The sixth assessment report recently released by the United Nations Intergovernmental Panel on Climate Change (IPCC) is a red alert for humanity.
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It identifies the direct impact of human activity on global warming and predicts that we are likely to see a 1.5°C global temperature rise in two decades – a tipping point once broken we will see increasingly extreme heatwaves, droughts and flooding. We must accelerate the pace of emission reduction while make our buildings, communities and cities more resilient.
The Mitigation Potential of the Construction Industry
Achieving net zero emission is the most ambitious goal set by the entire construction industry to tackle climate change. The C40 Cities Climate Leadership Group*, including Hong Kong, clearly requires to develop a pathway to achieve net zero city by 2050. According to a report by the World Resources Institute, Hong Kong needs to cut 32 million tons of carbon dioxide to achieve its 2050 net zero goal. Three key areas with the greatest potential for carbon reduction are “decarbonized energy”, “building energy efficiency” and “transport energy efficiency”. Hong Kong’s construction industry could reduce 10.6 million tons of carbon emissions by adopting energy-saving measures.
The construction industry accounts for nearly 40% of global carbon emissions and plays a vital role in the sustainable movement worldwide. Launched by the U.S. Green Building Council (USGBC) in 1998, LEED standard is now used in 181 countries and territories and has become a common language in green buildings globally. LEED enables green buildings to prove their enormous potential to mitigate climate change.
Due to the outstanding performance of green buildings, LEED has become a must-to-have for developers to implement sustainability initiatives.
According to USGBC North Asia, Hong Kong has been among the top 10 cities in China by the number of LEED certifications for several years. Landmark projects such as One Taikoo Place, Two International Finance Centre, K11 Musea have all been LEED certified.
Green Finance Boosts Green Buildings
In addition to carbon reduction, there are several factors that enhance LEED’s position to real estate developers. As Hong Kong Stock Exchange made its Environmental, Social and Governance (ESG) disclosure compulsory in 2016, listed developers must strengthen their efforts in green buildings and sustainable development to avoid falling behind their peers; meanwhile, in terms of green finance, green bonds, credit, funds and other green products in Hong Kong are booming. Many Hong Kong developers have begun to use green financial instruments such as green bonds and sustainability linked loans to raise funds. Green building has become a powerful tool to measure enterprise’s green performance.
On the other hand, green assets also show “excess returns” on investment value. In 2019, the “White Paper on Green Finance and Real Estate” released by JLL pointed out that the average rent of LEED-certified office buildings is about 10% higher than non-green ones. Similar premium has been observed in en-bloc sales.
Better Buildings Equal Better Lives
USGBC’s vision is “better buildings equal better lives”. Through carbon emissions reduction, LEED could be able to address climate change and improve the long-term well-being of our generation and future generations. High-performance office buildings, shopping malls, restaurants, and residences enable us to enjoy a healthy and comfortable indoor environment, improving our quality of life. In 2018, USGBC launched the Living Standard campaign, aiming to attract a wider range of people outside green building field. Only when people understand the importance of green buildings in sustaining health and combating climate change, we can make deliberate choices when we choose the place where we shelter, work, learn and connect.