects, has outlined the investment requirements to help slash emissions from the sector.
The body’s new report found that $1.5trn will need to be invested in developing nations by 2035 in order to reduce emissions and improve energy efficiency of buildings.
The IFC’s vice president for economics and private sector development Susan Lund noted that the “low-hanging fruit” of existing technologies like renewables and electrification of older buildings can help slash emissions while low-emission materials can help reduced embodied carbon.
The report found that adopting these existing measures can reduce construction-related emissions 13% by 2035 compared to current levels.
The report found that China would need the biggest investment package – accounting for $1.3trn in private sector funding – with Latin America, Asia and Africa also requiring increased levels of private sector focus.
The IFC also notes that nations would benefit from the development of a guarantee facility for private investors to boost finance in these markets.
However, one major barrier across developing nations is that of limited and poor policy and information on energy efficiency. The report found that more than 100 countries do not currently have building codes for energy efficiency.
Building blocks
The built environment sector is accountable for roughly a quarter of global greenhouse gas (GHG) emissions, amounting to 14.4 metric gigatons of CO2 equivalent (GtCO2e) annually.
Construction and building operations contribute to approximately 26% of all GHG emissions and 37% of combustion-related emissions.
Separate research from McKinsey earlier in the year found that professionals in the built environment sector can reduce more than 50% in industry emissions by 2030 using existing technologies.
Additionally, analysis from the World Benchmarking Alliance (WBA) and CDP found that more than half of built environment sector firms do not climate transition plans. This is leaving the jobs of more than a million workers at risk.
Transition plans are intended to support long-term emissions targets with interim goals and plans for their delivery, including innovation, investment, upskilling and reskilling staff, and more.
A significant minority (44%) of the companies assessed have no publicly-disclosed targets to reduce emissions at all.